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Morris Manning & Martin, LLP

11th Circuit Overturns Favorable Hoverboard Decision for E-Cig Distributors

10.03.2019

As product liability claims arising from the overheating or combustion of electronic cigarettes, vaporizers, vape pens, and other electronic nicotine delivery system (ENDS) products (“e-cigs”) become more common, it is important for those in the chain of distribution of these products to consider ways to limit their exposure to these claims. Many of these claims stem from combustions related to the lithium-ion batteries powering these devices. This client alert provides an update from a previous alert regarding a lawsuit over a hoverboard that caught fire due to an allegedly faulty lithium-ion battery.  The implications of this decision could potentially affect the liability of both manufacturers and sellers of e-cig products in Georgia and beyond.

In Irvin R. Love, Jr. v. Weeco, et al., the 11th Circuit ruled that the United States District Court for the Northern District of Georgia erred when it dismissed tort claims against Amazon.com, Inc. (“Amazon”), based on its online sale to the plaintiff of a hoverboard that caught fire due to an allegedly faulty lithium-ion battery. The plaintiff was severely burned and lost his home due to the fire.

The original lawsuit asserted claims for negligence and punitive damages against Amazon. It alleged that Amazon knew or should have known that the hoverboard was dangerous given that it knew about other incidents where hoverboards it sold had caught fire due to the lithium-ion battery. The District Court granted Amazon’s motion to dismiss for failure to state a claim, ruling that the plaintiff alleged insufficient facts regarding the details of the other incidents, such as the brands of the hoverboards and the circumstances that gave rise to the incidents. The plaintiff also failed to allege “how, when or where” Amazon received notice of the incidents. 

On appeal, the 11th Circuit reversed the District Court’s decision, concluding that plaintiff’s allegations regarding Amazon’s actual or constructive knowledge of the danger of the hoverboard were sufficient. The court observed that, like the hoverboard at issue, several pre-sale incidents identified in the complaint involved Chinese-manufactured hoverboards containing lithium-ion batteries, one of which was the same brand as the one sold to the plaintiff. The court also emphasized the plaintiff’s allegations that four of those incidents allegedly involved hoverboards sold by Amazon, and that it had received written notice of those incidents before the sale to plaintiff. The court also noted plaintiff’s allegation that “thousands of hoverboards had been seized by United States custom authorities based on concerns about the hoverboards’ ‘potentially explosive lithium batteries.’”

The court found that these allegations satisfied the federal pleading standard. Accordingly, while the court made “no determination about the ultimate merit” of the claims or whether Amazon may be entitled to summary judgment before trial on a more complete record, it concluded that plaintiff’s claims against Amazon were sufficient and that the plaintiff could proceed to discovery against Amazon.

Under the 11th Circuit’s reasoning, it could be easier for plaintiffs to file generalized complaints against product distributors, including those in the e-cig/vape industry, based on the distributors’ notice of other incidents involving similar products. For example, a plaintiff may be able to survive a motion to dismiss a negligence claim simply by alleging that the e-cig/vape distributor was on notice of prior incidents involving other e-cig/vape devices using lithium-ion batteries that the distributor sold, regardless of the brand or circumstances giving rise to the incidents.

Importantly for e-cig distributors, however, even if a claim survives a motion to dismiss at the beginning of a case, there are a number of additional hurdles plaintiffs face in cases against e-cig distributors, such as innocent seller statutes or other laws in many states that may preclude or limit liability in certain situations.[1] Also, the plaintiffs ultimately will be required to prove causation, which generally requires plaintiffs to demonstrate that they were not aware of the alleged dangers of the product and did not contribute to the incident themselves by failing to heed the instructions provided to them. Indeed, engaging an expert early on to analyze the source of the combustion and identify other potentially contributing factors can limit a distributor’s exposure. 

Finally, e-cig distributors can limit their liability proactively by including indemnity provisions in supplier contracts and requiring certificates of authenticity of the products. 

For more information about how these cases might affect your business and/or current or pending litigation, please contact one of the attorneys on the E-Cigarette/Vape Team.


[1] Indeed, Amazon.com was recently granted summary judgment on strict liability and negligence claims in a federal lawsuit in Arizona, State Farm Fire & Cas. Co. v. Amazon.com, Inc., no. 2:17-cv-01994 (D. Ariz. Sept. 27, 2019), similar to the case discussed in this client alert. The court’s decision was based on the lack of evidence of Amazon.com’s significant participation in the stream of commerce of the hoverboards.