A federal appeals court last week ruled against Amazon.com in a case that could expose the online retailer to lawsuits from customers who buy defective products from third-party vendors through its website.
Numerous other courts, including two federal appeals courts, have held that Amazon cannot be held liable as a seller of products from third-party vendors. The new ruling from the 3rd U.S. Circuit Court of Appeals in Philadelphia, which reversed a lower court decision, appeared to be the first to buck that trend.
In addition to selling its own inventory, Amazon allows third-party vendors to list products for sale on its website. Such vendors may store their products in Amazon’s warehouses or ship them directly to customers.
In last Wednesday’s opinion, Circuit Judge Jane Richards Roth, writing for a 2-1 majority of a three-judge panel, said Amazon may be liable in part because its business model “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 panel sent the case back to the lower court, which will have to decide whether the leash was actually defective.