Xbox Class Action Wrongly Revived, Microsoft Says

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Microsoft told the Supreme Court that the plaintiffs alleging Xbox 360s were defective can’t revive the claims in a proposed class action lawsuit following their voluntary dismissal of individual claims, arguing that the Court of Appeals did not have jurisdiction.

Plaintiff Seth Baker, who filed the lawsuit in 2011, claimed that an Xbox 360 design defect caused the console to scratch disks.

Microsoft, however, maintains that these scratches are caused by consumer misconduct, not by any potential defects of the gaming system.

In 2012, a judge denied certification to the proposed Class of plaintiffs, then Baker voluntarily dropped his individual claims so that a final decision could be eligible for appeals, according to court documents.

Last March, the proposed class action lawsuit was revived after the Ninth Circuit reversed the decision, citing a 2010 decision involving tire wear in Wolin v. Jaguar Land Rover.

In that case, the appeals court found that although individual factors may affect tire wear, they did not affect whether the vehicles were sold with an inherent alignment defect.

In response, Microsoft asked the Ninth Circuit to review the decision, and was denied. The tech company then filed a petition for the Supreme Court to review the decision of the Ninth Circuit.

Baker said that the Supreme Court’s has acknowledged that a final judgment is a final decision and that the dismissal of his individual claims should not make a difference in the final decision.

However, Microsoft argued that that the dismissal of the claims was conditional, then, not final.

“A conditional dismissal creates only the possibility of finality,” said Microsoft in its brief. “It terminates the lawsuit only if an appellate court fails to reverse an interlocutory procedural order having nothing to do with the merits of the plaintiffs’ individual claims.”

In January, the Supreme Court agreed to hear Microsoft’s challenge of the Ninth Circuit’s decision to revive the proposed class-action lawsuit. Microsoft maintains that the appellate court lacks jurisdiction to consider the proposed class action lawsuit.

With the backing and support of business and legal industry groups, Microsoft holds firm in its belief that the Ninth Circuit was in violation of basic appellate jurisdiction principles when it allowed a review of Baker’s appeal after class certification was denied following Baker’s voluntary dismissal of his individual claims with prejudice.

Baker argues that Microsoft is “confused” and that final judgments can be undone following successful appeals. Baker says if that wasn’t the case, appellate jurisdiction “would be limited to cases with no prejudicial error.”

Both Baker and business groups backing Microsoft disagree on the nature of the Supreme Court’s 1978 decision in Coopers & Lybrand v. Livesay and its relationship with the current case, with Baker saying the ruling applies to interlocutory appeals and Microsoft saying that the case is “exactly like Livesay in every way that matters.”

The plaintiffs are represented by Brendan Maher, Peter Stris, Daniel L. Geyser, Radha A. Pathak, Dana Berkowitz, Douglas D. Geyser, Victor O’Connell and Thomas E. Logan of Stris & Maher LLP; Darren T. Kaplan of Stueve Siegel Hanson LLP; Robert L. Esensten of Esenseten Law; Jeffrey M. Ostrow and Jonathan M. Streisfeld of Kopelowitz Ostrow Ferguson Weiselberg Gilbert PA; Mark A. Griffin, Amy Williams-Derry and Benjamin Gould of Keller Rohrback LLP; and Paul L. Stritmatter and Bradley J. Moore of Stritmatter Kessler Whelan Koehler Moore Kahler.

The Xbox Disc Scratch Class Action Lawsuit is Microsoft Corp. v. Seth Baker, et al., Case No. 15-457, in the Supreme Court of the United States.

UPDATE: On June 12, 2017, in a unanimous decision, the U.S. Supreme Court concluded that plaintiffs in the Xbox class action lawsuit cannot seek appeal of the trial court’s denial of Class certification after they voluntarily dismissed their own claims.