In Vasadi v. Samsung America, Case No. 2:21-cv-10238 (D NJ November 29, 2021), the District Court determined, in a proposed class action over allegedly shatter-prone camera glass in Samsung Galaxy S20 phones, that nearly all listed plaintiffs must arbitrate their claims. But two plaintiffs who opted out of the arbitration agreement may proceed in a New Jersey federal court, according to an unpublished order.
Samsung Electronics America Inc., according to Jean Vasadi and 19 others, advertised the professional-grade camera but failed to warn that the phones’ back camera glass may unexpectedly crack. The phones sold for as much as $1,600. Magistrate Judge Andre M. Espinosa of the United States District Court for the District of New Jersey concluded in an unpublished order that the arbitration agreement was legal when ruling on defendant’s motion to compel arbitration and to stay the action.
The basis of Samsung’s motion was that the purchase and use of the Galaxy S20 phone is subject to certain contractual terms and conditions, including an agreement to submit disputes to arbitration. Samsung argued that it repeatedly provides consumers “conspicuous notice” of the Terms and Conditions and the opportunity to opt out of the Arbitration Agreement. Consumers would accept the terms and conditions by activating the devices and clicking on the ‘accept” button when registering the product. However, two of the class members, Amber and Justin O’Connor, opted out.
The Magistrate Judge went through a detailed analysis concerning the conspicuousness of the terms and conditions and the arbitration agreement before ultimately concluding it was enforceable against all but those who had successfully opted out. The Court also analyzed the case under the two part standard. First, it determined whether the agreement to arbitrate existed, and then it deferred the question of what claims are subject to arbitration the arbitrator. “Thus, the question for the Court is whether an enforceable agreement to arbitrate exists between the parties.” “[T]he second question, whether the dispute falls within the scope of the applicable arbitration agreement, is delegated to the arbitrator if the agreement calls for arbitrability to be decided by the arbitrator.” [*13]
Although the opinion is marked “NOT FOR PUBLICATION,” it does provide a good road map for analyzing these types of cases.