Photo: Amazon

Photo: Amazon


Amazon Responsible for 3rd-Party Goods Sold on Its Site, Court Says

There was a recent ruling on the contentious issue of whether e-retailers are liable for goods sold on their platforms.

It was ruled that could be held liable for defective product sold on its site by third party vendors by the United States District Court for the Southern District of Texas. The court’s decision is based on Texas law, according to a note from Michael Ciamaichelo of the White and Williams LLP law firm. However, the case drew interest from outside of Texas. The Washington, D.C.-based United States Chamber of Commerce filed an amicus brief on behalf of the plaintiff.

In the case McMillan v., a plaintiff, Morgan McMillan, sued Amazon for defective product that was sold on its platform. The product in question was a generic Apple TV remote, which the plaintiff’s husband purchased from a Chinese company through the Amazon platform. When the remote was in the plaintiff’s possession, a battery fell out of the product. The plaintiff’s 19-month-old toddler swallowed the battery, which caused permanent damage to her esophagus.

The plaintiff filed a lawsuit against Amazon and the Chinese company for liability, negligence and breach of warranties. Amazon requested that the complaint be dismissed. The company’s lawyers reasoned that Amazon is not a seller under Texas’ product liability statute. However, the court disagreed. It ruled that Amazon was a seller because it was fundamentally involved and had control over the faulty product’s sale.

The ruling is the latest case of legal discussions over the years on whether an e-tailer can be liable for goods sold by third parties on its sites. In the White and Williams note, Ciamaichelo wrote that the decision had the potential to be far reaching.

“Although the analysis regarding whether Amazon is a “seller” under Texas’ product liability statute is fact specific, McMillan suggests that Amazon will be deemed a “seller” (at least in the Southern District of Texas) any time a third-party sells a product through the FBA (fulfillment by Amazon,)” he said.