A remote control with a button battery. Photo: jeab05/Shutterstock.com
After Texas' high court said Amazon isn't a "seller" under Texas law, it took only four days for the U.S. Court of Appeals for the Fifth Circuit to order the dismissal of a family's lawsuit over a remote-control battery that their toddler swallowed.
The Fifth Circuit on Tuesday remanded the case, McMillan v. Amazon.com, and ordered a federal district court to grant Amazon's summary judgment motion. When asked the same question, a federal trial court in New Jersey ruled the same way as the Fifth Circuit, but a state appellate court in California took the opposite approach—it allowed a plaintiff to sue Amazon for a third-party product.
"This interlocutory appeal presents a single, narrow question: May Amazon be held liable as a 'seller' under Texas products-liability law for third-party products sold on Amazon's website and handled through Amazon's Fulfillment by Amazon program," said the Fifth Circuit ruling by Judge Don Willett, joined by Judges Jacques Wiener and Gregg Costa.
The Fifth Circuit asked the Texas Supreme Court to answer that question, since it dealt with the Lone Star State's laws.
On June 25, the high court determined that Texas law said that a "seller" is limited to an entity that relinquishes title to a product at some point in the distribution chain.
Seen that way, Amazon wasn't a "seller," the Fifth Circuit ruled.
In the case, the McMillan family purchased a remote control from a third-party seller on the Amazon platform. The seller used the "Fulfillment by Amazon" program, meaning Amazon's warehouses stored the product and Amazon's workers packaged it for delivery. About a year after the family got the remote, their toddler swallowed its button battery, causing an injury to her esophagus.
The family sued Amazon and the China-based seller of the remote. The Chinese individual or entity never appeared in the lawsuit. Because the courts have now ruled that the McMillans can't sue Amazon either, they will not have any remedy for the girl's injury.
Products liability plaintiffs attorneys across the nation have tried holding Amazon accountable for third-party sellers' dangerous products, and they have had split success.
The question has come up in cases in New York, California, New Jersey, Pennsylvania and several other states. Courts have been split—some ruled Amazon is a seller, and some said no.
For example, the Fifth Circuit now has declined to allow plaintiffs to sue Amazon over third-party products. A federal trial court in New Jersey reached that same conclusion.
Yet the State of California Court of Appeal, Fourth Appellate District, ruled in August 2020 that plaintiffs could hold the platform strictly liable for a third-party's allegedly defective battery that exploded.
Editor's Note: Although not directly insurance-related, these rulings for Amazon and against victims of third-party products may have insurance implications for the third parties involved, if they can be identified, and eventually for Amazon if the company becomes liable for these injuries and damages at some point in the future.
Angela Morris
Angela Morris is ALM Media's Texas litigation reporter. She covers lawsuits in all levels of Texas state and federal courts. Based in Austin, Morris earned journalism and government degrees from the University of Texas at Austin in 2006, and since then, has worked primarily as a reporter and writer, but also has skills in videography, photography and podcasts. Follow her on Twitter at @AMorrisReports.