Back in May I reported that a California Appellate Court held that Amazon can be liable in products liability for products sold by other vendors through Amazon. As this happened, the exact same issue was certified to the Texas Supreme Court, and now we have a ruling.
In direct contrast with the California Appellate Court, the Texas Supreme Court held that Amazon can NOT be liable because it does not act as a seller.
If you are looking for good topic for a law review article, here you go! Now you have two totally opposite views on exactly the same issue.
In both cases Amazon argued that it should not be liable to the consumer because it operates only as a marketplace, not as a seller in the chain of commerce. The court in California did not agree, but the court in Texas did.
The California court found that Amazon operated as a seller, or at least a distributor in the chain of commerce, rather than as a neutral "mall". Amazon handled all product advertising, payment processing, and communication between the buyer and the manufacturer. Also, Amazon may be the only member of the distribution chain reasonably available for an injured consumer to recover damages.
The Texas court held that Amazon did not qualify as a seller because it was not engaged in the business of distributing products through ordinary sales or placing products in the stream of commerce through non-sale commercial transactions, even though Amazon controlled the process of the transaction and the delivery of the product.
It is difficult for me to understand how someone who "controls the process of the transaction and delivery of the product" is not placing the product in the stream of commerce, so my best guess is that the issue comes down to the phrase "ordinary sales."
Courthouse Network News has a short analysis of the case here.
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