Case Name: Morgan McMillan, individually and as next friend of E.G., a minor child, Plaintiff—Appellee, v., Inc., Defendant—Appellant

On December 18, 2020, the United States Court of Appeals for the Fifth Circuit filed the following certified question with the Texas Supreme Court: “Under Texas products-liability law, is Amazon a ‘seller’ of third-party products sold on Amazon’s website when Amazon does not hold title to the product but controls the process of the transaction and delivery through Amazon’s Fulfillment by Amazon program?”

According to the Fifth Circuit, “If the former, then Amazon is a ‘seller’ under Texas products-liability law and potentially liable for injuries caused by unsafe products sold on its website.” However, if it is not a seller, “injured consumers cannot sue [Amazon] for alleged product defects.”

On June 25, 2021, the Texas Supreme Court stated that is not “a ‘seller’ under Texas law when it does not hold title to third-party products sold on its website but controls the process of the transaction and delivery.” Therefore, “when the ultimate consumer obtains a defective product through an ordinary sale, the potentially liable sellers are limited to those who relinquished title to the product at some point in the distribution chain.” Justice Boyd issued a dissenting opinion, in which Justice Devine joined.

Analyses in both the majority and dissenting opinions focused on language in Tex.Civ. Prac. & Rem. Code § 82.001(3), which defines a “seller” under the Texas Products Liability Act (“Act”) as a “person who is engaged in the business of distributing or otherwise placing, for any commercial purpose, in the stream of commerce for use or consumption a product or any component part thereof.” (Emphasis supplied.) The bolded terms in the preceding sentence are not defined within the Act.

Justice Busby, writing for the majority, referenced dictionary definitions and Texas common-law products liability case law, which “has been shaped by section 402A of the Second Restatement of Torts.” On the other hand, the dissenting opinion relies only on dictionary definitions, and states:

. . . we must determine its meaning as of the date of [the statutory section’s enactment, in 1993]. To the extent our pre-1993 decisions illustrate the phrase’s meaning, such that we can assume the legislature intended to incorporate that meaning, to “distribute or otherwise place” a product into the stream of commerce meant to physically convey or transfer it within the sales process. To retroactively impute a new common-law possession-of-title requirement is to improperly “judicially amend the statute to add an exception not implicitly contained in the language of the statute.”

Additional case information and appellate briefs are available here.