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Court Delivers Knockout Blow to Amazon on Product Liability

April 26, 2021 Blog,Ecommerce

On April 26, 2021, Division Eight of the California Court of Appeal for the Second District delivered another decisive loss to Amazon and its quest to avoid liability for products sold on its online marketplace. In Loomis v., LLC, Case No. B297995 (2021), the court held Amazon strictly liable for a defective hoverboard that was purchased through Amazon and that later caught fire. This ruling is particularly significant because the hoverboard was not sold with “Fulfillment by Amazon,” meaning Amazon never had possession of the hoverboard. Instead, it shipped directly from the third-party vendor overseas.

Despite this fact, the Loomis court followed last year’s victory in Bolger v., 53 Cal.App.5th 431 (2020) to hold that Amazon was in the vertical chain of distribution of the hoverboard. In Bolger, the court held Amazon strictly liable for an exploding laptop battery that was fulfilled by Amazon. The Loomis court agreed with the holding in Bolger and found it extended even to products that were not fulfilled by Amazon. The court also examined other California precedent and the policy considerations underlying strict product liability, finding that both favored Amazon’s liability even when Amazon does not take possession. In a lengthy concurring opinion, Justice John Wiley explained how holding Amazon liable comports with the overarching policy goal of tort liability to minimize the “social cost of accidents,” i.e., the cost of injuries combined with the cost of avoiding them.

This holding will have sweeping implications for other online marketplaces that use a direct-ship method rather than taking possession of the product. Amazon has not yet said whether it will petition the California Supreme Court for review.

The Loomis family was represented by Christopher B. Dolan and the Dolan Law Firm. Casey Gerry partner Jeremy Robinson, the architect of the Bolger win, was co-counsel on the appeal.