Last year, the Consumer Products Safety Commission (CPSC) issued a little-noticed order against Amazon, the global e-commerce company with $575 billion in revenue.
In a unanimous vote, the Commission determined that Amazon was a “distributor” of products that are defective or fail to meet federal consumer product safety standards, and therefore bears legal responsibility for their recall.
More than 400,000 products were subject to the order – including faulty carbon monoxide (CO) detectors, hair dryers without electrocution protection, and children’s sleepwear that violated federal flammability standards.
The Commission ruled that Amazon failed to notify the public about these hazardous products and did not take adequate steps to encourage its customers to return or destroy them, thereby leaving consumers at substantial risk of injury.
Trial lawyer Don Fountain says that the CPSC decision identifying Amazon as a “distributor” will have a major impact on the civil justice system.
Over a 37 year career, Fountain has secured numerous multimillion-dollar verdicts that have led to industry-wide safety reforms and product recalls.
His landmark case Batchelder v. Malibu Boats resulted in an unprecedented $200 million verdict – $80 million in compensatory damages and $120 million in punitive damages.
Fountain played a key role in litigation that led to the largest tire recall in U.S. history.
His work has helped establish new safety standards across multiple industries while advocating for consumer protection through the court system.
“Under the consumer product safety law, if you are a distributor, you have duties to comply with the act,” Fountain told Corporate Crime Reporter in an interview last week. “They have to provide immediate notice of any product that could cause a substantial risk of injury to consumers or a product that presents an unreasonable risk of injury or death. There are other requirements for products for children. And they have a duty to provide notice of lawsuits. The CPSC publishes a workbook, a recall handbook, what to do if you are a distributor and you think there is an issue with one of your products. Amazon now has to comply with those rules.”
“If for example today, you notice a defect on a product and you report that defect to Amazon, that then triggers a duty for them to do an investigation. The rules say the internal investigation cannot last for more than ten days. And they then have to report it to the CPSC and that begins the potential recall process.”
“If the product is deemed to be hazardous, then Amazon must notify consumers, buy back the products, refund the money, destroy existing stock — all those things to try and get the products off the market as soon as they can.”
“That determination that Amazon is now a distributor is going to be very persuasive to courts in cases where an individual was killed or injured by a defective product. This will be important in states that have what’s called a stream of commerce, or chain of distribution theory of liability. That theory says that anybody involved in the chain of distribution of a defective product is responsible for all injuries that occur as a result of that defect.”
“If you are the designer, the manufacturer, the wholesaler, the distributor, the retailer, the exporter, the importer, the broker – all of those people are responsible for the defect in the product. And that’s a huge benefit to those people who are injured or families of those killed, if they are in a state that recognizes chain of distribution liability.”
“But about half of the states have a get out of jail free card for what are called innocent sellers. Some states only apply that principle of liability to the designer or the manufacturer, not the exporter, importer, retailer, distributor like Amazon. Politicians call this the innocent seller rule.”
“That’s really quite comical because the entire fundamental process and the public policy behind stream of commerce liability is that if a person is injured by a product, they should be able to seek recourse from anybody who is in the chain of distribution that profits from the product, rather than have those people have no ability to make a claim and seek recovery for their damages. The public, through Medicare, Medicaid and unemployment, have to absorb those costs.”
“The public policy is that anybody in the chain of distribution of the product has contracts with others in the chain. And they are free to contract away their responsibility if they want. Florida is a chain of distribution state. If you buy a product in Florida, you can bring a direct claim against Amazon if you’re injured or killed by it, even though the product was designed in Hong Kong, made in China, and distributed in Singapore. You may have trouble accessing those entities. But you can still bring a lawsuit against Amazon.”
“And the theory is that Amazon could then have a contract with each of those designers and manufacturers, and say – if we’re going to sell your products, if we’re sued for an injury or a death, then you must assume our defense and pay the damages that are attributable to us because of chain or distribution theory of liability.”
“The CPSC has a fast track program where their goal is to be notified of defects as soon as possible and get them off the market as soon as possible to avoid exposing people to risks. So, the fact that Amazon is now in the mix is huge. Reaching Amazon is much easier than reaching ABC manufacturing company in China. And we all know that Amazon has incredible systems in place. And they now can deploy those systems to notify the public of hazards. And the ultimate goal should be to notify the public as early as possible and get the defective products off the market and reduce exposure of the public to these risks.”
It just seems like this is a perfect rule for this administration to revoke.
“Maybe it’s as simple as this hasn’t popped up on their radar screen yet because Jeff Bezos hasn’t called Trump yet.”
Fountain’s most recent case in court was a $200 million verdict against Malibu Boats for the death of seven year old Ryan Batchelder.
In his recent book – Defect Safety: A Primer for Lawyers to Identify Defective Products and Promote Consumer Safety Through Litigation – Fountain says that three law firms turned down the Batchelder case before he agreed to take it.
Why did those law firms turn down that case and what did you see in the case that led you to take it?
“I didn’t know the three law firms had turned it down before we accepted the case,” Fountain says. “The lawyer who brought the case to us was worried that if he mentioned that to us, that we would not accept it. He didn’t know me very well. That has never been a deterrent.”
“What I saw was that the clients were incredibly wonderful people. A seven year old boy was doing nothing wrong, he was doing everything right. He was wearing a life jacket. He knew how to swim well. He was sitting in an approved seat where the boat company wanted him to sit. He just experienced a horrible death by being ejected.”
“It was a beautiful day. There was no weather event. No drinking, no drugs. The driver of the boat was a 65 year old merchant marine, a lifetime boat operator.”
“When we started to look at the case, we discovered that there had been essentially no engineering in this boat’s design.”
“The defect was clear. When the boat was used as intended by putting people in the front of the boat, it would easily swamp. When the boat was originally designed, it was designed with a closed front deck. It had no seats up front. In order to compete with other boats that had seats up front, the manufacturer just cut a hole in the front and dropped in seats without ever considering the effect of adding weight in the front of a boat that was never designed to have weight in the front of the boat. And that’s ultimately what got the jury mad.”
How did Ryan die?
“He was thrown out of the boat and he was wrapped around the propeller. He was wrapped so tightly they couldn’t get him off of the propeller. The boat had to be towed to shore with him under the boat and the boat had to be lifted out of the water on a lift. The paramedics had to cut his body off the propeller. It was the most horrendous thing you can think of. And this all happened at a family reunion while the entire family was there.”
How did the jury verdict affect design changes in boats?
“This is one of the most incredible things that encouraged me to write a book about it. We have seen many times when we expose a defect that the manufacturer will change the design after the fact. But they never say it’s because of a case or because of litigation. They say it’s continual product improvement.”
“In this case, Malibu took an extraordinary step – something I have never seen before. They issued a worldwide notice. They said because of this one case, because of this jury’s verdict, we have decided that no one should ride in the front of ten different models of our boat that we have made for 25 years when the boat is in operation. So please, don’t ride in the front of the boat. The boat is perfectly fine to use, but not when someone is in the bow of the boat. And they issued a warning sticker that essentially parroted what we said at trial. That was a literal admission of the benefits of the jury system, the power of the jury system and the benefit of the jury system.”
[For the complete q/a format Interview with Don Fountain, 39 Corporate Crime Reporter 11(13), March 17, 2025, print edition only.]