Under Tennessee state product liability law, retailers who sell defective products can often be held accountable for damages caused by those products. The Tennessee Products Liability Act assigns liability to the seller in cases where, “the product was in a defective condition or unreasonably dangerous at the time it left the control of the manufacturer or seller.”
A recent decision by the United States District Court for the Middle District of Tennessee helps to demonstrate why the law is never a cut and dried, black-and-white affair.
The judge ruled Amazon could not be held liable for the sale of a defective hoverboard because they were not considered to be the seller, even though they advertised the product on their platform, shipped it, and collected payment for it.
Instead, the W2M Trading Corp owned the hoverboard, retaining the title to the goods. They wrote the copy and placed the item on the Amazon website through the “Fulfillment by Amazon” program.
Amazon, whose sales account for 49.1% of retail sales across America, shrewdly designed their FBA program to limit or eliminate liability wherever possible. This has protected them fully in other cases.
The hoverboard caught fire, destroying the plaintiff’s home and injuring the family.
The judge ruled Amazon never held sufficient control over the product to retain liability. However, Amazon later took actions which opened it up to liability on other grounds, namely in that they were aware the hoverboards were dangerous and failed to provide adequate warning when they became aware of the problem.
They did send out an email offering “additional information about lithium ion batteries and safety tips for using products that contain them.” They did so after conducting an internal investigation of the hoverboards. Their email did not include any information about fires or explosions, did not mention they’d stopped selling the hoverboards, and made no mention of the investigation.
Sending the email caused the 6th Circuit court to conclude they had assumed a duty to warn customers and then breached that duty by failing to provide explicit information which would have caused the Fox family to discard the hoverboard.
Given their foreknowledge and investigation a case could have been made for a breach of duty to give warning even if they had not sent out a lacklustre, inadequate email.
If you are a retailer who becomes aware you’ve been selling defective products you should consult closely with a Tennessee corporate litigation attorney to ensure your next steps don’t put you in an even worse position.
