Minnesota high court weighs Amazon’s liability in $4M fire suit

Berkley Regional Insurance Company asked the Minnesota Supreme Court to hold Amazon liable for a property fire caused by a defective cellphone battery sold through the e-commerce site. The case presents a landmark test for the state’s high court over whether modern online marketplaces must follow the same strict product liability standards as traditional retailers.

The underlying dispute stems from a 2018 building fire in Edina, Minnesota, which caused nearly $4 million in property damage. Berkley Regional Insurance Company covered the loss and subsequently sued Amazon, the Chinese replacement electronics merchant Yishda, and an unknown manufacturer. Because the third-party seller became insolvent, Berkley sought to recover its losses from Amazon, making the e-commerce giant the sole suable defendant.

Strict Liability Versus Marketplace Exemption

Under Minnesota law, strict product liability holds commercial entities responsible for injuries or property damage caused by defective products, regardless of whether the company acted negligently. Berkley argues that Amazon should not escape this standard, maintaining that the platform controls, markets, and physically distributes products just like a traditional retailer.

Amazon counters that it operates purely as an online marketplace for third-party vendors rather than a seller or distributor holding title to the goods. Its legal representatives argued that the company does not source items, put them on physical shelves, or reap wholesale profits in the manner of brick-and-mortar stores like Walmart.

Bench Skepticism and Industry Concerns

During oral arguments, members of the bench expressed skepticism toward Amazon’s defense, emphasizing that someone must bear the risk when unvetted, overseas third-party sellers become insolvent. Justices questioned how e-commerce platforms can manage risks and ensure product safety when dealing with millions of global vendors who cannot be easily vetted or tested using traditional retail methods.

Amazon warned that forcing online platforms to inspect millions of global items imposes an unreasonable operational standard, noting that a majority of federal and state courts have refused to expand strict liability to online marketplaces.

Practical Steps for Consumers and Insurers

For ordinary people, disputes involving defective products purchased online can create significant recovery hurdles if the direct vendor is located overseas or goes out of business. Insurers and consumers dealing with property damage or injuries caused by defective items should preserve all purchase receipts, document the damage thoroughly, and notify their insurance provider. When dealing with complex liability questions involving third-party online platforms, consulting a qualified attorney can help clarify whether a viable claim exists against the marketplace or other available commercial entities.

This article is general information based on Courthouse News Service and court or agency records available at publication time. It is not legal advice; laws and deadlines differ by state and by case. Published October 5, 2026.