Morgan McMillan v. Amazon.com, Incorporated
983 F.3d 194
| 5th Cir. | 2020Background
- A toddler swallowed a button battery from a remote control purchased on Amazon; plaintiff McMillan sued Amazon and the listed seller (a third party using Fulfillment by Amazon (FBA)).
- The listed seller ("USA Shopping 7693") used Amazon’s FBA program; Amazon stored, retrieved, shipped the item, collected payments, remitted proceeds minus fees, and handled FBA returns.
- McMillan asserted strict liability (design and marketing defect), breach of implied warranty, negligence, and gross negligence against Amazon and the third-party seller; the third-party seller was never located or participated.
- District court found Amazon was an "integral component in the chain of distribution," denied Amazon summary judgment on the question whether it was a "seller" under the Texas Products Liability Act, but granted judgment to Amazon on claims premised on editorial control (CDA-related).
- Parties jointly sought interlocutory review; Fifth Circuit limited its review to whether Amazon qualifies as a "seller" under Texas law and certified that question to the Supreme Court of Texas because Texas precedent is sparse and the question is determinative and novel.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Amazon is a "seller" under Texas products-liability law for third-party products sold via Amazon when Amazon does not hold title but controls aspects of transaction and delivery (FBA). | Amazon placed the product into the stream of commerce: exercised control, had physical possession via FBA, delivered the product, collected and disbursed payments, earned fees, and could withhold payments. | Amazon merely facilitates sales: it is a platform/marketplace or delivery-service-like intermediary (not in the business of selling the third-party product), it does not take title, and acts like an auctioneer/UPS rather than a seller. | Fifth Circuit did not decide on the merits; it certified the question to the Supreme Court of Texas as a determinative novel state-law issue. |
| Whether FBA’s storage, retrieval, shipping, and returns processing converts Amazon from facilitator into a service-provider-seller. | FBA shows Amazon had physical control and exercised meaningful control over distribution and customer interactions. | FBA is an incidental service to enable third-party sales; service provision alone does not make Amazon a seller under Texas precedent. | Court found the facts and applicable Texas law inconclusive and appropriate for state-court resolution; certified to Texas Supreme Court. |
| Whether existing out-of-state and federal decisions resolve the issue for Texas. | Pointed to cases holding Amazon liable/seller in some jurisdictions and analogous reasoning supporting seller status. | Pointed to numerous decisions finding Amazon not a seller; argued those authorities show Amazon is a facilitator. | Fifth Circuit concluded out-of-state decisions are inconsistent and depend on differing state statutes/facts; they are not controlling for Texas. |
Key Cases Cited
- New Tex. Auto Auction Servs., L.P. v. Gomez de Hernandez, 249 S.W.3d 400 (Tex. 2008) (distinguishes entities that "place" products into commerce from those that merely "facilitate" sales)
- Centerpoint Builders GP, LLC v. Trussway, Ltd., 496 S.W.3d 33 (Tex. 2016) (service-provider analysis; selling product is not established where product provision is incidental to services)
- Firestone Steel Prods. Co. v. Barajas, 927 S.W.2d 608 (Tex. 1996) (holding that introducing a product into channels of commerce can suffice for seller status)
- Fresh Coat, Inc. v. K-2, Inc., 318 S.W.3d 893 (Tex. 2010) (discusses when a service provider may be treated as a seller)
- Erie Ins. Co. v. Amazon.com, Inc., 925 F.3d 135 (4th Cir. 2019) (illustrative federal decision addressing Amazon’s role; facts and state law differences noted)
- Bolger v. Amazon.com, LLC, 53 Cal. App. 5th 431 (Cal. Ct. App. 2020) (California appellate decision treating Amazon as a seller in certain circumstances)