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Jones v. Samsung Electronics America, Inc.

United States District Court, W.D. Pennsylvania

May 21, 2018

BRITTANY JONES, individually and on behalf of those similarly situated, Plaintiff,
v.
SAMSUNG ELECTRONICS AMERICA, INC., Defendant.

          MEMORANDUM AND ORDER RE: DEFENDANT'S MOTION TO COMPEL ARBITRATION, DISMISS CLASS CLAIMS, AND STAY PROCEEDINGS AND DEFENDANT'S MOTION TO DISMISS OR, IN THE ALTERNATIVE, STRIKE CLASS ALLEGATIONS (DKT. NOS. 13 & 16)

          MICHAEL A. PONSOR UNITED STATES DISTRICT JUDGE. [1]

         I. INTRODUCTION

         This class action lawsuit has been brought by Plaintiff Brittany Jones on behalf of herself and others in Pennsylvania, and in the United States as a whole, who purchased a Samsung S3 cell phone. The phone, according to Plaintiff, was defective in that it had a tendency to overheat and catch fire. Defendant has responded with two motions: one seeking to compel arbitration, to dismiss class claims, and to stay all proceedings (Dkt. No. 13) and the other seeking a ruling from the court dismissing the complaint entirely or, alternatively, striking the class allegations (Dkt. No. 16).

         For the reasons set forth below, the motions will be denied. The conclusion of this memorandum will specify a date to file a discovery plan pursuant to Fed. R. Civ. P 26 (f) and a date and time for a pretrial conference pursuant to Fed.R.Civ.P. 16(a).

         II. FACTUAL BACKGROUND

         The recitation of facts is drawn from the complaint itself and from undisputed representations made by counsel in their submissions and during oral argument. The background summary is limited to the facts needed to weigh the merits of Defendant's motions.

         In September 2013, Plaintiff purchased a Samsung S3 cell phone (“S3”) for use on the Sprint network. She purchased the phone from a Sprint retail store. After Plaintiff made her selection, the Sprint employee went into the storeroom, retrieved a box with the new phone, took it out of its packaging, and activated the phone for Plaintiff. The Sprint employee installed the battery, assisted Plaintiff in transferring information from her old phone to the new S3, and set up the phone. Plaintiff paid for the new S3 in full and left using the new phone, with her old phone in the S3 box in a Sprint bag.

         The box that had held her S3 phone had a sticker on the small-end side featuring printed bar codes and a list in small font of what the box contained.[2] (Dkt. No. 15, Attach. 1.) Of the seven items noted on this list, the penultimate one stated “Important Information Booklet.” The cover of the enclosed 64-page booklet stated in bold lettering, “Important Information for the Samsung SPH-L710.” The booklet contained four sections: Important Safety Information; Manufacturer's Warranty; General Terms and Conditions of Service; and Important Message from Sprint. Notably, none of the section headings specifically mentioned any contract provisions, waivers, or mandatory arbitration terms that might be binding on the consumer.

         Relevant to the parties' dispute here, the section titled “Manufacturer's Warranty” began on page 15. The language of this section indicated that Defendant was providing a one-year Limited Warranty that the S3 was “free from defects in material and workmanship under normal use and service.” (Dkt. No. 15, Attach. 2 at 16.) By referring to this section under the title “Manufacturer's Warranty” the booklet necessarily implied that it would be addressing Defendant's obligations. Consumers do not provide warranties. Nevertheless, Defendant for undisclosed reasons decided to slip the Arbitration Agreement in the section of the booklet supposedly describing warranties. The Agreement appears four pages into this “Manufacturer's Warranty” section on page 19 of the overall booklet, under the bolded and underlined heading “What is the procedure for resolving disputes?” (Id. at 20.) In capitalized text, the booklet informs the purchaser that all disputes with Defendant “shall be resolved exclusively through final and binding arbitration, and not by a court or jury.” (Id.) The next sentence states that a dispute with Defendant “shall not be combined or consolidated with a dispute involving any other person's” product. (Id.) The bottom of the booklet's page 20 and most of page 21 detail instructions on how a consumer could opt out of the arbitration requirement. However, a consumer had no more than 30 calendar days from the date of purchase of the product to do this.

         It is undisputed that Plaintiff did not notify Defendant of a desire to opt out of the Arbitration Agreement within 30 days of her purchase of the S3.

         In December 2016, Plaintiff left her S3 charging on a bed in her mother's home at 635 Chautauqua Street in Pittsburgh.[3] Plaintiff alleges that the phone overheated while charging and caught fire, causing over $10, 000 worth of damage to the home. She brought suit to recover for those damages for herself, as well as for a class of other S3 users whose devices overheated and caused damage.[4]

         On May 3, 2017, Plaintiff filed her class action suit against Defendant. The five counts in the complaint are: (I) strict liability; (II) negligence; (III) negligent misrepresentation; (IV) breach of implied warranty; and (V) violation of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2310(d)(1). Defendant has responded with the motions now before the court.

         III. DISCUSSION

         The standard of review for a motion to compel arbitration may vary depending on the context of the motion. Compare Noble v. Samsung Elecs. Am., Inc., 682 Fed. App'x 113, 115 (2017) (stating that “a motion to compel arbitration can be resolved under the same kind of standard applicable to a motion to dismiss”) with Quilloin v. Tenet Health Sys. Philadelphia, Inc., 673 F.3d 221, 228 (3d Cir. 2012) (stating that “motions to compel arbitration are reviewed under the Federal Rules of Civil Procedure summary judgment standard”). In Guidotti v. LegalHelpers Debt Resolution, LLC, 716 F.3d 764 (3d Cir. 2013), the Court of Appeals made it clear that the appropriate standard depends on whether the motion to compel arbitration is anchored on the four corners of the complaint itself along with related cognizable documents, or requires pursuit of discovery. Where the parties rely only on the face of the complaint and incorporated documents to litigate the issue, then “a motion to compel arbitration should be considered under a Rule 12(b)(6) standard ...


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