Another Court Gets on (Hover) Board with Online Marketplace Liability for Defective Products

Proskauer - Minding Your Business

Proskauer - Minding Your Business

In two prior blog posts, we covered how online marketplaces, like Amazon, are being held responsible for defective and counterfeit products sold on their platforms.  In the latest development in this space, California’s Court of Appeal (Second Appellate District) determined that Amazon could be held strictly liable for injuries a consumer suffered from a defective hoverboard she bought from the retailer, even though Amazon neither manufactured nor sold the product.  Loomis v. LLC.

The plaintiff in this latest case, Kisha Loomis, bought a hoverboard through the Amazon marketplace. The Amazon marketplace carries both products sold by Amazon and by third parties.  In this case, the hoverboard was sold by a Chinese company called SMILETO. Loomis gave the hoverboard to her son, who charged it in her bedroom.  Then the hoverboard and plaintiff’s bedroom caught fire. Fighting the fire, plaintiff suffered burns to her hand and foot.  She sued Amazon for products liability and fraud. Amazon moved for summary judgment, contending it was not part of the chain of distribution for the defective hoverboard and so was not liable for plaintiff’s injuries. The trial court adopted that argument and granted Amazon’s motion.

The Court of Appeal reversed, finding that there were triable issues of material fact that precluded summary judgment, and holding that a party who has control over and is integral to the chain of commerce, and receives a financial benefit from it, is strictly liable for injury caused by a product’s defects.

This decision follows a similar decision from California’s Fourth Appellate District, a sister district of the Second Appellate District, in Bolger v. LLC, which we covered in a prior post. Bolger involved a defective laptop that exploded and burned a consumer. The Bolger court found Amazon was a direct link in the chain of distribution because Amazon accepted possession of the laptop from the seller, stored it in an Amazon warehouse, attracted Bolger to, showed Bolger a product listing, took her payment for the laptop, and shipped the laptop to Bolger in Amazon packaging.

Similarly, Amazon did several of those things here with Loomis’ hoverboard (although here a third party shipped the product to the consumer). Thus, relying on and echoing public policy considerations discussed in Bolger, the Court found Amazon was not entitled to summary judgment on Loomis’ strict liability claim.

It remains to be seen whether Amazon will appeal this decision. Amazon appealed Bolger, but the California Supreme Court denied Amazon’s petition for review.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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