A federal appeals court on Wednesday ruled online retail giant Amazon can be held liable for the products sold by third-party sellers on its platform.

The 3rd U.S. Circuit Court of Appeals ruled 2-1 that customers can sue Amazon when they buy defective products from its platform, even if Amazon did not make those products.



ADVERTISEMENT

The decision could leave Amazon vulnerable to a slew of lawsuits.

The case before the appeals court, though, involved a plaintiff who was in Pennsylvania, and the appeals court carefully noted that it was finding Amazon liable under that state's strict product liability laws.

Amazon has argued that it does not count as a "seller" because it merely provides the platform, but the appeals court on Wednesday said it disagrees.

"Amazon ... plays a large role in the actual sales process," Circuit Judge Jane Richards Roth, a Reagan appointee, wrote in the opinion. "This includes receiving customer shipping information, processing customer payments, relaying funds and information to third-party vendors, and collecting the fees it charges for providing these services."

The case in question involves a woman named Heather Oberdorf, who bought a leash from Amazon that turned out to be defective. During a walk with her dog in 2015, the leash malfunctioned and hit Oberdorf's face, leaving her permanently blind in her left eye, according to the filing.



Oberdorf, who was in Pennsylvania at the time of the incident, bought the leash from a seller on Amazon called "The Furry Group," but neither Oberdorf's legal team nor Amazon have been able to get in touch with them since 2016.

Amazon is the country's most valuable retail company and about half of the items sold on its online retail platform are from third-party sellers.

Two federal appeals courts have previously ruled that Amazon cannot be held liable for products from third-party sellers, but the federal appeals court in Philadelphia reversed the latest lower court decision.

The appeals court also found that the Communications Decency Act (CDA), the law that protects online companies from being held liable for content posted by users, only protects Amazon from elements of Oberdorf's claims.

"To the extent that Oberdorf's negligence and strict liability claims rely on Amazon's role as an actor in the sales process, they are not barred by the CDA," the court found.