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Thomas DeLattre and Glen D. Wieland

Should online retailers share liability for third-party products?

On Behalf of | Apr 15, 2019 | Product Liability |

Product liability cases used to be simpler back when manufacturers sold directly (or nearly directly) to consumers. Liability rested with manufacturers, and there were few middlemen involved in the process.

That’s no longer the reality. As a recent lawsuit demonstrates, blame can be shared by multiple defendants, and it is not always clear what amount of liability each party should assume.

The victims were a Maryland family who received a defective battery-operated headlamp as a gift in 2014. A friend of the family had purchased it on from a Chinese manufacturer. The headlamp overheated and caught fire, completely burning down the family’s home. Thankfully, they had insurance, and their insurer covered their loss for $300,000.

When possible, insurance companies attempt to reclaim payout losses from at-fault parties through a process called subrogation. To that end, Erie Insurance Company sued the Chinese manufacturer and Amazon. The decision to sue the manufacturer was obvious. But should Amazon have been included in the lawsuit?

Amazon’s standard argument in similar situations is that it is not the seller of a product but rather a platform that connects buyers and third-party sellers. Attorneys for Erie, however, claimed that the defective product was warehoused at an Amazon facility, and that under Maryland state law, a seller is defined as “a person who sell or contracts to sell goods.” Together, these details suggest that Amazon played a larger role than simply helping connect buyers and sellers.

A district court judge originally dismissed the claim against Amazon, but Erie recently appealed to a three-judge panel to overturn that decision and reinstate Amazon as a defendant. No timeline has been set for the when the panel’s ruling will be announced.

Retail is now an international web of buyers, sellers and intermediaries. And this case shows that when a defective product harms consumers, it is not always clear who shares blame and liability. Thankfully for the victims, their claim was paid by their insurer and they didn’t have to pursue a product liability claim on their own. But the legal question posed in this case would apply to other product liability claims as well, regardless of who brings the lawsuit.

If you or a loved one has been harmed by a dangerous and defective product, seeking justice and compensation can feel overwhelming. That’s why you should discuss your rights and legal options with an experienced personal injury attorney.

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