This case arose from a fire caused by a defective battery purchased on Amazon. A consumer named Rochelle Zappa bought a battery from a third-party seller named Yishda, which participated in Amazon's Fulfillment by Amazon program. This program allows third-party sellers to use Amazon's infrastructure, including its warehouses and delivery drivers, to store, fulfill, and ship orders. The battery sparked and burst into flames at Zappa's workplace, causing nearly $3.9 million in damage. Berkley Regional Insurance Company, which paid for the damage as the employer's insurer, sued Amazon, Yishda, and the unknown manufacturer in state court. After the case was removed to federal court, Berkley dropped claims against the other defendants and sought to certify a question to the Minnesota Supreme Court regarding Amazon's liability. The district court, however, declined to certify and instead made an Erie guess that online marketplaces are not strictly liable when fulfilling orders for third parties. Berkley appealed that decision.
The Eighth Circuit, writing for the panel, held that the Minnesota Supreme Court should decide whether Amazon is strictly liable for third-party products sold through its fulfillment program. The court identified three primary reasons for certification. First, the question is novel. Amazon's business model, particularly the Fulfillment by Amazon program, did not exist when Minnesota's strict liability laws were developed. The court noted that while the Restatement (Third) of Torts offers general guidance, it does not clearly define whether Amazon counts as a seller or distributor in this context, leading to a nationwide split in how other courts have ruled. Second, the issue is of widespread public concern and likely to recur. The court emphasized that certification fosters cooperative federalism and allows the state's highest court to balance the public policy demand to protect consumers against the severe economic consequences of imposing strict liability on e-commerce platforms. Third, the legal question is clean and depends on undisputed facts. The record clearly establishes that Yishda listed the product and Amazon handled the fulfillment, leaving only the pure legal question of liability to be answered. The court concluded that making an Erie guess would be wading into murky waters and that the certification procedure under Minn. Stat. § 480.065, subd. 3, is the appropriate mechanism.
The Eighth Circuit stayed its proceedings pending the Minnesota Supreme Court's answer to the certified question. The court certified the following question: Under Minnesota law, if an e-commerce company allows an unrelated party to sell a defective product through its website and provides order-fulfillment services for the sale, is it strictly liable for any harm caused by the defect? The Minnesota Supreme Court may reformulate the question as it sees fit. Once the state court answers, the federal appeal will resume based on that ruling. This decision leaves the liability of Amazon and similar platforms in Minnesota unresolved until the state supreme court weighs in, avoiding a potential split in federal and state interpretations.