Court Rules Amazon Strictly Liable for Injuries to Consumers from Defective Products Sold by Third
Party Sellers; Significant Implications for Retailers Offering Third-Party Marketplaces
On July 3, 2019, the U.S. Court of Appeals for the Third Circuit in Obrerdorf v. Amazon.com Inc.
ruled that under Pennsylvania law, Amazon is strictly liable for defective products sold by
third-party sellers on their web marketplaces. The ruling has significant implications for
retailers who operate marketplaces utilized by third-party sellers.
The plaintiff, Heather Oberdorf, was permanently blinded in the left eye after a retractable leash
snapped off of her dog s collar when during a walk, the dog lunged. The D-ring on the dog s collar
broke during the lunge, which caused the leash to recoil and hit her face and eyeglasses. Oberdorf
purchased the collar on Amazon.com from a third-party seller who shipped the collar directly to
The court noted that on the Amazon platform, third-party vendors decide which products to sell, the
means of shipping, and product pricing. Amazon lists the products on the Amazon Marketplace,
collects orders from consumers, and processes payments. In exchange for these services, Amazon
collects fees from each third-party vendor. Amazon, in its selling agreement, receives a
royalty-free, non-exclusive, worldwide, perpetual, irrevocable right and licenses to commercially
or non-commercially exploit information provided by third-party sellers.
The court also noted that Amazon offers other services to sellers including, advertising on the
Amazon website, and Fulfillment by Amazon (FBA).
Pursuant to the sales agreement, vendors may not sell items at a higher price than they charge in
other sales channels, nor may they offer lower levels of service. Amazon collects commissions and
per item or monthly fees on the products posted on the marketplace.
The court considered a four-factor test articulated in the Pennsylvania Supreme Court case Musser
v. Vilsmeier Auction Co., Inc.2 relied on by Amazon to support its contention that it should not be
considered the seller:
- Is the actor the only member of the marketing chain available to the individual plaintiff for
- Does imposition of strict liability on the actor serve as an incentive to safety?
- Is the actor in a better position than the consumer to prevent the circulation of defective
- Can the actor distribute the cost of compensating for injuries resulting from defects by charging
for it in his business?
The court determined that all of the above factors weighed in favor of holding Amazon strictly liable for
consumer injuries caused by defective goods purchased on Amazon.com.
Retailers should assess their liabilities related to the relationships they have with third-party sellers in
the wake of this ruling.
Additional news in the regulatory update may be found here.