The 3rd US Circuit Court of Appeals in Philadelphia ruled on Wednesday that Amazon can be held liable under Penn. state law for defective products sold by third-party vendors.
Several other courts, including two appeals courts, have ruled that Amazon was not liable for third-party vendors. The new ruling is the first to buck that trend, which means that this case will almost certainly end up before the US Supreme Court.
Amazon made around $11 billion last quarter from the services it provided to third-party sellers. Statista estimates that around half of the items sold on Amazon are from third-party, including the retractable leash that Heather Oberdorf bought in 2016.
Oberdorf sued Amazon in 2016, saying she was blinded in one eye when a retractable dog leash she bought through Amazon's website snapped and recoiled. Liability for defective products is generally governed by state law, and Wednesday’s ruling is based on the laws of Pennsylvania, where Oberdorf lives.
The seller, The Furry Gang, was based in Nevada at the time, but has since reportedly vanished into the wind.
Circuit Judge Jane Richards Roth wrote in Wednesday's ruling that Amazon may be liable because the company "enables third-party vendors to conceal themselves from the customer, leaving customers injured by defective products with no direct recourse to the third-party vendor".
The case has been sent back to he lower court to decide whether the leash was actually defective.
That is a terrible ruling. Amazon is not the seller; instead it merely processed the transaction. If Amazon is liable then so is Visa (for handling the payment), UPS/Fedex (for handling the package), and the seller's bank (again, for handling the payment).
Deciding that Amazon is liable goes against common sense.
Let's hope the Supreme Court sees it that way, anyway.