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All content by Kyle E. Mitchell, who is not your lawyer.

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Not the Typetech exceptionalism in limp words and phrases

Amazon sold a laptop battery from a Chinese outfit to a lady in California. It cost twelve dollars and thirty cents. Sounds like a deal to me. Unfortunately, it also exploded, sending lady to hospital for two weeks. When she sued the US-based affiliates of the Chinese companies, presumably to cover more than $12.30 in medical bills, said affiliates promptly made themselves scarce. They got the papers, but never showed at court. Getting papers to the Chinese in China proved an unworkable two- to three-year proposition.

But she also sued Amazon, which cannot exactly skip town tomorrow. Amazon has cash.

Reading the recent California appeals decision in Angela Bolger v. Amazon (superior court case number 37-2017-00003009-CCU-PL-CTL), I’m struck by just how much “but we’re a platform” reminds me of “but it’s a utility token”. Both come out when people try to hold tech companies accountable under the law, often in totally predictable ways. Both have lost whatever magic they once held.

The companies plead, in effect, that they’re not the kinds of businesses the rules apply to. They’re in transportation, or retail, or investments, or finance, they have to admit. Their ads and IPO filings tell. But they don’t actually do those things, they say. They do websites. Or apps. Or platforms. Or “revolutionary information services”. Special, ethereal, exceptional things. Incantations in free air. Functional poetry in the realm of the mind.

It’s particularly easy to see this pretense laid bare in an opinion like Bolger, when the company gets thumped.

Amazon lost its appeal flat-out on the main question: Does California product liability law, which holds manufacturers and distributors responsible for physical harm from defective products, apply to Amazon and Ms. Bolger’s blow-up battery? The answer, to read the court tell it, is yes. And for pretty much all of the reasons. For one, that’s the rule. For two, all the reasons we have the rule in the first place say Amazon doesn’t get any free pass for being on the Internet or magic pocket rectangles. Exactly the opposite.

I’ve been well clear of the hard-core blockchain space for more than a year now. But I assume those still playing that game remain as resistant as ever to the idea that United States securities laws were designed to cover new approaches and technologies. New “innovations” aren’t entitled to new securities laws. Exactly the opposite. It is the courts’ explicit duty to look at the general rules and broad policies of the laws we already have, and have had for almost a hundred years, and to apply them to regulate new ideas in finance, until further notice.

Ditto California strict products liability law:

Regarding the policies to be served by the doctrine [of strict products liability], Amazon first claims that the Legislature, not this court, is the appropriate forum to address whether these policies would be served in new contexts. Amazon does not cite any California authority for this claim, which is unsurprising because it runs directly contrary to California law. Strict liability is a common law doctrine in California. It was created by the courts, which have expanded and contracted the doctrine where warranted by its purposes. … Amazon implies that e-commerce is somehow different. …

In other words, Amazon tried to argue its way out of responsibility by saying that the legislature, not the courts, should decide whether the old rules apply to its new kind of business. But that’s the opposite of what the rules we already have say, and what courts have done for quite some time.

There isn’t just a rule about liability. There’s a rule about how to read and apply the rule about liability, too. In the end, it’s the reasons for the rule that matter, not thew newfangledness of the business they apply to. Reasons like making sure people who get blown up by defective products can get money for their medical bills.

Thus, when it comes to products liability in California, courts “construe broadly”, consistent with those goals. They don’t “read narrowly”, only applying to familiar situations and very close matches. And we see similar meta-rule language in securities law, such as on whether a particular arrangement counts as a “security”, and therefore comes under heavy regulation. New frontiers in how don’t change why we regulate in the first place.

As if to hammer the point home, the Borger opinion ends with a solid and predictable defeat on a secondary issue, as well. Section 230 of the Communications Decency Act, the special protection for tech companies against lawsuits about what people say through their online services, doesn’t stop Ms. Borger from suing Amazon under California’s stuff-shouldn’t-explode rule.

I don’t fight out 230 suits all day. But there’s tons of case law on the limits of the law, and I’ve read, or read about, a fair amount of it. This doesn’t strike me as a strong argument for Amazon at all. More of a last-ditch Hail Mary.

But it couldn’t be more on-theme. In essence, Amazon pleaded for special treatment, as a tech company, every way it knew how. It gets special treatment under Section 230, for speech. But the federal government didn’t enact a universal tech-is-special-in-all-things law. It enacted a narrower, though still very generous, tech-is-special-when-it-comes-to-publishing-content law. As far as I’m aware, speech has yet to spontaneously combust anyone’s lap.

As I’ve written here before, the era of legislative coddling and cooing for digital tech in its infant stage seems to be coming to an end. Now that the industry’s big enough to fight and win against its corporate rivals, domestically and internationally, it’s no longer the infant, unformed, lovable bouncing ball of promise and potential crying out of sheltering and protection. We’ve picked a few fights, made some money, and ate too much. We’re getting kicked out of the house, to fend for ourselves.

I’m not remotely alone, or even close to first, in saying so. Even the Trump administration has picked up on the line, making noise, as it does, about reviewing and curtailing Section 230. Mr. President got mad at Twitter. I doubt the headline bait he’s dangled has much legal meat on it. But as ever, the talent for reading the room, if not getting anything done in it, remains instructive.

That doesn’t mean the end of tech as we know it, or that Amazon and its frenemies will now lose every round before a judge. It does mean that tech people and their lawyers will have to do more thinking about, accounting for, and socializing the policies and priorities behind the laws and regulations that apply to business as a whole. They will have to think big picture, not narrowly on their own terms, but on those passed down through long-running legal and democratic processes.

On so many levels, that is the challenge and opportunity of working in technology now. We are no longer invited to succeed in a soft, rounded-corners, baby-proofed alternative reality, simplified for our young minds, streamlined to nurture our confidence, insulated from all natural predators. Our collective childhood is done, comic book morality and powderpuff politics with it. Now comes the real world. We’ll have to fight our way in, to make good on the start we’ve been given.

Your thoughts and feedback are always welcome by e-mail.

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