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CLASS ACTION COMPLAINT

KELLER ROHRB ACK L .L .P .

1201 Third Avenue, Suite 3200 Seattle, WA 98101-3052

T E L E P H O N E : ( 2 0 6 ) 6 2 3 - 1 9 0 0 F A C S I M I L E : ( 2 0 6 ) 6 2 3 - 3 3 8 4

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UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON AT SEATTLE

GEORGE SCHMIDT, individually and on

behalf of all others similarly situated,

Plaintiff,

v.

SAMSUNG ELECTRONICS AMERICA,

INC.; SAMSUNG ELECTRONICS CO., LTD;

AND SAMSUNG SDI AMERICA, INC.,

Defendants.

No.


JURY TRIAL DEMANDED

Case 2:16-cv-01725 Document 1 Filed 11/04/16 of 28


i KELLER ROHRB ACK L .L .P .



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TABLE OF CONTENTS

I. INTRODUCTION ............................................................................................................ 1

II. PARTIES .......................................................................................................................... 9

III. JURISDICTION AND VENUE ....................................................................................... 9

IV. FACTUAL BACKGROUND ......................................................................................... 10

A. The Galaxy Note7 ............................................................................................... 10

B. First Recall of the Galaxy Note7 ........................................................................ 11

C. The Second Recall .............................................................................................. 14

V. CLASS ACTION ALLEGATIONS ............................................................................... 17

VI. CAUSES OF ACTION ................................................................................................... 19

VII. PRAYER FOR RELIEF ................................................................................................. 25

VIII. JURY TRIAL DEMANDED .......................................................................................... 26



Page - 1 KELLER ROHRB ACK L .L .P .



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Plaintiff George Schmidt, individually and on behalf of all others similarly situated, files

this Class Action Complaint against Samsung Electronics America, Inc., Samsung Electronics

Co., Ltd., and Samsung SDI America, Inc. (“Defendants” or “Samsung”), and alleges as follows

based in personal knowledge, the investigation of his counsel, and information and belief.

I. INTRODUCTION

1. Ninety percent of American adults own a cell phone. Sixty-four percent own a

smartphone – a mobile phone with more advanced computing capabilities. Since smartphones

started becoming commercially available in the mid-1990s, they have become a fact of everyday

life. On average, people check their phones 150 times a day and spend 177 minutes using them.1

It is expected that the number of smartphone users globally will reach 6.1 billion by 2020. People

rely on their smartphones to do vast array of activities: make phone calls, text, email, navigate

while driving, for mobile payments, as a camera, for entertainment, to help self-manage diabetes,

as language translators, etc. Indeed, it is only partially hyperbole to say that there is a smartphone

application for almost everything.

2. It is estimated that revenue from smartphone sales in 2015 was over $50 billion in

the United States and over $400 billion globally.2 With prices typically ranging from $50 to $850

per device, competition for a share of the smartphone market is fierce. Competitors such as

Samsung and Apple have historically released a “new and improved” smartphone in their

respective product lines every year. Smart phone companies continually race to develop

1 Google, Micro-Moments: Your Guide to Winning the Shift to Mobile, pg. 3,

https://think.storage.googleapis.com/images/micromoments-guide-to-winning-shift-to-mobile-download.pdf

2 Statista, Smartphone Sales in the United States from 2005 to 2016,

https://www.statista.com/statistics/191985/sales-of-smartphones-in-the-us-since-2005/; Statista, Number of

Smartphones Sold to End Users Worldwide from 2007 to 2015, https://www.statista.com/statistics/263437/global-

smartphone-sales-to-end-users-since-2007/.






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innovative features to entice customers, such as faster processors, increased storage capacity,

higher quality cameras, strengthened security features, longer battery life, faster charge times,

and water proofing.

3. Samsung’s Galaxy Note is a high-end smartphone product line that uses the

Android operating system. The series was first released on October 29, 2011, and was

noteworthy for its large screen and stylus. Since the release of the first Galaxy Note, Samsung

has released a new version of the Galaxy Note every fall. The Galaxy Note’s main competitor in

the United States has been the Apple iPhone. After learning that Apple’s iPhone 7 would have

relatively few improvements over the iPhone 6, Samsung saw an opportunity to claim more of

the market share with the Galaxy Note7. The Galaxy Note7 boasted several features that the

iPhone 7 did not, such as more RAM, an iris scanner, faster battery charging, expandable

storage, and a stylus. Samsung rushed the production of the Galaxy Note7 and moved up its

release date to better compete with the Apple iPhone 7.3

3 Yoolim Lee & Min Jeong Lee, Rush to Take Advantage of a Dull iPhone Started Samsung’s Battery Crisis,

Bloomberg, https://www.bloomberg.com/news/articles/2016-09-18/samsung-crisis-began-in-rush-to-capitalize-on-

uninspiring-iphone.






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http://web.archive.org/web/20161010081326/http://www.samsung.com/us/mobile/phones/galaxy-note/sm-n930azbaatt-sm-

n930azbaatt/

4. On August 19, 2016, after much fanfare and record pre-sales, the new Galaxy

Note7 hit the shelves. Within days, consumers began to realize that something was amiss as

report after shocking report of Galaxy Note7 phones catching fire began to emerge: Galaxy

Note7 phones were combusting and catching cars on fire;4 a plane was evacuated and grounded

after a Galaxy Note7 caught fire just before takeoff5; Galaxy Note7 phones burning right through

people’s pockets;6 owners waking up to flaming Galaxy Note7 phones by their bedside.7

4 Samsung Note7 Probed as Possible Cause of Car Fire, ABC News, (Sept. 14, 2016),

http://abcnews.go.com/Business/video/samsung-note7-probed-car-fire-42093654

5 http://www.sciencenewsdaily.org/consumer-gadgets-news/cluster1015333966/

6 Mariella Moon, Samsung Sued After Galaxy Note7 Explodes in Pocket, Engadget, (Sept. 17, 2016),

https://www.engadget.com/2016/09/17/samsung-sued-galaxy-note-7-pocket-explosion/

7 Paul Morris, Exploding Galaxy Note 7 Burns Down Garage; Jeep in Another Case; Airlines Now Banning the

Device, Redmond Pie, (Sept. 8, 2016), http://www.redmondpie.com/exploding-galaxy-note-7-burns-down-garage-

jeep-in-another-case-airlines-now-banning-the-device/






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http://www.today.com/video/did-a-galaxy-note7-replacement-battery-catch-fire-on-southwest-flight-780354627735

5. It took two weeks and over 35 reported incidents – an average of over two

incidents a day – before Samsung recalled the dangerously defective devices. Samsung asked

customers to discontinue using their brand new, top of the line phones and to return them. In

exchange, Samsung offered to replace the phones – with the new, purportedly “safe” Galaxy

Note7. Samsung explained that the fires in the old Galaxy Note7 were a result of a battery

malfunction and that the issue was corrected in the replacement phones. Samsung repeatedly

reassured the public that the Galaxy Note7 was completely safe.

6. In its eagerness to return the Galaxy Note7 to the market and despite knowing the

very real risks the Galaxy Note7 presented, Samsung disregarded the safety of its consumers and

put a device it knew was unsafe back in the market. Shortly after Samsung released its allegedly-

safe replacement Galaxy Note7, reports of the replacements catching fire began and it became

apparent to the public that, despite Samsung’s repeated assurances to the contrary, the

replacement was anything but safe.

7. It is outrageous that Samsung released such a patently unsafe device in the first

instance and that its safety protocols did not prevent such a large-scale debacle; the fact that it

did so twice is unconscionable. While Samsung may be trying to contain the fallout by asking

consumers who paid hundreds of dollars for the phone to cease using it, it cannot reasonably

contain its liability for putting an unsafe phone in consumers’ hands in the first place.






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8. Samsung finally issued a global recall of its “state of the art” device and stopped

production of the Galaxy Note7 entirely on October 10, 2016.8 The FAA issued an emergency

ban on consumers bringing the devices on any plane or in any checked baggage.9 Consumers

realized their state-of-the-art phones were literally ticking time bombs. A Galaxy Note7 owner

on a business trip for example, suddenly finds that she cannot fly with her phone, she cannot put

her phone in her checked luggage, and she cannot mail the phone. In such a situation, the

consumer is faced with the incredible decision of not returning home, or discarding an $850

device that is too high-risk to take on any plane and cannot be mailed without a special safety

box.

https://www.alaskaair.com/content/advisories/travel-advisories.aspx

8 Jose Pagliery, Samsung Tells Users: Turn Off Your Galaxy Note7 Phone NOW, CNN, (Oct. 10, 2016),

http://money.cnn.com/2016/10/10/technology/samsung-galaxy-note-7-turn-off/?iid=EL; Samsung website, (Oct.

13, 2016) Samsung Expands Recall to All Galaxy Note7 Devices, http://www.samsung.com/us/note7recall/

9 Jose Pagliery, FAA Banning Samsung Galaxy Note7 From All Flights, CNN, (Oct. 14, 2016),

http://money.cnn.com/2016/10/14/technology/samsung-galaxy-note-7-flight-ban/index.html






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9. The Galaxy Note7 is so dangerous that Samsung is distributing special fire-safe

boxes for customers to use when returning their phones.10 The special return boxes come

complete with gloves for customers to wear when handling their phones. According to

Samsung’s packing instructions, the phone is first placed in a special static shield, then put in a

box, then put inside a second box, and finally put inside a third box that is lined with thermally-

protective ceramic fiber paper designed to contain extreme heat. Even with all of these

precautions, the box is forbidden on all flights. FedEx recently announced that it is no longer

accepting the safety boxes from individual customers or retail outlets, but only from mobile

phone retail locations and only in packaging that meets strict regulatory guidelines, further

reducing customers options for returning their phones.

10

Shewali Tiwari, Samsung is Sending Fire-Proof Boxes With Gloves and Shield Bags to Pick Up the Note7 From

Customers, Indiatimes, (Oct. 13, 2016), http://www.indiatimes.com/lifestyle/technology/samsung-is-sending-fire-

proof-boxes-with-gloves-and-shield-bags-to-pick-up-the-note-7-from-customers-263461.html






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http://www.dailymail.co.uk/sciencetech/article-3833290/Samsung-sends-fire-resistant-recovery-boxes-customers-return-Galaxy-

Note-7-handsets-complete-protective-gloves.html

10. Not only was the Galaxy Note7 a safety hazard, but Samsung did not have

replacement Galaxy Note7 phones available to replace the approximately one million phones it

had already sold in the United States at the time of the first recall, forcing consumers to wait

days or even weeks for their replacement phones. By the time of the second recall, Samsung had

sold approximately 1.9 million devices in the United States that were no longer usable. After the

recalls, Galaxy Note7 owners were without an operational cell phone, a device that is an

everyday necessity for most Americans. In fact, cell phones are so necessary that many

customers, left with no other choice, were forced to continue to use their Galaxy Note7 phones,

despite the risk involved. Plaintiff Schmidt was forced to call the below-signed counsel from his

Galaxy Note7 because he had no other means of telephone access! Galaxy Note7 owners were

also required to continue paying for their cellular plans, though they did not have a safe phone on

which to utilize the plan.

11. As a result of Samsung’s faulty manufacturing process and poor quality control,

consumers were forced to go through the onerous process of returning their phones – in some

cases, not once but twice – and being completely without an operational phone for days or

weeks. Consumers who purchased phones through third party sellers or on the secondary market

were often left without recourse. The Galaxy Note7 was Samsung’s top of the line phone, and

those customers who finally received non-Galaxy Note7 replacement phones have found

themselves with a phone that is lacking in features and performance compared to the Galaxy

Note7 Samsung originally sold them on. As of this writing, reports are surfacing of other






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Samsung phones catching fire, suggesting that Samsung’s disregard for customer safety is

endemic.11

12. In addition to the phone itself, many consumers also purchased numerous

accessories for the Galaxy Note7. These include protective cases, screen shields, wireless

charging stations, mounts, memory cards, additional styluses, adapters, etc., and can total in the

hundreds of dollars. Many of these accessories were made specifically for the Galaxy Note7 and

are now completely useless. While Samsung and the major cellular carriers are allowing

customers to return accessories purchased directly through them, many third-party sellers are not

permitting returns.

13. Many customers purchase new phones through their cellular carriers, which offer

a variety of financing incentives and upgrade programs. After upgrading to a new phone, a

customer is generally not available for another upgrade for a set period of time, such as two

years. Customers who financed their Galaxy Note7 using a mobile carrier-offered upgrade are

now, out of necessity for a phone, being forced to buy replacement phones that are not actually

an “upgrade,” but nonetheless prevents the customer for being eligible for another upgrade to an

actual state of the art phone for two years. To add insult to injury, carriers are charging an

upgrade fee when customers buy replacement phones.

14. As a result of Samsung’s actions, Plaintiff and the Class have suffered injury in

fact, were put at risk through use of their phones, and incurred millions of dollars in fees and

costs associated with the Galaxy Note7.

11

Ken Manbert Salcedo, 2 Samsung Galaxy S7 Edge Units Caught Fire, Exploded This Week, International

Business Times, http://www.ibtimes.com/2-samsung-galaxy-s7-edge-units-caught-fire-exploded-week-2436388;

Darlene Storm, Samsung Galaxy S7 Edge Phones Are Catching Fire Too; 2 Fires in the Last Week,

Computerworld, http://www.computerworld.com/article/3134530/android/samsung-galaxy-s7-edge-phones-are-

catching-fire-too-2-fires-in-the-last-week.html






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II. PARTIES

15. Plaintiff George Schmidt is a citizen and resident of the State of Washington.

16. Defendant Samsung Electronics America, Inc. is a corporation existing under the

law of the State of New York and is headquartered at 85 Challenger Rd, Ridgefield Park, New

Jersey 07660. Defendant is registered with the Washington Secretary of State and regularly

conducts business throughout the State of Washington.

17. Defendant Samsung Electronics Co., Ltd. is a foreign corporation existing under

the law of South Korea with its principal place of business at 129, Samsung-Ro, Yeongtong-Gu,

Suwon-Shi, Gyenggi-do, South Korea 16677. Samsung Electronics Co., Ltd. is the parent

company of Samsung Electronics America, Inc.

18. Defendant Samsung SDI America, Inc. is a corporation existing under the law of

the State of California and is headquartered at 3655 North First Street, San Jose, CA 95134.

III. JURISDICTION AND VENUE

19. This Court has original jurisdiction over the subject matter of this action pursuant

to 28 U.S.C. § 1332 because Plaintiff Schmidt resides in Washington, and Defendants maintain

headquarters in New Jersey. This Court also has original jurisdiction over this action under the

Class Action Fairness Act of 2005, 28 U.S.C. § 1332(d)(2) (“CAFA”), as to the named Plaintiff

and every Class Member, because the proposed Class contains more than 100 members, the

aggregate amount in controversy exceeds $5 million, and Class Members reside across the

United States and are therefore diverse from Defendants.

20. This Court has personal jurisdiction over Defendants because Defendants have

significant minimum contact with this State, and intentionally availed themselves of the laws of






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Washington by transacting a substantial amount of business throughout the State and this

District.

21. Venue is proper under 18 U.S.C. § 1965(a), because Defendants are subject to

personal jurisdiction in this District as alleged above, and Defendants have agents located in this

District.

IV. FACTUAL BACKGROUND

A. The Galaxy Note7

22. On August 2, 2016, Samsung unveiled its Galaxy Note7 smartphone. Intended as

Samsung’s new premiere phone, it featured a larger screen, waterproof design, a stylus, and an

all-new iris-scanner. In South Korea, demand was so high that the pre-sale orders quickly broke

all previous Galaxy smartphone pre-sale records.12

23. Shortly after the Galaxy Note7 was unveiled, in early August 2016, Plaintiff

Schmidt pre-ordered two (2) Galaxy Note7 phones – one for himself and one for his significant

other, Sue, through their local Best Buy, paying approximately $800 each, for an approximate

total of $1,600 for both phones. Both Plaintiff and Sue were happy with their previous Galaxy

Note 4s and did not purchase the Galaxy Note 5, deciding to save their upgrade eligibility. When

the Galaxy Note7 was announced, they were excited about the new features it offered, including

increased security and stylus features, and decided to upgrade.

24. After much anticipation, the Galaxy Note7 went on sale in the United States and

nine other countries on August 19, 2016. Retailing at $850-$950, it was the most expensive

12

Robert Triggs, Galaxy Note7 Breaks South Korean Pre-Order Record (Update: Huge Demand in Canada Too),

Android Authority, (Aug. 11, 2016), http://www.androidauthority.com/galaxy-note-7-breaks-pre-order-records-

708863/






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mainstream smartphone being sold.13 Plaintiff picked up in-store his new phones on their release

date, August 19, 2016. Given the uniqueness of the Galaxy Note7’s features, no current

accessories fit the new Note7 and therefore Plaintiff also purchased two Galaxy Note7 phone

cases through Amazon for approximately $30 each, for an approximate total of $60. He also

purchased a Note7-specific car charger for approximately $40.

B. First Recall of the Galaxy Note7

25. Two days after its release, reports of the Galaxy Note7 catching on fire began to

surface. Despite reports of exploding phones and delaying additional shipments of the phone to

conduct safety tests, Samsung still released the Galaxy Note7 in China on September 1.

26. One day later and exactly two weeks after the phone was first released in the

United States, Samsung issued the first recall of the Galaxy Note7 on September 2, 2016.14

Samsung suspended sales of the Galaxy Note7 and offered to voluntarily replace those already

sold. Samsung’s statement did not recommend that users power down their devices or stop using

them, nor did it advocate for users to participate in the replacement program. As of the beginning

of September, an estimated 1 million Galaxy Note7 phones had already been sold in the United

States alone.

27. At the time of the first recall, Samsung reported 35 incidents involving the Galaxy

Note7, attributing the fires to a flaw in the Galaxy Note7’s 3,500 mAh lithium-ion battery. The

handset division chief of Samsung Electronics’ stated on September 2, 2016, that “[t]here was a

13

Gordon Kelly, New Galaxy Note7 Details Reveal Expensive Secret, Forbes, (Jul. 14, 2016),

http://www.forbes.com/sites/gordonkelly/2016/07/14/samsung-galaxy-note-7-price/#33cb212faece

14 Jethro Mullen and K.J. Kwon, Samsung is Recalling the Galaxy Note7 Worldwide Over Battery Problem, Forbes,

(Sept. 2, 2016), http://money.cnn.com/2016/09/02/technology/samsung-galaxy-note-7-recall/index.html






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minor flaw in the battery manufacturing process” and that “the quality control standards in the

production process may have been insufficient.”15

28. The battery in the Galaxy Note7 was supplied by one of two companies, Samsung

SDI Co. or Amperex Technology Ltd. Samsung SDI supplied the batteries for all the Galaxy

Note7 phones sold worldwide, except for those sold in China, which were supplied by Amperex.

The first recall did not extend to China because the batteries in the Galaxy Note7 phones sold

there were not made by Samsung SDI.

29. Shortly after Samsung issued the first recall, the Federal Aviation Administration

released a statement strongly advising passengers against turning on or charging the Galaxy

Note7 on board aircraft or stowing them in checked baggage.

30. On September 10, 2016, Samsung issued an additional statement urging Galaxy

Note7 users to power down their Galaxy Note7 phones and immediately participate in the

replacement program. Samsung did not explain why it had not asked users to power down their

devices or to exchange them in its first statement a week earlier.

31. The U.S. Consumer Product Safety Commission (“CPSC”) urged Galaxy Note7

users to stop using their phone on September 9, 2016.16 Six days later, CPSC issued a formal

recall of all Galaxy Note7 phones sold prior to September 15, 2016. CPSC stated that Samsung

had received 92 reports of batteries overheating in the United States, including 26 reports of

burns and 55 reports of property damage.

15

Eun-Young Jeong, Samsung’s Massive Galaxy Note7 Recall Brings Batter-Maker Into Focus, Wall Street

Journal, (Sept. 5, 2016), http://www.wsj.com/articles/samsungs-massive-galaxy-note-7-recall-brings-battery-

maker-into-focus-1473082175

16 Press Statement from the U.S. Consumer Product Safety Commission Regarding the Samsung Galaxy Note7,

(Sept. 9, 2016), https://www.cpsc.gov/Newsroom/Press-Statements/Press-Statement-from-the-US-Consumer-

Product-Safety-Commission-Regarding-the-Samsung-Galaxy-Note7/






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32. Samsung America President and COO Tim Baxter released a video on September

16, 2016, apologizing on behalf of Samsung. In the video, Mr. Baxter assured consumers that the

Galaxy Note7 with the new battery was safe and that the battery cell issue had been resolved. At

the end of the video, Mr. Baxter promised that the new Galaxy Note7 phones would be available

no later than September 21.17

33. After receiving their new Galaxy Note7 phones, Plaintiff did have some initial

concerns with how hot his and Sue’s phones got while charging, but was unaware that it was a

more problematic issue until Plaintiff saw that Samsung was issuing a voluntary recall of Note7

phones. Plaintiff immediately returned to the Best Buy location where he purchased his phones,

but was told that the Note7’s problems were limited to only those phones in China and his

phones were not affected.

34. Following an increase in media coverage regarding Samsung’s press release to

return all Note7 phones to providers, Plaintiff spent significant time engaged in multiple

conversations with management representatives with Best Buy and Verizon over the course of

multiple days attempting to return both Note7 phones. Plaintiff was frustrated with the

communication breakdown between Samsung and the various providers, which greatly impeded

his ability to participate in the recall.

35. Plaintiff was waitlisted for a replacement phone and had to wait almost a week

before it became available. In the meantime, Plaintiff and Sue continued to use their Galaxy

Note7 phones because they did not have any other phones and Samsung had not instructed them

not to use them. In or around mid-September, Plaintiff was finally authorized to return his

17

Video, Linus Tech Tips, (Sept. 20, 2016) http://www.pcr-online.biz/news/read/samsung-s-tim-baxter-apologises-

for-galaxy-note-7-recall/038716






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phones to Best Buy and was provided with two, new Note7 phones. Plaintiff only had the new

phones for approximately three days before the media reported that there were issues with the

“new” phones issued during the recall.

C. The Second Recall

36. On September 20, 2106, Verizon, AT&T and T-Mobile all released an automatic

software update for the Galaxy Note7 to help identify recalled Galaxy Note7 phones. Verizon,

AT&T, and Sprint both resumed selling the Galaxy Note7 by September 21, 2016, and T-Mobile

resumed sales on October 5, 2016.

37. On September 27, 2016, a new Galaxy Note7 purchased in China burst into

flames while charging.18 The batteries used in the Galaxy Note7 phones sold in China were the

same as those used in the replacement Galaxy Note7 phones.

38. Samsung resumed sales of the new Galaxy Note7 devices in Korea on October 1,

2016.19 Prior to the resumption of sales, Samsung opened several Galaxy Note7 “experience

zones” in Korea to showcase the device. To give users confidence in their new Galaxy Note7

phones, Samsung implemented three specific software changes affecting the battery indication.

39. On October 5, 2016, Southwest Airlines had to evacuate one of its planes on the

runway after a passenger’s replacement Galaxy Note7 caught fire.20 On October 7, 2016, a

18

Charles Riley, Samsung Customer Says His New Note7 Phone Burst Into Flames, CNN Money, (Sept. 27, 2016),

http://money.cnn.com/2016/09/27/technology/samsung-galaxy-note-7-fire-china/index.html

19 New Galaxy Note7 Now Available for Purchase, Samsung Newsroom, (Oct. 3, 2016),

https://news.samsung.com/global/new-galaxy-note7-now-available-for-purchase

20 Bart Jansen, Smoking, Popping Samsung Galaxy Note7 Prompts Southwest Evacuation, USA Today, (Oct. 5,

2016) http://www.usatoday.com/story/news/2016/10/05/samsung-galaxy-note-7-explodes-while-boarding-

southwest-flight/91602698/






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woman in Taiwan was walking her dog with her Galaxy Note7 in her back pocket when it started

smoking.21

40. Following reports of continued issues with the replacement phones, all four major

U.S. cell carriers stopped selling the Galaxy Note7 completely on October 10, 2016.22 That same

day, Samsung confirmed that it had ceased production of the Galaxy Note7.23

41. Just over a month after the first recall, Samsung finally issued a full recall of the

Galaxy Note7 on October 11, 2016. It asked all carriers and retailers globally to stop sales and

exchanges of its flagship Galaxy Note7.24

42. The CPSC announced its second recall on October 13, 2016, making it illegal to

sell the Galaxy Note7 in the United States.25 At the time of the recall, Samsung had received 96

reports of batteries in the Galaxy Note7 overheating, including 23 new reports since CPSC’s first

recall. Of those 96 known incidents, 13 involved burn injuries and 47 involved additional

property damage.26

43. As part of Samsung’s recall program, customers may exchange their Galaxy

Note7 for another Samsung smartphone with a refund of the price difference and a $100 bill

21

Bogdan Popa, “Safe” Samsung Galaxy Note7 Catches Fire in Taiwan, Second Recall More Likely, Softpedia,

(Oct. 8, 2016), http://news.softpedia.com/news/safe-samsung-galaxy-note-7-catches-fire-in-taiwan-509079.shtml

22 Paul Blake and Daniel Steinberger, All Four Major Carriers Halt Samsung Galaxy Note7 Sales and Exchanges,

ABC News, (Oct. 10, 2016), http://abcnews.go.com/Business/att-verizon-mobile-halt-samsung-note7-sales-

exchanges/story?id=42688402

23 Samsung Permanently Stops Galaxy Note7 Production, BBC News, (Oct. 11, 2016),

http://www.bbc.com/news/business-37618618

24 Samsung website, (Oct. 11, 2016), http://www.samsung.com/us/note7recall/

25 United States Consumer Product Safety Commission, Samsung Expands Recall of Galaxy Note7 Smartphones

Based on Additional Incidents with Replacement Phones; Serious Fire and Burn Hazards, (Oct. 13, 2016),

https://www.cpsc.gov/Recalls/2016/samsung-expands-recall-of-galaxy-note7-smartphones-based-on-additional-

incidents-with

26 Id.






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credit. They may also return their phone for a refund and a $25 bill credit, or exchange it for

another brand of smartphone and a $25 bill credit. The bill credit is expected to take 1-2 bill

cycles to appear on a customer’s bill.

44. Major carriers and Samsung are offering refunds for Galaxy Note7 accessories

purchased directly through them only. Samsung is not offering refunds for any other costs

associated with the recall, such as cell phone plan costs, upgrade fees and taxes, or third party

accessories.

45. Following reports that Samsung was officially recalling all Note7 phones, not just

the original Note7 models, Plaintiff again spent considerable time contacting both Best Buy and

Verizon – both of whom kept directing him to the other – to determine the best method of

returning his phone and finding an acceptable replacement. As was the case with the first recall,

Plaintiff was forced to spend a considerable amount of his own time communicating with his

various providers in order to determine where he was to surrender his phones - a process which

was only exacerbated by a significant communication breakdown between Samsung, Best Buy

and Verizon, which forced many consumers, such as Plaintiff to continue to use an unsafe phone

while they waited for answers.

46. Samsung’s shipment delays of replacement phones following the second recall

exacerbated frustrations among consumers who were being told they could not travel with

phones or were experiencing overheating, as replacement phones were not shipped to providers

for weeks. This further delay, in light of the FAA’s announcements that it was illegal to fly with

a Note7, was an unacceptable position to place consumers in. Plaintiff was personally forced to

wait nearly thirteen days following the second recall before he was allowed to return his phones






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in exchange for a lesser model, to which he has not been given reimbursement for the difference

in or in his costs expended for accessories.

V. CLASS ACTION ALLEGATIONS

47. Plaintiff brings this suit on behalf of himself and, pursuant to Federal Rule of

Civil Procedure 23, on behalf of the following Class:

All persons and entities in the United States who purchased or leased a Samsung

Galaxy Note7.

48. Excluded from the Class are the Defendants, the officers, directors or employees

of the Defendants, the attorneys in this case and any judge assigned to this matter, including the

Court’s staff.

49. Numerosity. The proposed Class is sufficiently numerous and its members are

dispersed throughout the United States, making joinder of all members impracticable. Indeed,

almost two million Galaxy Note7 cell phones were purchased throughout the United States.

50. Commonality. Common questions of fact and law exist for each cause of action

and predominate over questions affecting only individual class members, including:

A. whether Samsung violated Washington consumer protection statutes;

B. whether the Galaxy Note7 is materially defective and what are the defects;

C. whether Samsung knew, or should have known, that the Galaxy Note7 is

materially defective;

D. whether Samsung omitted and concealed material facts from its

communications and disclosures to Plaintiff and the Class regarding the

defects in the Galaxy Note7;

E. whether Samsung acted in violation of state and federal law; and






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F. whether Plaintiff and the Class are entitled to damages and/or injunctive

relief, and if so, the appropriate amount thereof.

51. Typicality. Plaintiff’s claims are typical of the claims of members of the

proposed Class because, among other things, Plaintiff and Class members sustained similar

injuries as a result of Defendants’ uniform wrongful conduct and their legal claims all arise from

the same conduct.

52. Adequacy. Plaintiff will fairly and adequately protect the interests of the

proposed Class. Plaintiff’s interests do not conflict with Class members’ interests and Plaintiff

has retained counsel experienced in complex class action and consumer protection litigation to

prosecute this case on behalf of the Class.

53. Rule 23(b)(3). In addition to satisfying the prerequisites of Rule 23(a), Plaintiff

satisfies the requirements for maintaining a class action under Rule 23(b)(3). Common questions

of law and fact predominate over any questions affecting only individual class members and a

class action is superior to individual litigation. The amount of damages available to individual

plaintiffs is insufficient to make litigation addressing Defendants’ conduct economically feasible

in the absence of the class action procedure. Individualized litigation also presents a potential for

inconsistent or contradictory judgments, and increases the delay and expense to all parties and

the court system presented by the legal and factual issues of the case. By contrast, the class

action device presents far fewer management difficulties and provides the benefits of a single

adjudication, economy of scale, and comprehensive supervision by a single court.

54. Rule 23(b)(2). Plaintiff also satisfies the requirements for maintaining a class

action under Rule 23(b)(2). Defendants have acted or refused to act on grounds that apply






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generally to the proposed Class, making final declaratory or injunctive relief appropriate with

respect to the proposed Class as a whole.

VI. CAUSES OF ACTION

COUNT I

Violation of the Washington Consumer Protection Act (“CPA”)

(RCW §§ 19.86 et seq.)

55. Plaintiff George Schmidt asserts this cause of action on behalf of himself and the

proposed Class.

56. Plaintiff repeats and realleges each and every allegation contained above as if

fully set forth herein.

57. This claims arises under the Washington Consumer Protection Act, RCW

§§19.86, et seq. (“CPA”).

58. At all relevant times, Defendants engaged in “trade” and/or “commerce” within

the meaning of RCW § 19.86.010.

59. The CPA broadly prohibits unfair methods of competition and unfair or deceptive

acts or practices in the conduct of trade or commerce. RCW § 19.86.0120.

60. Defendants made uniform representations that the Galaxy Note7 was of a

particular standard, quality, or grade when it was not, and that it would perform as represented

when it did not, and, as set forth above, made false and/or misleading statements regarding the

capacity and characteristics of the Galaxy Note7 that, as set forth above, were unfair or

deceptive, had and continue to have the capacity to deceive the public, caused injury to the

property of the Plaintiff and the other members of the Class, and were made in violation of the

CPA.






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61. In their communications and disclosures to the Plaintiff and the members of the

Class, Defendants intentionally concealed and/or failed to disclose that the Galaxy Note7 has a

design and/or manufacturing defect, and that the defect had the capacity to and, in several cases,

did, burst into flames causing bodily harm and property damage, for the purpose of inducing the

Plaintiff and other members of the class to purchase the Galaxy Note7 and/or the reissued

Galaxy Note7. Defendant also misleadingly stated that the defect had been corrected in the

reissued Galaxy Note7 for the purpose of inducing Plaintiff and members of the class to

exchange their old Galaxy Note7 for the reissued one or to purchase the reissued Galaxy Note7.

These omissions and misleading statements were unfair or deceptive, had the capacity to deceive

the public, caused injury to the property of the Plaintiff and the other members of the Class, and

were made in violation of the CPA.

62. Defendants had exclusive knowledge that the Galaxy Note7 had the defect or

defects set forth above, facts not known to the Plaintiff and the other members of the Class.

Defendants’ exclusive knowledge of these material facts gave rise to a duty to disclose such

facts, which they failed to perform.

63. The representations made by Defendants and the facts concealed and/or not

disclosed by Defendants to the Plaintiff and the other members of the Class are material facts

that were likely to deceive reasonable consumers, and that a reasonable consumer would have

relied on in deciding whether or not to purchase the Galaxy Note7.

64. The representations made by Defendants and the facts concealed and/or not

disclosed by Defendants detrimentally affect the public interest. There is an inherent public

interest in the truthful marketing and sales of products that do not damage persons, personal






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property and/or public property. The Galaxy Note7 damages users’ person, personal property,

and/or public property, thereby negatively impacting the public interest.

65. Plaintiff and the other members of the Class justifiably acted or relied to their

detriment on Defendants’ affirmative representations and the concealed and/or non-disclosed

facts as evidenced by their purchase and use of the defective Galaxy Note7.

66. Had Defendants disclosed all material information regarding the Galaxy Note7 to

Plaintiff and all of the Class members, they would not have purchased the Galaxy Note7.

67. Defendants knew, or were reckless in not knowing, that their statements about the

Galaxy Note7 were false and/or misleading.

68. By the conduct described herein, Defendants engaged in unfair methods of

competition and/or unfair or deceptive acts or practices in the conduct of business, trade or

commerce.

69. As a direct and proximate result of Defendants’ violations of the foregoing law,

Plaintiff and the other members of the Class have been injured.

70. Plaintiff and the other members of the Class have been damaged and are entitled

to all of the damages, remedies, fees, and costs available under the CPA.

71. Plaintiff will provide or already has provided any required notice to appropriate

entities regarding Defendants’ unfair and deceptive trade practices.

COUNT II

Breach of Warranty of Merchantability

(RCW § 62A.2-314)

72. Plaintiff asserts this cause of action on behalf of himself and the proposed Class.

73. Plaintiff repeats and re alleges each and every allegation contained above as if







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74. Plaintiff and other Class members who purchased the Galaxy Note7 are “buyers”

within the meaning of RCW § 62A.2-103.

75. The Galaxy Note7 phones are “goods” within the meaning of RCW §62A.2-105.

76. Through sales directly to consumers on Samsung.com, among other venues,

Defendants are “sellers” of the Galaxy Note7 within the meaning of RCW § 62A.2-103 and

“merchants” of the Galaxy Note7 within the meaning of RCW § 62A.2-104.

77. Defendants impliedly warranted to Plaintiff and the Class that the Galaxy Note7

was “merchantable” within the meaning of RCW § 62A.2-314.

78. The Defendants impliedly warranted to Plaintiff and members of the Class that

the Galaxy Note7 was fit for the ordinary purpose of a phone and handheld computing device.

79. Defendants have breached the implied warranty of merchantability to Plaintiff and

the Class because the Galaxy Note7 phones: (i) would not pass without objection in the trade; (ii)

were not fit for their ordinary purposes for which such goods are used; (iii) were not of even kind

and quality within each unit; and (iv) were not adequately contained, packaged and labeled.

80. As a proximate result of Defendants’ breach of the implied warranty of

merchantability, Plaintiff and other members of the Class sustained damages including, but not

limited to, the purchase price of the Galaxy Note7, the purchase price of related accessories, and

associated cellular carrier costs.

81. Plaintiff and other members of the Class are entitled to all of the damages,

remedies, fees, and costs available for Defendants’ breach of implied warranties of

merchantability.






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COUNT III

Violations of the Washington Product Liability Act (“WPLA”)

(RCW § 7.72.030)

82. Plaintiff asserts this common law cause of action on behalf of himself and the

proposed Class.



84. Defendants’ Galaxy Note7 is a product pursuant to RCW § 7.72.010(3).

85. Defendants are product sellers of this product pursuant to RCW § 7.72.010(1) and

manufacturers of this product pursuant to RCW § 7.72.010(2).

86. At all relevant times, Defendants designed, manufactured, sold, distributed, and/or

marketed Galaxy Note7 phones.

87. The design of the Galaxy Note7 was defective because the likelihood that the

product would cause the claimants’ harm or similar harms, and the seriousness of those harms,

outweighed the burden on the manufacturer to design a product that would have prevented those

harms and the adverse effect that an alternative design that was practical and feasible would have

on the usefulness of the product. RCW § 7.72.030(1)(a). The Galaxy Note7 was unsafe to an

extent beyond that which would be contemplated by the ordinary consumer. RCW § 7.72.030(3).

88. Defendant failed to perform adequate testing in that adequate testing would have

shown that the Galaxy Note7 phone was unsafe.

89. Defendants had a duty to provide honest and accurate information to their

customers so that customers could make informed decisions on the purchase of Galaxy Note7

devices.






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90. Defendants specifically and expressly misrepresented material facts to Plaintiff

and members of the class, as discussed above.

91. Defendants knew, or in the exercise of reasonable diligence should have known,

that the ordinary consumer would be misled by Defendants’ misleading and deceptive

advertisements.

92. As a proximate result of Defendants’ unsafe product design and

misrepresentations, Plaintiff and other members of the Class were put at risk of severe bodily

harm and sustained damages including, but not limited to, the purchase price of the Galaxy

Note7, the purchase price of related accessories, associated cellular carrier costs, and emotional

distress.

93. Plaintiff and other members of the Class are entitled to all of the damages,

remedies, fees, and costs available for Defendants’ unsafe product design and failure to warn in

violation of RCW § 7.72.030.

COUNT IV

Unjust Enrichment

94. Plaintiff asserts this common law cause of action on behalf of himself and the

proposed Class.



96. At all relevant times, Defendants designed, manufactured, sold, distributed, and/or

marketed Galaxy Note7 phones that had the capacity to, and in many cases did, overheat and

catch fire, but made false and misleading representations about the quality and safety of the

Galaxy Note7.






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97. Plaintiff and members of the class conferred upon Defendants, without knowledge

of the inherent flaws or dangers in the Galaxy Note7, payment for the devices – benefits that

were non-gratuitous. Defendant accepted or retained the non-gratuitous benefits from Plaintiff

and the members of the class, even though Plaintiff and the members of the class were not

receiving products of the high quality, nature, fitness, safety, or value that had been represented

by Defendants and that reasonable consumers would have expected, and inequity has resulted.

98. Retaining the non-gratuitous benefits conferred upon Defendants by Plaintiff and

members of the class under these circumstances is unjust and inequitable.

VII. PRAYER FOR RELIEF

WHEREFORE, Plaintiff, individually and on behalf of members of the Class,

respectfully requests that the Court enter judgment in his favor and against Samsung, as follows:

A. Certification of the proposed Class, including appointment of Plaintiff’s

counsel as Class Counsel;

B. An order temporarily and permanently enjoining Samsung from

continuing the unlawful, deceptive, fraudulent, and unfair business practices alleged in

this Complaint;

C. Injunctive relief, including public injunctive relief, as the court deems

appropriate;

D. Costs, restitution, damages, and disgorgement in an amount to be

determined at trial;

E. Revocation of acceptance;

F. Declaratory relief as the court deems appropriate;

G. Treble and/or punitive damages as permitted by applicable laws;






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H. An order requiring Samsung to pay both pre- and post-judgment interest

on any amounts awarded;

I. An award of costs and attorneys’ fees; and

J. Such other or further relief as may be appropriate.

VIII. JURY TRIAL DEMANDED

Plaintiff hereby demands a trial by jury on all issues so triable.

DATED this 4th day of November, 2016.

StandardSig KELLER ROHRBACK L.L.P.

By: /s/ Lynn Lincoln Sarko

By: /s/ Derek W. Loeser

By: /s/ Gretchen Freeman Cappio

By: /s/ Cari Campen Laufenberg

By: /s/ Lisa A. Nowlin

Lynn Lincoln Sarko, WSBA #16569 Derek W. Loeser, WSBA #24274 Gretchen Freeman Cappio, WSBA #29576 Cari Campen Laufenberg, WSBA #34354 Lisa A. Nowlin, WSBA #51512 KELLER ROHRBACK L.L.P. 1201 Third Avenue, Suite 3200 Seattle, WA 98101 Tel: (206) 623-1900 Fax: (206) 623-3384 Email: [email protected] [email protected] [email protected] [email protected] [email protected] Attorneys for Plaintiff


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