Amazon Protected By Top Texas Court: What It Means For E-Commerce Businesses
Over the past few years, one of the biggest stories in the world of product liability lawsuits has involved Amazon. The question is simple: is Amazon liable for the safety of the products sold on its platform, even though they are produced by third-party manufacturers? In some states, such as California, courts have surprisingly ruled against Amazon. Similar lawsuits have gained significant traction in Texas, but the Lone Star State has made the decision to shield the tech giant from liability – at least for now.
So what does this mean for e-commerce businesses in Texas? How will this decision impact companies that sell products online? If you are facing a product liability lawsuit in Texas due to merchandise sold online, you should get in touch with a qualified, experienced legal team as soon as possible. Work with professional attorneys who have extensive knowledge of product liability laws, and you stand a much better chance of a positive legal outcome.
McMillan v Amazon
In 2018, Morgan McMillan sued Amazon after her “knockoff Apple TV remote” malfunctioned, causing the battery to pop out. McMillan’s toddler then swallowed the battery, causing esophageal burns. In her lawsuit, she acknowledged that the product was sold and manufactured by a third party in China, not Amazon. However, she still maintained that Amazon was liable.
Part of the reason this lawsuit made it so much further than similar suits was the fact that the remote was sold through the tech giant’s “Fulfillment by Amazon” service. A judge in the Southern District of Texas initially decided that Amazon was liable because the product was placed in the “stream of commerce.” This essentially means that since Amazon was in control of the product’s storage and transport, it should shoulder some liability.
Amazon Wins After Appeal
Inevitably, Amazon appealed the decision. The 5th Circuit Court of Appeals later found that Amazon does not classify as a “seller,” and that it should not be liable for McMillan’s damages. The definition of “seller” proved to be very important in this decision. According to Texas common law, a “seller” is a “person who is engaged in the business of distributing or otherwise placing, for any commercial purpose, in the stream of commerce for use or consumption a product or any component part thereof.” Clearly, Texas courts do not believe that Amazon falls under this definition.
What Does This Mean for Online Sellers?
This decision sets a precedent for product liability lawsuits related to online sales in Texas. According to the decision, platforms cannot be liable for products sold via third-party manufacturers and sellers. If Amazon can get away with it, one would assume that the same protections extend to other platforms, such as eBay, Etsy, and lesser-known websites.
Enlist the Help of a Qualified, Experienced Attorney Today
For help from a skilled Brownsville product liability defense attorney, look no further than Colvin, Saenz, Rodriguez, and Kennamer. We have protected various organizations against legal action, and we can do the same for you. Reach out and book your consultation today.