Oberdorf v. Amazon.com Inc.
930 F.3d 136 (2019)
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Rule of Law:
Under Pennsylvania law, an online marketplace that plays a significant role in the sales process for products from third-party vendors can be held strictly liable as a 'seller' for injuries caused by a defective product. The Communications Decency Act does not shield the marketplace from such liability, except for claims based on a failure to warn, which are treated as editorial functions.
Facts:
- Heather Oberdorf purchased a dog collar on Amazon.com.
- The collar was listed for sale and sold by a third-party vendor named 'The Furry Gang'.
- Amazon processed the payment for the collar, but The Furry Gang shipped the product directly to Oberdorf from Nevada.
- While Oberdorf was walking her dog on a retractable leash attached to the collar, the dog lunged.
- The D-ring on the dog collar broke, causing the leash to recoil and strike Oberdorf in the face.
- The impact shattered her eyeglasses, resulting in permanent blindness in her left eye.
- Following the injury, neither Oberdorf nor Amazon was able to locate any representative of The Furry Gang, which no longer had an active account on Amazon.com.
Procedural Posture:
- Heather Oberdorf filed a complaint against Amazon.com in the United States District Court for the Middle District of Pennsylvania.
- Oberdorf's complaint included claims for strict product liability and negligence.
- Amazon moved for summary judgment, arguing it was not a 'seller' under Pennsylvania law and that the Communications Decency Act (CDA) barred the claims.
- The District Court granted Amazon's motion for summary judgment on both grounds.
- Oberdorf, as the appellant, appealed the District Court's judgment to the United States Court of Appeals for the Third Circuit, with Amazon as the appellee.
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Issue:
Under Pennsylvania law, is an online marketplace provider, like Amazon, that facilitates sales by third-party vendors but does not hold title to or possess the goods, considered a 'seller' subject to strict products liability for a defective product? And secondarily, does the Communications Decency Act (CDA) bar such products liability and negligence claims?
Opinions:
Majority - Roth, Circuit Judge
Yes, an online marketplace provider like Amazon is a 'seller' subject to strict liability, and No, the CDA does not bar most of the claims. The court determined that Amazon qualifies as a seller under Pennsylvania's strict products liability law by applying the four-factor test from 'Musser v. Vilsmeier Auction Co.' First, Amazon is the only member of the marketing chain available for redress, as it enables third-party vendors to conceal their identity. Second, imposing liability provides an incentive to safety, as Amazon exerts substantial control over vendors and can remove unsafe products. Third, Amazon is in a better position than consumers to prevent defective products from circulating due to its control over the platform and its ability to collect customer feedback. Fourth, Amazon can distribute the cost of compensation through indemnification agreements and by adjusting its fees. Regarding the second issue, the court held that the CDA does not bar claims based on Amazon's direct role in the sales and distribution process. However, the CDA does bar Oberdorf's 'failure to warn' claim, as that claim seeks to hold Amazon liable for its editorial function of deciding what content to publish on its product listings.
Concurring-in-part-and-dissenting-in-part - Scirica, Circuit Judge
No, an online marketplace provider like Amazon is not a 'seller' under Pennsylvania law. The dissent argues that the majority expands Pennsylvania law beyond its established boundaries. A 'seller' is almost always an entity that transfers ownership or possession of a product, which Amazon does not do for third-party marketplace sales. Amazon's role is 'tangential' to the sale, akin to an auctioneer, which the Pennsylvania Supreme Court in 'Musser' held was not a seller. The dissent contends that Amazon is a 'product distribution facilitator,' not a seller, and that the policy factors from 'Francioni' should not be used to create liability where the entity is not a supplier in the first place. This opinion concurs with the majority's analysis regarding the application of the Communications Decency Act.
Analysis:
This decision marked a significant departure from the prevailing legal consensus in other jurisdictions, which had consistently held that Amazon was not a 'seller' for strict liability purposes. By classifying Amazon as a seller, the Third Circuit expanded products liability doctrine in Pennsylvania to encompass e-commerce platforms that exercise significant control over their marketplaces, even without taking title or possession of the goods. This ruling heightens the legal risk for online marketplaces and creates an incentive for them to more rigorously vet third-party vendors and their products. It also provides a crucial clarification on the scope of CDA immunity, distinguishing between protected editorial functions (like providing warnings) and unprotected commercial activities (like processing sales and distribution).
