Fall-Update “Brick” Class Action Brought Against Microsoft

Text of Complaint (Nov 29, 2006)
Microsoft has been sued over an allegation that its XBox 360 Fall Update (ie: a mandatory XBox 360 download) caused a total system malfunction (turned the units into “bricks”) for some users.

The claim alleges that Microsoft is refusing to pay the shipping, repair or replacement costs of affected units. Microsoft says it is paying shipping costs to fix or replace all affected units. The claim alleges breach of contract, negligence and violation of Washington’s Consumer Protection Act. It seeks $5 million in damages - presumably for the a yet-to-be-certified class and not just for the particular aggrieved plaintiff Kevin Ray.

Of particular interest the claim alleges that the limitations of liability, warranty and remedies clauses contained in Microsoft’s Terms of Use (TOU) are unenforceable due to unconscionability in that:

• XBox owners were never shown to the Class/Plaintiff: This isn’t likely. I specifically recall being presented with Microsoft’s TOU when I signed up for Xbox Live.
• the limitations and disclaimers were not specifically shown to each member of the Class - Case after case have upheld click wrap agreements of this kind. Unless there is something specific under Washington consumer protection law on this point, I’d be enormously surprised if this is relevant to any court.
• the limited remedy under the TOU fails in its essential purpose because it deprives the Class of the substantive value of its bargain - again, such clauses are commonplace in click-wrap agreements and routinely enforced by courts.

Sources: ars technica | Seattle Post Intelligencer | GameSpot | ZDNet | Joystiq | Next Generation

• Microsoft Retroactively Extends Xbox 360 Warranty from 90 Days to One Year (December 27, 2006)
• Motion Filed to Dismiss Xbox 360 Overheating Lawsuit (January 2, 2006)
• Man Commences Class Action Suit Against Microsoft over Alleged Xbox 360 Glitch (December 5, 2005)

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