Who Pays When Your Amazon Purchase Catches Fire?

As technology develops, one of the most debated issues remains: how much responsibility should internet service providers bear in respect to third party content published through their website?  Is Section 230 of the of the Communications Decency Act a relic of primitive internet usage?  When products are sold through the internet, does responsibility shift to the marketplace provider?
To shed light on the issue, a parallel arises between how consumer law and internet usage is developing.
Take the Texas case where a third-party sold a remote control through Amazon.com.  The remote was purchased and delivered to a customer with no issues.  However, the customer’s nineteen-month-old child later ingested the remote’s battery which resulted in permanent esophagus damage.  Who is responsible for the damages – Amazon or the third-party seller?  (Amazon.com, Inc. v. McMillan, No. 20-0979, 2021 WL 2605885 (Tex. June 25, 2021))
The customer, Ms. McMillin, brought a lawsuit against both.  Ultimately, the Supreme Court of Texas found that legal liability for the personal injury did not lie with Amazon but remained with the third-party seller.  This decision determined who was the “Seller” under Tex. Civ. Prac. & Rem. Code Ann. § 82.001 and the legal framework behind placing items into a stream of commerce.  The dispositive factor was whether or not, at any point during the “chain of distribution”, title to the remote had been transferred to Amazon.  In other words, who owned the remote?
The court found that unless Amazon held and relinquished title, or the “legal right to control and dispose of property” (TITLE, Black’s Law Dictionary (11th ed. 2019)), they could not be considered an actual “Seller” under the law and therefore were not liable for injury.  Even though throughout use of the marketplace Amazon “controlled the process of the transaction and the delivery of the product,” the third-party seller retained title and was thus the liable “Seller.”
These ideas run parallel to those behind Section 230, where internet service providers are not liable for content published through their services.  Under this section, “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” (47 U.S.C. § 230, subd. (c)(1)).  In the McMillin case, the court notes the “significant potential consequences of holding online marketplaces responsible for third-party sellers’ faulty products.”
In a case originating in Arizona, the deciding factor in a strict liability consumer law case again comes down to ownership.  Here, personal injury was incurred by a defective battery in a hoverboard that caught fire which had been sold through Amazon.com.  The court ruled in favor of Amazon after applying state law in a “contextual analysis [that] balanced multiple factors to determine whether a company ‘participate[d] significantly in a stream of commerce.’”  (State Farm Fire & Cas. Co. v. Amazon.com, Inc., 835 F. App’x 213 (9th Cir. 2020))
Under Arizona law, the “realities of the marketplace” bear on the outcome and evaluated using a seven-part test to determine whether strict liability can be held against a party.  This occurs when:
“(1) provide a warranty for the product’s quality; (2) are responsible for the product during transit; (3) exercise enough control over the product to inspect or examine it; (4) take title or *216 ownership over the product; (5) derive an economic benefit from the transaction; (6) have the capacity to influence a product’s design and manufacture; or (7) foster consumer reliance through their involvement.”
In these factors we again see the idea of ownership being used to help draw the line.  Just because Amazon facilitated the sale of defective products through their website, they were not involved enough with the product to actually be liable for its deficiencies.
This trend is not limited to Amazon.com.  Take the example of the consumer in Indiana who purchased a 3D printer through Walmart.com that later caught fire and damaged property.  The consumers, the Terrys, brought a lawsuit for merchantability issues under Indiana Code § 26-1-2-314, which provides that the “warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind.”  (Indiana Farm Bureau Ins. v. Shenzhen Anet Tech. Co., No. 419CV00168TWPDML, 2020 WL 7711346 (S.D. Ind. Dec. 29, 2020))
Here, again, the court determined that Walmart.com was not a “Seller” or “Manufacturer” under the Indiana law and could not be held liable for the damages caused by defective third-party products.
However, law developing out of California reaches a contradictory conclusion.  Here, in a case where an Amazon.com-sold laptop battery caught fire, the court ruled that in regard to strict liability the Communications Decency Act did not offer immunity to internet marketplaces.  The court supported the finding by determining that Amazon played an “’integral part of the overall producing and marketing enterprise.’”  Here, Amazon’s role providing speech, which is immunized, is differentiated from its “role in the chain of production and distribution of an allegedly defective product.”  Bolger v. Amazon.com, LLC, 53 Cal. App. 5th 431, 267 Cal. Rptr. 3d 601 (2020), review denied (Nov. 18, 2020)
The convergence between consumer law and Section 230 helps develop an understanding of how we think about the responsibility of internet service providers when the content or products they facilitate cause damage.  Ultimately, the emerging trend is that a party must in some way own the content in question.

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