“…[W]e conclude that a person who ‘otherwise participates in the placing of a product in the stream of commerce’ must exert some control over the product as a prerequisite to supplier liability.”

Justice French, opinion of the Court

“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”

Justice Donnelly, separate concurrence in judgment only  

On October 1, 2020, the Supreme Court of Ohio handed down a merit decision in Stiner v. Amazon.com, Inc., 2020-Ohio-4632. In a unanimous opinion written by Justice French, the Court held that Amazon is not a supplier under the Ohio Products Liability Act, and therefore not responsible for the death of a teenager killed by an overdose of pure caffeine powder sold on its site. Justice Donnelly concurred in judgment only, with a separate opinion. The case was argued April 29, 2020.

Case Background

On February 27, 2014, K.K., a friend of Logan Stiner’s, bought some caffeine powder off Amazon’s website. K.K. did a product search on Amazon’s website for “pre-workout.” Her search produced several results, one of which was Hard Rhino Pure Caffeine Powder. This product was sold by third-party vendor Tenkoris, L.L.C., under the storefront name TheBulkSource. Three months after buying the caffeine powder, K.K. gave some to Logan Stiner. That same day, in May of 2014, Logan was found dead at his home. The coroner gave the cause of death as cardiac arrythmia and seizure from acute caffeine toxicity.

At the time K.K. bought the caffeine powder, the Federal Food and Drug Administration (“FDA”) had not restricted pure caffeine powder nor taken a public position that it was dangerous. In July of 2014, Amazon removed caffeine-powder listings from its website in response to an FDA warning to consumers about the dangers of pure caffeine powder.

Amazon’s Services Business Solutions Agreement

To become a seller on the Amazon.com Marketplace, third-party vendors such as Tenkoris must agree to its Service Business Solutions Agreement, which requires third-party vendors to “source, sell, fulfill, ship and deliver” the products they sell on Amazon. Sellers are responsible for product packaging, and compliance with any applicable laws. The product description seen by the buyer comes from the seller and must be kept current. The seller sets the price of the product and is responsible for any defects, problems, or recalls. While the seller may offer a warranty, Amazon does not warrant any third-party products sold on the marketplace.

Third-party sellers can opt to use Amazon’s fulfillment program. For a fee, Amazon will store the seller’s product in one of its fulfillment centers until it is bought, at which point Amazon packages and ships the product to the buyer.

Tenkoris did not use Amazon’s fulfillment program to sell the Hard Rhino caffeine powder to K.K. Tenkoris fulfilled this order itself straight from its own inventory, and packaged and shipped it directly to K.K. So, Amazon never had possession of the caffeine powder purchased by K.K. and never physically touched the product.

The Lawsuit

After Logan died, his father, Dennis Stiner, sued Amazon and its affiliated companies, Tenkoris, K.K., the product manufacturer and importer alleging numerous causes of action.  Eventually, Stiner dismissed all defendants except Amazon (and was never able to complete service of process on the Chinese company that manufactured the product). 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.

Stiner appealed, and on appeal dropped all his claims except those arising under the Ohio Product Liability Act (“the Act”) and the Ohio Pure Food and Drug Safety Act. The Ninth District affirmed, finding that Amazon was not a supplier under R.C. 2307.71(A)(15), and was not liable under the Ohio Pure Food and Drug Safety Act.

Read the oral argument preview of the case here and an analysis of the argument here.  

Key Statutes and Precedent

R.C. 2307.71 Product Liability Definitions

(A)(15)(a)(1)(Defines supplier as “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.”)

R.C. 3715.52 (Prohibits the “manufacture, sale, or delivery, holding or offering for sale of any food, drug, device, or cosmetic that is adulterated or misbranded.”)

Anderson v. Olmsted Util. Equip., 60 Ohio St.3d 124 (1991) (Pre-Products Liability Act case imposing strict liability and finding that a company that refurbished an aerial device that later failed placed the device in the stream of commerce even though the company may not have “sold” the device.)

Queen City Terminals, Inc., v. Gen. Am. Transp. Corp., 73 Ohio St.3d 609, 653 N.E.2d 661 (1995) (The principles of strict liability set forth in the Restatement of Torts (Second) Section 402A were developed to promote product safety and to shift the cost of injuries away from consumers.)

Fraley v. Estate of Oeding, 2014-Ohio-452 (When a statute contains a list of specific terms followed by a catchall term, courts should “consider the catchall term as embracing only things of similar character as those comprehended by the preceding terms.”)

Allstate N.J. Ins. Co. v. Amazon.com, Inc., Civil Action No. 17-2738 (D.N.J. 2018) (Amazon never exercised the necessary control over the product sufficient to make Amazon the seller when the third-party seller had decided what to sell, as well as sourced and packaged the product.)

Fox v. Amazon, Inc., 930 F.3d 415 (6th Cir. 2019) (Declining to limit “sellers” under Tennessee product liability law to those who transfer title to products and instead looked to the degree of control over a product and held that Amazon was not the seller of a defective hoverboard.)

Stiner’s Proposed Propositions of Law

First Proposition of Law

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.

Second Proposition of Law

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. 2307.51(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.

Does the Court adopt Stiner’s Propositions of Law?

No

Merit Decision

Executive Summary

In order to be held liable as a supplier under the “otherwise participates in the placing of a product in the stream of commerce” catch-all provision of Ohio’s Products Liability Act, a person (or entity) must exert some control over the product. Under the facts of this case, Amazon did not.

Meaning of “Supplier” under the Ohio Products Liability Act

Stiner’s product-liability claims, both in strict liability and in negligence, turn on whether Amazon is a supplier under the Act. This is the definition of “supplier” under the Act:

“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.”

Stiner argues that Amazon is a supplier because Amazon took part in placing the caffeine powder in the stream of commerce.

Legislative Intent

In interpreting any statute, the Court starts with the statutory language itself. Here, what is crucial to the unwinding of the case is first, the determination that “otherwise participates in the placing of a product in the stream of commerce” is a catch-all provision, and second, the determination that this catch-all provision must be read in conjunction with the list of actionable specific actions that come before the catch-all provision. In other words, the catch-all provision is a like-kind item, linked with the rest. And in this case, the common element of each of the items that precedes the catch-all provision is control over the product.

The next section of the Act lists what” supplier” does not include, such as a person who provides financing for the sale of a product or who arranges for a lease of the product. The Court concludes that these persons don’t become “suppliers” in the absence of control over the product, even if they might have helped enable the delivery of a product into the stream of commerce. And the Court notes that the Act codifies the “well-settled principle in products-liability law that strict liability does not extend to every participant in a product’s chain of distribution.”

So, the sine qua non to be found to be a “supplier” under the Act is some control over the product.

Stiner’s arguments about Amazon’s control of products on its marketplace

Stiner identified a number of factors to demonstrate that Amazon controls all aspects of sales by third-party vendors. According to Stiner, Amazon prevents sellers from contacting customers, has the sole discretion over the content and design of its website, reserves the right to change the content of product descriptions, and imposes pricing restrictions. While the Court acknowledges that these factors show control over the sellers, they don’t show sufficient control over the products themselves to make Amazon a supplier under the Act.

Tenkoris, the seller of the caffeine powder, not Amazon, had the sole responsibility for the fulfillment, packaging, labeling, and shipping its product directly to its customers. Amazon had no relationship with the manufacturer or anyone else in Tenkoris’s distribution network. Tenkoris decided what to sell on Amazon and took the responsibility for getting the product from the manufacturer to the consumer. Tenkoris wrote the product description that K.K. and other buyers would see on the Amazon marketplace. K.K.’s purchase order clearly states that the powder is “Sold by: TheBulkSource” which was to be contacted with any questions about the product. And Tenkoris conceded that Amazon never had possession of the caffeine powder and never physically touched its product.

The Court reviews decisions from several other courts which have declined to hold Amazon liable for products sold by third-party vendors on its marketplace. In all the decisions it reviewed, the common theme is control over the product, which is the touchstone in finding liability in this context. And while not binding on the Ohio high court, the prevailing legal headwinds are 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.”

Policy Considerations

Stiner argued that the Court should consider the policy objectives set forth in the Second Restatement of Torts, Section 402A when deciding whether Amazon is a supplier under the Act. Those policy objectives are to promote product safety and to shift the costs of product injuries away from consumers and on to those who market the products. And yet, French writes, when the General Assembly enacted the Products Liability Act in 1988, it did not codify the policy considerations set forth in Section 402A of the Restatement or of the Court’s common law precedent.  On the contrary, when the legislature added subsection (B) to R.C. 2307.71 effective April 2005, it expressed its intent to abrogate all common law product liability causes of action. So, French notes, that means legislative intent must be discerned strictly from the text of the Act.  And that text clearly means that the phrase “otherwise participates in the placing of a product in the stream of commerce” in the Act means that in order to be liable as a supplier, a person must exert some control over the product.

The Court takes this one step further, by noting that even if it were to consider policy considerations that pre-dated the Act, Stiner failed to demonstrate that holding Amazon liable would promote product safety.  Amazon did not choose to offer the caffeine powder for sale, nor did it manufacture, package, or label the product.  While Amazon certainly can remove or suspend sellers from its marketplace,  that alone does not show that Amazon can eliminate unsafe products.

So, under the facts of this case, Stiner failed to show that Amazon could safeguard the quality and safety of the caffeine powder before it entered the stream of commerce.

Stiner also argued that Amazon’s retail online dominance put it in the best position to compensate injured consumers and to apportion those costs to itself and third-party vendors.  Take that up with the General Assembly, says French.

Justice Donnelly’s Opinion Concurring in Judgment Only

Concurrence is Reluctant

Justice Donnelly characterizes his concurrence as a reluctant one, believing there was no choice, given the definition of “supplier” in the Ohio Products Liability Act.  He begins his opinion, though, with his disagreement with the notion that holding Amazon liable for unsafe products on its marketplace would not promote the purpose of product-liability law.

“To the contrary, the failure to hold Amazon liable for injuries to its customers thwarts the purpose of products liability law because it puts Amazon’s customers at risk of being injured by a seller that can easily make itself unreachable for redress,” Donnelly wrote. He further noted that strict liability would incentivize Amazon to select safer products.

Turning his attention to the catchall phrase in the Act, “otherwise participates,” Donnelly notes that while that phrase is extremely broad, the canon of construction known as ejusdem generis means a broad phrase has to be limited by the specifics that precede it in the statute. Here those specifics are selling, distributing, leasing, preparing, blending, packaging and labeling.

Stone Age Concepts in Internet Era

But the most significant aspects of Justice Donnelly’s separate concurrence are his observations about the inequities of “applying the 1980’s retail-sales paradigm to modern e-commerce…” The Ohio Products Liability Act was enacted in the pre-Internet era, where sellers facilitated and fulfilled their own orders, and the statutory term “supplier” must be understood in that context.  And he sees that match-up as inequitable, noting that the Act can apply to a person who does nothing more than place a sticker on a product, but not to a person (or entity) that controls each and every aspect of placing a product in the stream of commerce except transferring ownership or physically controlling the product.

“The divide between the pre-Internet age and the current age is so profound that laws like this Act might as well have been written in the stone age. Notwithstanding all the foregoing, though, this court cannot modernize the Act by judicial fiat; we must apply the statutory scheme as it is currently written,” Donnelly wrote.

Public Policy Objectives

Justice Donnelly makes it clear that if the public policy that undergirds products liability laws were taken into account, those policy objectives would be best served by holding Amazon liable for unsafe and defective products offered for sale on its website. Historically, the way to accomplish the goal of consumer protection has been to incentivize manufacturers to make safe products, wholesalers to choose safe and reputable manufacturers, and sellers to choose safe and reputable wholesalers. In legal terms, this means applying strict liability all along the supply chain, and making at least one, usually the one with the most direct contact, reachable by the consumer.

Examining Amazon’s Role in the Internet Era

To Donnelly, even if Amazon can’t be considered a supplier in the traditional sense, he sees its “all encompassing participation” in the entire sales transaction as placing it foursquare in the supply chain between the seller and the consumer.

Donnelly observes that Amazon actually goes beyond the role of seller because of its “Buy Box” system, its ability to control product prices, its control over communication with the customer, and as the party customers are most likely able to reach. In short, Amazon is in the best position to monitor third-party sellers and their products, and to restrict sales only to safe products and reputable third-party sellers. 

Finally, Donnelly chides his colleagues for focusing on what Amazon is not obliged to do, instead of focusing on what Amazon should be obligated to do.

“The fact that the limited wording of the Act leaves a gap that allows e-commerce entities like Amazon to evade any obligation does not mean that there is a corresponding gap in the policy underlying the law; it means that the Act is failing to fully realize its purpose,” he wrote.

Donnelly concludes by noting that from a public policy standpoint, the objectives of products liability law would best be met by treating Amazon, in the context of sales fulfilled by third parties, the same way it treats sellers. But, as he notes again, such policy concerns belong to the General Assembly.

Case Disposition

Judgment for Amazon affirmed.

Trial Court Judge (affirmed)

Lorain County Common Pleas Court Judge John L. Miraldi

Ninth District Court of Appeals (affirmed)

Opinion by Judge Julie Schafer, joined by Judges Tom Teodosio and Lynne Callahan

Concluding Observations

Here’s what I wrote after argument:

I’m calling this for Amazon, although I don’t want to, because I think the Ohio legislature intended to sharply limit strict liability and because I don’t think the justices in this case want a public policy overread into those mysterious words from the legislature, “otherwise participates in the placing of a product in the stream of commerce…” 

“Times have changed. Product liability laws enacted back in the day don’t fit these new internet retailers like Amazon. Of course the common law is much better suited to adapt to changing times than a statute…

“While Amazon may not, as it strenuously argues here, control the product, it certainly controls the entire process by which the product enters the stream of e-commerce. And while there may be a national trend in federal courts in favor of Amazon in cases like this, the wording in the various state statutes is different.  Ohio, for example, uses “supplier” where others use “seller,” and includes that broad language “otherwise participates in the placing of a product in the stream of commerce.” So, this case will probably turn on how broadly or narrowly the Supreme Court of Ohio interprets that phrase, whether it leans more toward “facilitates” or more toward ‘control plus hands-on action.’” It clearly leaned toward the latter.

Count me in Justice Donnelly’s camp on this one. Are any of Ohio’s legislators out there listening? The genius of the common law is its adaptation to societal changes. Statutes don’t have that flexibility.