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Friday, July 24, 2015

Baker v. Microsoft: Ninth Circuit Addresses Effect of Prior Order Denying Class Certification in Related Matter

I didn't see this case when it came down in March, but the Court modified it a couple of weeks ago, so I'll discuss it now.

In 2007, purchasers of Microsoft Xbox 360 game consoles brought a putative class action, alleging design defects. Scratched Disc Litigation, 2009 WL 10219350. The judge in that case denied certification, finding that common issues did not predominate because most Xbox owners had not experienced the purported defect.

In Baker v. Microsoft Corporation, ___ F.3d ___ (9th Cir. 3/18/15, mod. 7/20/15), another group of Xbox owners brought another putative class action alleging the same design defects. The district court struck the plaintiffs' class allegations, finding that comity required deferral to the 2009 order denying certification. The Ninth Circuit denied the plaintiffs' petition for an interlocutory appeal, the parties stipulated to dismiss the case with prejudice, the district court approved the stipulation, and the plaintiffs appealed.

The Ninth Circuit reversed, holding as follows:

The Court had jurisdiction to hear the appeal, even though the parties stipulated to the dismissal. Absent a settlement, a stipulated dismissal "does not destroy the adversity in that judgment necessary to support an appeal."

The district court erred in striking the class allegations. In Wolin v. Jaguar Land Rover N. Am. LLC, 617 F.3d 1168 (9th Cir. 2010) (discussed here -- it's funny to look back at my old posts and see how bad they were!) the Court rejected "the notion that individual manifestations of a defect precluded resolution of the claims on a class-wide basis." As in Wolin, which controls the current case, questions regarding the Xbox's design and any breaches of warranty are common questions that are "susceptible to proof by generalized evidence and do not require proof of individual causation." The fact that individual class members may have suffered different damages would not affect class certification. Defendant's arguments on the merits are not relevant at the class certification stage. The Court did not hold that the class should be certified; it held only that the district court erred in striking the class allegations.

The opinion is here

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