ILMA Compoundings - November/December 2020 - 37

Regardless of the fact
that Amazon only " connected " the seller and
consumer, the legal test
set forth by the appeals
court rests on who
places a good into the
stream of commerce.

every possible product liability case,
but its far easier to make a business
jump through hoops to demonstrate
product safety before allowing sales.
Businesses that deal in chemical
products, including ILMA members,
could face outright prohibitions,
forcing them to compete against a
digital marketplace's generic brands.
Amazon, for example, currently sells

its own motor oils alongside those sold
through branded storefronts.
If the California Supreme Court
does not overturn the decision, there
is a real concern about decreased
competition for digital marketplaces,
which would face a significant risk
that previously did not exist. In the
event that the state's high court does
reverse the appeals court, there is a
second method of imposing strict
liability that, strangely, Amazon has
publicly supported: legislation.
Less than two weeks after the
California appeals court handed down
its decision in Bolger, Amazon said
that it would support a bill going
through the California legislature,
extending strict product liability to
all digital marketplaces, as long as it
was evenly applied to all platforms.

Considering the tech giant's California Supreme Court appeal came only
a few weeks later, along with another
case before the Pennsylvania Supreme
Court in which the company said
it should not be liable for defective
products, many were surprised by the
zig-zagging (Amazon settled the case
in Pennsylvania shortly after making
its argument). Walking through the
implications of the appeals court's
decision, it is clear why Amazon
wanted a law, rather than a court
opinion. Based on how the appeals
court decided, future courts would
look at how a marketplace is set up to
apply strict liability to one platform at
a time, in this case Amazon, whereas
a law applies to all digital marketplace
providers right away.
The California bill was defeated
in the legislature, but it is likely to
return if Amazon loses at the state's
highest court. Although this seems at
first to be a California-only problem,
the importance of digital marketplaces could affect both sellers and
purchasers in other states and should
be watched.
Levetown serves as
associate counsel to ILMA
through Bassman, Mitchell,
Alfano & Leiter Chtd.
He may be reached at 202-466-6502 or
mlevetown@bmalaw.net.

37



ILMA Compoundings - November/December 2020

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