Disciplined in Sophisticated Defense and Insurance Litigation

May 30, 2019 | Blog Post| Should Amazon be Liable for Products Sold in its Marketplace?

Amazon, the largest e-commerce website in the world and a member of the “Big Four” has repeatedly, and successfully, argued that the company is not liable for harm caused by the defective products that are sold by third parties on its website. Most recently, Amazon avoided potential liability arising from a house fire caused by a defective headlamp. In Erie Insurance Company v. Amazon.com, Inc., 2019 WL 215146, the Fourth Circuit Court of Appeals granted summary judgment in favor of Amazon finding that Amazon did not sell the headlamp and therefore was not liable for its defective condition. While the decision was not unusual, Judge Motz of the Fourth Circuit hinted that legislative reform may be necessary to address online marketplaces like Amazon.

The critical issue facing customers is that many of the products sold through Amazon are manufactured by foreign entities that are effectively judgment-proof. Amazon does not warrant nor assume responsibility for these products. In the above-referenced case, the customer’s receipt explicitly stated that the headlamp was “Sold by: Dream Light [a third-party seller] – and Fulfilled by Amazon.” The “fulfillment services” offered by Amazon allowed Dream Light to ship its inventory to an Amazon warehouse for storage and, once an order was received, Amazon would retrieve the product from inventory, box it, and ship it to the customer. Amazon collected payment and, after withdrawing its service fee, remitted the balance to Dream Light. The Court, like several courts before it, determined that Amazon did not constitute a “seller” because it never received title to the headlamp. Facilitating the sale, the Court found, did not open Amazon to liability any more than UPS would be liable for delivering the defective product. 

Judge Motz agreed that Amazon was not a seller but wrote separately “to emphasize why this may not always be so.” In her opinion, Judge Motz distinguished Amazon’s business model from the traditional supply chain where title is transferred as the product moves along the supply chain from manufacturers to distributors to retailers, which almost always provides some legal recourse against an entity available for service of process within the United States. Amazon disrupted the traditional supply chain by cutting out the middlemen “reducing the friction that might keep foreign (or otherwise judgment- proof) manufacturers from putting dangerous products on the market.”

Amazon’s contributions to customers and their experience are obvious – who doesn’t enjoy affordable prices and two-day shipping? But the pressure to lower prices and shorten delivery time could leave certain customers holding the bag without adequate legal protection. Judge Motz appears to suggest that change may be coming, stating that “nothing in today’s holding prevents Maryland’s own courts or legislators from taking up and resolving these difficult, fast-changing, and cutting-edge issues differently.” But will legislatures take a stand against the $1 trillion behemoth that is Amazon? Only time will tell.

Michael Wolfer | ASSOCIATE

Casualty Defense Litigation, First-Party Coverage and Subrogation & Recovery

(215) 405-9191 | PHILADELPHIA

May 08, 2019 Blog PostSUBRO IN SECONDS | VLOG 2

Aaron Jacobs recaps the latest in the world of Subrogation.

Read More »
April 29, 2019 Blog PostKNOW YOUR LEASE: FLORIDA'S 3RD DISTRICT REVISITS SUBROGATION IN THE CONTEXT OF LANDLORD/TENANT LEASES

Historically, a tenant who pays towards its landlord’s insurance premiums, pursuant to the terms of the lease, is generally considered a “co-insured” under the landlord’s policy.  See Lumber Mutual Insurance Co. v. Zoltek Corp., 647 N.E.2d 395 (Mass. 1995). However, a Florida court recently reviewed a lease with such a provision and came to an opposite conclusion.  Zurich American Insurance Company v. Puccini, LLC, 2019 WL 454222 (Fla. 3d DCA February 4, 2019).

Read More »
April 17, 2019 Blog PostNotre Dame and Handling Tragic Losses

Imagine you just received an email, subject line “New Assignment – April 15 2019 loss – Paris France.” You open the email and learn that you will be assisting in the rebuilding of Notre Dame.

Read More »
April 15, 2019 Blog PostUnsuccessfully Using Requests for Admissions as a Sword for Attorney's Fees

As a defense attorney practicing in the areas of auto accidents, premises liability, and products liability cases, I observe plaintiff’s counsel serving my clients with requests for admission, asking for improbable admissions.  The requests often ask my clients to admit that they were negligent in causing the accident, failed to provide sufficient security or training to prevent a criminal act against a customer or tenant, failed to take the necessary precautions to prevent a slip and fall or make a product safe, and that such negligence was a proximate cause of plaintiff’s claimed damages. 

Read More »
February 28, 2019 Blog PostSubro in Seconds | Vlog 1

Aaron Jacobs recaps the latest in the world of Subrogation while discussing important articles and court decisions that can impact future Subrogation claims.

Read More »
February 18, 2019 Blog PostDiversity For Jurisdictional Purposes In Federal Litigation

Recently, I was speaking with a client, and we were discussing some of the unique issues subrogation professionals face on a regular basis. He stated that one of the things that new recovery adjusters are rarely familiar with is the concept of “diversity” for jurisdictional purposes in federal court litigation.

Read More »
January 25, 2019 Blog PostIntroducing the New Florida Supreme Court (from an Insurance Perspective)

Ron DeSantis, the newly sworn Governor of the State of Florida, was given a unique opportunity to remake the Florida Supreme Court within his first days of office.  Three of the seven justices of the Florida Supreme Court were forced to step down in the first days of January 2019 due to mandatory retirement.  Those justices were Barbara Pariente, Peggy Quince, and Fred Lewis.

Read More »
November 09, 2017 Blog PostDon't Wreck Your Carmack Claim: Requirements for the Written Notice of Claim

Carmack claims are unique animals.  Carmack provides a shipper—or its subrogating insurance company—with the sole remedy for damages sustained when goods are shipped between states.  As the sole remedy, it’s imperative that a claimant strictly comply with Carmack’s notice of claim requirements and any additional notice requirements outlined in the bill of lading.  As subrogation professionals, when a cargo claim comes in, the bill of lading should be the first document reviewed to determine what needs to be done—in addition to the five items listed below—to provide proper notice of the claim to the carrier.  Failure to file proper written notice will bar the claim. 

Read More »
September 25, 2017 Blog PostA Primer on Florida's "25 Percent Rule" for Roof Repair/Replacement

The 2014 Florida Existing Building Code (the “Code”) contains what is conventionally called the “25 percent rule” (the “Rule”). The Rule applies to roof repair of any commercial or residential building.  In a nutshell, the Rule states that if more than 25 percent of a roof or section of a roof is “repaired, replaced, or recovered” then the “entire roofing system” or “roof section” must be brought up to code.  Obviously, the Rule is of extreme importance for Florida Irma property claims. Here is the text of the Rule:

Read More »
September 21, 2017 Blog PostThe Rule of Sevens: Evaluating Claims Involving a Child

As subrogation professionals, we may be tasked with evaluating property loss claims where a child caused or contributed to the property damage.  For example, is a child playing with matches or a lighter liable for a fire loss?  Or, is a child liable for driving a vehicle into the neighbor’s home? In some instances, a parent may be held liable for the child’s acts.   As more fully set forth below, when evaluating a claim involving a child, it is important to evaluate the age and capacity of the at-fault party, and to be familiar with state specific statutes regarding parental liability. 

Read More »
September 01, 2017 Blog PostHurricane Hindsight is 20/20

It took years of depositions and other discovery to realize that that most of my 2004-2005 hurricane condominium association claims were much simpler to defend than I thought.   The center of gravity of these claims was the proper calculation of Actual Cash Value (ACV).

Read More »
August 29, 2017 Blog PostThe Common Interest Doctrine: Maintaining Confidentiality

While confidentiality is usually destroyed when communications between an attorney and client take place in the presence of a third party or when work product is shared with others, those communications can remain protected if the common interest doctrine applies.

Read More »
August 23, 2017 Blog Post"It's Not Old, It's A Classic!": Risk in Aging Aircraft with GARA Protecting Manufacturers

The General Aviation Revitalization Act of 1994 (“GARA”) was a byproduct of aging aircraft, rising costs, and tort liability in the United States.  Congress was concerned that aircraft manufacturers were being devastated by liability costs for accidents occurring long after the planes left the manufacturer.  These liability costs drove up the price for aircraft beyond what the market would bear, and general aviation experienced a sharp decline.  The General Aviation Manufacturers Association reports the total U.S.-manufactured general aviation airplane shipments went from a high of 17,811 in 1978 to a low of 929 in 1994.  As a result many manufacturers stopped making certain model aircraft, including Cessna which ceased production of all piston aircraft in 1986. 

Read More »
August 15, 2017 Blog PostThe ABC's of ACV in Subrogation Claims

Oftentimes, during the course of a subrogation claim, third-party liability adjusters will refuse to pay the full amount of the “Repair Cost Value” (“RCV”) of the damages demanded, and contend that they only owe “Actual Cash Value” (“ACV”), regardless of the amount paid in the underlying first party property claim adjustment.   Oftentimes, this position is not necessarily predicated on a specific legal doctrine or theory, but rather a general “understanding” that is commonly used in the insurance context.   The true measure of damages, in the legal context, is always dictated by state law. 

Read More »
July 18, 2017 Blog PostSubrogation Following a Hurricane is All Hands on Deck

Hurricane season began June 1 st, and runs through November 30th.   However, we are about 30 days from approaching the peak of hurricane season, when the season becomes its most active.  Weather predictors are predicting an above-average number of storms this year, with 14 expected named storms.  As anyone who has worked “CAT” claims knows, when a hurricane hits, it’s “all hands on deck.”  This is true for subrogation professionals, as well.  There is a significant increase in the number of claims that must be triaged, with a goal of finding any claims that might have subrogation potential. 

Read More »
February 16, 2016 Blog PostDrone Wars: Will The Litigation Awaken?

The use of drones (unmanned aerial vehicles) has drastically increased over the last few years, and this trend has no sign of abating any time soon. According to the Washington Post, approximately 700,000 recreational drone purchases were expected to be made in 2015, a 63% increase from 2014.

Read More »
November 16, 2015 Blog PostWest Virginia Supreme Court Allows Landlord's Subrogation against Tenant

The West Virginia Supreme Court of Appeals recently opened the door further for a landlord’s insurer subrogating against a tenant for damages to the landlord’s property.

Read More »
October 13, 2014 Blog PostIs Texas Following Florida's Lead On Changing The Economic Loss Rule?

Practicing in both Florida and Texas I have seen the Economic Loss Rule evolve over the years, and its direct impact on the recovery potential for our subrogation claims appears to be moving in a positive direction. Recently, the Texas Supreme Court held in a per curium opinion in Chapman Custom Homes, Inc. v. Dallas Plumbing Co., 2014 WL 4116839 (Tex. Aug. 22, 2014), that a claimant can now bring a tort claim (negligence, in this case) against a party, as well as a breach of contract claim. In doing so, the Court applied ...

Read More »