Good News for Consumers – Supreme Court’s Decision Not to Hear Appeals Means Arbitration Clauses Still Cannot be Hidden in a Product’s Packaging – at Least in California
October 9th, 2017
On October 2, 2017, the United States Supreme Court denied Samsung’s appeals from two joint decisions by the Ninth Circuit of Appeals on Norcia v. Samsung Telecoms. Am. LLC, 845 F.3d 1279 (9th Cir. 2017) and Dang v. Samsung Elecs. Co., 673 F. App’x 7798 (9th Cir. 2017). Before Norcia and Dang decisions, it was common practice for a manufacturer to include terms and conditions inside a product’s packaging. Within those terms were clauses forcing consumers to forego their rights to band together or go to court against the manufacturer. The Ninth Circuit’s decisions struck down enforcement on the grounds that for the clause to be applied, a consumer must know about it prior purchasing the item. The opinion became law for many consumers, including those in the country’s most populous state—California.
The Ninth Circuit decisions are at odds with the Seventh Circuit’s 1997 opinion in Hill v. Gateway 2000, which established a company’s ability to “shrink-wrap” terms in a product’s packaging. This split between the Ninth and Seventh Circuits means an arbitration clause found in the packaging of a Samsung phone is enforceable in Chicago but not in Los Angeles.
It is yet to be determined what effect the Supreme Court’s refusal to hear the appeals will have on modern commerce and contracting. Halunen Law’s Consumer Class Action team served as co-counsel and prevailed in Dang v. Samsung Elecs. Co. We will continue to closely monitor these cases in our vigilant defense of consumer rights across the country.
With abounding energy and a quest to unearth the details, Halunen Law attorney Charles Moore brings analytic skills and insight to each class action case. His work includes cases involving consumer products, financial scams, and pharmaceuticals. Seeing his work impact not just consumers, but our society as a whole drives his steadfast determination.