The Ninth Circuit reversed an order striking class allegations against Microsoft reasoning that the Washington district court misapplied its precedent and thereby abused its discretion. Plaintiffs alleged that a design defect in Microsoft’s Xbox 360 video game console made it unable to withstand vibrations during normal game playing conditions and caused game discs to become scratched and unplayable. Microsoft countered that the majority of Xbox units do not manifest the alleged defect because only about 0.4 percent of owners reported disc scratching and the actual cause is consumer abuse.

The district court relied on In re Microsoft Xbox 360 Scratched Disc Litig., where certification of a similar putative class was denied on the basis that individual issues predominated over common issues of fact and law. The district court in that case relied heavily on the reasoning from Gable v. LandRover N. Am., Inc., where the court denied class certification because plaintiffs failed to demonstrate that an alleged vehicle defect manifested in a majority of vehicles thereby obviating the need for individual inquiries. The Ninth Circuit reversed Gable, however, in Wolin v. Jaguar Land Rover N. Am., concluding that the Gable court erred because proof of the manifestation of a defect is not a prerequisite to class certification. Nevertheless, the district court in the Xbox case reasoned that Wolin did not undermine the causation analysis articulated in Scratched Disc and that comity required deferral to the earlier certification order.

The Ninth Circuit disagreed, noting that in Wolin it expressly rejected the notion that individual manifestations of a product defect precluded resolution of the claims on a class-wide basis. The appellate court concluded that although individual factors may affect the timing and extent of the disc scratching, they do not affect whether the Xboxes were sold with a defective disc system. Whether the Xboxes are defectively designed and whether such design defect breaches an express or an implied warranty are both issues capable of common proof, and both are susceptible to proof by generalized evidence that does not require evidence of individualized causation.

Baker v. Microsoft Corp., No. 12-35946 (9th Cir. Mar. 18, 2015).