In California, the manufacturers of defective products are strictly liable for injuries that are caused by the defects to people who use the products in the manner in which they were intended. The state extended strict liability to retailers of products in 1964. However, online retailers, including Amazon, eBay, Etsy, and others, have relied on a loophole to escape strict liability. If passed and enacted, a new assembly bill would erase the loophole and expose online retailers
to liability when defective projects that are sold on their platforms by third-party sellers injure consumers.
Proposed legislation to end defective products loophole
California AB 3262 was introduced by Assemblyman Mark Stone (D-Santa Cruz) on Feb. 21, 2020. This law would extend strict liability for defective products to online retailers. Currently, product designers and manufacturers are strictly liable for injuries caused by their products. Brick-and-mortar retailers are also liable when they sell products to consumers that are defective and cause injuries. While laws have been in place to hold retailers accountable when they sell defective products that injure consumers, online retailers, including Amazon, Etsy, and eBay have been able to rely on a loophole to escape liability.