Erie Insurance Co. v. Amazon.com

by
In the underlying action, a customer purchased a headlamp on Amazon's website from a third party seller and then gave it to friends as a gift. After the headlamp's batteries malfunctioned and ignited the friends' house on fire and caused over $300,000 in damages, the insurer of the house paid the loss and, as subrogee, filed suit against Amazon alleging claims of negligence, breach of warranty, and strict liability tort. The insurer argued that Amazon was liable under Maryland law because it was the "seller" of the headlamp. The district court granted summary judgment to Amazon and held that Amazon was immune from suit. The Fourth Circuit held that, although Amazon was not immune from suit under the Communications Decency Act, 47 U.S.C. 230(c)(1), Amazon was not the "seller" of the headlamp and therefore did not have liability under Maryland law for products liability claims asserted by reason of the product's defective condition. The court explained that insofar as liability in Maryland for defective products falls on "sellers" and manufacturers (who are also sellers), it is imposed on owners of personal property who transfer title to purchasers of that property for a price. In this case, there was no evidence to dispute that when Dream Light shipped its headlamp to Amazon's warehouse in Virginia, it was the owner of the headlamp. Furthermore, when Dream Light transferred possession of the headlamp to Amazon, without Amazon's payment of the headlamp's price or an agreement transferring title to it, Amazon did not, by that simple transfer, receive title. There was also no action or agreement that amounted to the consummation of the sale of the headlamp by Dream Light to Amazon. Accordingly, the court affirmed in part and reversed in part. View "Erie Insurance Co. v. Amazon.com" on Justia Law