Nintendo of America Inc. prevailed in its motion to compel arbitration in a product defect suit alleging that the Nintendo Switch video game console’s Joy-Con controllers are flawed. The Western District of Washington claimant, a minor who brought the suit through his guardian, will now have to arbitrate his claims.
According to the court’s Thursday opinion, the Switch was released for sale in March 2017. Its standard packaging states that by using the Switch, the gamer agrees to Nintendo’s End-User License Agreement (EULA), which contains an arbitration provision, and provides the web address at which the EULA is available. Also, when users power up the Switch for the first time, they are informed of the EULA.
The screen reportedly states, “ ‘(b)y selecting the Accept button, you acknowledge that you have read and agree to be bound by the End-User License Agreement. If you do not agree, stop using this system.’ ” The opinion noted that users can opt out of the arbitration agreement by notifying Nintendo within 30 days of purchase in writing, and that if a user does not wish to accept the EULA, they can return the console for a full refund.
The court explained that several months after the minor plaintiff purchased a Switch the console’s Joy-Con controllers began displaying a defect known as “drifting.” The defect reportedly occurs when video game characters or items move without user command or manual operation of the Joy-Con controller. The gamer then filed a class action against Nintendo, to which it responded with a motion to compel arbitration.
The user asserted that the parties never formed a valid arbitration agreement because the minor plaintiff lacked the capacity to contract. The court concluded that the minor had the capacity to form a contract under both California and Washington law. The court did not reach the plaintiff’s next argument, that he disaffirmed the EULA, because it found that the parties agreed to have an arbitrator decide the dispute.
The court also considered and disposed of the plaintiff’s final argument: that delegating the dispute to arbitration was unconscionable. The court held that the gamer “had a meaningful choice to accept the delegation provision, to opt out of the arbitration clause (including the delegation provision), or to reject the entire EULA and return his Nintendo Switch.”
Relatedly, a class action filed in February alleged that Sony sold PlayStation 5 (PS5) DualSense Wireless Controllers that similarly suffered from a drift defect. On April 5, the case was transferred from the Southern District of New York to the Northern District of California.