Products Liability Law Daily Product supplier liability could not be imposed on Amazon in teen’s death
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Friday, October 2, 2020

Product supplier liability could not be imposed on Amazon in teen’s death

By Pamela C. Maloney, J.D.

Amazon did not have the requisite control over a pure caffeine powder sold through its website and, thus, was not a supplier for purposes of Ohio’s product liability law.

Amazon did not exert "control" over a pure caffeine powder that was sold on its website by a third party vendor, and therefore, it could not be held liable as a "supplier" in a products liability action filed on behalf of a teen whose death was linked to the ingestion of the powder, the Ohio Supreme Court ruled, upholding the trial court’s grant of summary judgment in Amazon’s favor (Stiner v. Amazon.com, Inc., October 1, 2020, French, J.).

An 18-year-old died of cardiac arrhythmia and seizure from acute caffeine toxicity after ingesting Hard Rhino Pure Caffeine, a pure caffeine powder that had been purchased by the teen’s friend through Amazon’s website. The seller of the caffeine powder, which had been advertised as a "pre-workout" supplement, was identified as The Bulk Source, the trade name under which Tenkoris, the supplement’s wholesaler, sold the powder. The Bulk Source was responsible for fulfilling and shipping the order to the teen’s friend. The teen’s father filed a lawsuit against Amazon and its affiliated companies, Tenkoris, K.K. (the purchaser), CSPS Pharmaceutical Co., Ltd. (the manufacturer of the caffeine powder), and Green Wave Ingredients, Inc. (the importer), alleging strict product liability and negligence under the Ohio Products Liability Act, violations of the Ohio Food and Drug Safety Act, supplier negligence, breach of implied warranty of merchantability, punitive damages and fraud. Tenkoris, K.K., and CSPS Pharmaceutical Co., Ltd. were dismissed from the action and CCPC Pharmaceutical was not subject to service of process, leaving Amazon the sole defendant in the lawsuit. The trial court granted summary judgment to Amazon on all counts and the court of appeals affirmed, holding that the e-commerce giant was not a "supplier" under the state’s product liability law [see Products Liability Law Daily’s February 20, 2019 analysis]. The teen’s father appealed.

Meaning of "supplier." The teen’s father sought to hold Amazon liable for alleged defects in the powder’s design and warnings and for the product’s failure to conform to specifications, not as a manufacturer, but as a supplier of the product. Under Ohio law, a supplier is subject to product liability as if it were the manufacturer under limited circumstances. A "supplier," as defined by the Act, includes "a person that sells, distributes, leases, prepares, blends, packages, labels, or otherwise participates in the placing of a product in the stream of commerce." The teen’s father argued that Amazon qualified as a supplier because it participated in the placing of the caffeine powder in the stream of commerce.

The Ohio Supreme Court rejected that argument, explaining that all of the actions specified in the definition of supplier involved some act of control over a product or the preparation of a product for use or consumption. A further examination of the exclusions from the Act’s definition of "supplier" demonstrated that the state legislature did not intend to impose supplier liability on persons who did not exercise a level of control over the product. In this case, there was no evidence that Amazon exercised the requisite amount of control over the caffeine product that had been sold on its marketplace and, therefore, Amazon was not a "supplier" for purposes of the Act. According to the high court, the evidence showed that Amazon had no relationship with the manufacturer or the other entities in the distribution channel. Tenkoris, as the seller of the caffeine powder, wrote the product description that appeared on the Amazon website and had sole responsibility for the fulfillment, packaging labeling, and shipping of the product directly to consumers. The purchase order clearly stated that the powder was sold by The Bulk Source and indicated that purchasers should contact The Bulk Source with any questions.

The high court also rejected the argument that Amazon’s control over all aspects of sales by third-party vendors, which included: preventing sellers from contacting customers; retaining sole discretion to determine the content, appearance, and design of its website; reserving the right to alter the content of product descriptions; and imposing restrictions on pricing, established the requisite control over the product to render Amazon a supplier. These factors only demonstrated the degree of control that Amazon sought to exert in its relationship with sellers, the high court opined. They did not establish that Amazon exercised control over the products themselves.

Furthermore, holding Amazon liable would not promote product safety. Amazon did not have a relationship with the manufacturers of the third-party products offered on its website and, thus, it lacked control over product safety. In addition, Amazon did not choose to offer the caffeine powder for sale, and it had no role in manufacturing, labeling or packaging the product. Although Amazon could address safety issues by suspending or removing sellers, its control over its website did not show that Amazon was in a position to eliminate the unsafe character of products in the first instance.

Concurring opinion. Justice Donnelly wrote separately to concur in the judgment only, stating that he agreed with the court’s holding that the definition of supplier in the state’s product liability act was written in such a way that it did not allow the court to incorporate the role that Amazon.com played when a sale on its website was fulfilled by a third-party merchant. However, Justice Donnelly disagreed with the court’s conclusion that it would not promote the purpose of products liability law to hold Amazon liable for unsafe products that would not have reached consumers but for the consumer’s decision to shop on its website. In concluding that the purpose and policy objectives at the foundation of products liability law would be well-served by holding Amazon liable for unsafe, defective products that customers purchased on its website, Justice Donnelly pointed out that when the Act became effective in 1988, the descriptors used to explain the meaning of "supplier" reflected the paradigm of retail sales in the 1980s. To applying that paradigm to modern e-commerce was inequitable, in Donnelly’s opinion. Given the fundamental purpose of products liability law to protect consumers from harm, the application of strict liability to ecommerce would incentivize websites like Amazon to select and monitor reputable merchants with safety products, just as the doctrine incentivizes sellers to select safer products that are sourced from reputable wholesalers or manufacturers.

The case is No. 2020-Ohio-4632.

Attorneys: Brian K. Balser (Brian K. Balser Co., L.P.A.) and Drew Legando (Merriman, Legando, Williams & Klang, L.L.C.) for Admr Stiner. Joyce D. Edelman (Porter, Wright, Morris & Arthur, L.L.P.) and Julie L. Hussey (Perkins Coie, L.L.P.) for Amazon.com, Inc.

Companies: Amazon.com, Inc.

MainStory: TopStory SCLIssuesNews GCNNews DefensesLiabilityNews DrugsNews OhioNews

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