Online sellers have radically changed the way consumers buy goods. Every passing year, the need to travel to brick and mortar businesses decreases. But, this technological and commercial revolution has created complications for defective product lawsuits.
Under traditional product liability law, sellers of products assume any risk of loss by defective merchandise instead of consumers. Manufacturers, retailers and all participants in the supply chain may be held liable for a defective product under a product liability lawsuit. However, web purchases have changed the way many products go through the supply chain.
In a federal district court decision from Arizona, the court ruled that Amazon was not liable for harm caused by two hoverboard batteries that caught on fire when they were charging and damaged the consumer’s home. In that case, an insurance company paid for that damage and sought reimbursement from Amazon and the third-party vendor. The court found that Amazon was not legally responsible under Arizona law because it had limited control over the products, did not own them and that their services merely connected purchases to vendors. This ruling essentially declares Amazon and other online sellers a “middle man,” which absolves the company of responsibility.
Federal district courts in Illinois and Ohio, two federal appeals courts and an Ohio state appeals court have issued similar rulings. A federal appeals court panel with jurisdiction over Pennsylvania and New Jersey issued a different decision, but that court is reconsidering its stance.
These decisions can have serious consequences. Over 4,000 products on Amazon’s website were banned by federal regulators or had deceptive labels, according to a Wall Street Journal investigation. Listings indicated that Amazon shipped 46 percent of these products from its warehouses. According to the Wall Street Journal, only 57 percent of them were removed from Amazon’s platform or had their descriptions corrected.