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625 S.W.3d 101
Tex.
2021
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Background

  • Amazon operates a marketplace that lists products sold by Amazon, by Amazon-owned inventory, and by third-party merchants; Fulfillment by Amazon (FBA) lets merchants store inventory in Amazon warehouses while the merchant retains title.
  • McMillan's 19-month-old swallowed a button battery from a remote bought on Amazon from a third-party FBA seller (identified later as Hu Xi Jie); the child suffered permanent injury.
  • McMillan sued Amazon and the third-party seller in federal court asserting strict-products-liability claims under the Texas Products Liability Act (Chapter 82).
  • The district court denied Amazon's summary-judgment motion, finding Amazon's control and possession could make it a "seller"; the Fifth Circuit then certified the question to the Texas Supreme Court.
  • Certified question: whether Amazon is a "seller" under Texas law when it never held title to a third-party product but controlled transaction and delivery via FBA.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Is Amazon a "seller" under Tex. Civ. Prac. & Rem. Code §82.001(3) when it controls transaction/delivery but never holds title? McMillan: Amazon's possession, control, and role in the sale make it a seller; title not required. Amazon: Chapter 82 tracks common law—"seller" in ordinary sales means the party who held or relinquished title; Amazon never held/relinquished title. No. Under Chapter 82, sellers in ordinary sales are entities that relinquish (or previously held) title; Amazon did not and thus is not a seller here.

Key Cases Cited

  • McKisson v. Sales Affiliates, Inc., 416 S.W.2d 787 (Tex. 1967) (adopted Restatement §402A principles and recognized distributors as sellers)
  • Firestone Steel Prods. Co. v. Barajas, 927 S.W.2d 608 (Tex. 1996) (discussed "introducing" products into channels of commerce)
  • New Tex. Auto Auction Servs., L.P. v. Gomez de Hernandez, 249 S.W.3d 400 (Tex. 2008) (auctioneers/facilitators are not necessarily sellers)
  • Fresh Coat, Inc. v. K-2, Inc., 318 S.W.3d 893 (Tex. 2010) (entities supplying goods as part of mixed goods/services can be sellers)
  • Centerpoint Builders GP, LLC v. Trussway, Ltd., 496 S.W.3d 33 (Tex. 2016) (provision of product incidental to services does not make one a seller)
  • Armstrong Rubber Co. v. Urquidez, 570 S.W.2d 374 (Tex. 1978) (bailor/lessor may be liable when bailment is for mutual commercial benefit)
  • Rourke v. Garza, 530 S.W.2d 794 (Tex. 1975) (lessor retaining title and renting defective equipment can be treated as seller)
  • Erie Ins. Co. v. Amazon.com, Inc., 925 F.3d 135 (4th Cir. 2019) (federal court concluded Amazon did not hold title and thus was not a seller under Maryland law)
Read the full case

Case Details

Case Name: amazon.com, Incorporated v. Morgan McMillan, Individually and as Next of Friend of E.G., a Minor
Court Name: Texas Supreme Court
Date Published: Jun 25, 2021
Citations: 625 S.W.3d 101; 20-0979
Docket Number: 20-0979
Court Abbreviation: Tex.
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    amazon.com, Incorporated v. Morgan McMillan, Individually and as Next of Friend of E.G., a Minor, 625 S.W.3d 101