The Amazon Lawsuit That Bankrupted Cross-Border Seller Podofo: A Buyer's 60 Million RMB Claim

By Alan Lee (马沙老师）

Masei & Ryland

In 2025, the "Podofo lawsuit" has garnered widespread attention within the Chinese Amazon seller community. It is a personal injury lawsuit that began with a single button battery and escalated into an astronomical claim capable of wiping out the company's capital, serving as a textbook example of overseas product liability risks for cross-border sellers.

The defendants in the case are Shenzhen Cheyang Technology Co., Ltd. (the owner of the "Podofo" brand) and Amazon. The plaintiffs are an American consumer and her injured toddler.

In July 2023, the plaintiff's 18-month-old child accidentally swallowed a button battery that had fallen out of a Podofo car audio remote control. The battery became lodged in the child's airway, causing severe chemical burns and requiring surgical removal.

A critical detail is that the battery was not the original one included with the product; it had been purchased and installed by the consumer. In October 2023, the consumer initially sued Amazon. In July 2024, Cheyang Technology was added as a co-defendant.

However, the seller's own missteps played a key role in escalating this from a minor dispute to a massive claim. In April 2024, Amazon's legal counsel notified Cheyang Technology via email, but the company's operations team mistakenly flagged it as spam, causing them to miss the critical response window.

Initially, the consumer sought $80,000. Through legal negotiations, Cheyang Technology reduced the amount to $15,000 and reached a settlement. However, just 'over a month later, the consumer backed out unilaterally and abruptly escalated the claim to $8.325 million (approximately 60 million RMB).

Because the company failed to cease operations promptly, the funds frozen in Cheyang Technology's accounts accumulated from $220,000 to $1.5 million, further inflating the plaintiff's claim.

The breakdown of this massive claim is also alarming: of the $8.325 million, medical bills accounted for just over $500,000, while the remaining $7.8 million consisted of pain and suffering damages.

Because the case involves an injured child, it was set for a jury trial in Washington State. Given the state's stringent standards for punitive damages in child product liability cases, the seller's prospects of winning were grim.

Insurance and loss mitigation failures proved equally fatal. Cheyang Technology's product liability insurance had a maximum coverage of only $1 million, woefully insufficient to cover the claim. Furthermore, in the face of massive debt, simply "abandoning the store to cut losses" was ineffective, as the platform can trace affiliated entities and all accounts under the brand for cross-border recovery.

The settlement in this case (Allen v. Amazon.com Services LLC) was approved in August 2025, though the specific settlement amount was not publicly disclosed. For Cheyang Technology, although the case has been resolved, the combined losses from frozen funds and inventory have exceeded 20 million RMB, leaving the company on the brink of bankruptcy.

The lessons from the Podofo case are stark: in the face of U.S. product liability litigation, missing critical notices from platforms or attorneys, and continuing operations during a lawsuit (which allows account funds to accumulate), can both turn a minor dispute into an irreversible disaster. For cross-border sellers, four elements are absolutely indispensable: product safety compliance, adequate liability insurance coverage, a robust notification response mechanism, and effective litigation loss mitigation strategies.

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The Amazon Lawsuit That Bankrupted Cross-Border Seller Podofo: A Buyer's 60 Million RMB Claim

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The Amazon Lawsuit That Bankrupted Cross-Border Seller Podofo: A Buyer's 60 Million RMB Claim

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