Wallace v. Tri-State Assembly, LLC
2021 NY Slip Op 06664 (2021)
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Rule of Law:
Under New York law, an online marketplace provider that does not take title to, possess, or control a product sold by a third party on its platform is not a "seller" under the Uniform Commercial Code and cannot be held liable for breach of the implied warranties of merchantability or fitness.
Facts:
- Tyrone Wallace's father purchased an electric bicycle for him on the Amazon.com website.
- The bicycle was listed for sale and sold by Eshion, a China-based third-party vendor.
- Wallace's father also purchased an assembly service through Amazon, which was provided by a separate third-party company, Tri-State Assembly.
- Eshion shipped the bicycle directly to Wallace.
- Amazon never took title to, possession of, or control over the bicycle at any point.
- While Wallace was riding the bicycle after it had been assembled by Tri-State, the handlebars loosened.
- The loosening handlebars caused Wallace to fall and sustain injuries.
Procedural Posture:
- Tyrone Wallace sued Amazon.com, LLC, and others in the Supreme Court, New York County (trial court).
- Amazon moved for summary judgment to dismiss the complaint against them.
- The trial court granted Amazon's motion for summary judgment.
- A final judgment dismissing the complaint as against Amazon was entered on July 24, 2020.
- Plaintiff Wallace, as appellant, appealed the judgment to the Supreme Court, Appellate Division, First Department, with Amazon as the respondent.
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Issue:
Does an online marketplace provider, which facilitates the sale of a product by a third-party vendor but never takes title to or possession of the product, qualify as a "seller" subject to liability for breach of implied warranties under New York law?
Opinions:
Majority - Shulman, J.
No. An online marketplace provider that merely facilitates a transaction between a third-party seller and a buyer, without ever taking title to or possession of the product, is not a 'seller' and cannot be held liable for breach of implied warranties. The Uniform Commercial Code (UCC 2-314, 2-315) explicitly limits liability for breach of implied warranties to sellers. Amazon provided unrefuted evidence that it did not sell, manufacture, distribute, or assemble the bicycle; the third-party seller, Eshion, sold and shipped the product directly to the plaintiff. Citing well-settled New York precedent like Spallholtz v. Hampton C.F. Corp., the court affirmed that liability for breach of warranty may not be imposed on a party outside the manufacturing, selling, or distribution chain. The court characterized Amazon as a 'provider of services' rather than a distributor, as it never held title to the bicycle. The court declined to create an equitable remedy or follow out-of-state precedent that expanded liability under different legal theories, concluding that doing so would contradict established New York law.
Analysis:
This decision reinforces the legal distinction in New York between e-commerce platforms and traditional retailers, shielding marketplace facilitators like Amazon from seller liability under the UCC. By classifying Amazon as a service provider rather than a distributor, the court maintains a narrow interpretation of the 'distribution chain.' This ruling solidifies a significant protection for online marketplaces in New York, placing the burden on consumers to pursue remedies directly from third-party sellers, who may be foreign and difficult to access legally. The decision stands in contrast to a developing trend in some other jurisdictions that are considering expanding liability to e-commerce platforms under different legal theories, such as strict products liability.
