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Samsung & Others Guilty of Hiding Binding Arbitration Clauses in Terms & Conditions

Late last year, stories began flooding the news about Samsung’s Galaxy Note7 phone, a device that bears more resemblance to a small tablet than a smartphone. Released just last August, by October so many complaints of spontaneously exploding phones had been thrown at the company that they decided to stop all sales of the Galaxy Note7 until they could determine the cause of the fires. In the same press release, Samsung implored all users to immediately turn off their phone and send back for either a refund or for an entirely different model. What many Galaxy Note7 users likely didn’t notice was that buried at the bottom of the phone’s box was a small 16 page booklet containing a paragraph stating that users could not sue Samsung. Instead, they were agreeing to binding arbitration as a means to settle any claim of injury or death arising from use of their product.

Teen Among Many Injured By Galaxy Note7
In Illinois, Michael Taylor, 19, went to sleep with his Samsung Galaxy Note7 on the charger next to his bedside. He woke up hours later to excruciating pain in his leg and to his smartphone on fire. The phone had exploded while charging, causing severe burns to the teen’s leg. When he consulted with an attorney in an attempt to sue Samsung for his injuries, it was discovered that hidden deep in a booklet seldom read by users, Taylor had unknowingly agreed to arbitration. Without knowing it, Taylor had waived his right to a jury trial, agreed to use an arbitrator chosen by Samsung to settle his dispute, and to pay Samsung’s legal fees if the arbitrator determined Samsung was not at fault. While that same part of the booklet also states that consumers can opt out within 30 days of purchase, it is hardly likely that most consumers would read a 16 page booklet of terms and conditions. Users assume that the products they purchase are safe and that they are protected by law should an injury occur from its use.  Instead of taking true ownership for the burns suffered by Mr. Taylor, Samsung hid behind the agreement they placed in the product packaging, stating that he agreed to abide by their arbitration process to settle any grievances.

Samsung Overruled
Michael Taylor just might be in luck due to a recent court decision. On January 19th, the Ninth Circuit Court of Appeals upheld a lower court’s finding that Samsung’s use of binding arbitration agreements in product packaging does not constitute consent by the user and that the placement of such agreements is unlawful. While many class action lawsuits have been filed against the South Korean-based technology giant, it is unknown how many will be affected by the recent ruling by the court.

Other Companies Guilty of Hiding Arbitration Agreements in Fine Print
CBS News conducted a review and found a lengthy list of other corporations guilty of sneaking binding arbitration clauses into user agreements and other fine print. Among many others were Uber, Motorola, Nintendo, Dell, and FitBit. Taken directly from Uber’s legal agreement (available online through uber.com) is the following statement: ‘By agreeing to the Terms, you agree that you are required to resolve any claim that you may have against Uber on an individual basis in arbitration, as set forth in this Arbitration Agreement. This will preclude you from bringing any class, collective, or representative action against Uber, and also preclude you from participating in or recovering relief under any current or future class, collective, consolidated, or representative action brought against Uber by someone else.’

The unfair reality of concealing legal agreements in densely worded, seemingly irrelevant documents may be over, thanks to the latest court ruling against Samsung. While it remains to be seen if companies will update their terms and conditions to eliminate arbitration clauses, the law is now on the side of those who have been injured by faulty products and forced into submission by these hidden ‘agreements.’

About Levin & Perconti
Levin and Perconti is one of the most well-respected injury firms in Chicago. Our product liability attorneys have secured numerous large judgments for victims of faulty medical devices, electronics, toys, and other products that had previously been deemed safe for public use. If you or a loved one has suffered injury or death from use of a product, you may be entitled to compensation. A consultation with one of our skilled attorneys is free and can be requested by filling out our online case evaluation form or by calling us toll-free at 877-374-1417.