Loomis v. Amazon.com LLC
Not reported in text provided (2021)
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Rule of Law:
An online marketplace like Amazon can be held strictly liable under California law for injuries caused by a defective product sold by a third-party seller through its website, as it acts as an integral link in the vertical chain of distribution and satisfies the underlying public policy considerations of strict products liability.
Facts:
- On November 28, 2015, Kisha Loomis ordered a hoverboard from Amazon’s website; the listing identified TurnUpUp (SMILETO), allegedly a China-based company, as the third-party seller.
- Amazon processed Loomis’s payment, transmitted the order to TurnUpUp, facilitated communications between Loomis and TurnUpUp, and received a 15 percent referral fee from the $370 sale of the hoverboard.
- Loomis received the hoverboard on December 16, 2015, and subsequently gifted it to her son.
- On New Year’s Eve, Loomis's son plugged the hoverboard into an outlet in Loomis’s bedroom to charge.
- Later that day, Loomis’s boyfriend discovered a fire burning in her bedroom, with her bed and the hoverboard on fire.
- Kisha Loomis suffered burns to her hand and foot as a result of fighting the fire.
Procedural Posture:
- Kisha Loomis brought suit against Forrinx Technology (USA), Inc. and Doe defendants for products liability and fraud in the Los Angeles County Superior Court (trial court).
- Loomis later amended her complaint to substitute Amazon.com LLC into the lawsuit for a Doe defendant.
- Amazon moved for summary judgment on several grounds, including that it was not within the chain of distribution and that federal law barred Loomis's claims.
- The trial court granted Amazon’s motion for summary judgment.
- Loomis timely appealed the judgment to the California Court of Appeal, Second Appellate District, as Plaintiff and Appellant.
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Issue:
Can Amazon.com LLC be held strictly liable for injuries caused by a defective product sold by a third-party seller through its online marketplace?
Opinions:
Majority - Ohta, J.
Yes, Amazon.com LLC can be held strictly liable for injuries caused by a defective product sold by a third-party seller through its online marketplace. The court adopted the reasoning of Bolger v. Amazon.com, LLC, finding Amazon to be a direct link in the vertical chain of distribution. Amazon placed itself squarely between the seller and buyer by taking the order, processing payment, transmitting the order, facilitating communication, and deducting fees (including a 15% referral fee). These actions, unlike those of a typical mall owner, are consistent with a retailer or distributor. Even if Amazon does not fit a traditional 'seller' definition, the 'stream of commerce' or 'marketing enterprise theory' applies because Amazon receives direct financial benefits (fees), plays an integral role in bringing the product to market (creating a triable issue of fact regarding TurnUpUp hoverboards), and has a substantial ability to influence the manufacturing or distribution process (e.g., by requiring safety certification, indemnification, and insurance). The court rejected Amazon's argument that it is solely a service provider, citing Canifax where a defendant without physical possession or title was still held strictly liable for facilitating a sale. The underlying public policies of strict liability—enhancing product safety (Amazon can exert pressure on sellers), maximizing protection for injured plaintiffs (Amazon may be the only available defendant, as seen with Forrinx), and apportioning costs (Amazon can adjust costs through fees, indemnity, and insurance)—are all furthered by applying strict liability to Amazon's third-party seller model. The court reversed summary adjudication on the negligence claim, finding Amazon failed to meet its burden to demonstrate it owed no duty of care.
Concurring - Wiley, J.
Yes, Amazon.com LLC can be held strictly liable for injuries caused by a defective product sold by a third-party seller through its online marketplace. Justice Wiley emphasized that tort law, particularly strict liability, is fundamentally about minimizing the social costs of accidents through a cost-benefit analysis. Amazon is 'well situated swiftly to learn of and to contain the emerging problem, thereby reducing accidental injuries' and has 'cost-effective options for minimizing accident costs.' Amazon's own admissions (from an online press release cited in its brief) confirm its sophisticated systems, teams, and technologies to prevent unsafe products, continuously scan listings, and notify customers of safety issues. Imposing strict liability on Amazon provides a financial incentive to align its ingenuity with efficient customer safety, thereby encouraging it to undertake (or continue) cost-effective measures to reduce accidents. This 'deep structure of modern tort law' dictates that when efforts to minimize accident costs are inexpensive and effective, courts impose tort duties. The court contrasted Amazon's situation with cases where tort duties were not imposed (e.g., secondhand dealers, finance lessors, certain service providers) because the defendants in those cases lacked cost-effective means to prevent accidents.
Analysis:
This case significantly broadens the scope of strict products liability in California, cementing the precedent that online marketplaces can be held liable for defective third-party products. It emphasizes that the court's role is to adapt tort law to evolving commercial realities, ensuring consumer protection and incentivizing safety in the e-commerce landscape. The decision ensures that injured plaintiffs have a solvent and accessible entity for recourse, particularly when actual manufacturers or distant third-party sellers are unavailable, thereby reinforcing the core public policy goals of strict liability.
