Disgruntled Xbox 360 owners may finally get their day in court now that a class action lawsuit, which was previously rejected by a lower court, has been revived by an appeals court. The lawsuit was filed on behalf of Xbox 360 owners whose game discs were damaged by the 360's optical drive. Due to the design of the optical drive, any movement or vibration of the console while it was reading a disc would cause to the disc to be scratched and rendered unusable.
The disc scratching problem got much less attention in the media than the notorious Red Ring of Death, which also affected a large number Xbox 360 owners. While the RROD was acknowledged by Microsoft as a hardware defect, they claim that disc scratching problem is the fault of users who were warned not to move the console while it is turned on and had a disc inside it. Microsoft further claims that this issue is not the result of a hardware defect in the 360 because only 0.4% of Xbox 360 owners have reported it. However, a court document reveals that a Microsoft manager admitted that they knew that the console could scratch discs before it was released in 2005.
The lower court rejected the class action lawsuit and ruled that each individual would have to file suit separately. The court based this decision on Gable v. Land Rover, in which Land Rover was being sued due to a defect in the alignment of the Land Rover LR3, which caused premature tire wear. In that case the class action lawsuit was rejected because only a small number of vehicles suffered from the defect, and for that reason each case needed to be tried separately. Based on that ruling, the lower court rejected the class action lawsuit against Microsoft because the disc scratching problem had only manifested in a small number of consoles.
The 9th US Circuit Court of Appeals has reversed the decision of the lower court and stated that they misapplied the precedent established in earlier cases. Although the disc scratching only occurred for a small number of Xbox 360 owners, the design flaw which allowed it to happen was present in all Xbox 360s, as admitted to by a Microsoft manager. For this reason, the appeals court ruled that Xbox 360 owners could bring a class action lawsuit against Microsoft on this matter.
Microsoft doesn't seem too concerned by this decision by the appeals court. They are confident that the problem is the result of user error and they will not be held liable for any of the scratched discs. A spokesman for Microsoft stated, "We've won in the lower court previously and believe the facts are on our side."
Is Microsoft liable for the scratched discs, or is it the fault of user error? Leave your comment below.