Daniel Norcia, on his own behalf and on behalf of all others similarly situated, Plaintiff-Appellee,
Samsung Telecommunications America, LLC, a New York Corporation; Samsung Electronics America, Inc., a New Jersey corporation, Defendants-Appellants.
and Submitted October 17, 2016 San Francisco, California
from the United States District Court for the Northern
District of California, D.C. No. 3:14-cv-00582-JD James
Donato, District Judge, Presiding
R. Hurley (argued), Eduardo G. Roy, Daniel C. Quintero, and
Jill Dessalines, Prometheus Partners L.L.P., San Francisco,
California, for Plaintiff-Appellee.
D. Unger (argued), John P. Phillips, and Ryan C. Nier, Paul
Hastings LLP, San Francisco, California, for
Before: Sidney R. Thomas, Chief Judge, and Carlos T. Bea and
Sandra S. Ikuta, Circuit Judges.
/ California Law
panel affirmed the district court's order denying
Samsung's motion to compel arbitration of a class action
complaint alleging that Samsung made misrepresentations as to
the performance of the Galaxy S4 phone.
moved to compel arbitration of the dispute on the ground that
an arbitration provision, which was contained in a warranty
brochure included in the Galaxy S4 box, was binding on
panel applied California law. The panel rejected
Samsung's theory that the Product and Safety &
Warranty Information brochure in the Galaxy S4 box created a
binding contract between plaintiffs and Samsung to arbitrate
the claims in plaintiff's complaint. The panel further
held that Samsung failed to demonstrate the applicability of
any exception to the general California rule that an
offeree's silence did not constitute consent. The panel
further held that the brochure was not enforceable as an
panel rejected Samsung's argument that plaintiff agreed
to arbitrate his claims by signing a Customer Agreement with
Verizon Wireless. The panel noted that Samsung was not a
signatory to the agreement. The panel concluded that Samsung
failed to bear its burden of establishing that it was a
third-party beneficiary of the Customer Agreement, and
therefore Samsung could not enforce the arbitration provision
in the agreement.
Norcia filed a class action complaint against Samsung
Telecommunications America, LLC, and Samsung Electronics
America, Inc., (collectively, "Samsung"), alleging
that Samsung made misrepresentations as to the performance of
the Galaxy S4 phone. Samsung moved to compel arbitration of
the dispute on the ground that an arbitration provision,
which was contained in a warranty brochure included in the
Galaxy S4 box, was binding on Norcia. We affirm the district
court's denial of Samsung's motion.
23, 2013, Norcia entered a Verizon Wireless store in San
Francisco, California, to purchase a Samsung Galaxy S4 phone.
Norcia paid for the phone at the register, and a Verizon
Wireless employee provided a receipt entitled "Customer
Agreement" followed by the name and address of the
Verizon Wireless store. The receipt stated the order
location, Norcia's mobile number, the product
identification number, and the contract end date. Under the
heading "Items, " the receipt stated "WAR6002
1 YR. MFG. WARRANTY." Under the heading "Agreement,
" the receipt included three provisions, including a
statement (in all capital letters):
I agree to the current Verizon Wireless Customer Agreement,
including the calling plan, (with extended limited
warranty/service contract, if applicable), and other terms
and conditions for services and selected features I have
agreed to purchase as reflected on the receipt, and which
have been presented to me by the sales representative and
which I had the opportunity to review.
receipt also stated (in all capital letters): "I
understand that I am agreeing to . . . settlement of disputes
by arbitration and other means instead of jury trials, and
other important terms in the Customer Agreement." The
Customer Agreement did not reference Samsung or any other
party. Norcia signed the Customer Agreement, and Verizon
Wireless emailed him a copy.
signing the Customer Agreement, Norcia and a Verizon Wireless
employee took the Galaxy S4 phone, still in its sealed
Samsung box, to a table. The front of the product box stated
"Samsung Galaxy S4." The back of the box stated:
"Package Contains . . . Product Safety & Warranty
Brochure." The Verizon Wireless employee opened the box,
unpacked the phone and materials, and helped Norcia transfer
his contacts from his old phone to the new phone. Norcia took
the phone, the phone charger, and the headphones with him as
he left the store, but he declined the offer by the Verizon
Wireless employee to take the box and the rest of its
Samsung Galaxy S4 box contained, among other things, a
"Product Safety & Warranty Information"
brochure. The 101-page brochure consisted of two sections.
Section 1 contained a wide range of health and safety
information, while Section 2 contained Samsung's
"Standard Limited Warranty" and "End User
License Agreement for Software." The Standard Limited
Warranty section explained the scope of Samsung's express
warranty. In addition to explaining Samsung's
obligations, the procedure for obtaining warranty ...