Berkley Regional Insurance Company v. Shenzhenshi Yishengda Dianzi Youxian Gongsi

U.S. District Court, District of Minnesota January 24, 2023

Trial Court Opinion

                 UNITED STATES DISTRICT COURT                            
                    DISTRICT OF MINNESOTA                                


Berkley Regional Insurance Company,    Case No. 20-cv-2382 (WMW/DJF)     

                   Plaintiff,

ORDER

John Doe Battery Manufacturer;
Shenzhenshi Yishengda Dianzi Youxian
Gongsi; Amazon.com, Inc.; and Shenzhen

Maxpower Technology Co., Ltd.,

Defendants.

In this products-liability action, Defendant Amazon.com, Inc. (Amazon), moves for
summary judgment and Plaintiff Berkley Regional Insurance Company (Berkley) moves
to certify a question to the Minnesota Supreme Court. (Dkts. 70, 76.) For the reasons
addressed below, the Court grants Amazon’s motion for summary judgment and denies
Berkley’s motion to certify.
BACKGROUND
Berkley is an insurance company based in Iowa that conducts business in
Minnesota. Schoeneckers, Inc., doing business as BI Worldwide (BI Worldwide), is a
Minnesota corporation insured by Berkley. Amazon is a Delaware corporation based in
Washington that operates an online marketplace in which third-party retailers sell products
including, as relevant here, replacement cell phone batteries.
Berkley provided property and casualty insurance to BI Worldwide effective from
September 1, 2018, through July 1, 2019. In November 2018, BI Worldwide employee
Rochelle Zappa purchased a replacement cell phone battery on Amazon’s online
marketplace from Defendant Shenzhenshi Yishengda Dianzi Youxian Gongsi, doing
business as Yishda (Yishda). Subsequently, Zappa’s cell phone caught fire and damaged

BI Worldwide’s office. Berkley paid BI Worldwide more than $3 million under
BI Worldwide’s insurance policy to cover the fire damage.
In July 2019, Berkley commenced this products-liability action against the
manufacturer of Zappa’s replacement cell phone battery in Minnesota state court. Berkley
alleges that the fire at BI Worldwide’s office resulted from the defective and unreasonably

dangerous condition of the replacement cell phone battery that Zappa purchased. Berkley
amended its complaint in October 2020, adding a strict-products-liability claim against
Amazon, and Amazon removed the action to this Court in November 2020.
Amazon now moves for summary judgment, arguing that it cannot, as a matter of
law, be strictly liable for damages caused by a product that it did not manufacture or sell.

Berkley opposes Amazon’s motion and cross-moves to certify a question to the Minnesota
Supreme Court—namely, whether Amazon may be subject to strict tort liability for a
defective product that was purchased on Amazon’s website from a third-party merchant, if
the product manufacturer is unavailable or unable to satisfy a judgment.
ANALYSIS
I. Amazon’s Motion for Summary Judgment
Summary judgment is proper when the record before the district court establishes
that there is “no genuine dispute as to any material fact” and the moving party is “entitled
to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A genuine dispute as to a material

fact exists when “the evidence is such that a reasonable jury could return a verdict for the
nonmoving party.” Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 248

 (1986).  When 
deciding a motion for summary judgment, a district court construes the evidence in the 
light most favorable to the nonmoving party and draws all reasonable inferences in the 
nonmoving party’s favor.  See Windstream Corp. v. Da Gragnano,

757 F.3d 798

, 802–03 

(8th Cir. 2014).  When asserting that a fact is genuinely disputed, the nonmoving party 
must “submit affidavits, depositions, answers to interrogatories, or admissions on file and 
designate specific facts” in support of that assertion.  Gander Mountain Co. v. Cabela’s, 
Inc.,

540 F.3d 827

, 831–32 (8th Cir. 2008); see also Fed. R. Civ. P. 56(c)(1)(A).  A 
nonmoving party may not “rest on mere allegations or denials but must demonstrate on the 

record the existence of specific facts which create a genuine issue for trial.”  Krenik v. 
County of Le Sueur,

47 F.3d 953, 957

 (8th Cir. 1995) (internal quotation marks omitted).   
    Under  Minnesota  law,  “[p]roducts  liability  is  a  manufacturer’s  or  seller’s  tort 
liability for any damages or injuries suffered by a buyer, user, or bystander as a result of a 
defective product.”  Glorvigen v. Cirrus Design Corp.,

816 N.W.2d 572, 581

 (Minn. 2012) 

(internal quotation marks and brackets omitted).  “Products liability can be based on a 
theory of negligence, strict liability, or breach of warranty.”

Id.

 (internal quotation marks 
omitted).  The Minnesota Supreme Court has recognized strict tort liability against both 
the manufacturer of a defective product and the commercial seller of a defective product.  
In re Shigellosis Litig.,

647 N.W.2d 1, 6

 (Minn. Ct. App. 2002) (citing Farr v. Armstrong 
Rubber Co.,

179 N.W.2d 64, 68

 (Minn. 1970), and McCormack v. Hankscraft Co.,

154 N.W.2d 488

,  497–98  (Minn.  1967)).    Here,  it  is  undisputed  that  Amazon  did  not 
manufacture the allegedly defective battery at issue.  Indeed, Berkley alleges only that 
Amazon “is a commercial seller and/or commercial distributor” of the battery at issue.  As 
such, the only dispute before this Court is whether Amazon may be held strictly liable as a 
“seller” under Minnesota law.                                             

    In Farr, the Minnesota Supreme Court relied on the Second Restatement when it 
recognized that “a commercial seller who sells a product in a defective condition . . . is 
liable for physical harm to the user caused by the defective condition, even though the 
seller was not negligent.”

179 N.W.2d at 68

 (citing Restatement (Second) of Torts § 402A).  
Neither the Second Restatement nor Minnesota courts have defined “commercial seller.”  

But the Second Restatement provides that strict liability applies to anyone “engaged in the 
business of selling” a defective product, including “any wholesale or retail dealer or 
distributor.”  Restatement (Second) of Torts § 402A(1)(a) & cmt. f.       
    The  Minnesota  Legislature  subsequently  enacted  a  “seller’s-exception  statute,”

Minn. Stat. § 544.41

, that “tempers the harsh effect of strict liability as it applies to passive 

sellers, while ensuring that a person injured by a defective product can recover from a 
viable source.”  In re Shigellosis Litig.,

647 N.W.2d at 6

 (citing

Minn. Stat. § 544.41

).  
Section 544.41 permits the dismissal of strict-liability claims against a passive seller of a 
defective product in certain circumstances that are not presented in this case.  See

id.

  But 
Section 544.41 neither defines “commercial seller” nor expands the scope of strict liability 
beyond the manufacturer and commercial seller of a defective product.  Indeed, the 

Minnesota Legislature expressly disclaimed any attempt to expand strict liability.  See

Minn. Stat. § 544.41

, subdiv. 4 (providing that “[n]othing contained in [Section 544.41] 
shall be construed to create a cause of action in strict liability in tort or based on other legal 
theory”).  As such, Section 544.41 confirms that Minnesota law limits strict products 
liability to manufacturers and commercial sellers but provides no guidance as to whether 

Amazon falls within the scope of the “commercial seller” category.        
    Minnesota courts “have relied on Restatement (Third) of Torts when considering 
the law of products liability.”  Duxbury v. Spex Feeds, Inc.,

681 N.W.2d 380, 387

 (Minn. 
Ct. App. 2004), review denied (Minn. Aug. 25, 2004).  The Third Restatement, consistent 
with the Second Restatement, provides that anyone “engaged in the business of selling or 

otherwise distributing” a defective product may be subject to liability for harm caused by 
the defect.

Id.

(quoting Restatement (Third) of Torts § 1). But the Third Restatement,
unlike the Second Restatement, expressly defines commercial sale: “One sells a product
when, in a commercial context, one transfers ownership thereto either for use or
consumption or for resale leading to ultimate use or consumption.” Id. (quoting
Restatement (Third) of Torts § 20(a)).1 “Sales occur at all levels in the distributive chain
including manufacturer sellers, wholesale sellers, and retail sellers.” Restatement (Third)
of Torts § 20(a) cmt. b. As such, to prove that Amazon is a commercial seller, Berkley
must present evidence that Amazon transferred ownership of the allegedly defective battery
to Zappa at some point in the chain of distribution as part of a commercial transaction.

Amazon presents evidence that Yishda, the third-party seller of the allegedly
defective battery in this case, entered into an Amazon Services Business Solutions
Agreement (BSA) with Amazon in April 2016. The BSA provides that Yishda retained
the responsibility to “source, offer, and sell” its products. Specifically, Yishda retained the
responsibility to decide what products to sell, what prices to set for its products, how to

package and label its products, how to describe its products on Amazon’s online
marketplace and whether to offer any warranties as to its products. Consistent with the
BSA, Amazon’s website identifies Yishda as the third-party seller throughout the product
viewing and ordering process, and Zappa’s order identifies the allegedly defective battery
she purchased as being “[s]old by: YiSHDA” and “[f]ulfilled by: Amazon.” Customers

1 When the definition of a word of legal significance is not provided, Minnesota
courts “may consider dictionary definitions to determine a word’s common usage.” Great
N. Ins. Co. v. Honeywell Int’l, Inc.,

911 N.W.2d 510, 516

(Minn. 2018). Consistent with
the Third Restatement, both the common and legal definitions of “seller” contemplate the
transfer of property ownership in exchange for money. See Merriam-Webster’s Collegiate
Dictionary 1129 (11th ed. 2014) (defining “seller” as “one that offers for sale”); id. at 1097
(defining “sale” as “the transfer of ownership of and title to property from one person to
another for a price”); Black’s Law Dictionary 1567 (10th ed. 2014) (defining “seller” as
“[s]omeone who sells or contracts to sell goods” and defining “sell” as “[t]o transfer
(property) by sale”).
also assent to “Conditions of Use” that, among other things, represent to customers that
“[i]f you purchase any of the products or services offered by [other] businesses or
individuals, you are purchasing directly from those third parties, not from Amazon.”
Berkley has not identified any evidence that materially contradicts the foregoing evidence.
Although Yishda retained certain responsibilities as part of the BSA, it is undisputed

that Amazon acquired possession of Yishda’s products. Specifically, Amazon provides
optional logistics services to some third-party sellers, including Yishda, whereby the third-
party seller pays service fees to store its products in Amazon’s fulfillment centers. But as
part of the BSA, Yishda represented that it had valid legal title to the products fulfilled by
Amazon and, in turn, Amazon agreed that Yishda could request the return of its products

at any time. Nothing in the evidence presented reflects that Amazon acquired title to
Yishda’s products.
The uncontroverted evidence reflects that Amazon facilitated the transfer of
possession of the allegedly defective battery, whereas Yishda transferred ownership of the
battery. Minnesota courts recognize that “products liability theory considers the

relationship of the parties in the stream of commerce, not concepts of transfer and
possession.” Duxbury,

681 N.W.2d at 387

.  The fact that Amazon transferred possession 
of the battery is immaterial because the “relevant consideration is whether the defendant is 
in the business of selling or otherwise distributing a product,” and the Third Restatement 
defines  selling  a  product  as  “transfer[ring]  ownership”  of  the  product.

Id.

  (internal 

quotation  marks  omitted).    Significantly,  possession  is  distinct  from  ownership,  as 
ownership  includes  the  right  to  convey  the  property  to  another.    See  Black’s  Law 
Dictionary 1280 (10th ed. 2014) (defining “ownership” as a “bundle of rights allowing one 
to use, manage, and enjoy property, including the right to convey it to others;” defining 
“owner” as “[s]omeone who has the right to possess, use, and convey something;” and 
defining “own” as “to have legal title to” property); cf. State v. Evenson,

554 N.W.2d 409, 411

 (Minn. Ct. App. 1996) (recognizing, in the context of criminal liability, that “lawful 
possession does not require actual title or ownership rights” based on the commonly 
understood meaning of possession).  The record includes no evidence that Amazon ever 
obtained or transferred an ownership interest in the battery.  Consequently, Berkley cannot 
prove that Amazon was a “seller” of the allegedly defective battery because Yishda—not 

Amazon—transferred ownership of the product to Zappa.                     
    Relying on Duxbury, Berkley argues that a sale of property does not require the 
transfer  of  title  to  the  property.2   Berkley  misconstrues  Duxbury.    In  Duxbury,  the 

2    Berkley also relies on State Farm Fire & Cas. Co. v. Homewerks Worldwide, LLC, 
in support of this argument.  See

2017 WL 3469467

, at *4–5 (Minn. Ct. App. Aug. 14, 
2017).  Because Homewerks is unpublished, it is non-precedential and has only persuasive 
value.  See Minn. Stat. § 480A.08, subdiv. 3(b); Cent. Specialties, Inc. v. Large,

18 F.4th 989

, 999 n.2 (8th Cir. 2021).  In Homewerks, the Minnesota Court of Appeals held that the 
plaintiff was not required to prove that the defendant sold the defective product to establish 
strict liability.  See

2017 WL 3469467

, at *4–5.  This holding is consistent with Minnesota 
law,  as  a  plaintiff  can  instead  prove  that  the  defendant  manufactured  or  otherwise 
distributed the defective product.  But the Homewerks court did not undertake a detailed 
analysis  of  this  issue.    The  Homewerks  court  did  not  address  Third  Restatement’s 
requirements, the holding in Duxbury or any of the other Minnesota precedent addressed 
herein that clearly limits strict-liability claims to manufacturers and sellers.  Moreover, the 
Homewerks court expressly declined to address whether the record included sufficient 
evidence of sale, relying instead on evidence that the product was the defendant’s product, 
the  defendant’s  name  was  printed  on  the  product  and  the  product  had  been  in  the 
Minnesota Court of Appeals held that the defendant—“a manufacturer and supplier of 
animal feed” for “profit”—was “engaged in the business of selling or otherwise distributing 
animal feed.”  681 N.W.2d at 387–88.  The defendant argued that it had not sold animal 
feed to the plaintiff because the plaintiff had retained title to one of the components used 
to manufacture the feed—namely, corn that the plaintiff had deposited with the defendant.

Id. at 385

.  The court rejected this retention-of-title argument because, although the plaintiff 
retained title to the deposited corn, the plaintiff lost the right to reclaim that corn after 
directing that the corn be used to make feed.

Id. at 387

.  Thereafter, “[c]ompensation [was] 
required for the goods and services integrated into the finished product,” and “title to the 
feed [was] not transferred until the depositor [paid] this price.”

Id.

As such, Duxbury does

not establish that a sale of property does not require the transfer of title to the property, as
Berkley suggests. Moreover, the facts in Duxbury are not analogous to the circumstances
presented here, as Amazon had no role in manufacturing Yishda’s batteries and did not
transfer ownership of those batteries. Duxbury, therefore, does not support Berkley’s
position.

Berkley suggests that Amazon may be considered a “distributor” and, therefore,
subject to distributor liability. Both the Second Restatement and the Third Restatement
reflect that a distributor may be subject to liability. See Restatement (Second) of Torts
§ 402A cmt. f (providing that a person engaged in the business of selling a product includes

defendant’s control. For these reasons, Homewerks is both factually distinguishable and
minimally persuasive.
“any . . . distributor”); Restatement (Third) of Torts § 1 (providing that anyone “engaged
in the business of selling or otherwise distributing” defective products may be subject to
liability). The Second Restatement does not define “distributor.” But the Third
Restatement provides that distributor liability applies to “a commercial transaction other
than a sale.” Restatement (Third) of Torts § 20(b) (emphasis added). Here, because it is

undisputed that the allegedly defective battery was sold to Zappa through a commercial
transaction, this case does not involve “a commercial transaction other than a sale” as
required to implicate distributor liability under the Third Restatement.
In addition, the Third Restatement provides that distributor liability applies to
“forms of product distribution that are the functional equivalent of product sales.”

Restatement (Third) of Torts § 1 cmt. b. The Third Restatement defines distributors to
include “lessors, bailors, and those who provide products to others as a means of promoting
either the use or consumption of such products or some other commercial activity.”
Restatement (Third) of Torts § 20(b). There is no allegation or evidence that Zappa
obtained the battery at issue here through a lease or bailment of the product. The Third

Restatement explains that distributor liability also may apply to a defendant that gives away
or lends products as a means of commercial promotion—for example, free samples,
promotional giveaways or vehicle test drives. Id. at cmts. b, f. But here, the evidence does
not suggest that Amazon gave or lent the battery to Zappa as a means of commercial
promotion. To the contrary, the evidence establishes that the Amazon did not have the

right to give away or lend Yishda’s products to customers under the BSA.
Moreover, the Third Restatement expressly excludes from liability “product
distribution facilitators,” providing that anyone “assisting or providing services to product
distributors, while indirectly facilitating the commercial distribution of products, [is] not
subject to liability.” Id. § 20 cmt. g. Such distribution facilitators include, for example,
entities “engaged in advertising products” or “engaged exclusively in the financing of

product sale or lease transactions.” Id. Here, the record reflects that Amazon provided
services to third-party sellers such as Yishda, including access to an online storefront,
payment processing services and fulfillment services. But in doing so, Amazon did not
assume responsibility for sourcing, pricing, packaging, labeling, describing or warranting
the quality or functionality of Yishda’s products. Cf. Kapps v. Biosense Webster, Inc.,

813 F. Supp. 2d 1128

, 1163–64 (D. Minn. 2011) (concluding that defendant was not merely a 
service provider because, when conveying the defective product, defendant provided its 
own  instructions  for  using  the  product,  removed  the  original  manufacturer’s  labels, 
provided a warranty as to the functionality of the product and represented to customers 
that,  “legally  and  practically,  we  are  the  manufacturers”  of  the  product).    The 

uncontroverted  evidence  demonstrates  that  Amazon  only  indirectly  facilitated  the 
distribution of Yishda’s products through the provision of services, which falls outside the 
scope of distributor liability.                                           
    Several  unpublished  Minnesota  state  court  decisions  support  the  foregoing 
analysis.3  In Lyzhoft v. Waconia Farm Supply, the Minnesota Court of Appeals declined 
to extend strict liability to the bailor of an allegedly defective propane cylinder and 
observed that “no Minnesota appellate court has extended strict liability to commercial 
bailors, lessors, or both.”

2013 WL 3368832

, at *3–4 (Minn. Ct. App. July 8, 2013).  In 

Tabish  v.  Target  Corp.,  the  Minnesota  Court  of  Appeals  held  that  a  company  that 
assembled a defective bicycle was a service provider that “falls outside of the traditional 
strict-liability  scope”  because  “strict-liability  claims  are  enforceable  only  against 
manufacturers, suppliers, and sellers of products.”

2011 WL 2519209

, at *6 (Minn. Ct. 
App. June 27, 2011).  And in Bremer v. Forklifts of Minnesota, Inc., the Hennepin County 

District Court, Fourth Judicial District, dismissed strict-liability claims against an entity 
that inspected and modified an allegedly defective forklift but did not sell the forklift.

2015 WL 3512409

, at *6 (Minn. Dist. Ct. May 6, 2015).  Although none of these decisions 
involved an online marketplace such as the one operated by Amazon, these decisions 
reflect that Minnesota courts narrowly construe the scope of strict products liability.      

    In  summary,  under  Minnesota  law,  strict  products  liability  applies  only  to 
manufacturers  and  sellers  of  defective  products.    Amazon  undisputedly  did  not 

3    Under Minnesota law, unpublished decisions “must not be cited as precedent.”  
Minn. Stat. § 480A.08, subdiv. 3(b).  “However, when interpreting state law, if the highest 
state court has not decided an issue [a federal court] must attempt to predict how the highest 
court would resolve the issue, with decisions of intermediate state courts being persuasive 
authority.”  Cent. Specialties,

18 F.4th at 999

n.2 (recognizing that unpublished Minnesota
Court of Appeals decisions may be cited as persuasive authority when attempting to predict
how the Minnesota Supreme Court would resolve an issue of first impression).
manufacture the allegedly defective battery in this case. The uncontroverted evidence does
not demonstrate that Amazon either sold the battery through a transfer of ownership or
otherwise distributed the battery based on how those terms have been defined and described
in the Second Restatement, the Third Restatement and the decisions of Minnesota courts.
Rather, the evidence reflects that Amazon acted as a distribution facilitator, which the Third

Restatement expressly exempts from strict liability. For these reasons, the Court grants
Amazon’s motion for summary judgment.
II. Berkley’s Motion to Certify Question to the Minnesota Supreme Court
Berkley argues that, in lieu of ruling on Amazon’s motion for summary judgment,
this Court should certify the following question to the Minnesota Supreme Court:

Under Minnesota law, is an e-commerce business like Amazon
subject to strict liability in tort for a defective product
purchased on Amazon’s website from a third-party merchant,
at least in situations where the product manufacturer is
unavailable or unable to satisfy a judgment and Amazon
provided services through its [Fulfilled By Amazon] program?
Berkley contends that this Court should delay ruling on Amazon’s motion for summary
judgment until after the Minnesota Supreme Court responds to the foregoing question.
The Minnesota Supreme Court “may answer a question of law certified to it by a
court of the United States . . . if the answer may be determinative of an issue in pending
litigation in the certifying court and there is no controlling appellate decision, constitutional
provision, or statute of this state.”

Minn. Stat. § 480.065

, subd. 3.  Whether to use a state’s 
certification procedure is within a federal district court’s discretion.  Lehman Bros. v. 
Schein,

416 U.S. 386

, 390–91 (1974); Allstate Ins. Co. v. Steele,

74 F.3d 878

, 881–82 (8th 
Cir. 1996). Although certification might “save time, energy, and resources and help[ ] build 
a cooperative judicial federalism,” certification is never required, even if state law is in 
doubt.  Lehman Bros., 416 U.S. at 390–91.  “Absent a close question and lack of state 
sources enabling a nonconjectural determination, a federal court should not avoid its 
responsibility to determine all issues before it.”  Smith v. SEECO, Inc.,

922 F.3d 406, 412

 

(8th Cir. 2019) (internal quotation marks omitted).  The “most important consideration” 
when deciding whether to certify a question to a state supreme court is whether the 
certifying court “finds itself genuinely uncertain about a question of state law.”  Johnson 
v. John Deere Co.,

935 F.2d 151, 153

 (8th Cir. 1991) (quotation omitted).   
    It is undisputed that Minnesota courts have not addressed the precise issue presented 

here—namely, whether the operator of an online marketplace may be subject to strict 
liability for harm caused by a defective product sold by a third-party merchant.  But for the 
reasons addressed in Part I of this Order, the available sources of state law enable this Court 
to reach a “nonconjectural determination” as to this issue.  Smith,

922 F.3d at 412

 (internal 
quotation marks omitted).  These sources include precedential decisions from Minnesota 

courts demonstrating the scope of strict liability and the appropriate reliance on the Second 
Restatement and Third Restatement and the text and commentary provided in the Second 
Restatement and the Third Restatement.  These sources also include persuasive authority 
from unpublished Minnesota state court decisions, together  with Minnesota statutory 
authority, which demonstrate that Minnesota courts narrowly construe the scope of strict 

products liability as applied to non-manufacturers.  Although these state-law sources do 
not address the precise issue presented in this case, these sources provide sufficient 
guidance to enable this Court “to reach a sound decision without indulging in speculation 
or conjecture.”  Kaiser v. Mem’l Blood Ctr. of Minneapolis, Inc.,

938 F.2d 90, 93

 (8th Cir. 
1991).  There is not a dearth of legal authority such that this Court is left “genuinely 
uncertain about a question of state law.”  Johnson,

935 F.2d at 153

 (quotation omitted).  

    Accordingly,  the  Court  denies  Berkley’s  motion  to  certify  a  question  to  the 
Minnesota Supreme Court.

ORDER

    Based on the foregoing analysis and all the files, records and proceedings herein, IT 
IS HEREBY ORDERED:                                                        

    1.   Defendant Amazon.com, Inc.’s motion for summary judgment, (Dkt. 70), is 
GRANTED.                                                                  
    2.   Plaintiff Berkley Regional Insurance Company’s motion to certify a question 
to the Minnesota Supreme Court, (Dkt. 76), is DENIED.                     


Dated:  January 24, 2023                s/Wilhelmina M. Wright            
                                       Wilhelmina M. Wright              
                                       United States District Judge

Trial Court Opinion

                 UNITED STATES DISTRICT COURT                            
                    DISTRICT OF MINNESOTA                                


Berkley Regional Insurance Company,    Case No. 20-cv-2382 (WMW/DJF)     

                   Plaintiff,

ORDER

John Doe Battery Manufacturer;
Shenzhenshi Yishengda Dianzi Youxian
Gongsi; Amazon.com, Inc.; and Shenzhen

Maxpower Technology Co., Ltd.,

Defendants.

fact exists when “the evidence is such that a reasonable jury could return a verdict for the
nonmoving party.” Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 248

 (1986).  When 
deciding a motion for summary judgment, a district court construes the evidence in the 
light most favorable to the nonmoving party and draws all reasonable inferences in the 
nonmoving party’s favor.  See Windstream Corp. v. Da Gragnano,

757 F.3d 798

, 802–03 

(8th Cir. 2014).  When asserting that a fact is genuinely disputed, the nonmoving party 
must “submit affidavits, depositions, answers to interrogatories, or admissions on file and 
designate specific facts” in support of that assertion.  Gander Mountain Co. v. Cabela’s, 
Inc.,

540 F.3d 827

, 831–32 (8th Cir. 2008); see also Fed. R. Civ. P. 56(c)(1)(A).  A 
nonmoving party may not “rest on mere allegations or denials but must demonstrate on the 

record the existence of specific facts which create a genuine issue for trial.”  Krenik v. 
County of Le Sueur,

47 F.3d 953, 957

 (8th Cir. 1995) (internal quotation marks omitted).   
    Under  Minnesota  law,  “[p]roducts  liability  is  a  manufacturer’s  or  seller’s  tort 
liability for any damages or injuries suffered by a buyer, user, or bystander as a result of a 
defective product.”  Glorvigen v. Cirrus Design Corp.,

816 N.W.2d 572, 581

 (Minn. 2012) 

(internal quotation marks and brackets omitted).  “Products liability can be based on a 
theory of negligence, strict liability, or breach of warranty.”

Id.

 (internal quotation marks 
omitted).  The Minnesota Supreme Court has recognized strict tort liability against both 
the manufacturer of a defective product and the commercial seller of a defective product.  
In re Shigellosis Litig.,

647 N.W.2d 1, 6

 (Minn. Ct. App. 2002) (citing Farr v. Armstrong 
Rubber Co.,

179 N.W.2d 64, 68

 (Minn. 1970), and McCormack v. Hankscraft Co.,

154 N.W.2d 488

,  497–98  (Minn.  1967)).    Here,  it  is  undisputed  that  Amazon  did  not 
manufacture the allegedly defective battery at issue.  Indeed, Berkley alleges only that 
Amazon “is a commercial seller and/or commercial distributor” of the battery at issue.  As 
such, the only dispute before this Court is whether Amazon may be held strictly liable as a 
“seller” under Minnesota law.                                             

    In Farr, the Minnesota Supreme Court relied on the Second Restatement when it 
recognized that “a commercial seller who sells a product in a defective condition . . . is 
liable for physical harm to the user caused by the defective condition, even though the 
seller was not negligent.”

179 N.W.2d at 68

 (citing Restatement (Second) of Torts § 402A).  
Neither the Second Restatement nor Minnesota courts have defined “commercial seller.”  

But the Second Restatement provides that strict liability applies to anyone “engaged in the 
business of selling” a defective product, including “any wholesale or retail dealer or 
distributor.”  Restatement (Second) of Torts § 402A(1)(a) & cmt. f.       
    The  Minnesota  Legislature  subsequently  enacted  a  “seller’s-exception  statute,”

Minn. Stat. § 544.41

, that “tempers the harsh effect of strict liability as it applies to passive 

sellers, while ensuring that a person injured by a defective product can recover from a 
viable source.”  In re Shigellosis Litig.,

647 N.W.2d at 6

 (citing

Minn. Stat. § 544.41

).  
Section 544.41 permits the dismissal of strict-liability claims against a passive seller of a 
defective product in certain circumstances that are not presented in this case.  See

id.

  But 
Section 544.41 neither defines “commercial seller” nor expands the scope of strict liability 
beyond the manufacturer and commercial seller of a defective product.  Indeed, the 

Minnesota Legislature expressly disclaimed any attempt to expand strict liability.  See

Minn. Stat. § 544.41

, subdiv. 4 (providing that “[n]othing contained in [Section 544.41] 
shall be construed to create a cause of action in strict liability in tort or based on other legal 
theory”).  As such, Section 544.41 confirms that Minnesota law limits strict products 
liability to manufacturers and commercial sellers but provides no guidance as to whether 

Amazon falls within the scope of the “commercial seller” category.        
    Minnesota courts “have relied on Restatement (Third) of Torts when considering 
the law of products liability.”  Duxbury v. Spex Feeds, Inc.,

681 N.W.2d 380, 387

 (Minn. 
Ct. App. 2004), review denied (Minn. Aug. 25, 2004).  The Third Restatement, consistent 
with the Second Restatement, provides that anyone “engaged in the business of selling or 

otherwise distributing” a defective product may be subject to liability for harm caused by 
the defect.

Id.

911 N.W.2d 510, 516

relationship of the parties in the stream of commerce, not concepts of transfer and
possession.” Duxbury,

681 N.W.2d at 387

.  The fact that Amazon transferred possession 
of the battery is immaterial because the “relevant consideration is whether the defendant is 
in the business of selling or otherwise distributing a product,” and the Third Restatement 
defines  selling  a  product  as  “transfer[ring]  ownership”  of  the  product.

Id.

  (internal 

quotation  marks  omitted).    Significantly,  possession  is  distinct  from  ownership,  as 
ownership  includes  the  right  to  convey  the  property  to  another.    See  Black’s  Law 
Dictionary 1280 (10th ed. 2014) (defining “ownership” as a “bundle of rights allowing one 
to use, manage, and enjoy property, including the right to convey it to others;” defining 
“owner” as “[s]omeone who has the right to possess, use, and convey something;” and 
defining “own” as “to have legal title to” property); cf. State v. Evenson,

554 N.W.2d 409, 411

 (Minn. Ct. App. 1996) (recognizing, in the context of criminal liability, that “lawful 
possession does not require actual title or ownership rights” based on the commonly 
understood meaning of possession).  The record includes no evidence that Amazon ever 
obtained or transferred an ownership interest in the battery.  Consequently, Berkley cannot 
prove that Amazon was a “seller” of the allegedly defective battery because Yishda—not 

Amazon—transferred ownership of the product to Zappa.                     
    Relying on Duxbury, Berkley argues that a sale of property does not require the 
transfer  of  title  to  the  property.2   Berkley  misconstrues  Duxbury.    In  Duxbury,  the 

2    Berkley also relies on State Farm Fire & Cas. Co. v. Homewerks Worldwide, LLC, 
in support of this argument.  See

2017 WL 3469467

, at *4–5 (Minn. Ct. App. Aug. 14, 
2017).  Because Homewerks is unpublished, it is non-precedential and has only persuasive 
value.  See Minn. Stat. § 480A.08, subdiv. 3(b); Cent. Specialties, Inc. v. Large,

18 F.4th 989

, 999 n.2 (8th Cir. 2021).  In Homewerks, the Minnesota Court of Appeals held that the 
plaintiff was not required to prove that the defendant sold the defective product to establish 
strict liability.  See

2017 WL 3469467

, at *4–5.  This holding is consistent with Minnesota 
law,  as  a  plaintiff  can  instead  prove  that  the  defendant  manufactured  or  otherwise 
distributed the defective product.  But the Homewerks court did not undertake a detailed 
analysis  of  this  issue.    The  Homewerks  court  did  not  address  Third  Restatement’s 
requirements, the holding in Duxbury or any of the other Minnesota precedent addressed 
herein that clearly limits strict-liability claims to manufacturers and sellers.  Moreover, the 
Homewerks court expressly declined to address whether the record included sufficient 
evidence of sale, relying instead on evidence that the product was the defendant’s product, 
the  defendant’s  name  was  printed  on  the  product  and  the  product  had  been  in  the 
Minnesota Court of Appeals held that the defendant—“a manufacturer and supplier of 
animal feed” for “profit”—was “engaged in the business of selling or otherwise distributing 
animal feed.”  681 N.W.2d at 387–88.  The defendant argued that it had not sold animal 
feed to the plaintiff because the plaintiff had retained title to one of the components used 
to manufacture the feed—namely, corn that the plaintiff had deposited with the defendant.

Id. at 385

.  The court rejected this retention-of-title argument because, although the plaintiff 
retained title to the deposited corn, the plaintiff lost the right to reclaim that corn after 
directing that the corn be used to make feed.

Id. at 387

.  Thereafter, “[c]ompensation [was] 
required for the goods and services integrated into the finished product,” and “title to the 
feed [was] not transferred until the depositor [paid] this price.”

Id.

As such, Duxbury does

813 F. Supp. 2d 1128

, 1163–64 (D. Minn. 2011) (concluding that defendant was not merely a 
service provider because, when conveying the defective product, defendant provided its 
own  instructions  for  using  the  product,  removed  the  original  manufacturer’s  labels, 
provided a warranty as to the functionality of the product and represented to customers 
that,  “legally  and  practically,  we  are  the  manufacturers”  of  the  product).    The 

uncontroverted  evidence  demonstrates  that  Amazon  only  indirectly  facilitated  the 
distribution of Yishda’s products through the provision of services, which falls outside the 
scope of distributor liability.                                           
    Several  unpublished  Minnesota  state  court  decisions  support  the  foregoing 
analysis.3  In Lyzhoft v. Waconia Farm Supply, the Minnesota Court of Appeals declined 
to extend strict liability to the bailor of an allegedly defective propane cylinder and 
observed that “no Minnesota appellate court has extended strict liability to commercial 
bailors, lessors, or both.”

2013 WL 3368832

, at *3–4 (Minn. Ct. App. July 8, 2013).  In 

Tabish  v.  Target  Corp.,  the  Minnesota  Court  of  Appeals  held  that  a  company  that 
assembled a defective bicycle was a service provider that “falls outside of the traditional 
strict-liability  scope”  because  “strict-liability  claims  are  enforceable  only  against 
manufacturers, suppliers, and sellers of products.”

2011 WL 2519209

, at *6 (Minn. Ct. 
App. June 27, 2011).  And in Bremer v. Forklifts of Minnesota, Inc., the Hennepin County 

District Court, Fourth Judicial District, dismissed strict-liability claims against an entity 
that inspected and modified an allegedly defective forklift but did not sell the forklift.

2015 WL 3512409

, at *6 (Minn. Dist. Ct. May 6, 2015).  Although none of these decisions 
involved an online marketplace such as the one operated by Amazon, these decisions 
reflect that Minnesota courts narrowly construe the scope of strict products liability.      

    In  summary,  under  Minnesota  law,  strict  products  liability  applies  only  to 
manufacturers  and  sellers  of  defective  products.    Amazon  undisputedly  did  not 

3    Under Minnesota law, unpublished decisions “must not be cited as precedent.”  
Minn. Stat. § 480A.08, subdiv. 3(b).  “However, when interpreting state law, if the highest 
state court has not decided an issue [a federal court] must attempt to predict how the highest 
court would resolve the issue, with decisions of intermediate state courts being persuasive 
authority.”  Cent. Specialties,

18 F.4th at 999

Minn. Stat. § 480.065

, subd. 3.  Whether to use a state’s 
certification procedure is within a federal district court’s discretion.  Lehman Bros. v. 
Schein,

416 U.S. 386

, 390–91 (1974); Allstate Ins. Co. v. Steele,

74 F.3d 878

, 881–82 (8th 
Cir. 1996). Although certification might “save time, energy, and resources and help[ ] build 
a cooperative judicial federalism,” certification is never required, even if state law is in 
doubt.  Lehman Bros., 416 U.S. at 390–91.  “Absent a close question and lack of state 
sources enabling a nonconjectural determination, a federal court should not avoid its 
responsibility to determine all issues before it.”  Smith v. SEECO, Inc.,

922 F.3d 406, 412

 

(8th Cir. 2019) (internal quotation marks omitted).  The “most important consideration” 
when deciding whether to certify a question to a state supreme court is whether the 
certifying court “finds itself genuinely uncertain about a question of state law.”  Johnson 
v. John Deere Co.,

935 F.2d 151, 153

 (8th Cir. 1991) (quotation omitted).   
    It is undisputed that Minnesota courts have not addressed the precise issue presented 

here—namely, whether the operator of an online marketplace may be subject to strict 
liability for harm caused by a defective product sold by a third-party merchant.  But for the 
reasons addressed in Part I of this Order, the available sources of state law enable this Court 
to reach a “nonconjectural determination” as to this issue.  Smith,

922 F.3d at 412

 (internal 
quotation marks omitted).  These sources include precedential decisions from Minnesota 

courts demonstrating the scope of strict liability and the appropriate reliance on the Second 
Restatement and Third Restatement and the text and commentary provided in the Second 
Restatement and the Third Restatement.  These sources also include persuasive authority 
from unpublished Minnesota state court decisions, together  with Minnesota statutory 
authority, which demonstrate that Minnesota courts narrowly construe the scope of strict 

products liability as applied to non-manufacturers.  Although these state-law sources do 
not address the precise issue presented in this case, these sources provide sufficient 
guidance to enable this Court “to reach a sound decision without indulging in speculation 
or conjecture.”  Kaiser v. Mem’l Blood Ctr. of Minneapolis, Inc.,

938 F.2d 90, 93

 (8th Cir. 
1991).  There is not a dearth of legal authority such that this Court is left “genuinely 
uncertain about a question of state law.”  Johnson,

935 F.2d at 153

 (quotation omitted).  

    Accordingly,  the  Court  denies  Berkley’s  motion  to  certify  a  question  to  the 
Minnesota Supreme Court.

ORDER

    Based on the foregoing analysis and all the files, records and proceedings herein, IT 
IS HEREBY ORDERED:                                                        

    1.   Defendant Amazon.com, Inc.’s motion for summary judgment, (Dkt. 70), is 
GRANTED.                                                                  
    2.   Plaintiff Berkley Regional Insurance Company’s motion to certify a question 
to the Minnesota Supreme Court, (Dkt. 76), is DENIED.                     


Dated:  January 24, 2023                s/Wilhelmina M. Wright            
                                       Wilhelmina M. Wright              
                                       United States District Judge

Reference

Status: Unknown