The Third Circuit is the first federal appeals court to hold that Amazon.com Inc. is a product “seller” that can be held liable under state law for sales on its marketplace.

In a divided July 3 ruling, the court said Amazon is subject to liability under Pennsylvania law for an eye injury that was allegedly caused by a retractable leash recoiling from a defective dog collar sold on the company’s website.

Pennsylvania uses guidelines used by some other states as...