ERIE INSURANCE COMPANY, a/s/o Minh Nguyen and Anh Nguyen, Plaintiff - Appellant,
AMAZON.COM, INC., Defendant-Appellee, and EBAY, INC., Defendant.
Argued: March 21, 2019
from the United States District Court for the District of
Maryland, at Greenbelt. Roger W. Titus, Senior District
Kerry Weston, SACKS WESTON DIAMOND, LLC, Philadelphia,
Pennsylvania, for Appellant.
William Brendan Murphy, PERKINS COIE LLP, Seattle,
Washington, for Appellee.
M. Cohen, SACKS WESTON DIAMOND, LLC, Philadelphia,
Pennsylvania, for Appellant.
D. Miller, Laura Hill, PERKINS COIE LLP, Seattle, Washington,
GREGORY, Chief Judge, and NIEMEYER and MOTZ, Circuit Judges.
NIEMEYER, CIRCUIT JUDGE
main issue before us is whether Amazon.com, Inc., is subject
to liability for a defective product that a customer
purchased on its website from a third-party seller with
Amazon "fulfilling" the transaction by storing the
product and shipping it to the customer.
Cao of Montgomery County, Maryland, purchased a headlamp on
Amazon's website and then gave it to friends as a gift.
The headlamp's batteries apparently malfunctioned,
igniting the friends' house and causing over $300, 000 in
damages. Erie Insurance Company, which insured the house,
paid the loss and now, as subrogee, is pursuing this action
to obtain reimbursement from Amazon for negligence, breach of
warranty, and strict liability in tort, arguing that Amazon
has liability under Maryland law because it was the
"seller" of the headlamp. In particular, Erie
contends (1)that, based on the services that Amazon provided
in the transaction, it was a seller; (2)that, in any event,
Amazon was a "distributor," which Maryland law
deems to be a seller; and (3) that Amazon was an
"entrustee," as the term is used in Maryland's
Uniform Commercial Code, and therefore Amazon passed title to
the purchaser of the headlamp and thus should be considered a
Amazon's motion, the district court granted summary
judgment to Amazon, concluding that Amazon was not the seller
of the headlamp and therefore did not have liability for its
defective condition. It also held that Amazon was immune from
suit under the Communications Decency Act, 47 U.S.C. §
230(c)(1), a federal law protecting internet intermediaries
in the online publication of a third-party's information.
we conclude that in this case Amazon is not immune under
§ 230(c)(1), we do agree with the district court that,
in the circumstances of the transaction before us, Amazon was
not the "seller" of the headlamp and therefore did
not have liability under Maryland law for products liability
claims asserted by reason of the product's defective
April 9, 2014, Trung Cao, a resident of Montgomery County,
Maryland, purchased online an LED headlamp - "for
cycling, camping, [and] hiking" - and gave it as a gift
to his friends, Minh and Anh Nguyen, who lived in
Burtonsville, also in Montgomery County. Two weeks later, the
headlamp malfunctioned, supposedly from a defective battery
or batteries, igniting the Nguyens' house and causing
$313, 166.57 in damages. Erie Insurance Company, the
Nguyens' insurer, paid the loss.
purchased the headlamp on Amazon's website, and the
document evidencing the transaction stated that the headlamp
was "sold by: Dream Light" - and "Fulfilled
by: Amazon." There can be no dispute that this
information was displayed to Cao on the website when he
purchased the headlamp. The headlamp was paid for by credit
card and delivered to Cao on April 11, 2014, by UPS Ground.
arrangement between Dream Light and Amazon was governed by
Amazon's comprehensive "Amazon Services Business
Solutions Agreement" and included
"fulfillment" services offered by Amazon. Under the
fulfillment program, Amazon provided logistics services for a
fee. The seller could ship its inventory to an Amazon
warehouse for storage and, once an order was received online
for a product, Amazon would retrieve the product from
inventory, box it, and ship it to the purchaser. In this
case, Dream Light shipped its headlamps to Amazon's
warehouse in Virginia, and, when Cao's order for one came
in, Amazon packaged and shipped it to Cao using the
third-party shipper, UPS Ground. As part of its fulfillment
services, Amazon also collected payment and, after
withdrawing its service fee, remitted the balance to Dream
Light. Dream Light set the price for the headlamp and created
the content of the product's description used on the
Amazon site. While Dream Light was also allowed under the
program to "offer any warranty," apparently no
explicit warranty information was provided in this case.
paying the fire loss, Erie Insurance Company, as subrogee,
commenced this action against Amazon, asserting products
liability claims based on its allegation that Amazon was the
"seller" of the headlamp and therefore had the