298 F. Supp. 3d 1285
N.D. Cal.2018Background
- Plaintiffs bought various Samsung phones (S7, S7 Edge, S6, S6 Edge, S6 Edge+, Note5) and sued; Samsung moved to compel arbitration and to dismiss class claims for certain plaintiffs.
- Central legal question: whether each plaintiff formed a contract to arbitrate with Samsung under their home-state law (California, Massachusetts, Maryland).
- Samsung relied on arbitration provisions included in an in-box guidebook and on online warranty pages; many guidebooks stated acceptance occurs "by using this device" and described a 30-day opt-out by email/phone.
- The court applied the two-step arbitration-enforcement inquiry: (1) is the arbitration agreement valid, and (2) does it cover the claims — focusing here on formation/assent under state law.
- The Ninth Circuit’s Norcia decision (unenforceability where brochure in box did not put consumer on notice) framed the California analysis; the court grouped plaintiffs by phone model/facts to assess notice and acceptance.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Holzworth (MA) assent to arbitration via in-box materials? | Holzworth: no agreement formed with Samsung. | Samsung: outside-the-box notice + in-box guidebook telling user that using device manifests acceptance and contains opt-out. | Granted: MA plaintiff bound; guidebook (notice + opt-out) sufficient. |
| Do California plaintiffs assent where terms arrived inside box or online? | Plaintiffs: Norcia controls; silence/inaction cannot form assent where brochure/warranty presentation is inconspicuous. | Samsung: use of device (conduct) manifests assent; guidebook language and table of contents gave adequate notice for many models. | Mixed: Arbitration compelled for some S7/S7 Edge and S6 Edge+ plaintiffs (notice present); denied for others (e.g., Dee, Note5, S6/S6 Edge plaintiffs) where presentation was inconspicuous per Norcia. |
| Did Maryland plaintiff Robison assent to arbitration from in-box/online materials? | Robison: no adequate notice; guidebook/webpage did not make consumer obligations or arbitration clear. | Samsung: incorporation by reference and acceptance-by-use doctrines bind consumer. | Denied: no reasonable notice; arbitration not formed under Maryland law. |
| Should class claims be dismissed for plaintiffs subject to arbitration? | Plaintiffs: contest enforceability/class waiver. | Samsung: guidebooks include explicit class-action waiver below arbitration clause; Supreme Court enforces class waivers in arbitration. | Granted: class claims dismissed for plaintiffs whose arbitration agreements were enforced; court also stayed litigation pending arbitration. |
Key Cases Cited
- Ashbey v. Archstone Prop. Mgmt., Inc., 785 F.3d 1320 (9th Cir. 2015) (two-step inquiry for petitions to compel arbitration)
- Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63 (2010) (courts consider challenges specific to arbitration clause validity)
- AT&T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643 (1986) (arbitration is a matter of contract; parties cannot be compelled to arbitrate disputes they did not agree to submit)
- ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996) (inside-the-box terms + right-to-return can bind consumers)
- Hill v. Gateway 2000, Inc., 105 F.3d 1147 (7th Cir. 1997) (customers may be bound by inside-the-box terms if given opportunity to review and return)
- Norcia v. Samsung Telecommunications Am., LLC, 845 F.3d 1279 (9th Cir. 2017) (brochure in box that did not conspicuously put buyer on notice of arbitration was unenforceable)
- Meyer v. Uber Technologies, Inc., 868 F.3d 66 (2d Cir. 2017) (enforcing arbitration where pre-action prompt "By creating an account, you agree" provided adequate notice)
- Am. Express Co. v. Italian Colors Rest., 570 U.S. 228 (2013) (Supreme Court enforces class-action waivers in arbitration agreements)