The recent decision by the California Court of Appeal, Fourth District, Division 1 in Bolger v. Amazon.com, LLC, No. D075738, (Cal. Ct. App. Aug. 13, 2020), provides the most comprehensive rationale to date for imposing strict liability on Amazon for third-party sellers' defective products.

The court reasoned that Amazon was an integral part of the overall marketing enterprise for a consumer product, and therefore should bear the cost of injuries resulting from product defects.²

In reversing the grant of summary judgment by the trial court, Bolger emphasized the purposes of strict products liability: to protect consumers in an increasingly complex society, and to expand liability where necessary to account for new transactions and business realities.

The plaintiff-appellant, Angela Bolger, purchased a replacement laptop computer battery on Amazon, which subsequently exploded, causing severe burns.

The Amazon product listing identified "E-Life" as the seller of the battery, but Bolger concluded that this was a fictitious name that Amazon permitted the true third-party seller, Lenoge Technology (HK) Ltd ("Lenoge"), to use.³

Lenoge and the other entities in the chain of distribution could not be made defendants in the action.

Bolger recited a number of facts to support its conclusion that Amazon was a "direct link in the chain of distribution" and a "powerful intermediary" between the consumer and third-party seller.

In particular, Amazon:

•compels the consumer to interact directly with Amazon, not the seller, to place the order;

•created the environment (its website) that allowed Lenoge to offer the replacement battery for sale;

•attracted customers through its own activities;

•set the terms of Lenoge's involvement;

•demanded fees in exchange for Lenoge's participation;

•required Lenoge to indemnify it;

•accepted possession of Lenoge's products;

•registered Lenoge's products in its own inventory system;

•stored Lenoge's products in its own warehouses pursuant to the "Fulfilled By Amazon" program;

•created the format for Lenoge's offer for sale; and,

•allowed Lenoge to use a fictitious name in its product listing.⁴

The court rejected the argument that Amazon could not be held liable in strict liability because it did not meet the definitions of "seller" and "distributor," noting that, under California law, such definitions do not control the scope of strict liability.

In reaching this conclusion, Bolger found two older, pre-internet cases to be instructive, Barth v. B.F. Goodrich Tire Co., 265 Cal. App. 2d 228 (1968) and Canifax v. Hercules Powder Co., 237 Cal. App. 2d 44 (1965).

In Barth, the court rejected the argument that either transfer of title or a sale was required for the imposition of strict liability on a distributor and installer where they both were integrally involved in the distribution of the manufacturer's tires.

In Canifax, the court imposed strict liability on a wholesaler that did not manufacture or possess the dynamite fuse at issue, but did bill the customer and pay the manufacturer's invoice.

In addition, Bolger focused on several policy considerations underlying the doctrine of strict liability. First, Amazon was the only member of the distribution chain available to the plaintiff, especially because Amazon enables sellers with little presence in the U.S. to sell products to consumers.⁵

Second, Amazon plays a large role in making sure that third-party products are safe, and its current efforts demonstrate that it has and had the ability to exert its influence on third-party sellers.

For example, it monitors and tracks consumer complaints, requires third-party sellers to comply with applicable laws and regulations, and has the power to require proof of such compliance and suspend sales of certain products.⁶

Additionally, products sold on Amazon have an "implied representation of safety."⁷

Third, Amazon is in a position to adjust the cost of compensating injured plaintiffs between itself and the third-party sellers, and already does so by imposing continuing contractual duties on such sellers, including the requirement that third-party sellers broadly indemnify Amazon.⁸

Bolger also rejected an additional argument by Amazon, that the federal Communications Decency Act ("CDA"), Title 47 United States Code section 230, shielded it from liability.

Section 230 provides in relevant part that "[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider."⁹

Although this section immunizes internet service providers from liability as publishers of third-party content, the court concluded that Bolger's claims were predicated on Amazon's own activities, not its status as a speaker or publisher of third-party content.¹⁰

As the court observed, "[t]he 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."¹¹

Although Bolger offers the most comprehensive argument to date for imposing strict liability on Amazon, it follows in the footsteps of two other reported decisions.

Last year, in State Farm Fire & Cas. Co. v. Amazon.com, Inc., 390 F. Supp. 3d 964, 972–73 (W.D. Wis. 2019), the federal district court, interpreting Wisconsin law, held that Amazon could be held liable for strict liability in connection with the sale of a defective bathtub faucet adapter that malfunctioned and caused extensive property damage.

The court found that Amazon was a critical component of the chain of distribution, deeply involved in the transaction that resulted in the adapter being delivered to Wisconsin.

The court also reasoned that earlier cases established that Wisconsin did not require formal transfer of ownership, and that holding Amazon liable served the purposes of the state's strict liability doctrine, particularly because neither the unknown manufacturer nor the Chinese distributor, XMJ, was amenable to suit in Wisconsin.

Finally, the court rejected Amazon's arguments regarding the CDA, concluding that the strict products liability claims focused on Amazon's role in the distribution chain and Amazon's own conduct.

Shortly after the district court's order denying Amazon's motion for summary judgment, the parties reported the case settled on the court docket.

In Oberdorf v. Amazon.com, Inc., 930 F.3d 136, 142 (3d Cir.), vacated and reh'g en banc granted, 936 F.3d 182 (3d Cir. 2019), the plaintiff, Heather Oberdorf, purchased a dog collar on Amazon from a third-party seller, The Furry Gang, which shipped the collar from Nevada to Oberdorf.

After she received the collar, Oberdorf attached a retractable leash to the collar, and during a walk, the D-ring on the collar broke, resulting in a recoiling of the leash that permanently blinded her in one eye.

The district court granted summary judgment in favor of Amazon on the ground that it was not a product seller.

A divided panel of the Court of Appeals for the Third Circuit reversed and vacated that judgment in part, concluding that the following four policy considerations supported the imposition of strict liability:

•Amazon was the only member in the chain available to the plaintiff, as neither Oberdorf nor Amazon could locate The Furry Gang, which had not had an active account on Amazon since May of 2016;

•imposition of strict liability would incentivize safety;

•Amazon is positioned better than the plaintiff to prevent circulation of the defective product; and,

•Amazon can distribute the costs of strict liability.¹²

In addition, the court relied upon a Pennsylvania Superior court decision, Hoffman v. Loos & Dilworth, Inc., 452 A.2d 1349 (1982), holding that a sales agent could be subject to strict liability even though the agent did not take possession or title to the linseed oil at issue.

Hoffman stated that strict liability in Pennsylvania is properly extended "to anyone 'who enters into the business of supplying human beings with products which may endanger the safety of their persons and property.'"¹³

The court also concluded that the CDA did not immunize Amazon from liability to the extent that Oberdorf's claims related to Amazon's roles in the sales process.¹⁴

After Amazon filed a petition for rehearing, the Third Circuit, sitting en banc, certified a question of law to the Pennsylvania Supreme Court to determine whether Pennsylvania law requires the one-step analysis employed by the Third Circuit panel, or a two-step analysis, with the first step being a determination of whether a defendant is in the business of selling the kind of product at issue when the product was not possessed or owned by Amazon.

As of this writing, the certified question is pending before Pennsylvania Supreme Court, and neither of the parties has submitted their briefs.

If Bolger is not reversed on appeal, it and State Farm may be viewed by other courts as significant precedents in analyzing whether Amazon should be subject to the imposition of strict liability.

Nevertheless, there are a number of reasons why other states may not accept either the results or rationales in these cases.

First, differences in state law may lead to different conclusions about whether Amazon is subject to strict liability.

States vary in their approaches to strict liability, and Bolger is most likely to be viewed as persuasive by courts in those states that currently apply the doctrine to all sellers in the chain of distribution.

Second, there may be factual differences that lead to different outcomes, even if the state laws appear the same.

For example, consistent with the general law in some states applicable to non-internet platforms, Amazon might be considered a product seller subject to strict liability in cases where it is the only defendant, but not in cases where there is another viable defendant.

Similarly, Amazon might be considered a product seller in a case where it was in actual possession of product, but not in a case where it was not. In Bolger, for example, Amazon had possession of the replacement computer battery, but in Oberdorf it did not have possession of the dog leash.

Although Bolger and the vacated decision in Oberdorf arrived at similar conclusions, the courts' policy-driven analyses enabled this conclusion. In states where such considerations are not predominant, these factual distinctions may prove pivotal.

1 See, e.g., Erie Ins.Co. v. Amazon.com, Inc., 925 F.3d 135, 141 (4th Cir. 2019) (relying on dictionary definitions); Eberhart v. Amazon.com, Inc., 325 F. Supp. 3d 393, 398 (S.D.N.Y. 2018) (relying on requirement of title transfer).

2 Bolger, at *14.

3 Id. at *1, 4.

4 Id. at *2, 10–11.

5 Id. at *12.

6 Id.

7 Id. at *13 (quoting Peterson v. Superior Court, 10 Cal.4th 1185 (1995).

8 Id.

9 47 U.S.C. § 230(c)(1).

10 Bolger, at *20.

11 Id. (citing HomeAway.com, Inc. v. City of Santa Monica, 918 F.3d 676, 682–83 (9th Cir. 2019)).

12 Oberdorf, 930 F.3d at 145–47.

13 Id. at 148 (quoting Hoffman v. Loos & Dilworth, Inc., 452 A.2d 1349, 1353 (1982)).

14 Oberdorf, 930 F.3d at 153.