By Kathleen Bianco, J.D.
Allegations in consumer complaints and media reports related to the safety of the DLux space heater lent credence to claims that the online retailer had knowledge of risks associated with the product.
A majority of product liability claims premised on negligence, failure to warn, and breach of warranty against online retailer Amazon.com, Inc. were sufficiently pleaded to avoid dismissal, according to the federal district court in Nebraska. With the exception of the claim for breach of warranty of fitness for a particular purpose, the court concluded that the allegations contained in the complaint asserted plausible product liability claims against the retailer, thus allowing the claims to proceed (Legal Aid of Nebraska, Inc. v. Chaina Wholesale, Inc., January 3, 2020, Gerrard, J.).
In 2016, a non-profit organization that provided legal services to disadvantaged individuals purchased a DLux Infrared Quartz Space Heater manufactured by Chaina Wholesale, Inc., d/b/a Deluxe Import, for its office in Omaha, Nebraska. The heater had been purchased online from Amazon.com. The heater was delivered to the purchaser’s place of business in packaging bearing the Amazon.com logo. On February 19, 2018, the DLux space heater caused a fire to break out in the plaintiff’s place of business, resulting in damages exceeding $783,000.00.
In the aftermath of the fire, the plaintiff filed suit against the manufacturer and the seller of the heater, alleging claims for negligence, failure to warn, breach of express warranty, breach of implied warranty of merchantability, and implied warranty of fitness. Amazon sought dismissal of the claims against it, arguing that the complaint failed to state claims upon which relief was available.
Negligence. Negligence actions in Nebraska require a showing that a defendant had a duty to protect a plaintiff from injury and failed to discharge that duty, and that this failure proximately caused damages. Thus, in order to avoid dismissal on a product liability negligence action, a plaintiff must plead facts showing evidence of duty, breach, causation, and damages. Amazon contended that the non-profit failed to plead facts establishing a breach of duty. Specifically, Amazon argued that the non-profit failed to present facts showing that the retailer knew or should have known about the space heater’s design flaw or had been aware of consumer complaints and media reports.
The court rejected Amazon’s contention, asserting that it was not necessary for the non-profit to plead every fact with formalistic particularity. To avoid dismissal, a complaint need only plead sufficient facts to state a facially plausible claim for relief from which the court may draw a reasonable inference that the party seeking dismissal may be liable for the misconduct alleged. Having examined the factual allegations, the court found that the complaint sufficiently alleged facts demonstrating a plausible product liability claim based on negligence against the retailer.
Failure to warn. As to the failure-to-warn claim, the court again found the allegation in the complaint adequate to defeat Amazon’s motion for dismissal based on the claims that the retailer knew or should have known about the defect in the space heater it was distributing. The complaint alleged that the heater was unsafe in normal use because it lacked overheat protection, despite the assertion on the retailer’s website that the heater had overheat protection and that the housing stayed at room temperature during use. As such, it was plausible to infer that the retailer knew the heater was unsafe without those protections. The court opined that the complaint’s allegations regarding consumer complaints and media reviews, at a minimum, established constructive knowledge of the heater’s inherent defective design. Consequently, the court determined that the complaint sufficiently alleged facts establishing Amazon’s constructive or actual knowledge of the heater’s unsafe condition, which gave rise to the retailer’s duty to warn of risks or hazards inherent to the product’s design and condition related to the product’s intended and reasonably foreseeable use. Thus, dismissal of the failure-to-warn claim was not warranted.
Breach of warranty. The breach of express warranty claim was permitted to proceed based on the retailer’s statement on its website that the heater had overheat protection and a plastic housing that stayed at room temperature during use. Lab testing of the product indicated that the description of the heater provided by the retailer was not correct. Thus, the complaint sufficiently alleged facts asserting that the retailer had created an express warranty that the product it contracted to sell to the non-profit would conform to the description provided by the retailer, when in fact, testing showed that it did not.
As to the claim for breach of implied warranty of merchantability, Amazon’s contention that it was not a merchant subject to such a claim was rejected. The court determined that the allegations in the complaint were sufficient to include Amazon within the legal definition of a merchant, and plausibly demonstrated that Amazon breached an implied warranty of merchantability.
Finally, the non-profit’s claim for breach of implied warranty of fitness for a particular purpose was subject to dismissal because the complaint failed to assert any factual allegation showing that the purchaser had communicated that it had a particular purpose for its purchase. Furthermore, the court found no facts alleging that the non-profit had relied upon the skills or judgment of Amazon in selecting the space heater. Thus, the complaint failed to state a claim for breach of implied warranty of fitness for a particular purpose.
The case is No. 4:19-CV-3103.
Attorneys: Steven L. Theesfeld (Yost & Baill, LLP) for Legal Aid of Nebraska, Inc. J. Daniel Weidner (Koley Jessen P.C.) for Amazon.com, Inc.
Companies: Legal Aid of Nebraska, Inc.; Chaina Wholesale, Inc. d/b/a Deluxe Import; Amazon.com, Inc.
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