Products Liability Law Reporter

A federal district court held that Amazon was not liable to a family whose home burned down in a fire linked to a hoverboard purchased on Amazon’s website two months before the fire.

David and Kim Carpenter ordered a hoverboard with a lithium-ion battery on Amazon’s website as a gift for their daughter. The product was sold and fulfilled by a Chinese third-party seller, Paradise 00. The following month, Amazon emailed Kim and other hoverboard customers, alerting them of news reports regarding hoverboard and lithium-ion battery safety issues. The email did not state that Amazon had removed the hoverboards from its website, nor did it explain the risk of fire from hoverboards. Several weeks later, the Carpenter’s home burned down in a fire allegedly caused by the hoverboard. The family sued Amazon, alleging, among other claims, fraudulent concealment, strict liability, and negligence. The defendant moved for summary judgment. 

Granting the motion, the court found that misrepresentation and concealment amounts to fraud where there is reliance on the alleged concealment. Here, the court said, there is no evidence Kim relied on the defendant’s alleged concealment—specifically that it failed to disclose the nature and existence of the hoverboard defect—because she did not see the email that contained the purported misrepresentations. Therefore, the court concluded, the plaintiffs could not have acted on an alleged misrepresentation they never received.

Turning to the issue of strict liability, the court noted that a party outside a product’s vertical chain of distribution may be strictly liable where it plays an integral role in the product’s production and marketing and profits from placing it into the stream of commerce. Liability under this so-called marketing enterprise doctrine requires proof that the defendant received a direct financial benefit from the sale of the product, the defendant’s role was integral to the business enterprise and was a necessary factor in bringing the product to the initial consumer market, and the defendant had control or influence over the manufacturing and distribution process. The court found that here, the plaintiffs offer no specific evidence that Amazon’s conduct was a necessary factor in bringing hoverboards to the initial consumer market or that the company played a dominant role in creating the market for hoverboards. There is no evidence that but for Amazon’s conduct, the initial consumer market for Paradise 00’s hoverboards would not have existed.

Similarly, the court concluded that the plaintiffs failed to show a specific duty on the part of the defendant to protect customers from defective products. Amazon’s role as a marketplace provider does not automatically establish a general legal duty justifying negligence liability under California law, the court said.

Citation: Carpenter v. Amazon.com, Inc., 2019 WL 1259158 (N.D. Cal. Mar. 19, 2019).