Business Law

Third Circuit Extends Product Liability to Online Platforms

by Bennet Kelley

Generally, under product liability law, the seller, distributor or manufacturer of a defective product can be liable strictly liable for an injury from a defective product.  In Oberdorf v Amazon.com, Inc., 930 F.3d 136 (July 3, 2019), the Third Circuit has extended this principle to online marketplaces in a landmark ruling.

The Plaintiff in Oberdorft was rendered permanently blind in one eye as a result of an accident involving a defective dog leash she bought through Amazon.  The District Court granted Amazon.com summary judgment finding that (i) Amazon cannot be sued under Pennsylvania’s strict products liability law because it does not constitute a “seller” within the meaning of Pennsylvania strict liability law, and (ii) Plaintiff’s claims are barred by Section 230 of the Communications Decency Act (CDA230) because she seeks to hold Amazon liable for its role as the online publisher of a third party’s content.

In reversing, the Third Circuit relied on factors enumerated by the Pennsylvania Supreme Court for determining whether a party is a “seller” for product liability purposes.  These factors include whether the seller is the only actor who is available for redress; whether the imposition of liability would serve as an incentive to safety; whether the actor is in a better position than the buyer to prevent the circulation of defective products and whether the act can distribute costs associated with liability to others.

The Court found that these factors favored imposing liability on Amazon, noting that “[w]e do not believe that Pennsylvania law shields a company from strict liability simply because it adheres to a business model that fails to prioritize consumer safety.”

The dissent argued that Amazon was not a seller for product liability purposes but merely a platform that facilitated the transaction and any liability was barred by CDA230.

Bennet Kelley (@InternetLawCent) is the founder of the Internet Law Center in Santa Monica.

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