CHICAGO – A Chicago federal judge has delivered a win to Amazon and Chinese online seller Shenzhen Gangshen Technology Company Ltd. in a lawsuit filed by an Illinois couple, who claimed their home was damaged when the hoverboard they purchased caught fire.
On Nov. 6, 2015, Annette Garber bought a hoverboard through the Amazon online marketplace. The order detail documents and final invoice associated with the purchase said the hoverboard was “sold by” and “fulfilled by” the entity “Libert00,” a name used by Shenzhen, and that Shenzhen was the “seller of record,” court records said. Amazon processed all the money for the transaction but did not package or label the hoverboard. Libert00 shipped the hoverboard to Garber.
David and Annette Garber initially filed suit in state court claiming a hoverboard they purchased through Amazon’s online marketplace was defective and caused a fire that damaged their home. The Garbers alleged one count of strict liability and one count of negligence in their lawsuit.
Amazon later removed the case to federal court.
In a March 31 ruling, U.S. District Judge Virginia Kendall granted summary judgment to Amazon.
Amazon operates an online marketplace, which facilitates commerce between buyers and sellers. Amazon sells some of its own products on its marketplace, but more than a million third-party sellers also use the marketplace.
Amazon requires all third-party sellers using its marketplace to agree to its "Amazon Services Business Solutions Agreement," which Shenzhen did. The BSA requires third-party sellers like Shenzhen to adhere to Amazon’s policies.
Court documents said Amazon did not design, manufacture, inspect, maintain, repair, install or modify the hoverboard and never possessed it. Libert00 owned the hoverboard, set the price for it, and transferred title to Annette Garber.
The Garbers allege that on June 29, 2016, the hoverboard self-ignited and started a fire that caused extensive damage to their home. The parties do not dispute that the hoverboard was defective in design, that it self-ignited or that it damaged the Garbers’ home.
Court documents said, ‘’in the second half of November 2015, Amazon’s product safety team began a 'deep dive' investigation into the safety of hoverboards" following media coverage of hoverboard fires. As a result of its investigation, Amazon was concerned about the Chinese manufacturing and that safety issues were prevalent throughout many different brands of the hoverboard, court filings said
As of Dec. 10, 2015, Amazon believed that a “significant number” of the 245,000 hoverboards were bought as holiday gifts. Two days later, Amazon posted a warning to its hoverboard customers that the products had fire and explosion hazards affiliated with them.
Amazon ceased all listings and sales of hoverboards until third-party sellers showed proof of compliance with various safety and performance standards.
The Garbers argued in court that Amazon and Shenzhen were “co-sellers” of the hoverboard that damaged their home.
‘’Based on their co-seller theory, the Garbers argue that Amazon should be strictly liable for selling the hoverboard in an unreasonably dangerous condition ... and that it failed to exercise due care at the time of sale,’’ court documents said.
Amazon, meanwhile, argued that it did not design, manufacture, sell or touch the hoverboard, but merely provided an online marketplace.
‘’Amazon argues that as an online marketplace provider, it cannot be held liable under Illinois law, either under strict liability or negligence, for defective products sold by third parties,’’ the judge noted.
The Garbers countered in an allegation that Amazon “designed, prepared, manufactured, advertised, marketed, distributed, supplied and/or sold” the hoverboard.
“But the Garbers made no specific allegations that Amazon manufactured, supplied, or distributed the hoverboard and provided no facts or evidence to support those contentions, so they cannot proceed on those theories,’’ Kendall said in her ruling. ‘’That leaves the question of whether Amazon 'sold' the hoverboard."
Amazon argued that, to survive summary judgment, the Garbers must create a genuine dispute over whether Amazon was a “seller” of the hoverboard. The court found that the Garbers did not create such a dispute and that Amazon did not sell the defective hoverboard.