925 F.3d 135, 140 (4th Cir. 2019)
In April 2014, Trung Cao, a resident of Montgomery County, Maryland, purchased an LED headlamp online through Amazon.com's website and gave it as a gift to his friends Minh and Anh Nguyen, who lived in Burtonsville, Maryland.1 The headlamp was listed as sold by Dream Light and fulfilled by Amazon.2 Two weeks after delivery, the headlamp malfunctioned from a defective battery or batteries, igniting the Nguyens' house and causing $313,166.57 in damages.3 Erie Insurance Company, the Nguyens' insurer, paid the loss and became subrogated to their rights.4
The transaction document displayed to Cao stated that the headlamp was sold by Dream Light and fulfilled by Amazon.5 Dream Light shipped its inventory of headlamps to an Amazon warehouse in Virginia under the Amazon Services Business Solutions Agreement.6 When Cao's order arrived, Amazon retrieved the headlamp from its warehouse, packaged it, and shipped it via UPS Ground to Cao on April 11, 2014.7 Amazon collected payment from Cao's credit card, deducted its service fee, and remitted the balance to Dream Light.8 Dream Light set the price and created the product description on the website.9
Erie Insurance Company, as subrogee, commenced this action against Amazon asserting products liability claims based on its allegation that Amazon was the "seller" of the headlamp.10 On Amazon's motion, the district court granted summary judgment to Amazon.11 Erie appealed the district court's judgment to the United States Court of Appeals for the Fourth Circuit.12 The appeal was argued on March 21, 2019, before Chief Judge Gregory and Circuit Judges Niemeyer and Motz.13
Whether Amazon.com, Inc. is immune from products liability claims under the Communications Decency Act, 47 U.S.C. § 230(c)(1)?14
The Communications Decency Act provides that no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider. 47 U.S.C. § 230(c)(1).15 Immunity is limited to claims based on the publication of third-party speech and does not extend to liability for the provider's own tortious acts as a seller of defective products.16
No. The products liability claims asserted by Erie are based on Amazon's alleged status as the seller of the headlamp and its own actions in fulfilling the transaction, not on any publication of speech by Dream Light.17 There is no claim that Amazon is liable for a misrepresentation or defamatory content published on its website.18 The claims arise from the defective condition of the product itself.19
Amazon is not immune from the products liability claims under the Communications Decency Act.20
Whether Amazon.com, Inc. is a seller under Maryland law when it provides fulfillment services for a product sold by a third-party seller on its website?21
Maryland products liability law, whether under negligence, breach of warranty, or strict liability, requires attribution of the defect to a seller.22 A seller is defined as a person who sells or contracts to sell goods, meaning one who transfers title to the goods for a price. Md. Code, Com. Law § 2-103(1)(d); § 2-106.23 Entities that merely facilitate the sale without taking title, such as warehousemen or shippers, are not sellers.24
No. Dream Light shipped the headlamp to Amazon's warehouse but retained title to the goods under the agreement. Amazon stored the product, packaged it, and shipped it to Cao but did not hold or transfer title.25 Dream Light set the price and was identified as the seller on the website, while Amazon acted as a service provider in the fulfillment program.26
Amazon is not a seller under Maryland law and therefore has no liability for the defective headlamp.27
Related opinions on this issue
I concur fully in the court's opinion rejecting Erie's claims that Amazon is a seller under Maryland law.28 I write separately to emphasize why this may not always be so.29 Although at the moment, Maryland law supports the result we reach, much of the State's product liability law was adopted at a time when the American economy operated much differently than it does now.30
Amazon disrupts the traditional supply chain.31 By design, Amazon's business model cuts out the middlemen between manufacturers and consumers, reducing the friction that might keep foreign manufacturers from putting dangerous products on the market.32 Indeed, Amazon played an outsized role in the transaction at issue in this case.33
A federal court sitting in diversity, however, must proceed with caution.34