A Case About Scratched Xbox 360 Discs Heads to the Supreme Court

A case about video game consoles could mean much for class-action lawsuits in general.

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Jan 17 2016, 3:00pm

Image: PhotoAtelier/Flickr

Cases related to video games rarely reach the U.S. Supreme Court, but the justices made an exception yesterday when they decided they'd hear a 2008 case centered on allegedly faulty units of Microsoft's Xbox 360 gaming console. Some users of the system have argued for years that the console's optical drive tends to damage discs inserted in the system and render them unplayable, and if the Court rules against Microsoft, it could find itself facing a massive class-action lawsuit.

Affected users argue that even tiny vibrations in the Xbox 360 console are enough to cause damage to inserted discs, as they fly off of the track and get scratched by other parts of the console. Microsoft claims affected users were mishandling the unit by placing it at a tilt and in other positions. The company later implemented a replacement plan for discs for Microsoft games only, provided owners forked over a $20 fee.

The seeds of the current case were planted in 2012, when U.S. District Judge Ricardo Martinez of Seattle ruled that there weren't enough people involved in the case to warrant a class-action lawsuit. Earlier appeals revealed that Microsoft had received 55,000 complaints about the issue by 2008. As big as that sounds, though, Microsoft claims that those numbers represent a mere 0.4 percent of total Xbox 360 units sold (which reportedly amounted to 84 million in June of last year). As a result of that decision, anyone involved in the class action attempt would need to file a (potentially costly) individual suit.

Last March, though, the Ninth Circuit overruled the 2012 ruling, thus reviving the class-action suit, forcing Microsoft to either tackle it head-on or head to the Supreme Court.

Microsoft chose the latter. It's not hard to understand why. If the class-action suit goes forward, it could easily end up being expensive for Microsoft. It'd be familiar territory, too. In 2007, the company spent $1.15 billion to address the Xbox 360's infamous "Red Ring of Death" defect, which often left early versions of the popular console unusable.

Complicating matters, though, is Microsoft's own admission that it knew discs could be scratched back before the Xbox 360 even game out, particularly in cases where players "reoriented" their consoles. Back in 2008, program manager Hiroo Umeno attested in a court document that "This is . . . information that we as a team, optical disc drive team, knew about. When we first discovered the problem in September or October, when we got a first report of disc movement, we knew this is what's causing the problem."

Back in March, Reuters reported that a Microsoft spokesman expressed his belief that "the facts are on our side." Now to see if the Supreme Court agrees.