Erie Ins. Co. v. Amazon.com, Inc. - 925 F.3d 135 (4th Cir. 2019)

Rule:

There is no indication that the term "seller," as used in Maryland's products liability law, should be understood in any manner other than its ordinary meaning. And the ordinary meaning of seller is one that offers property for sale, with sale defined as the transfer of ownership of and the title to property from one person to another for a price. Indeed, the Maryland Uniform Commercial Code adopts this definition precisely. Md. Code Ann., Com. Law § 2-103(1)(d) defines a seller as a person who sells or contracts to sell goods, and Md. Code Ann., Com. Law § 2-106 defines a sale as the passing of title from the seller to the buyer for a price.

Facts:

Trung Cao of Montgomery County, Maryland, purchased a headlamp on Amazon's website and then gave it to friends as a gift. The headlamp's batteries apparently malfunctioned, igniting the friends' house and causing over $300,000 in damages. Erie Insurance Company, which insured the house, paid the loss and now, as subrogee, is pursuing this action to obtain reimbursement from Amazon for negligence, breach of warranty, and strict liability in tort, arguing that Amazon has liability under Maryland law because it was the "seller" of the headlamp. In particular, Erie contends (1) that, based on the services that Amazon provided in the transaction, it was a seller; (2) that, in any event, Amazon was a "distributor," which Maryland law deems to be a seller; and (3) that Amazon was an "entrustee," as the term is used in Maryland's Uniform Commercial Code, and therefore Amazon passed title to the purchaser of the headlamp and thus should be considered a seller. On Amazon's motion, the district court granted summary judgment to Amazon, concluding that Amazon was not the seller of the headlamp and therefore did not have liability for its defective condition. It also held that Amazon was immune from suit under the Communications Decency Act, 47 U.S.C. § 230(c)(1), a federal law protecting internet intermediaries in the online publication of a third-party's information.

Issue:

Is Amazon subject to liability for a defective product that a customer purchased on its website from a third-party seller with Amazon "fulfilling" the transaction by storing the product and shipping it to the customer?

Answer:

No.

Conclusion:

The court held that the district court erred in finding Amazon immune from suit under the Communications Decency Act, 47 U.S.C.S. § 230(c)(1), because the products liability claims were not based on the publication of another's speech. The district court properly found that Amazon did not have liability under Maryland law for products liability claims asserted by reason of the product's defective condition because by providing a website for use by other sellers of products and facilitating those sales under its fulfillment program, it was not a seller, and it did not have the liability of a seller.