Amazon has traditionally enjoyed immunity from any liability problems coming from the sale of its products, particularly on the platform’s third-party marketplace. A big blow to that immunity came when a state appeals court in California ruled there would be no Amazon liability in a personal injury case involving a laptop sold on its network.
Angelo Bolger bought a replacement laptop battery from Lenoge Technology HK Ltd, which operated under the pseudonym “E-Life” on the Amazon platform. Bolger’s lawsuit said the battery burst into flames while positioned on her lap and caused severe leg injuries.
Judge Patricia Guerrero of the Fourth District of Appeals ruled for Bolger’s right to target Amazon in her personal injury lawsuit, which overturned a previous decision from the San Diego Superior Court that upheld Amazon’s legal immunity. That immunity was based on the fact Amazon is a service provider—a platform if you will—and not a manufacturer in their own right.
But Judge Guerrro saw it differently and cited the following facts as pertinent in her decision:
- Amazon placed themselves between Lenoge and Bolger in the distribution chain.
- Amazon accepted possession of the product and stored it in an Amazon warehouse.
- Amazon controlled the conditions of the offer for sale.
- Amazon received Bolger’s payment.
- Amazon received additional fees with each purchase.
- Amazon shipped the product.
- Amazon controlled Lenoge’s access to Bolger’s customer information.
- Amazon requires that Lenoge communicate with customers through the Amazon platform.
In the eyes of Judge Guerrero, these facts made it less important in how Amazon described themselves in the marketplace and more important to note that they were “pivotal” in making the purchase happen.
In evaluating the aftermath of the decision, the first thing to point out is that it may not stand. Amazon has recourse to appeal and this case may well end up in front of California’s Supreme Court. But if it stands, the Guerrero ruling does have implications for Amazon’s business model, for the law and potentially throughout the tech industry. Consider these facts:
- Over the last 4 years, a majority of products sold on Amazon come from independent vendors like Lenoge. This third-party marketplace has allowed Amazon to maintain large stockpiles of items while shielding itself from liability. This ruling is a threat to that.
- The legal implications are much more complex. State laws govern personal injury cases and rulings on similar cases will be forthcoming from Pennsylvania and Ohio. Differing interpretations and standards on a state-by-state basis aren’t a problem for a brick-and-mortar store, even if it’s a chain. It’s more complicated for an online global retailer.
- Amazon sought legal protection under Section 230 of the Communications Decency Act of 1996, which protects tech companies from being sued over content posted on their sites. If Amazon cannot escape personal injury liability, how long before social media giants like Facebook and Twitter are subject to lawsuits for defamation and libel lawsuits from content shared on their platforms?
In short, Judge Guerrero’s ruling was important, but it’s a single chapter in a big legal drama that’s still unfolding.