Federal Appeals Court Rules Amazon Not Liable for Defective Third-Party Products

In 2014, a Maryland couple’s house was burned down by a headlamp purchased on Amazon. The couple sued Amazon for damages, but Amazon asserted that the Chinese company that manufactured the product was at fault. A Maryland judge sided with Amazon, stating that Amazon was only the platform for selling the product and never actually owned the product. The couple appealed the ruling, but the 4th U.S. Circuit Court of Appeals in Richmond agreed with the original decision.

Amazon and Product Liability

This isn’t the first time Amazon has had trouble with product liability allegations. In 2016, a Tennessee family’s home was burned down by a defective hoverboard purchased on Amazon. In 2015, a Pennsylvania woman was partially blinded by a defective dog leash purchased through Amazon. In both these incidents state and appeals courts sided with Amazon. The winning argument in these cases rests on the assertion that Amazon is not a vendor, but rather a marketplace for vendors. Amazon does not have creative control over the products it sells, and has no say in safety standards. Lawyers from Bloomberg Law analyzed Amazon’s history with product liability litigation.  In the Maryland court case, the judge pointed out that while Amazon advertised, stocked, handled, shipped the headlamp, it never actually owned the product. The title of the items sold on Amazon are transferred directly from the third-party vendor to the buyer, with Amazon at no point owning the products sold by third-parties. This protects Amazon from any liability caused by defective products.

Product Liability in the Digital Era

Amazon has had a lot of success winning cases that create precedents that limit their liability. However, some people are concerned that the rules of product liability haven’t kept up with the changes in the global economy. The purpose of product liability law is to push the costs of defective products on to producers so they are incentivized to make their products more safe. U.S. Circuit Court Judge Diana Motz, commenting on the headlamps case, agreed that Amazon was not liable. However, she said “By design, Amazon’s business model cuts out the middlemen between manufacturers and consumers, reducing the friction that might keep foreign (or otherwise judgment-proof) manufacturers from putting dangerous products on the market.” Her belief was that under the current law Amazon’s business practices were fine, but that states should consider changing their laws to prevent shoddy imports coming to the U.S. through vendors like Amazon.

How to Look Out for Defective Products

The Consumer Protection Safety Commission (CPSC) states that over 80% of recalled products in the U.S. are imported. In 2014, Chinese goods made up 23% of all goods in the U.S., domestic or imported, but Chinese goods accounted for 51% of recalls. Additionally, litigating product liability cases against Chinese companies is notoriously hard, especially for individual consumers. The CPSC warns that due to the difficulty of suing Chinese companies, the scale of Chinese imports, and the relative lack of safety standards in certain Chinese industries, consumers should be more careful with Chinese products. It is important for consumers to remember, when purchasing goods through a site like Amazon, to be more careful of products that are potentially made in areas with lower safety standards.

If an unsafe product has caused you or a loved one to suffer, you owe it to yourself to take action. The team at Regan Zambri Long PLLC can help. Reach out today to learn how we can assist you with your product liability case.