State Farm Sues Amazon to Recover Payout for Fire Damage Claim

State Farm Fire & Casualty is trying to get Amazon to reimburse it for a payment it made to cover damages to the home of one of its New York insureds. State Farm and its insured claim that the damage was caused by a fire started by a faulty LED light strip that the insured, Mark Orminski, bought through Amazon.

The insurer claims the giant online retailer breached its duty by negligently selling and failing to warn about the risks of the LED lights. State Farm also claims that Amazon expressly and implicitly warranted that the lights were safe for their intended use and that the homeowner relied upon Amazon’s skill and judgment

The insurer wants Amazon to pay it the $246,215 that it paid on Orminski’s claim.

State Farm originally filed its suit in state court in Schenectady County in June but it has been removed to federal court.

Consumers have sued the online retailer for years seeking to hold it liable for defective products sold on its website. Last September, in hopes of curbing these lawsuits, Amazon.com initiated a program under which it will pay up to $1,000 to shoppers who suffer injuries or property damage from defective goods others sell on its U.S. platform.

Amazon has maintained that sellers themselves are responsible, and most courts have ruled in its favor including the Texas Supreme Court that held in 2021 that Amazon is not liable under that state’s law for injuries caused by a third-party seller’s product that the e-commerce giant shipped from its warehouse.

However, last month, the California Supreme Court left intact a ruling that allows customers to sue Amazon.com for failing to warn buyers that some products it sells may contain hazardous substances such as mercury. The state’s Proposition 65 requires companies to warn consumers about products they make or sell that contain chemicals known to cause cancer, reproductive harm or birth defects.

Also last year, the U.S. Consumer Product Safety Commission sued Amazon, seeking to require it to participate in formal recalls of defective products sold on its marketplace. The regulator is also seeking what would be a precedent-setting ruling that Amazon is a distributor of consumer products under federal law, a designation that would subject it to future mandatory recalls on behalf of its sellers.