Amazon.Com, Incorporated v. Mcmillan

625 S.W.3d 101 (2021)

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Nature of the Case

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Facts

D is an e-commerce company. D's online retail marketplace offers D-branded products, third-party-branded products owned by D and listed on the website as 'sold by' Amazon, and products owned and 'sold by' third parties. D makes no warranties for products 'sold by' third-party merchants and disclaims responsibility for third-party product descriptions. Other than a short line of text under the 'buy' button identifying the seller, the experience of purchasing products 'sold by' third-party merchants is no different from buying products 'sold by' D. When a customer purchases a third-party product listed on D, D processes payment, retains a portion of the purchase price, and remits the remainder to the third-party merchant. A third-party merchant may store and ship that product itself or use the Fulfillment by Amazon (FBA) logistics service. Under FBA, the merchant uses D warehouses to store product inventory, and D packages a product when it is sold and delivers it to a carrier for shipment to the purchaser. The merchant retains title to its products prior to the ultimate customer purchase. D maintains significant control over products sold through FBA. D has the ability to refuse products and controls all aspects of customer service. D also processes returns and delivers customer refunds for FBA products, and merchants must reimburse D for these costs. McMillan's (P) husband purchased a remote control on Amazon.com that was 'sold by' 'USA Shopping 7693.' Almost a year later, P's nineteen-month-old daughter opened the remote's battery compartment and swallowed the included button battery. Though the battery was surgically removed, battery fluid caused permanent damage to the child's esophagus. P sought information from Amazon about 'USA Shopping 7693.' The account belonged to Hu Xi Jie, an FBA user with an address in China. D suspended Hu Xi Jie's account and removed the remote from its website. P sued both D and Hu Xi Jie in strict liability for design and marketing defects. Hu Xi Jie did not answer or make an appearance. At the close of discovery, D moved for summary judgment on the ground that it was not a seller of the remote and therefore could not be held strictly liable. P claimed that D was a non-manufacturing seller that could be held liable. Although non-manufacturing sellers typically are not liable under the Act, an exception applies when the manufacturer is not subject to the jurisdiction of the court. The federal district court concluded that D had taken the initial steps required to trigger the exception. The court concluded that: (1) D's role as a service provider did not preclude it from also being a seller; (2) D's possession and control of the remote was evidence that it engaged in the business of placing the product in the stream of commerce; (3) D's lack of title did not preclude it from being a seller; and (4) D's relationship to the manufacturer aligned with the policy justifications for strict liability. The district court certified its order for interlocutory appeal. The Fifth Circuit certified the following question: Under Texas products-liability law, is D a 'seller' of third-party products sold on D's website when D does not hold title to the product but controls the process of the transaction and delivery through D's Fulfillment by Amazon program?