Charles Brian Fox and Megan Fox, Individually and as Parents and Next Friends of Hailey Fox; Matthew Fox; Rebecca Fox; Sarah Fox, Plaintiffs-Appellants,
Amazon.com, Inc., Defendant-Appellee.
Argued: March 14, 2019
from the United States District Court for the Middle District
of Tennessee at Nashville. No. 3:16-cv-03013-William Lynn
Campbell, Jr., District Judge.
E. Anderson, ANDERSON & REYNOLDS, PLC, Nashville,
Tennessee, for Appellants.
Brendan Murphy, PERKINS COIE LLP, Seattle, Washington, for
E. Anderson, ANDERSON & REYNOLDS, PLC, Nashville,
Tennessee, Mark E. Spear, Kaylin L. Hart, SPEAR, SPEAR &
HAMBY, P.C., Mobile, Alabama, Donald Capparella, DODSON
PARKER BEHM & CAPPARELLA, P.C., Nashville, Tennessee, for
Brendan Murphy, Eric D. Miller, Rachel Constantino-Wallace,
PERKINS COIE LLP, Seattle, Washington, Lela M. Hollabaugh,
Scott Burnett Smith, BRADLEY ARANT BOULT CUMMINGS LLP,
Nashville, Tennessee, for Appellee.
Before: CLAY and STRANCH, Circuit Judges; PEARSON, District
Charles Brian and Megan Fox, individually and as parents and
next friends of their minor children Hailey, Matthew,
Rebecca, and Sarah Fox, appeal the district court's May
30, 2018 order granting summary judgment in favor of
Defendant Amazon.com, Inc. Plaintiffs' complaint alleges
that Defendant (1) sold Plaintiff Megan Fox a defective or
unreasonably dangerous product, in violation of the Tennessee
Products Liability Act of 1978, Tenn. Code Ann. §
29-28-101 et seq., (2) breached a duty to warn
Plaintiff Megan Fox about the defective or unreasonably
dangerous nature of that product, in violation of Tennessee
tort law, and (3) caused Plaintiff Megan Fox confusion or
misunderstanding about the source of that product, in
violation of the Tennessee Consumer Protection Act of 1977,
Tenn. Code Ann. § 47-18-101 et seq. For the
reasons set forth below, we AFFIRM IN PART
and REVERSE IN PART the district court's
summary judgment order.
are a family of six that resides in Davidson County,
Tennessee. Defendant is a corporation that operates a
worldwide online marketplace. Defendant's marketplace
facilitates the sale of products from sellers, including both
Defendant and third-party sellers, to buyers. W2M Trading Corp.
("W2M") is a corporation that at one time was a
third-party seller that utilized Defendant's marketplace
to sell hoverboards.
November 2015, Defendant's marketplace contained a
webpage offering for sale a FITURBO F1 hoverboard. The
webpage contained, among other things, the purchase price,
$274.79, and a detailed product description, including that
the hoverboard was equipped with an "original Samsung
advanced battery pack." (RE 150, PageID #
2117.) Defendant did not set the purchase price
or develop any of the product-related content that appeared
on the webpage.
November 3, 2015, Plaintiff Megan Fox accessed the webpage
and purchased a FITURBO F1 hoverboard. At that time,
Plaintiff believed that Defendant owned the hoverboard, and
that she purchased the hoverboard from Defendant. However,
Defendant's records show that W2M owned the hoverboard,
and that Plaintiff purchased the hoverboard from W2M. For
instance, Plaintiff's order history lists the
hoverboard's "[s]eller of record" as "W2M
Trading Corp." (RE 120, PageID # 1566.) Neither Defendant
nor W2M manufactured the hoverboard; the manufacturer remains
Megan Fox paid the purchase price to Defendant, and the
purchase receipt was sent from "amazon.com" to
Plaintiff's email address. (RE 161, PageID # 2205.) The
receipt contained various details about the purchase,
including the order date, the shipment date, the shipping
address, and the billing address. The receipt also contained
the phrase, "Sold by: -DEAL-." (Id.)
operates a program known as "Fulfillment by Amazon"
("FBA"), through which third-party sellers can opt
to use storage and shipping services offered by Defendant. If
a third-party seller participates in FBA, its products are
stored in an Amazon Fulfillment Center until they are
purchased, at which point Defendant ships the products to the
buyers. Participants in FBA pay a fee to Defendant for these
services, but retain title to their products.
parties disagree over whether W2M participated in FBA, and
accordingly over whether W2M or Defendant stored and shipped
the hoverboard purchased by Plaintiff Megan Fox.
Defendant's records show that, in 2015, W2M participated
in FBA for some of the products it sold on Defendant's
marketplace. Additionally, the hoverboard purchased by
Plaintiff was shipped from China via Federal Express, arrived
in an Amazon-labeled box, and its Amazon Standard
Identification Number ("ASIN") was B00WGX04YM. And
Defendant's records show that, in 2015, Defendant had
Amazon Fulfillment Centers in China, shipped items via
Federal Express in Amazon-labeled boxes, and stored a
hoverboard with the ASIN B00WGX04YM. However, Defendant's
records also show that multiple third-party sellers sold
hoverboards with the ASIN B00WGX04YM, and that
Plaintiff's hoverboard was "[f]ulfilled by:
W-Deals." (RE 120, PageID # 1566.) Plaintiff received
the hoverboard sometime between November 10, 2015 and
November 17, 2015.
requires all third-party sellers that utilize its marketplace
to sign Defendant's Business Solutions Agreement
("BSA"). The BSA provides in part that third-party
sellers are prohibited from direct communication with buyers.
Rather, all communication with buyers comes from Defendant.
The BSA also provides that Defendant retains initial control
over customer payments. Generally, customers pay Defendant,
and Defendant then remits those payments to third-party
sellers every 14 days. However, Defendant retains the right
to impose a 90-day hold on those payments.
parties disagree over whether Defendant remitted Plaintiff
Megan Fox's payment to W2M. Defendant's records show
that from January 1, 2015 through December 31, 2016,
Defendant remitted approximately $1.4 million in customer
payments to W2M. However, Defendant's records do not show
that Plaintiff's payment specifically was remitted to
in November 2015, following news reports of hoverboard fires
and explosions, Defendant began a thorough internal
investigation into the dangers posed by hoverboards. That
investigation identified at least 17 complaints of hoverboard
fires or explosions in the United States that involved
hoverboards purchased on Defendant's marketplace. For
instance, on November 30, 2015, a customer sent an email to
Defendant's CEO, Jeff Bezos, informing Bezos that a
hoverboard the customer had purchased had burst into flames
while his daughter was riding it.
on the results of the investigation, Damon Jones,
Defendant's product safety manager, was concerned that
the entire product category of hoverboards was
"bad." (RE 117-5, PageID # 1265.) In his view,
"there was no precedent for this kind of event in the
product safety community," in part because of the
"widespread nature of the problem." (Id.
at PageID # 1264- 65.) On December 10, 2015, the results were
presented to "a broad set of senior
decision-makers" at Defendant. (Id. at PageID #
1258.) By that time, Damon Jones had removed his own
hoverboard from his home.
December 11, 2015, Defendant ceased all hoverboard sales
worldwide. At that time, Defendant knew that approximately
250, 000 hoverboards had been sold on its marketplace in the
previous 30 days. At that time, Defendant knew that
approximately 25% of those hoverboards had not yet been
delivered. Also at that time, Defendant knew that it was
likely that a majority of those hoverboards would remain
unopened until the holiday season in late December. As a
result, Defendant made "contingency plans" in
anticipation of more fires and explosions, including
scheduling employees to work on December 26, 2015 in order to
monitor news reports and customer complaints about hoverboard
fires and explosions. (RE 161, PageID # 2209.)
December 12, 2015, Defendant sent an email to hoverboard
purchasers that Defendant described as intended to be
"non-alarmist" because it would likely be
"headline news." (Id. at PageID # 2210.)
The subject line of the email stated: "Important Product
Safety Notification Regarding your Amazon.com Order."
(RE 117-17, PageID # 1402.) The body of the email stated:
"There have been news reports of safety issues involving
products like the one you purchased that contain rechargeable
lithium-ion batteries. As a precaution, we want to share with
you some additional information about lithium-ion batteries
and safety tips for using products that contain them."
(Id.) The email included a link for the
"information and safety tips," a link "to
initiate a return," and a request that the recipient
"pass along this information" to the proper person
if the hoverboard was purchased for someone else.
(Id.) The email did not inform hoverboard purchasers
of any of the actions Defendant had taken to evaluate the
dangers posed by hoverboards, including the findings and
results of its internal investigation. The email did not
inform hoverboard purchasers that the reported safety issues
included a risk of fire and explosion. And the email did not
inform hoverboard purchasers that Defendant had ceased all
hoverboard sales worldwide.
December 12, 2015 email was sent to Plaintiff Megan Fox.
Plaintiff does not recall receiving or reading the email.
However, Plaintiff "had a habit" of reading emails
sent to her email address. (RE 161, PageID # 2210.) Plaintiff
testified that she would not have let the hoverboard enter or
remain in her home had she known that there had been 17
complaints of hoverboard fires or explosions in the United
States that involved hoverboards purchased on Defendant's
marketplace, that Defendant anticipated additional complaints
during the holiday season in late December, or that Defendant
had ceased all hoverboard sales worldwide.
January 9, 2015, Matthew Fox was playing with his new
hoverboard while the rest of the family was away from the
home. Eventually, he stopped playing with the hoverboard and
left it on the first floor of the family's two-story
home. When Hailey Fox returned to the home, she sent a text
message to Plaintiff Megan Fox stating that she thought that
someone had broken into the home. Plaintiff Megan Fox alerted
Plaintiff Charles Brian Fox of Hailey's message, and he
drove home immediately, accompanied by Sarah and Rebecca Fox.
By the time he arrived, Matthew and Hailey had hidden on the
second floor of the home, fearing an intruder.
Plaintiff Charles Brian Fox arrived, the home was on fire,
and Matthew and Hailey were trapped on the second floor. He
frantically searched for a way to enter the home, but the
intensity of the fire prevented him from getting inside. He
then heard Hailey banging on a second-floor window. At his
instruction, Hailey broke the window, and jumped out. He
attempted to break her fall. He then heard Matthew banging on
another second-floor window. Again, at his instruction,
Matthew broke the window, and jumped out. Plaintiff Megan Fox
arrived shortly thereafter to find that everyone had escaped
from the home, but that the fire was still raging. As a
result of the fire, the ...