Limitation of Liability under the LPLA: Can Internet Retailers be Manufacturers?

The Louisiana Products Liability Act (“LPLA”) contains the exclusive theories of recovery against a manufacturer for damages caused by its product. The term “manufacturer” within the LPLA includes “the seller of a product who exercises control over or influences a characteristic of the design, construction, or quality of the product that causes damage.” The rapid growth of e-commerce raises a unique question – how do we classify internet retailers?

Internet retailers generally act as a middleman for third party manufacturers and online consumers. In this respect, they are not technically “sellers” as defined by the LPLA because they typically do not have control over the design or construction of the products they sell. Nevertheless, the proper categorization of internet retailers may become important when someone is injured by a product, as was the case in State Farm Fire and Casualty Company v. Amazon.com, Inc., 2019 WL 5616708 (Miss. N.D. 10/31/19) — F.Supp.3d —.

In State Farm Fire and Casualty Company v. Amazon.com, Inc., two hoverboards purchased through Amazon caught fire inside a Mississippi home and the home was destroyed. In considering Amazon’s possible liability, the Mississippi Court asked whether Amazon was a “service provider” or a “marketplace.” In Mississippi, a finding that Amazon was a “service provider” would insulate it from the claim. However, if Amazon acted as a “marketplace,” it could be exposed by the common law to a negligent failure-to-warn claim. The Mississippi Court held that, because Amazon operated as a marketplace, the claim against it could go forward.

If similar facts arose in Louisiana, could Amazon or similar retailers be exposed under the LPLA? If an internet retailer established policies that forced a “true” manufacturer to negatively alter product quality, would the LPLA provide a remedy?  For example, if an internet retailer sets a price ceiling, this artificial figure, especially if unreasonably low, might pressure a manufacturer to lower product safety. Is setting a price range the exercise of enough control or influence over the “design, construction, or quality of a product” to render internet retailers subject to suit under the LPLA? That is a question likely to be answered in cases to come.