Amazon.com, Inc. v. McMillan

2021 Tex. LEXIS 624 (2021)

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Amazon.com, Inc. v. McMillan

Texas Supreme Court
2021 Tex. LEXIS 624 (2021)

Facts

Amazon.com, Inc. (defendant) was a global e-commerce company that operated an online marketplace. In addition to selling its own products, Amazon listed products owned and sold by third parties. Amazon facilitated the sale of third-party products by processing buyers’ payments, retaining a portion of each payment, and sending the remainder of the payment to the seller. Some sellers also used the Fulfillment by Amazon (FBA) logistics service. These sellers retained title to their products prior to sale, but the products were stored in an Amazon warehouse and packaged and shipped to purchasers by Amazon. The husband of Morgan McMillan (plaintiff) bought a remote control from Hu Xi Jie, an Amazon third-party seller who lived in China and used the FBA service. McMillan’s 19-month-old daughter was severely injured when she opened the remote control’s battery compartment and swallowed the button battery. McMillan sued Amazon and Jie in federal district court, alleging strict liability for design and marketing defects. Jie did not make an appearance or file an answer, and Amazon moved for summary judgment, arguing that it could not be held strictly liable because it was not a seller of the remote. McMillan argued that Amazon was strictly liable as a nonmanufacturing seller under the Texas Products Liability Act. The district court denied Amazon’s motion, and Amazon appealed. The United States Court of Appeals for the Fifth Circuit certified to the Texas Supreme Court the question of whether an e-commerce website qualifies as a seller under Texas law if it does not hold title to third-party products sold on its website but controls the transaction and the delivery.

Rule of Law

Issue

Holding and Reasoning (Busby, J.)

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