Plaintiffs was injured when a new replacement battery purchased on Amazon.com exploded. The seller was listed as “E-Life” – a fictitious name used on Amazon by Lenoge Technology (HK) Ltd. Amazon argued that product liability theories did not apply because it did not manufacture, distribute, or sell the product in question. The court of appeal disagreed.
“Amazon created the environment (its website) that allowed Lenoge to offer the replacement battery for sale. Amazon attracted customers through its own activities, including its direct offers for sales and its Amazon Prime membership program, which includes benefits for some products offered by third-party sellers (including the Lenoge replacement battery at issue here). Amazon set the terms of Lenoge’s involvement, and it demanded fees in exchange for Lenoge’s participation. Amazon required Lenoge to indemnify it and, assuming Lenoge met the sales threshold, to obtain general commercial liability insurance listing Amazon as an additional named insured. Because Lenoge participated in the FBA program, Amazon accepted possession of Lenoge’s products, registered them in its inventory system, and stored them in an Amazon warehouse awaiting sale. Amazon created the format for Lenoge’s offer for sale and allowed Lenoge to use a fictitious name in its product listing. The listing itself conforms to requirements set by Amazon. Even setting aside the use of a fictitious name, the listing does not conspicuously inform the consumer of the identity of the third-party seller or the nature of Amazon’s relationship to the sale. To purchase the product, the consumer adds it to her Amazon cart, not her Lenoge or E-Life cart. The consumer pays Amazon for the product, not Lenoge or E-Life. And, in the FBA program, Amazon personnel retrieve the product from its place in an Amazon warehouse and ship it to the consumer in Amazon-branded packaging. If convenient, Amazon will ship the product together with products sold by other third-party sellers or by Amazon itself. Lenoge is not involved in the sales transaction. It does not approve the sale before it is made. It may not even know a sale has occurred until it receives a report from Amazon. It does not receive payment until Amazon chooses to remit the proceeds. Its use of any customer or transaction information, if it even receives any from Amazon, is strictly limited. But it accepts the burden of substantial fees for Amazon’s participation, approximately 40 percent here. If a customer wishes to return the product, she ships it back to Amazon under the FBA program. Amazon personnel inspect the product, determine whether it can be resold, and if so return it to inventory in the Amazon warehouse. Third-party sellers like Lenoge are prohibited from communicating with Amazon customers except through the Amazon website, where such interactions are anonymized. Given these facts, Amazon is an integral part of the overall producing and marketing enterprise that should bear the cost of injuries resulting from defective products. Amazon was involved in the vertical distribution of consumer goods and responsible for passing the product down the line to the consumer. It was one of the entities responsible for placing a defective product into the stream of commerce. Amazon enabled Lenoge to offer the replacement battery for sale, inventoried and stored the replacement battery, accepted Bolger’s order for the battery, billed Bolger the purchase price for the battery, received her payment, retrieved the battery from its inventory, and shipped the battery to her in Amazon-branded packaging.”
The court also rejected Amazon’s argument that it was immune from liability under Section 230 of the Communications Decency Act. “Bolger’s strict products liability claims do not depend on the content of Lenoge’s product listing, e.g., whether it was false or misleading. Bolger’s claims are based on Amazon’s role in the chain of production and distribution of an allegedly defective product. The fact that some content provided by Lenoge was posted on the Amazon website does not automatically immunize Amazon for its own choices and activities unrelated to that content.”
Bolger v. Amazon.com, No.75738, 2020 WL 4692387 (Cal. App. 4th Dist. Aug. 13, 2020).