Five years ago, Heather R. Oberdorf did something millions of people do every day. She went shopping on Amazon.com and bought a collar for her dog, Sadie, a powerful black Lab mix.
Not long after, during a short evening walk in the central Pennsylvania town of Hartleton, Sadie lunged, and the new collar — pink with Sadie’s name on it in sparkling letters — broke. The retractable leash flew back, hit Oberdorf’s face, and permanently blinded her left eye.
The Furry Gang, the Nevada entity that posted the collar for sale on Amazon, has disappeared. Even a private investigator Amazon hired couldn’t track down the business owner.
With nowhere else to turn, Oberdorf sued Amazon — which says it is a services provider and not responsible for defects in products that third parties sell on its site — in a case that has become nationally significant as it heads toward a rare full-panel hearing early next year in the Third Circuit Court of Appeals in Philadelphia.
The products-liability case is a prime example of judges grappling with the application of legal standards and laws from an era before the internet enabled new forms of commerce, over which not just Amazon but also such firms as Uber, Facebook, and Google reign supreme even as they are reluctant to take on the traditional obligations of retailers, publishers, and employers.
For judges, it’s not a liberals-vs.-conservatives question, and it’s not a simple matter of judges calling balls and strikes, said Matthew Stiegler, a Philadelphia lawyer who specializes in federal appeals and writes a blog on the Third Circuit.
“Here there’s no strike zone,” Stiegler said. “Here the judges are having to take a legal framework that was developed in another era and figure out how it ought to apply today.”
Oberdorf, 44, represented by Williamsport lawyer David Wilk, scored a victory in the Third Circuit court last summer when a panel ruled 2-1 that “under Pennsylvania law Amazon is strictly liable for consumer injuries caused by defective goods purchased on Amazon.com."
“Strict liability” means that any seller in the chain of commerce — manufacturer, wholesaler, distributor, or retailer — can be held liable for a defective product if the manufacturer is beyond reach.
Amazon has argued in legal filings that a victory for Oberdorf “would constitute an unprecedented expansion of products-liability law.” The Seattle company did not provide additional comment.
Through Wilk, a partner at Lepley, Engelman, Yaw & Wilk, Oberdorf declined to be interviewed.
During a 2017 deposition, a lawyer for Amazon asked Oberdorf whether she bought the collar from Dogaholics, another name for the Furry Gang. “Did I purchase it from them?” Oberdorf responded. “I purchased it on Amazon.”
The Amazon lawyer repeated his question. “I don’t know. The product was in my cart and I paid for it as usual,” said Oberdorf, who at that time worked in production planning for a food manufacturer in Milton, Pa. She still had Sadie and had added a second dog, a German shepherd named Max.
For Wilk and other lawyers, the exchange illustrates the consumer perception that Amazon is the seller.
Before the favorable decision in her case, federal judges had ruled at least a half-dozen times — in cases involving hoverboards with exploding batteries, a headlamp that caused a house fire, a French press coffee maker that shattered, and a laptop battery that caught fire — that Amazon, in the case of third-party merchants, was not part of the commercial chain and bore no responsibility for defective products.
The decisions have not dealt with actual liability, but only with the question of whether Amazon is in the chain of potential liability.
In an earlier decision upholding Amazon’s view against Oberdorf, U.S. District Judge Matthew Brann went so far as to describe the Amazon Marketplace “as a sort of newspaper classified ad section, connecting potential consumers with eager sellers in an efficient, modern, streamlined manner.”
Third-party sales on Amazon — effectively a store with infinite virtual space that allows any products on its shelves, but controls the order in which they appear to consumers and runs the checkout — skyrocketed to $160 billion last year from $100 million in 1999, the company has said. On a percentage basis, Amazon’s third-party sales soared to 58% of merchandise sales from 3 percent.
Meanwhile, Amazon has increasingly come under fire for products sold on its website. A Wall Street Journal investigation published in August found “4,152 items for sale on Amazon.com Inc.’s site that have been declared unsafe by federal agencies, are deceptively labeled or are banned by federal regulators — items that big-box retailers’ policies would bar from their shelves.”
Amazon’s legal defenses may be starting to crumble.
The Third Circuit majority opinion by Jane R. Roth and Patty Shwartz contained zingers such as one targeted at the dissent by Anthony J. Scirica: “We do not believe that Pennsylvania law shields a company from strict liability simply because it adheres to a business model that fails to prioritize consumer safety.”
Then, shortly after that ruling in favor of Oberdorf — a ruling that the court vacated when it decided to rehear the case en banc — a judge in U.S. District Court for the Western District of Wisconsin ruled against Amazon in a product-liability case involving a defective bathtub faucet adapter offered by a third-party merchant and purchased by a man named Luke Cain.
“Amazon does not merely provide a marketplace where third-parties sell to Amazon customers,” wrote Judge James D. Peterson. “Amazon was so deeply involved in the transaction with Cain that Wisconsin law would treat Amazon as an entity that would be strictly liable for the faucet adapter’s defects, if, as in this case, the manufacturer cannot be sued in Wisconsin.”
In August, a federal judge in New Jersey followed the Oberdorf decision and found that Amazon could be sued for a defective scooter bought on the site. The third-party seller did not respond to the complaint.
If the legal landscape for products liability changes under Amazon’s feet, it wouldn’t be the first time tort law evolved in response to new ways of doing business.
“Since the industrial revolution tort law has responded to changes in the technology of consumer transactions and to the nature of consumer goods. An early problem was the lengthening distribution chain,” Edward J. Janger and Aaron D. Twerski, professors at Brooklyn Law School, said in an email.
There was a time, for example, when a manufacturer was shielded from liability for a defective product by the retailer. “But, as early as 1916, negligence liability was extended to include remote manufacturers, and, with the advent of strict products liability in the 1960s, courts and commentators broadly concluded that peculiarities of a transaction’s structure should not limit the plaintiff’s ability to sue anyone in the distribution chain for a defective product,” Janger and Twerski said.
Specific to Amazon, Janger and Twerski wrote in a recent research paper: “Amazon’s contention that it is a neutral platform that simply facilitates sales between sellers and buyers is a myth. Amazon exercises control over each sale through a host of mechanisms that maximize profit to itself, and determines who will buy what from whom.”
Whatever the Third Circuit judges decide after the next hearing, in February, Wilk, Oberdorf’s lawyer, expects the loser will ask the U.S. Supreme Court to take the case.
“I’m going to run it out to the end,” he said.