If you ever owned an Xbox 360, you might want to take note—due to a disc-scratching manufacturing defect, Microsoft is in hot water with the courts.

In March, a three-judge circuit court panel denied a class action suit about an issue with disc-scratching due to an Xbox 360 defect, but that panel didn’t throw out the entire case. Microsoft appealed that decision to have the whole case thrown out, This week the full Ninth Circuit Court denied Microsoft’s request to have the case thrown out and also reversed the initial decision about no class action.

The lawsuit will move forward to federal district court, where it may become a class-action suit, unless Microsoft appeals to the U.S. Supreme Court.

The original 2007 case brought against Microsoft argued that when tilted or swiveled even under normal playing conditions, the Xbox 360 disc drive spins discs out of control, resulting in recognizable scratches on the surface; this can make the discs unplayable in serious cases. The console uses an optical disc drive, much like your average DVD player. Allegedly, Microsoft knew about this defect, and had considered solutions to it. Among those considered were slowing the drive’s speed and adding parts, but this would have added an extra 50 cents per console—a considerable hit—to manufacturing costs. They decided not to address it, and supposedly have continued to ignore the problem. Plaintiffs argue that this is a breach of warranty, violation of the Washington Product Liability Act, and violation of the Magnuson-Moss Warranty Act. Microsoft had received 55,000 complaints about the disc-scratching defect by 2008.

This lawsuit would impact two classes of people: a Console Owners Class (anyone residing in the United States who bought or was given an Xbox 360—within the four years preceding the original lawsuit in 2008, that is) and a Damaged Disc Subclass (anyone who experienced serious problems with the manufacturing defect).

This isn’t the first lawsuit Microsoft has had to deal with. The “Red Ring of Death” is well-known as a serious design failure, and cost Microsoft over $1 billion in the end. (Three flashing red lights surrounding the Xbox 360 power button instead of the usual green lights indicate an internal problem that requires service.)

Xbox microsoft red ring of death disc-scratching

The “Red Ring of Death.”

The Xbox 360 was launched in November of 2005  and cost between $300 and $500, depending on which version of console you bought. By 2008, the year of the lawsuit, Microsoft had sold over 10 million Xbox 360 consoles.

This article was written by

Keezy is a gamer, illustrator, and designer. Her background is in teaching and tutoring kids from ages 9 to 19, and she's led workshops for young women in STEM. She is also holds a certificate in teaching English. Her first memory of gaming is when her dad taught her to play the first Warcraft when she was five. You can find her at Key of Zee and on Twitter @KeezyBees.