Welcome

Amazon Contests Injury Liability as California Weighs Bill

Aug. 10, 2020, 8:56 AM

Amazon.com Inc. is expected to tell a California appeals court Tuesday that a woman injured in a laptop battery fire can’t hold the company liable under state law for defective products sold on its marketplace.

Oral argument is scheduled in Angela Bolger’s suit before the San Diego-based California Court of Appeal, Fourth District, Division One.

But the state appeals court isn’t the only forum in California weighing Amazon’s potential product-related liability under state law.

In Sacramento, state lawmakers are considering legislation that would treat Amazon and other “electronic retail marketplaces” like retailers for purposes of California strict liability law. The bill passed the California State Assembly in June, 54–14, and is currently pending before a State Senate committee.

And a state-law product case is also currently pending with the U.S. Court of Appeals for the Ninth Circuit, based in San Francisco.

The state appeals court’s decision in Bolger’s case will likely precede the Ninth Circuit’s, which hasn’t set a specific argument date yet in Carpenter v. Amazon, even though it is seeking one before January.

Elsewhere, the top courts of Ohio and Pennsylvania are considering whether Amazon is a “seller” or “supplier” under those states’ laws, and the Fifth Circuit is hearing a case under Texas law.

More Than ‘Service Provider’

In the California state case, Bolger alleges she bought a Lenoge Technology HK Ltd. replacement laptop battery in a “marketplace” sale by a third-party seller, E-Life.

Amazon allegedly stored the battery in its warehouse, packaged it, added a special lithium-ion battery shipping label, and shipped it to Bolger under a “Fulfillment by Amazon” arrangement with the seller, which was later identified as Lenoge.

Amazon allegedly received reports of battery fires and banned Lenoge from selling on the site a few months after Bolger’s purchase. A month later, Bolger’s battery caught fire when she had the computer on her lap, causing third-degree burns to her arms, legs, and feet.

A trial court ruled in Amazon’s favor, saying the company was a service provider not covered under state product liability law. It wasn’t a seller, a distributor, or a participant in a “marketing enterprise,” it said.

It also held, however, that the Communications Decency Act, which protects internet platforms from liability for publishing others’ speech and is another significant defense for Amazon, wouldn’t have immunized the company from Bolger’s claims had they been allowed under state law.

Bolger has appealed the service-provider finding.

She argues that strict liability is “broad” and “flexible” in California, and not dependent on a sale or the transfer of title, as in some other states. Amazon put the product into a chain of distribution, fitting the parameters for strict liability under California law, according to Bolger’s September 2019 opening brief.

“Amazon’s website sells products for people to buy, not services,” Bolger says. The trial court said Amazon’s “service” was “for sellers to offer their products and for buyers to purchase them,” which is the same as being a retailer, she argues.

Law Not So Flexible

Amazon disagrees, saying it’s neither a seller nor a distributor under state law when it comes to marketplace sales.

Being a “seller” isn’t “a malleable concept that can be stretched to encompass a service provider that never owned or controlled the product,” it argues in a response brief filed in December.

“For that reason, nearly every court nationwide to have considered this issue has held that Amazon is not the seller of products sold by third parties on Amazon.com,” it says.

Comparisons to service providers like auctioneers are apt, it argues. “Amazon provides the place—a website rather than a physical auction house—where others sell products.”

Providing that place doesn’t make a company strictly liable for others’ products, it says.

Amazon also argues the CDA protects it. The law “applies even though the harm occurred offline” because publication of third-party content was the only link between Amazon, Bolger, and her injury, the company says.

But Bolger says she isn’t seeking to hold Amazon liable as a publisher of the battery offer. Rather, “Amazon is liable to Ms. Bolger because it sold her a defective product sitting in its warehouse,” her reply brief says.

The consumer-oriented law firm Public Justice and Consumer Attorneys of California agree. California’s policies of protecting consumers would be served by permitting the suit against Amazon, which has “upended the consumer marketplace, exerting control over every aspect of its sales.” according to their friend of the court brief.

The U.S. Chamber of Commerce, meanwhile, supports Amazon, and says in its amicus brief that Bolger is seeking to expand strict liability.

And the tort system imposes costs on businesses that are passed on to consumers, the Chamber says. At “a time in our history when innovation is essential to America’s economic competitiveness, strict liability reduces the incentives for innovation, competition, and entrepreneurial activity,” it says.

The California Court of Appeal issues decisions within three months of oral argument.

Casey, Gerry, Schenk, Francavilla, Blatt & Penfield LLP represents Bolger. Perkins Coie LLP represents Amazon.

Lieff Cabraser Heimann & Bernstein LLP and Siminou Appeals Inc. represented Public Justice and CAC. Baker Botts LLP represented the Chamber.

The case is Bolger v. Amazon.com, Inc., Cal. Ct. App., 4th Dist., No. D075738, oral argument 8/11/20.

To contact the reporter on this story: Martina Barash in Washington at mbarash@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Steven Patrick at spatrick@bloomberglaw.com

To read more articles log in.

Learn more about a Bloomberg Law subscription.