Proposed Class Action Over Exploding Samsung Phones Won't Flame Out in Arbitration

Although the phone maker had pushed for arbitration, noting that lead plaintiff Brittany Jones never opted out of the company’s arbitration agreement, Ponsor said the agreement and opt-out language were too inconspicuously buried in the phone’s informational manual to be enforceable. “The degree of prominence of the arbitration agreement here seems calibrated with dual goals: on the one hand, just enough to persuade a court to smother potential litigation; on the other hand, not enough to make it likely that a consumer will actually notice the agreement and perhaps hesitate to buy,” Ponsor said. “It is one thing to hold consumers to agreements they have not read; it is another to hold them to agreements that, perhaps by design, they will probably never know about.” Ponsor sits on the U.S. District Court for the District of Massachusetts, but the case was assigned to him by the U.S. Court of Appeals for the Third Circuit. According to Ponsor, Jones sued the device maker after her Samsung 3S allegedly overheated when it was charging in her mother’s house and caught fire. The complaint said the incident eventually caused $10,000 in damage to the home. Jones brought strict liability, negligence, breach of warranty and negligent misrepresentation claims. In response to the suit, Samsung sought to compel arbitration, or to dismiss the claims entirely. The company noted that the phone came with an informational booklet, and contended that a sticker on the outside of the box the phone came in notified Jones about the significance of the booklet. According to Ponsor, the arbitration agreement appeared on page 19 of the 64-page booklet, in a section regarding warranties. Along with saying that all disputes needed to be resolved at arbitration and that disputes couldn’t be consolidated with other claims against Samsung, the booklet said the buyer had 30 days to opt out of the arbitration agreement, Ponsor said. There was no dispute that Jones did not opt out of arbitration. The company contended that Ponsor should follow the 1997 case in Hill v. Gateway 2000, in which the Seventh Circuit compelled arbitration despite a plaintiff’s claims that he had not read the arbitration agreement. Ponsor instead chose to follow precedent established in the Ninth Circuit’s 2017 case Norcia v. Samsung Telecommunications America and the Third Circuit’s decision from last year in Noble v. Samsung Electronics America. Those cases, Ponsor said, came to similar conclusions that an arbitration agreement that is “buried inconspicuously” should not be enforceable. “Defendant noted at argument that, if Samsung had wanted to make the arbitration agreement even more inconspicuous, it could have,” Ponsor said. “This is probably true, though it would not have been easy.” Daniel Levin of Levin Sedran & Berman, who, along with Aaron Rihn of Robert Peirce & Associates, is representing Jones, said he was pleased with the ruling. “We believe that the judge decided correctly,” Levin said. Arnold & Porter Kaye Scholer attorney Robert Katerberg, who is representing Samsung, did not return a call seeking comment Monday afternoon. Yahoo News]]>