Hobbsr: Samsung Hit With First U.S. Lawsuit for Exploding Note 7 Smartphone

Thursday, October 20, 2016

Samsung Hit With First U.S. Lawsuit for Exploding Note 7 Smartphone

The first lawsuit has been filed against Samsung as a result of the exploding Galaxy Note 7s that were recalled last month. Surprisingly, the lawsuit is not over the phone explosion itself, but rather the economic damages that the recall notice caused to consumers. A judge still needs to approve the class-action status of the lawsuit.

For the 1.9 million Samsung phones that were subject to the recall in the U.S., consumers were advised to cease using and power down their phones. That left the phones unusable, leaving many consumers not just without a phone, but still on the hook for pricey phone bills. That’s exactly what this lawsuit is covering, as well as incidental damages and loss in value.

Can Samsung Really Be Liable to Pay Consumer Phone Bills?

It is the hope of the three named plaintiffs and their attorneys that Samsung can be held liable for the economic damages the phone recall caused to a large number of US consumers. The lawsuit is alleging a breach of warranty and fraud. When people purchased and activated the phone, they may not have had another phone to use on their carrier’s network. For many Note 7 owners, when the recall was issued, they had to stop using their cellular service while they waited for their replacement phone to arrive, which for some people took weeks.

If the allegation that Samsung knew the product was defective before it began going on sale can be proven, then the plaintiffs will have a good chance at success. The fact that Samsung was selling a product that they knew people have contracts they are obligated to pay third parties for, opens them up to the special damages for the breach of warranty.

But Couldn’t the Plaintiffs Suspend Their Services?

When a person loses or breaks their phone, or is leaving the country for an extended period of time, or gets deployed in the military, most phone carriers will allow a person to suspend their service if they are on a regular, post-paid contract (not prepaid services). Basically, the phone carrier puts your contract on hold. The caveat, you need to call them or go online, and for some Note 7 users out there, the recalled device could potentially be their only way to do either.

So while Samsung may be on the hook for incidental economic damages, it is likely that they can argue that non-prepaid customers should have mitigated their damages by suspending their cellular services. Additionally, the suit is claiming loss in value and other incidental damages sustained by consumers, so this mitigation argument would only be applicable to a portion of the damages claimed.

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