The continued growth of e-commerce has prompted courts to reevaluate traditional product liability principles, particularly as they apply to third-party sellers and online marketplaces. While strict product liability for defective products was originally only available against manufacturers, many states have expanded the reach to include distributors, retailers, and, most recently, online “platforms” such as Amazon.com.

The most significant development in this area comes from California, where the Court of Appeal in Bolger v. Amazon.com, LLC, 53 Cal.App.5th 431 (Cal. App. 2020) held that Amazon could be strictly liable for a defective product sold by a third-party vendor on its platform. Amazon’s active role in the distribution train, which included control over the  listing, processing payment, and facilitating delivery, persuaded the court to extend strict liability for the defective product to Amazon.com. In doing so, the court reinforced that strict liability is intended to place responsibility on entities best positioned to prevent harm and spread risk, even if they do not fit the traditional definition of a seller.

Other western states grappling with similar issues have not yet gone as far as California. In Nevada, strict liability still turns on whether the defendant qualifies as a “seller” or “distributor,” but the analysis is increasingly fact-specific. Shoshone Coca-Cola Bottling Co. v. Dolinski, 82 Nev. 439, 441, 420 P.2d 855 (1966). Where a platform exerts control over key aspects of the transaction, such as payment processing or fulfillment, there is a viable argument that it operates as more than a passive intermediary. Colorado remains more conservative, generally limiting liability to parties directly tied to the sale. Miller v. Solaglas Cal., 870 P.2d 559 (1993).  Although the rise of fulfillment-based business models is beginning to test those boundaries. As a result, cases involving inventory control or shipping by the platform may create openings for subrogation recovery.

Washington provides a more flexible statutory framework, allowing claims against product sellers in circumstances where the manufacturer is not subject to jurisdiction or cannot be identified.

 Am. Fam. Mut. Ins. Co., SI v. Wood Stoves Etc., Inc., 24 Wn. App. 2d 26 (2022). This is particularly useful in subrogation matters involving foreign or insolvent manufacturers, where pursuing upstream parties may be impractical. Oregon, by contrast, maintains clearer statutory limits, typically protecting entities that merely facilitate sales. Johnston v. Water Sausage Corp., 83 Ore. App. 637 (1987). However, liability may still attach where a party exercises sufficient control over the product or plays a substantial role in placing it into the stream of commerce.

As courts continue to confront the realities of e-commerce, third-party sellers and online platforms will remain an increasingly important focus in subrogation recovery strategies.

If you have any questions about subrogation recovery, please contact Paul Landis at 480.502.4664 Ext. 4225 or e-mail at plandis@blwmlawfirm.com,  or  at Christine Pham at 480.502.4664 Ext. 4206 or e-mail at cpham@blwmlawfirm.com.