Ohio: 'Control' determines whether Amazon is subject to strict liability
2020 PRINDBRF 0286
By James H. Rotondo, Esq., and Andrew M. Ammirati, Esq., Day Pitney LLP
Practitioner Insights Commentaries
November 3, 2020
(November 3, 2020) - Day Pitney attorneys James H. Rotondo and Andrew M. Ammirati discuss the recent Stiner v. Amazon.com decision in Ohio and how it compares to the August Bolger v. Amazon.com ruling in California.
Early in October, the Supreme Court of Ohio issued the most recent appellate court decision on whether Amazon may be subject to strict liability.
In Stiner v. Amazon.com Inc., No. 2019-0488, (Ohio Oct. 1, 2020), at ¶ 1, the court concluded that Amazon was not a "supplier" within the meaning of Ohio's products liability statutes, and therefore could not be held strictly liable. The court declined to consider the policy objectives of products liability law in its analysis, focusing instead on statutory construction and Amazon's limited control over the product.
The appellant, Dennis Stiner, brought suit on behalf of his 18-year-old son, Logan Stiner, who died after ingesting a fatal dose of caffeine powder obtained from a friend, K.K. Several months prior to Logan's death, K.K. performed a product search for "pre-workout" on Amazon's website.
Hard Rhino Pure Caffeine Powder appeared as an option when she clicked on one of the products. The powder was sold by Tenkoris, L.L.C., a third-party vendor, which posted the product on Amazon's website under the storefront name TheBulkSource.1

A question of statutory construction

Stiner brought claims under the Ohio Products Liability Act, Ohio Rev. Code Ann. § 2307.71, which subjects suppliers to product liability in certain circumstances. Accordingly, the court observed that "Stiner's product-liability and negligence claims therefore all depend on whether Amazon is a 'supplier' under the Act."2
Under the Act, a "supplier" includes "[a] person that, in the course of a business conducted for the purpose, sells, distributes, leases, prepares, blends, packages, labels, or otherwise participates in the placing of a product in the stream of commerce."3 Stiner argued that Amazon fit within the statutory language because it "otherwise participates in the placing of a product in the stream of commerce."4
In rejecting Stiner's argument, the court indicated that "the catchall phrase must be read in conjunction with the preceding list of specific actions that may subject a supplier to liability."5
The court relied on its own precedent and the commentary of former U.S. Supreme Court Justice Antonin Scalia and Bryan Garner in observing that "[w]hen, as here, a statute contains a list of specific terms followed by a catchall term linked to the previous list, 'we consider the catchall term as embracing only things of a similar character as those comprehended by the preceding terms.'"6
Neither party cited the court to any relevant legislative history with respect to this issue.
The court did not explicitly accept Amazon's argument that either ownership or physical contact with the product were required, but did conclude that the catchall provision — "otherwise participates in the placing of a product in the stream of commerce" — applied to conduct similar in character to the conduct identified in the preceding list, and that "[a]ll the specified actions involve some act of control over a product or preparation of a product for use or consumption."7
In reaching its conclusion, the court also relied on the language of the next subsection of the Act, which excludes from the definition of supplier those acting solely in a financial capacity with regards to the selling of a product, and those leasing a product in which the "selection, possession, maintenance, and operation of the product are controlled by a person other than the lessor."8
Accordingly, the court held that "a person who 'otherwise participates in the placing of a product in the stream of commerce' must exert some control over the product as a prerequisite to supplier liability."9

The facts make a difference

After identifying the applicable legal standard, the court examined the facts to determine whether Amazon exerted the requisite control. Stiner identified the following set of facts as establishing that Amazon did not have control of the product at issue:
•Tenkoris, the seller of the caffeine powder, had sole responsibility for the fulfillment, packaging, labeling, and shipping of the product directly to customers. Amazon has no relationship with the manufacturer or entities in the seller's distribution channel.
•Tenkoris, not Amazon, decided what to sell on Amazon, and by agreement, took on the responsibility of sourcing the product from the manufacturer until it reached the end user.
•Tenkoris wrote the product description for the caffeine powder that buyers would see on the Amazon marketplace.
•The relevant purchase order clearly stated that the powder was "Sold by: TheBulkSource" and indicated that the buyer should contact TheBulkSource for any questions about the order.
•Amazon never had possession of the caffeine powder and never physically touched the product.10
The court rejected Stiner's argument that Amazon's control over the relationship with Tenkoris, the third-party seller — e.g., Amazon prevents sellers from contacting customers; retains sole discretion to determine the content, appearance, and design of its website; reserves the right to alter the content of product descriptions; and imposes restrictions on pricing — established that Amazon exercised control over the product itself sufficient to make it a "supplier" under the Act.
While these factors may demonstrate the degree of control that Amazon seeks to exert in its relationship with sellers, they do not establish the requisite control over the product itself.11

Declining to entertain policy considerations

The court rejected Stiner's argument that it should take policy considerations into account in determining whether Amazon was a supplier.
Stiner argued that the court should consider the policy objective articulated in Restatement (Second) of Torts Section 402A (1965) — that the burden of accidental injuries caused by products intended for consumption be placed upon those who market them, and be treated as a cost of production against which liability insurance can be obtained — because the court had approved Section 402A as governing products liability claims in Ohio before the effective date of the Act.12
The court concluded that the express language and legislative history of the Act foreclosed Stiner's public policy arguments. The court presumed that the Ohio General Assembly knew the common law when it enacted the Act in 1988, and the General Assembly did not include any language adopting the policy considerations articulated in the Restatement.
Moreover, the Act was later amended to expressly provide that Ohio Rev. Code Ann. §§ 2307.71 through 2307.80 "are intended to abrogate all common law product liability claims or causes of action." Based on that statutory language and the legislative history, the court concluded that the statutory text controlled Ohio's products liability law — not the policy objectives of the Restatement.13
The concurring Justice, who concurred in the judgment only, observed that failing to hold Amazon liable in strict products liability thwarts the objectives of products liability law, and that the imposition of such liability would incentivize Amazon to ensure product safety.
The Justice noted, however, that, although applying a 1980s retail-sales paradigm to e-commerce is inequitable, such concerns are for the legislature to address, because the Act "is worded in such a way that it does not allow us to incorporate in it the role that appellee, Amazon.com, plays when a sale on its website is fulfilled by a third-party merchant."14
Although not discussed in the court's opinion, it may have been significant to the outcome that the court's decision did not leave Stiner without a remedy.
In responding to Stiner's argument that Amazon should be subject to strict liability because it was the "party most likely to compensate plaintiff," Amazon presented evidence in its appellate brief that Stiner had reached "substantial settlements" with three of the defendants: Tenkoris, Green Wave (the importer), and the friend, K.K. Apparently, Stiner never perfected service on the other defendant, the manufacturer in China, CSPC Pharmaceutical Co., Ltd.

A patchwork of strict liability

Stiner was decided about six weeks after the California Court of Appeal, Fourth District's decision in Bolger v. Amazon.com LLC, No. D075738, (Cal. Ct. App. Aug. 13, 2020), which held that Amazon could be subject to strict liability under California law because Amazon was an integral part of the overall marketing enterprise for a consumer product.
Stiner and Bolger demonstrate the importance of the differences in state law to the outcome of each case. The Bolger 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," concluding that such definitions did not control the scope of strict liability under California law.
Instead, it took into account policy considerations under 402A of the Restatement, whereas the Stiner Court could not do so given the express language of Ohio's product liability statutes.
The two cases also demonstrate how different facts may lead to different results. The seller in Bolger participated in the Fulfillment by Amazon program ("FBA") program, where Amazon took possession of and exerted direct control over the product itself, whereas the seller in Stiner did not participate in the FBA program, and Amazon was not responsible for the storage, fulfillment, packaging, or shipping of the order.
Stiner leaves open the possibility that if a product were delivered through Amazon's FBA program, then Amazon might have enough control over the product to be considered a "supplier" under Ohio law.
Participation in the FBA program would seem to satisfy one of the set of facts that Stiner identified as critical to the issue of control. Stiner's favorable citation to Allstate N.J. Ins. Co. v. Amazon.com, Inc., No. 17-cv-2738, (D.N.J. July 24, 2018), however, militates against the likelihood of a different outcome.
In Allstate, the court concluded that, even though the third-party seller had participated in the FBA program, the FBA program did not grant Amazon control over the product because Amazon's only role was locating, boxing, and shipping an already packaged and assembled product.15
It remains to be seen how a plaintiff might establish the requisite degree of control by Amazon to hold Amazon strictly liable under Ohio law, but it is clear that plaintiffs will be playing defense in future litigation as Amazon now has another favorable decision to add to its defensive arsenal in these litigations.
Notes
1 Stiner, 2019-0488, at ¶ 2.
2 Id. at ¶ 12.
4 Stiner, 2019-0488, at ¶ 13 (quoting Ohio Rev. Code Ann. § 2307.71(A)(15)(a)(i)).
5 Id. at ¶ 15.
6 Id. (quoting Fraley v. Estate of Oeding, 138 Ohio St. 3d 250, 255 (2014)) (citing Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 199 (2012)).
7 Id. at ¶ 16.
9 Id. at ¶ 19.
10 Id. at ¶ 20.
11 Id. at ¶ 21.
12 Id. at ¶ 25.
13 Id. at ¶ 27 (quoting Am. Sub. S. B. No. 80, 150 Ohio Law 7915, 7955).
14 Id. at ¶ 31.
By James H. Rotondo, Esq., and Andrew M. Ammirati, Esq., Day Pitney LLP
James H. Rotondo and Andrew M. Ammirati, attorneys at Day Pitney LLP in Hartford, Connecticut, represent corporate clients and entities in a broad range of product liability, negligence, torts, class action and commercial litigation matters. They can be reached at [email protected] and [email protected], respectively.
Image 1 within Ohio: 'Control' determines whether Amazon is subject to strict liabilityJames H. Rotondo
Image 2 within Ohio: 'Control' determines whether Amazon is subject to strict liabilityAndrew M. Ammirati
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