Amazon’s Blame for Product Defect Injuries Gets Full Court Look

Amazon is set to argue it isn’t a “seller” subject to product liability claims under Pennsylvania law when the full Third Circuit hears a closely watched case Wednesday involving a woman injured by an allegedly defective dog collar.

A panel of the Third Circuit was the first and only federal appeals court to find Amazon subject to liability as the seller of an item offered by a third party, when it ruled 2-1 in July in favor of plaintiff Heather Oberdorf, who alleges she purchased the pet product from a Chinese company through Amazon’s marketplace.

But that decision was vacated when the full court granted rehearing.

The U.S. Court of Appeals for the Third Circuit won’t hear oral argument on a separate issue that remains in the case, whether the Communications Decency Act immunizes the web platform provider from suit.

Meanwhile, a bill is pending in the Pennsylvania Senate that would redefine “product seller.” It wouldn’t apply to Oberdorf’s case, but could protect online platforms like Amazon from product liability suits in the future if enacted, according to defense attorney Louis C. Long of Thomas, Thomas & Hafer LLP in Pittsburgh.

‘Supplying’ of Product Critical

Oberdorf alleges the D-ring on her dog’s collar broke when the dog lunged, causing a retractable leash to spring back and blind her in one eye.

Amazon said in a brief to the full court that determining the company to be a seller would extend Pennsylvania law, which a federal appeals court isn’t allowed to do.

Under Pennsylvania law, a seller must “supply” the item in question, Amazon said in its brief to the court. And that involves selecting the product, which Amazon said it never does when it comes to marketplace sales.

But Amazon defines “supplying” too narrowly, Oberdorf said in her own appellate brief.

Other factors under Pennsylvania law also support categorizing Amazon as a seller, she said. It has enough power over third-party sellers to create incentives for them to offer safe products, she said. And it can make sure that such sellers carry liability insurance and are amenable to suit in the U.S., she said.

‘Innocent Seller’ Law

The product seller bill in the legislature, S.B. 516, “would be beneficial to Amazon” or other platforms if enacted, said Curt Schroder, a former state lawmaker and executive director of the Pennsylvania Coalition for Civil Justice Reform, which represents business interests.

“We can either move into these modern methods of commerce that the internet provides for or be hamstrung by archaic laws,” he said.

But it’s not just for e-commerce, he said. “Brick-and-mortar retailers in Pennsylvania have long wanted an ‘innocent seller’ statute,” he said.

Plaintiffs’ attorney Chip Becker of Kline & Specter PC in Philadelphia also said the bill isn’t limited “to addressing the narrow issue presented in the Oberdorf case.”

“Instead, it would generally immunize product sellers and distributors from strict liability in Pennsylvania law, profoundly reducing the right to a remedy in Pennsylvania law to the detriment of everybody in Pennsylvania who purchases and uses products,” he said in an email.

While Long described the Republican-dominated legislature as having a “business-oriented bent,” he noted the governor is a Democrat, and said he doesn’t know how the bill will fare.

Ohio, Ninth Circuit Cases

Amazon’s liability for defective products isn’t only being weighed in Pennsylvania.

Ohio’s top court is scheduled to hear oral arguments in April on its role in the death of a teen who died from caffeine powder sold on its website.

And, although no argument has yet been scheduled, the Ninth Circuit is considering Amazon’s liability for fire damage caused by a defective hoverboard under California law.

The case is Oberdorf v. Amazon.com, Inc., 3d Cir. en banc, No. 18-01041, oral argument scheduled 2/19/20.