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Binding arbitration turns out to be, well, not binding

Here’s a story with a California nexus that easily relates to residents in Connecticut and all other states.

It involves a smartphone, namely the Samsung S7 Edge, which owner Daniel Ramirez had high expectation for following his purchase of the once highly touted product (the S7 is no longer on the market).

Ramirez obviously expected high performance from his phone. What he did not expect was for its battery to explode in his pocket and start his pants on fire. According to one of myriad national news sources, the resulting flames burned directly through Ramirez’s clothes “and engulfed his right leg in flames.”

Ramirez reportedly suffered significant burns and sought to take Samsung to court on a product liability claim.

The device maker fought back, contending that litigation was not an option owing to an arbitration-only clause contained in a safety and product booklet that came with the phone. Such provisions are widely used by companies that seek to avoid courtroom disputes and collective claims brought by class action plaintiffs. Courts often honor such clauses.

That turned out not to be true in Ramirez’s case, though. A California federal tribunal recently reviewing the matter found fault with Samsung’s buried arbitration language and argument that the claimant was denied an opportunity to air his grievance before a judge and jury. The court found it illogical to assume that a “reasonable person” would spot an arbitration provision within pages of warranty language and affirmatively opt out of it to preserve the right to potentially litigate a dispute.

The outcome: denial of the phone maker’s motion to compel arbitration, coupled with judgment in favor of the consumer.

Damage amounts were not discussed or specified in the above-linked article.

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