STINER, ADMR., APPELLANT, v. AMAZON.COM, INC., APPELLEE.
No. 2019-0488
Supreme Court of Ohio
October 1, 2020
2020-Ohio-4632
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Stiner v. Amazon.com, Inc., Slip Opinion No. 2020-Ohio-4632.]
NOTICE
This slip opinion is subject to formal revision before it is published in an advance sheet of the Ohio Official Reports. Readers are requested to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 South Front Street, Columbus, Ohio 43215, of any typographical or other formal errors in the opinion, in order that corrections may be made before the opinion is published.
SLIP OPINION NO. 2020-OHIO-4632
STINER, ADMR., APPELLANT, v. AMAZON.COM, INC., APPELLEE.
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Stiner v. Amazon.com, Inc., Slip Opinion No. 2020-Ohio-4632.]
Torts—Products liability—
(No. 2019-0488—Submitted April 29, 2020—Decided October 1, 2020.)
APPEAL from the Court of Appeals for Lorain County, No. 17CA011215, 2019-Ohio-586.
{¶ 1} This products-liability lawsuit requires us to decide whether appellee, Amazon.com, Inc., has participated in placing a product in the stream of commerce and therefore can be held liable as a “supplier”
FACTS AND PROCEDURAL BACKGROUND
{¶ 2} This lawsuit arises from the tragic death of 18-year-old Logan Stiner, appellant‘s son. Logan died in May 2014 after ingesting a fatal dose of caffeine powder that he obtained from his friend, K.K. Several months earlier, K.K. went to Amazon‘s website and performed a product search using the term “pre-workout.” Her search generated several products. When she clicked on one of the listed products, Hard Rhino Pure Caffeine Powder appeared as an option. Tenkoris, L.L.C., a third-party vendor, sold the caffeine powder and posted the product on Amazon‘s website under the storefront name TheBulkSource.
{¶ 3} Tenkoris listed the powder on the Amazon.com Marketplace. To become a seller on the marketplace, third-party vendors must agree to the Amazon Services Business Solutions Agreement. The agreement requires third-party vendors to “source, sell, fulfill, ship and deliver” the products they sell on the marketplace. The seller is responsible for ensuring proper packaging of its product, including compliance with all applicable laws and minimum-age, marking, and labeling requirements. The product description displayed to the buyer on the Amazon marketplace comes from the seller, who must provide “accurate and complete Required Product Information for each product or service that [it] make[s] available to be listed through the Amazon Site and promptly update such information as necessary to ensure it at all times remains accurate and complete.” The seller sets the price, subject to certain restrictions, including that the seller must maintain price parity between products it sells on the Amazon marketplace and on other sales channels. The seller is “responsible for any non-conformity or defect in, or any public or private recall of, any of [its] Products.” While the seller may offer a warranty of its choosing, Amazon does not warrant third-party products sold on the marketplace.
{¶ 4} Third-party sellers can choose to use the “Fulfillment by Amazon” program. For a fee, Amazon stores the seller‘s product in an Amazon fulfillment center until it is purchased, at which point Amazon packages and ships the product to buyers. Tenkoris, however, did not use the Fulfillment by Amazon program to sell the Hard Rhino caffeine powder to K.K. Tenkoris kept the powder in its own inventory, fulfilled the order, packaged it, and shipped it directly to K.K.
{¶ 5} K.K. purchased the caffeine powder on February 27, 2014. Her purchase order states that the powder is “Sold by: TheBulkSource,” provides a link to TheBulkSource‘s return and replacement policy, and indicates that the buyer should contact TheBulkSource for any questions about the order. According to Tenkoris, Amazon never had possession of the caffeine powder and never physically touched the product.
{¶ 6} Three months after purchasing the caffeine powder, K.K. poured some into a plastic bag and gave it to her friend Logan. That same day, Logan was found unresponsive in his home and was pronounced dead on the scene. The coroner
{¶ 7} At the time of K.K.‘s purchase, the Federal Drug Administration (“FDA”) had not restricted pure caffeine powder and had not taken a public position that it was dangerous. In July 2014, Amazon removed caffeine-powder listings from its website in response to the FDA‘s publication of an advisory warning consumers of the dangers of pure powdered caffeine.
{¶ 8} After Logan‘s death, Stiner commenced this action against Amazon and its affiliated companies, Tenkoris, K.K., CSPC Pharmaceutical Co. Ltd. (the manufacturer of the caffeine powder), and Green Wave Ingredients, Inc. (the importer). The complaint asserted 12 causes of action, alleging strict product liability and negligence under the
{¶ 9} Amazon remained in the lawsuit as the sole defendant. Amazon and Stiner both filed motions for summary judgment. The trial court granted summary judgment to Amazon on all counts and denied Stiner‘s motion.
{¶ 10} The Ninth District affirmed. On appeal, Stiner abandoned all but his claims under the
QUESTIONS PRESENTED
{¶ 11} This court initially declined to review Stiner‘s discretionary appeal. 156 Ohio St.3d 1443, 2019-Ohio-2496, 125 N.E.3d 911. But on reconsideration, we accepted the appeal, 156 Ohio St.3d 1487, 2019-Ohio-3331, 129 N.E.3d 461, which presents two propositions of law limited to Stiner‘s product-liability claims:
(1) Where an internet provider such as Amazon acts as more than a neutral platform for third-party sales and actively promotes the sale of a deadly product, courts must apply public policy considerations underlying Ohio‘s consumer protection laws, including incentivizing safety and shifting risk away from consumers, in determining supplier status.
(2) An internet provider such as Amazon “otherwise participates in placing a product in the stream of commerce” and is a “supplier” under
O.R.C. [2307.71(A)(15)] when it agrees to promote a deadly consumable product, introduces and recommends that product to a consumer, and otherwise uses its influence to lead that consumer to believe the product is safe.
ANALYSIS
Meaning of “supplier” under the
{¶ 12} Stiner asserted four claims under the
{¶ 13} For the purposes of the Act, the definition of a “supplier” includes “[a] person that, in the course of a business conducted for the purpose, sells, distributes, leases, prepares, blends, packages, labels, or otherwise participates in the placing of a product in the stream of commerce.”
{¶ 14} In construing the definition of “supplier” in
{¶ 15} We start with the language immediately preceding the operative catchall provision. A supplier is one who “sells, distributes, leases, prepares, blends, packages, labels, or otherwise participates in the placing of a product in the stream of commerce.” (Emphasis added).
{¶ 16} Applying that rule here, the catchall provision—“otherwise participates in the placing of a product in the stream of commerce”—embraces conduct of a similar character as the sale, distribution, lease, preparation, blending, packaging or labeling of a product. All the specified actions involve some act of control over a product or preparation of a product for use or consumption.
{¶ 17} The next subsection of the statute further demonstrates that the General Assembly did not intend to impose supplier liability on persons who do not exercise
{¶ 18} The language in
{¶ 19} When reading the definition of “supplier” in
Amazon is not a supplier
{¶ 20} Based on the understanding that placing a product in the stream of commerce requires some act of control over the product, we conclude that Amazon should not be held liable as a supplier under the
{¶ 21} Stiner points to various factors to argue that Amazon controls all aspects of sales by third-party vendors. According to Stiner, Amazon prevents sellers from contacting customers; retains sole discretion to determine the content, appearance, and design of its website; reserves the right to alter the content of product descriptions; and imposes restrictions on pricing. While these factors may demonstrate the degree of control that Amazon seeks to exert in its relationship with sellers, they do not establish that Amazon exercised control over
{¶ 22} Other courts, focusing similarly on the degree of control that Amazon had exerted over a product, have declined to hold Amazon liable for products sold on its marketplace by third-party vendors. In Allstate N.J. Ins. Co. v. Amazon.com, Inc., D.N.J. No. 17-2738, 2018 U.S. Dist. LEXIS 123081 (July 24, 2018), the court construed a provision in New Jersey‘s products-liability act that is similar to Ohio‘s act. The New Jersey law defined a seller as “any party involved in placing a product in the line of commerce.” Id. at *19. The court concluded that “control over the product is the touchstone” under that state‘s law for determining whether a party has the requisite involvement to be a product seller. Id. at *20. And it found that Amazon never exercised control over the product sufficient to make it the seller when the third-party seller had decided what to sell, sourced the product from the manufacturer, and ensured the product was properly packaged and complied with all applicable laws. Id. at *22-23.
{¶ 23} The United States Sixth Circuit Court of Appeals also considered Amazon‘s liability under Tennessee‘s products-liability law, which also hinged on a seller‘s degree of control over a product. Fox v. Amazon.com, Inc., 930 F.3d 415, 424-425 (6th Cir.2019). The court found that Amazon could not be held liable for a defective hoverboard sold on its website because it had not chosen to offer the hoverboard for sale, had not set the price, and had not made any representations about the safety or specifications of the hoverboard on the Amazon marketplace. Id. at 425. See also Carpenter v. Amazon.com, Inc., N.D. Cal. No. 17-cv-03221, 2019 U.S. Dist. LEXIS 45317, *13-14 (Mar. 19, 2019) (granting summary judgment to Amazon because plaintiffs did not establish that Amazon‘s role was integral to the business enterprise and a necessary factor in bringing hoverboards to the consumer market).
{¶ 24} While not controlling on this court, these decisions demonstrate a prevailing understanding that Amazon‘s role in the chain of distribution is not sufficient to trigger the imposition of strict liability for defective products sold by third-party vendors on its marketplace.
The policy objectives of products-liability law
{¶ 25} Stiner argues that our determination whether Amazon is a “supplier” under the Act should take into account the policy objectives of products-liability law, as articulated in 2 Restatement of the Law 2d, Torts, Section 402A (1965), which this court had approved as the state of the law governing products-liability claims in Ohio before the January 5, 1988 effective date of the Act. See Am.Sub.H.B. No. 1, 142 Ohio Laws, Part I, 1661, 1757; see also Temple v. Wean United, Inc., 50 Ohio St.2d 317, 322, 364 N.E.2d 267 (1977).
{¶ 26} Stiner relies specifically on Anderson v. Olmsted Util. Equip., Inc., 60 Ohio St.3d 124, 573 N.E.2d 626 (1991), to argue that the policy considerations evident in the Restatement warrant the imposition of liability on Amazon for placing a product into the stream of commerce. In Anderson, this court held that the rebuilder of a defective device could be held strictly liable under Section 402A, even if it did not actually sell the device. Id. at 129. In reaching that conclusion, the court noted the rationale in Section 402A for imposing strict liability: “ ‘public policy demands that the burden of accidental injuries caused by products intended for consumption be placed upon those who market them, and be treated as a cost of production against which liability insurance can be obtained.’ ” Id. at 128,
{¶ 27} This court has recognized that the principles of strict liability in Section 402A developed in order to achieve the policy objectives of promoting product safety and shifting the costs of injuries away from consumers. Queen City Terminals, Inc. v. Gen. Am. Transp. Corp., 73 Ohio St.3d 609, 621, 653 N.E.2d 661 (1995). We also presume that the General Assembly knows the common law when it enacts legislation. Walden v. State, 47 Ohio St.3d 47, 56, 547 N.E.2d 962 (1989) (Resnick, J., concurring in part and dissenting in part), citing Davis v. Justice, 31 Ohio St. 359, 364 (1877). Yet, when the General Assembly enacted the
{¶ 28} But even if we were to consider the policy objectives of products-liability law predating the Act, Stiner has not demonstrated that holding Amazon liable would promote product safety. Because Amazon does not have a relationship with the manufacturers of third-party products, Amazon lacks control over product safety. Amazon did not choose to offer the caffeine powder for sale and has no role in manufacturing, labeling or packaging the product. While Amazon can address safety issues by suspending or removing sellers, Amazon‘s control over its website does not establish that Amazon is in a position to eliminate the unsafe character of products in the first instance. Under the facts of this case, Stiner has not demonstrated that Amazon was in a position to safeguard the quality and safety of the caffeine powder before it entered the stream of commerce.
{¶ 29} Finally, Stiner points to Amazon‘s retail dominance to argue that Amazon is the party best positioned to compensate injured consumers and to allocate those costs to itself and third-party vendors. Stiner‘s arguments for cost-spreading and risk allocation, however, implicate policy concerns that we reserve for the General Assembly to address.
CONCLUSION
{¶ 30} Under the facts of this case, we find that Amazon is not a supplier, as defined in
Judgment affirmed.
O’CONNOR, C.J., and KENNEDY, FISCHER, DEWINE, and STEWART, JJ., concur.
DONNELLY, J., concurs in judgment only, with an opinion.
{¶ 31} Reluctantly, I agree that the definition of “supplier” in the
{¶ 32} The
{¶ 33} When the
{¶ 34} Applying the 1980s retail-sales paradigm to modern e-commerce produces results that strike me as inequitable. The Act applies to a person with a role as minor as placing a sticker on a product but not to a person that controls every single aspect of placing a product in the stream of commerce except for transferring ownership or physically controlling the product. The Act applies to a mom-and-pop
{¶ 35} If the purposes and policy objectives at the foundation of products-liability law were taken into consideration, however, I believe that those objectives would be well-served by holding Amazon liable for unsafe, defective products that it allows its customers to purchase on its website. The fundamental purpose of the products-liability law is to protect consumers from harm, particularly to protect them from suffering harm without recourse. See Prosser, The Assault Upon the Citadel (Strict Liability to the Consumer), 69 Yale L.J. 1099, 1122-1123 (1960). The mechanism historically used to accomplish the purpose of consumer protection is to incentivize manufacturers to make safe products, to incentivize wholesalers to choose safe, reputable manufacturers, and to incentivize sellers to choose safe, reputable wholesalers. See generally Brooks v. Beech Aircraft Corp., 120 N.M. 372, 376, 902 P.2d 54 (1995), citing Vandermark v. Ford Motor Co., 61 Cal.2d 256, 262-263, 37 Cal.Rptr. 896, 391 P.2d 168 (1964). The mechanism used to ensure that consumers have recourse for any harm caused is to apply strict liability along the entire supply chain. By doing so, we ensure that at least one entity along that line—most likely the one with direct contact with the consumer—will be reachable by the consumer. Cavico Jr., The Strict Tort Liability of Retailers, Wholesalers, and Distributors of Defective Products, 12 Nova L.Rev. 213, 221-222 (1987); State Farm Fire & Cas. Co. v. Amazon.com, Inc., 390 F.Supp.3d 964, 970 (W.D.Wis.2019) (“sellers and distributors are liable, not because of any particular activity on their part, but because they are proxies for the absent manufacturer”).
{¶ 36} Even if Amazon cannot be considered a supplier in the traditional, pre-Internet sense, I believe that its all-encompassing participation in the sales transactions of its third-party merchants places Amazon squarely on the supply chain, between the seller and the consumer. Amazon plays the role of the seller by taking all customer orders, handling all payment processing, guaranteeing shipment terms, and processing returns. State Farm, 390 F.Supp.3d at 972. It even exceeds the role of the seller because it directly controls third-party merchants’ pricing through explicit
{¶ 37} Perhaps even more importantly, Amazon exceeds the role of the seller because it indirectly controls the pricing of all products through its “proprietary ‘Buy Box’ system,” its “inherent position of competition” with its third-party merchants, and its ability to collect and exploit all merchants’ business data to drive down prices. Id. at 754, 756. Amazon controls all communication with the customer—“ [t]hird-party sellers * * * are prohibited from communicating with Amazon customers except through the Amazon website, where such interactions are anonymized,” Bolger v. Amazon.com, L.L.C., ___ Cal.Rptr.3d ___, 53 Cal.App.5th 431, *11 (2020)—and Amazon is the party that customers will most likely be able to reach for any matter, including a products-liability lawsuit. Because Amazon is so deeply involved in the chain of distribution leading to the Amazon customer, Amazon is well positioned to monitor third-party sellers and their products and to limit its e-commerce services to reputable third-party sellers that select safer products, just as sellers are in a position to select safer products that are sourced from reputable wholesalers or manufacturers.
{¶ 38} The majority maintains that even if the court were to consider policy objectives, holding Amazon liable in this case would not promote the policy objectives of products-liability law, because Amazon does not have a relationship with the manufacturers of the third parties’ products, does not choose the products to be sold, and does not make any choices about their preparation or marketing. But the majority‘s position merely identifies what Amazon is not obligated to do under the
{¶ 39} The central mechanism of products-liability law is to force members of the supply chain to make safer decisions about products that reach consumers. Amazon is the final stop in the supply chain, and it is capable of making decisions about third-party sales that would better protect Amazon‘s customers from defective, hazardous products. Accordingly, from a policy standpoint, the objectives underlying products-liability law would be accomplished by treating Amazon—in the context of its sales fulfilled by third parties—the same way it treats sellers.
{¶ 40} Closing the obligation gap in the
Brian K. Balser Co., L.P.A., and Brian K. Balser; and Merriman, Legando, Williams & Klang, L.L.C., Drew Legando, and Edward S. Jerse, for appellant.
Porter, Wright, Morris & Arthur, L.L.P., Joyce D. Edelman, Kathleen M. Trafford, and L. Bradfield Hughes; and Perkins Coie, L.L.P., and Julie L. Hussey, for appellees.
Christopher J. Walker, urging affirmance for amici curiae Chamber of Commerce of the United States of America and Ohio Chamber of Commerce.