Photo by Sari Montag on Flickr.
Madeline O’Toole, Associate Member, University of Cincinnati Law Review
I. Introduction
As our society has become increasingly technologically-driven, retailers are no longer confined to the physical limitations of brick-and-mortar stores. The development and expansion of e-commerce has allowed not only traditional retailers to reach a new and expansive customer base, but also independent, third-party sellers. By opening its e-commerce marketplace to more than 2.5 million third-party vendors, “Amazon has emerged as the nation’s largest online retailer.”[1] The 2.5 million third-party vendors account for close to sixty percent of the physical goods sold on Amazon and $18.2 billion in revenue for the company.[2]
While Amazon has clearly reaped the rewards of its third-party vendors, it has largely shielded itself from their risks and liabilities. In its recent decision, the Ohio Supreme Court, following suit of states such as New Jersey and Tennessee, held that Amazon was not a supplier under Ohio products-liability law under the facts of the case, and, as a result, was not liable for the defective product sold by its third-party vendors.[3] This article examines the decision in Stiner v. Amazon.com, Inc. and examines the policy implications of the current law under the Ohio Products Liability Act.
II. Stiner v. Amazon.com, Inc.
In 2014, 18-year-old Logan Stiner died after ingesting a lethal dose of caffeine powder that he received from a friend.[4] The friend had purchased the powder through Amazon’s website from Tenkoris, L.L.C., a third-party vendor.[5] After Logan’s death, Dennis Stiner, Logan’s father, brought suit against Amazon, Tenkoris, Logan’s friend, the manufacturer of the caffeine powder, and the importer.[6] Unable to complete service of process on the manufacturer and dismissing the other parties from the action, Amazon remained as the sole defendant.[7]
The trial court granted summary judgment to Amazon on all causes of action alleged.[8] On appeal, Stiner preserved only his claims under the Ohio Products Liability Act and the Ohio Pure Food and Drug Act.[9] The claims under the Ohio Products Liability Act alleged defects in design, inadequate warnings or instructions, failure to conform to representations, and supplier negligence.[10] While the first three causes of action impose liability on manufacturers, Stiner sought to impose liability on Amazon through R.C. 2307(B), which subjects a supplier to liability as if it were the manufacturer, when such manufacturer is not subject to judicial process in Ohio.[11] The Ninth District Court of Appeals, however, affirmed the trial court’s ruling, holding that Amazon was not a supplier within the meaning of the Ohio Products Liability Act and was therefore not subject to liability.[12]
Writing for a unanimous supreme court, Justice French affirmed the lower courts’ rulings, holding that, under the facts and circumstances of this case, Amazon was not a supplier as defined in R.C. 2307.71(A)(15)(a).[13] Interpreting the Ohio Products Liability Act, the majority noted that a person who “‘otherwise participates in the placing of a product in the stream of commerce’ must exert some control over the product as a prerequisite to supplier liability.”[14] Ultimately, the court found the facts presented by Stiner merely established Amazon’s control over its relationship with the third-party vendors, not Amazon’s control over the caffeine powder itself.[15] The majority also rejected Stiner’s argument that Amazon should be considered a supplier in light of the policy objectives of the products-liability law that governed prior to the current statute’s enactment.[16] It reasoned that the General Assembly intentionally abrogated from common law product liability claims and excluded any policy considerations for imposing strict liability when drafting the current law.[17] The court went on further to say that even if it were to consider the policy objectives of the State’s previous products-liability law, no facts presented support the finding that holding Amazon liable would promote product safety.[18]
Justice Donnelly concurred in the judgment, but argued that imposing strict liability on Amazon would promote the purpose of products-liability law by incentivizing Amazon to carefully select and monitor reputable sellers with safe products.[19] While Justice Donnelly conceded that under the plain language of the Ohio Products Liability Act, Amazon is a not a supplier, and, therefore, not liable, he asserted that applying this statute, drafted prior to modern e-commerce in the 1980s, produces inequitable results.[20]
III. Discussion
Given the plain language in R.C. 2307.71(A)(15)(a) of the Ohio Products Liability Act, it is clear that Amazon was not a “supplier” in the case at hand. To sell goods on Amazon.com Marketplace, third-party vendors must agree to the Amazon Services Business Solutions Agreement, which requires them to “‘source, sell, fulfill, ship and deliver’ the products they sell on the marketplace.”[21] Moreover, third-party vendors are responsible for packaging their products in compliance with all applicable laws and labeling requirements, for providing an accurate and updated product description for each product they make available for sale, and for any defect or recall on any of their products.[22] Tenkoris, in accordance with the agreement, kept the caffeine powder it sold in its own inventory, fulfilled the order, and shipped it, without Amazon ever possessing it.[23] As a result, Amazon clearly never exerted the requisite control over the caffeine powder as it was being placed into the stream of commerce to be considered a supplier under the Ohio Products Liability Act.
Had Tenkoris opted to use the “Fulfillment by Amazon” (“FBA”) program, where, for a fee, Amazon stores the third-party vendor’s product in an Amazon fulfillment center, packages it, and ships it, the court would have likely held Amazon was a supplier within the meaning of the statute. In fact, the California Fifth District Court of Appeals recently held Amazon liable for a defective battery sold by a third-party vendor through its FBA program.[24] There, the court emphasized Amazon’s role in the chain of distribution, stating that it chose to host the seller’s product listing, accepted the product into the FBA program, took possession of the product, accepted the customer’s order, took the customer’s payment, and shipped the product to her.[25] The court held that Amazon’s decisions and control over both the product and the process by which that product was sold led to the harm caused, and, as a result, found that Amazon should share in the consequences.[26]
While Amazon may eventually be found a supplier and held liable for defective products sold by third-party vendors through its FBA program, the current law in Ohio still leaves some customers open to no possible recourse. In the event a customer’s product, like the one in Stiner, was sourced, fulfilled, shipped, and delivered solely by the third-party vendor, Amazon will not be considered a supplier and will not be subject to liability for any product defects. As Justice Donnelly stated in his concurrence, it is clear that the 1988 law produces inequitable results among major e-commerce platforms, such as Amazon, and traditional brick-and-mortar retail stores.[27] Despite the fact that Amazon profits from its relationship with third-party vendors and connects them with the end-buyer, any lack of direct physical control of the product can shield it from liability. Considering the role of the internet and its influence on the supply chain, present-day suppliers need not physically control a product to place it in the stream of commerce. Therefore, even though Amazon acts as a supplier, the mere fact it is an e-commerce platform will shield it from liability.
Furthermore, the current law is ill-equipped to address the policy concerns of product liability in the modern day. The purpose of products-liability law is to protect customers from harm by incentivizing manufacturers and suppliers to make and provide safe products by applying strict liability along the supply chain.[28] Amazon is currently well-positioned to vet and monitor third-party vendors and their products.[29] However, if and until Amazon is held strictly liable for the defective products of all its third-party vendors, even those not participating in the FBA program, the monetary incentive to institute such a vetting system is likely low. So, even though Amazon is not considered a supplier under the current statute, Ohio consumers would be well-served by a change in the law that more closely reflects our current retail landscape.
IV. Conclusion
While the Stiner decision is by no means surprising, given the strict interpretation of the statute, the statute itself is outdated. Technological changes have swept through the retail industry, connecting buyers and sellers across the globe through e-commerce platforms, such as Amazon. Amazon in particular has greatly profited from allowing third-party vendors to sell their products through its website. When a customer receives a defective product from a third-party vendor, however, and is not able to complete service of process on that third-party vendor or the manufacturer of the product, the customer has no other recourse under the Ohio Products Liability Act. This is because Amazon is not considered a supplier under the statute because of its lack of control over the product as it is placed in the stream of commerce. The law would better serve the policy concerns of product liability if such physical control was not a perquisite to be considered a supplier who may be held liable. However, this is issue is ultimately one that lies in the hands of the Ohio General Assembly.
[1] Jay Greene, Burning Laptops and Flooded Homes: Courts Hold Amazon Liable for Faulty Products, Wash. Post (Aug. 29, 2020)https://www.washingtonpost.com/technology/2020/08/29/amazon-product-liability-losses/.
[2] Id.
[3] Stiner v. Amazon.com, Inc., Slip Opinion No. 2020-Ohio-4632 at ¶ 1 (Oct. 1, 2020).
[4] Id. at ¶ 2.
[5] Id.
[6] Id. at ¶ 8.
[7] Id. at ¶¶ 8-9.
[8] Id. at ¶ 9
[9] Id.
[10] Id. at ¶ 12.
[11] Id.
[12] Id. at ¶ 10.
[13] Id. at ¶ 30.
[14] Id. at ¶ 19; Ohio Rev. Code Ann. § 2307.71(A)(15)(a)(i).
[15]Stiner v. Amazon.com, Inc., Slip Opinion No. 2020-Ohio-4632 at ¶ 21 (Oct. 1, 2020).
[16] Id. at ¶¶ 25-27.
[17]Id. at ¶¶ 26-27.
[18] Id. at ¶ 28.
[19] Id. at ¶ 31.
[20] Id. at ¶ 34.
[21] Id. at ¶ 3.
[22] Id.
[23] Id. at ¶ 4-5.
[24] Bolger v. Amazon.com, LLC., 53 Cal. App. 5th 431 (2020).
[25] Id. at 457.
[26] Id.
[27] Stiner v. Amazon.com, Inc., Slip Opinion No. 2020-Ohio-4632 at ¶ 33-34.
[28] Id. at ¶ 35.
[29] Id. at ¶ 37.
