Guerriero v. Sony Electronics Inc.

Background

John Guerriero brought a proposed class action against Sony Electronics Inc., alleging that the shutter in Sony’s a7iii mirrorless digital camera did not perform as promised and failed relatively frequently. He alleged that he purchased the camera online in 2019 and sued on behalf of New Yorkers who purchased the camera.

Sony moved under Section 4 of the Federal Arbitration Act to compel arbitration and strike the complaint’s class allegations. Sony asserted that each camera was packaged with a one-year limited warranty containing a mandatory arbitration provision, a class-action waiver, and instructions allowing the purchaser to opt out in writing within 30 days of purchase. Sony said it had no record that Guerriero opted out. The opinion also states that Sony contended the warranty was available on its website.

Motion to Compel Arbitration

The court applied New York law, which the parties did not dispute governed the agreement’s formation. Under that law, an enforceable contract requires an offer, acceptance, consideration, mutual assent, and intent to be bound. The court explained that mutual assent may be shown through conduct when a reasonable person would understand that conduct as agreement.

The court held that Sony showed Guerriero was on inquiry notice of the arbitration provision. The court relied on Sony’s evidence that the warranty was mailed with the camera, that the warranty was only one page long, and that portions of the arbitration provision were bolded and written in capital letters. The court found the type small but readable and the provision sufficiently clear and conspicuous.

The court also held that Guerriero assented through his conduct because the warranty gave him 30 days to opt out in writing and he did not do so. Guerriero did not submit evidence that he failed to receive the warranty, did not realize it contained an arbitration provision, or opted out. The court found that questions raised by his attorney in the opposition brief did not create a genuine factual dispute. It therefore granted the motion to compel arbitration.

Class Allegations

The court separately addressed Sony’s request to strike the class allegations. It held that, by agreeing to the warranty’s arbitration provision, Guerriero also waived participation in a class action. The provision stated that disputes would be considered only on an individual basis and could not proceed as a class, representative, consolidated, or private-attorney-general action. The court therefore granted the motion to strike the class allegations and required Guerriero to arbitrate individually.

Disposition

The court granted the motion to compel arbitration and strike the class allegations. It ordered the parties to arbitrate their dispute on an individual basis and stayed the action pending arbitration. The clerk was instructed to administratively close the case, without prejudice to either party moving by letter to reopen it within 30 days after the arbitration proceedings concluded. The opinion did not decide whether the camera was defective or whether Guerriero was otherwise entitled to relief on the underlying claim.