Jessica Karmasek Jan. 19, 2016, 1:24pm


WASHINGTON (Legal Newsline) - Last week, the U.S. Supreme Court decided it will hear an appeal by Microsoft Corp. over a class action lawsuit filed by Xbox 360 owners who argue the video game system scratches game discs.

The nation’s high court on Friday granted the Washington state-based technology giant’s petition, but limited it to the following question: “Whether a federal court of appeals has jurisdiction under both Article III and 28 U.S.C. 1291 to review an order denying class certification after the named plaintiffs voluntarily dismiss their individual claims with prejudice.”

The plaintiffs allege that a design defect in the console causes scratches and gouges that render discs unplayable.

Microsoft counters that the overwhelming majority of Xboxes do not manifest the alleged defect -- only 0.4 percent of owners have reported such disc scratching -- and that the cause of any disc scratching is consumer misuse, not a product defect.

In 2012, the U.S. District Court for the District of Washington struck the class allegations based on an earlier class certification denial by another district court.

Following a stipulated dismissal with prejudice in order to vest appellate jurisdiction with the appeals court, the U.S. Court of Appeals for the Ninth Circuit in March reversed the district court and remanded the case for further proceedings, finding that the stipulated dismissal created appellate jurisdiction and that the district court’s decision striking class allegations was in error.

Microsoft filed its petition for writ of certiorari with the Supreme Court in October, once again seeking to dismiss the lawsuit.

In November, the Product Liability Advisory Council Inc., the U.S. Chamber of Commerce, DRI -- The Voice of the Bar and the Washington Legal Foundation each filed amicus briefs in support of Microsoft’s petition.

WLF, joined by the National Association of Manufacturing and the International Association of Defense Counsel, said the Ninth Circuit’s decision effectively grants plaintiffs immediate repeal rights to which federal law does not entitle them.

The foundation said by permitting such immediate appeals, the Ninth Circuit’s ruling will encourage multiple, piecemeal appeals from a single lawsuit, thereby undermining the “evenhanded administration of justice” by granting plaintiffs -- and only plaintiffs -- an “extra bite at the class-certification apple.”

As WLF’s brief pointed out, the Third, Fourth, Seventh, Tenth and Eleventh Circuits have independently rejected the theory of appellate jurisdiction ratified by the Ninth Circuit.

Stephen M. Rummage of Seattle-based law firm Davis Wright Tremaine LLP is representing Microsoft. Darren T. Kaplan of New York firm Stueve Siegel Hanson LLP is co-lead counsel for the group of disgruntled Xbox 360 owners.

Neither could be immediately reached for comment on the high court’s decision to hear the case.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

Organizations in this Story

Davis Wright Tremaine LLP
1201 3rd Avenue
Seattle, WA 98101

Stueve Siegel Hanson LLP
1359 Broadway
New York, NY 10018

Microsoft
1 Microsoft Way
Redmond, WA 98052-6399

U.S. Supreme Court
1 First St NE
Washington, DC 20543

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