A few years ago, a gentleman named Daniel Norcia complained that Samsung misled him about the capabilities of the Samsung Galaxy S4. More specifically, Norcia said that he wasn't told the truth about the device's speed, performance and memory. The phone owner wants to take Samsung to Court. Samsung would prefer to take its chances in binding arbitration. The company says that the warranty sheets inside the phone's retail box prohibit Norcia from taking his complaint inside a courtroom. Additionally, Samsung said that the warranty papers inside the box also prevent the consumer from initiating a class action suit. That would mean that anyone suing Samsung over the same issues would have to pay to have their own case brought to court.
In 2014, a U.S. District Court in California disagreed with Samsung. The court ruled that the warranty papers found inside the box do not provide enough of a notice to alert consumers about the arbitration clause. So Samsung appealed, and both sides presented their case before the 9th Circuit Court of Appeals last October (check out the video at the top of this story). The appeals court unanimously ruled against Samsung. While agreeing that the language used in the warranty is "contractual," the warranty is there to guarantee Samsung's obligations as the phone's manufacturer and does not impose anything binding on the part of the buyer. And because the clause in the warranty specifically is written to cover "the sale, condition or performance" of the device, the court ruled that contracts law should apply.
With that in mind, the three judge panel went by previous rulings in California, where the phone was purchased. Courts there have ruled that "silence or inaction does not constitute acceptance of an offer." Samsung even tried to use the Verizon Customer Agreement to say that Mr. Norcia's complaints had to be heard under binding arbitration; the appellate court wasn't having any of it. The judges wrote that Samsung is not a signatory, and there is no evidence showing that the Verizon Customer Agreement was written to benefit the manufacturer.
But don't count Samsung out yet. The company's record with the Supreme Court recently has been pretty good, and taking the case all the way up to the most powerful court in the land is still an option.
source: U.S.CourtofAppeals (9th Circuit) via TheConsumerist, Engadget