Trial News

In a case brought by a family who lost their home after a hoverboard purchased on Amazon.com allegedly triggered a fire, the Sixth Circuit held that Amazon assumed a duty to warn of the risk of fire. Although Amazon was not a “seller” of the product under the Tennessee Products Liability Act (TPLA), the court said Amazon assumed a duty to provide an adequate warning of the risk of fire and explosion by sending emails to hoverboard purchasers about safety issues with rechargeable lithium-ion battery products. The decision sends a message to online retailers that they may be held liable for providing incomplete warnings. (Fox v. Amazon.com, Inc., 2019 WL 2417391 (6th Cir. June 10, 2019).)

In November 2015, Megan Fox purchased a hoverboard from W2M Trading Corp. for her son using Amazon.com. The hoverboard was shipped via Federal Express from China in a box marked “Amazon” with no information about the product seller or manufacturer. It’s unclear whether W2M or Amazon shipped the hoverboard. But Amazon sent the purchase receipt, which included the phrase “Sold by -DEAL-”—Amazon contends that is the name W2M uses when selling products on Amazon.com.

On Dec. 10, 2015, Amazon’s product safety team completed an investigation into the safety of hoverboards like the one Fox purchased and issued a written report that identified 17 complaints of hoverboard fires and explosions from hoverboards purchased on Amazon.com. Amazon then suspended all hoverboard sales and sent a “non-alarmist email” to hoverboard purchasers about reports of safety issues with products containing rechargeable lithium-ion batteries such as hoverboards. The email was sent to Fox, but she did not recall receiving it. In January 2016, the Foxes’ home was consumed by fire after their son played with the hoverboard and left it on the first floor by a couch. Two of the Fox children were trapped during the fire and were injured while being evacuated from second floor windows.

The Foxes filed suit in Tennessee district court in October 2016, alleging Amazon knew of the hoverboard’s fire risk and failed to adequately warn purchasers. The plaintiffs also alleged that Amazon was liable as a seller under the TPLA and had a duty not to sell or distribute a defective or unreasonably dangerous product. The district court granted Amazon summary judgment, and the Foxes appealed.

The Sixth Circuit first considered whether Amazon was a seller under the TPLA. Amazon argued that a seller must be engaged in transferring title and that it never held title to the hoverboard in this case. However, the TPLA defines seller more broadly to include “lessors” and “bailors” that would not necessarily transfer title. A TPLA “seller” need not transfer title to be subject to a products liability claim for breach of implied warranty, the court said—it just must “exercise[e] sufficient control over a product in connection with its sale, lease, or bailment.” Here, however, the court said, Amazon did not exercise sufficient control because it did not choose to offer the hoverboard for sale, did not set the price, and did not make representations about the hoverboard’s safety on its web platform.   

 The court then analyzed whether Amazon had assumed a duty to act under Tennessee tort law and The Restatement (Second) of Torts §§323 and 324A. The court focused on §324A, which addresses liability to third parties when one undertakes to render services to another, and found this provision dictated Amazon’s liability to Fox’s family members. The court said that the lower court had incorrectly held that §324A does not apply to the Foxes’ claims, because Amazon’s negligent warning had “caused physical harm to the other members of [Fox’s] family.” By emailing Fox in December 2015, Amazon had “plainly sought to warn her of the dangers posed by the hoverboard” and in doing so, had assumed a duty to provide an adequate warning.

The court reversed dismissal of the Foxes’ duty-to-warn claim, concluding that a genuine issue of material fact existed as to whether the email to Fox was a negligent warning because it did not include information about the risk of fire or explosion and did not indicate that Amazon had suspended hoverboard sales worldwide. The court also concluded that a genuine issue of material fact existed as to whether Fox had relied on the email in keeping the hoverboard in her home.     

Nashville, Tenn., attorney Steven Anderson, who represents the Foxes, said he was very pleased with the Sixth Circuit’s ruling. “In emailing [customers] about potential dangers, Amazon had assumed a duty to adequately warn hoverboard purchasers. Now a jury will have an opportunity to determine whether Amazon adequately fulfilled that duty.” Calling the emailed warning “tepid at best,” Anderson said it was intended to “preclude a mass influx of returns and refund requests following news of the product’s fire risk.” While the court fell short of finding Amazon to be a “seller” under the TPLA, he hopes the decision will “send a message to online retailers to provide more fulsome warnings rather than assume that by saying nothing, they will be excused of liability.”