Second N.J. judge finds Amazon can be sued as 'seller' of third-party product

By
Cyber Monday operations at Amazon fulfillment center in Robbinsville New Jersey
A fast-moving conveyor moves a package through a scanning machine on its way to a delivery truck during operations on Cyber Monday at Amazon's fulfillment center in Robbinsville, New Jersey, U.S., November 29, 2021. REUTERS/Mike Segar
  • Amazon placed Chinese-made hoverboard in stream of commerce, judge says
  • 3rd Circuit previously said Amazon liable under similar Pennsylvania law

(Reuters) - Internet commerce giant Amazon.com Inc can be sued under New Jersey law for defective products sold by third parties through its online marketplace, a second federal judge in the state has ruled.

The decision Wednesday from U.S. District Judge Julien Neals in Newark allows a lawsuit accusing the company of selling a defective self-balancing scooter, or hoverboard, that caused a fire at a New Jersey woman's home to go forward.

Courts across the country have been split on Amazon's responsibility for the products sold in its online marketplace.

Dennis Crawford of Crawford Law said he was "very pleased" with the decision. Lawyers for Amazon did not immediately respond to requests for comment.

The lawsuit was filed in 2016 by New Jersey Manufacturers Insurance Group on behalf of an insured homeowner, Angela Sigismondi, bringing claims under the New Jersey Product Liability Act (NJPLA) and for common law breach of warranty and negligence. The insurer said a ForTech Smart Scooter, manufactured by Shenzhen, China-based Paradise 00 and sold through Amazon, spontaneously caught fire while charging in Sigismondi's home, causing more than $350,000 in damage.

Amazon sought judgment in its favor on the grounds that it was not the product's seller, pointing to language in the NJPLA saying that a company is liable if it has "significant control" over a product. It said it did not have such control over third parties' offerings.

The company has made similar arguments successfully against lawsuits in multiple states, including Maryland, Ohio, Tennessee and Texas, where it won dismissal in federal or state appeals courts. However, courts have allowed such claims to go forward in California, Pennsylvania and New Jersey, where they remain pending.

Neals, in ruling against the company on Wednesday, said the company could be sued because the NJPLA extended to any party that "otherwise is involved in placing a product in the line of commerce," even without significant control. Amazon, he said, fit that bill.

Another New Jersey district judge, Kevin McNulty, reached the same conclusion in 2019 in a different case over a hoverboard. He cited a ruling by the 3rd U.S. Circuit Court of Appeals finding that Amazon could be liable for an injury caused by a defective dog leash under a similar Pennsylvania law.

The case is New Jersey Manufacturers Insurance Group v. Amazon.com Inc, U.S. District Court, District of New Jersey, No. 2:16-cv-09014.

For the insurer: Dennis Crawford of Crawford Law

For Amazon: Beth Rose of Sills Cummis & Gross

Read more:

Amazon not liable for third party's product, says Texas top court

Amazon can be liable for third party's exploding hoverboard - Calif. court

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

Brendan Pierson reports on product liability litigation and on all areas of health care law. He can be reached at brendan.pierson@thomsonreuters.com.

Read Next / Editor's Picks