CBS News reports that a 19-year-old Illinois man may not be able to sue Samsung for damages after his Galaxy Note 7 exploded, caught fire and severely burned his legs. It happened when the phone was plugged in while he was sleeping.
Due to incidents like this and airlines banning Galaxy Note 7 phones on flights per the FAA, Samsung merely apologized and then recalled all Galaxy Note 7 phones.
Buried Arbitration Clause
At issue: an arbitration clause buried in the warranty’s fine print. CBS reports the last few pages of the warranty contain an arbitration clause. It requires all disputes be resolved through arbitration. The fine print states consumers have 30 days after purchase to opt out of the clause, or they cannot pursue justice through the courts. The consumer learned about this when he attempted to pursue legal action against Samsung.
He discovered that with arbitration, he would give up his right to appeal if he was unhappy with the decision. Also, if he lost in arbitration, he could be ordered to pay Samsung’s legal fees and costs.
Mandatory arbitration clauses are common in contracts for many types of consumer goods and services including banks, credit cards, nursing homes, doctors and employers. As in this case, they are often hidden in the fine print. By signing these contracts, people forfeit their consumer rights to hold companies accountable by pursuing a claim in court.
Consumer protection lawyers found that arbitration is generally one-sided and favors corporations. At Terrell Hogan, we are working to help eliminate mandatory forced arbitration. We are member of the American Association for Justice, Take Justice Back and Public Justice. They all support efforts to restore consumers’ rights to a trial by jury.