Allstate, which brought suit seeking to recover money it paid out in insurance claims on the fire, said Amazon met the definition of a seller under New Jersey’s products liability statute.But Wolfson on Tuesday granted Amazon’s motion for summary judgment, finding it did not meet the definition of seller because it did not decide what product to sell; nor did it procure the product from the manufacturer or upstream distributor, or ensure that it complied with applicable laws.The case sheds light on Amazon’s business model, which involves three types of transactions with consumers, according to the decision. The first is the direct sale of its own, Amazon-branded products to consumers; second is the sale of products directly from a vendor to a consumer, with Amazon merely providing means for the vendor to advertise the product and the consumer to order it; and, finally, the sale of a product from a vendor to a consumer, with Amazon fulfilling the transaction by holding the product in its inventory and shipping it to the consumer.

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The first transaction type, Wolfson said, clearly qualifies Amazon as a product seller under the New Jersey Product Liability Act, and under the second model, it certainly would not be considered a product seller.But the transaction in the present case falls into the third category, which she said is the “grayest” of the three.According to the decision, Kathleen Cancel of Farmingdale purchased the battery for her daughter’s computer on July 31, 2016. On Sept. 9, 2016, after the laptop was left sitting on her daughter’s bed, a fire started.Allstate filed the case in New Jersey Superior Court in Monmouth County on March 8, 2017, and Amazon removed it to federal court on April 21, 2017.

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Allowing an injured plaintiff to sue a party that can shift the risk up the distribution chain would support the consumer protection goals of products liability law, but other policies underpinning the law—chiefly, setting limits on the reach of products liability—”are stronger counterweights,” Wolfson said.Citing the New Jersey Supreme Court’s 1996 decision in Zaza v. Marquess & Nell, Wolfson said “stretching the case law to capture Amazon’s activities in this case would conflict with the spirit of the law.”She added that courts “should be cautious in expanding the law when doing so would impose a substantial economic burden on these businesses and individuals, without necessarily achieving the goal of enhanced product safety.”Amazon also asserted that it was immune from liability under Section 230 of the Communications Decency Act, which says online intermediaries that host or republish speech are protected against a range of laws that might otherwise be used to hold them legally responsible for what others say and do.