The recall affects the 2.5 million Samsung Galaxy Note 7 cell phones that have already been sold around the world. Estimated $5.3 Billion recall and stopped production and sales.

Criminal Prosecution

The government now considers the Note 7s “forbidden hazardous material” under U.S. law. Anyone observed with one of the phones will be prohibited from boarding an aircraft, the release said. Government urged passengers not to side-step the order. “Passengers who attempt to evade the ban by packing their phone in checked luggage are increasing the risk of a catastrophic incident,” the DOT said in a release. “Anyone violating the ban may be subject to criminal prosecution in addition to fines.”

Implied Warranty

Sellers and manufacturers are legally bound by the “implied warranty of merchantability” and the “implied warranty of fitness for a particular purpose.” These are terms that mean that sellers promise buyers that the product is safe and designed well enough to be used in the manner the designer intended. These promises are implied — which means that they need not be spelled out every time you buy something. The company that made whatever you purchased may still have to pay you damages if it is unsafe.

Manufacturer’s Warranty (Express Warranty)

Most cell phones and electronic devices carry a one to two-year manufacturer’s warranty, valid from the date of product purchase.

Warranties, unlike insurance, cover against mechanical faults and failures that are not caused by the device owner. If your device breaks down through no fault of your own and you’re within the warranty period, you are entitled to a repair or replacement for your phone. However, the warranty doesn’t cover accidental damage, theft or loss (which is where insurance comes in). A manufacturer’s warranty is also unlikely to cover any consequential damage caused, such as time and expense spent to get the product repaired or loss of personal data on the device.

Strict Liability

In design defect cases (which is what the Samsung case appears to be), the legal standard applied is called ‘strict liability. These damages can include physical damages and emotional distress damages.”

In Product Liability cases involving injuries caused by manufactured goods, strict liability has had a major impact on litigation since the 1960s. In 1963, in Greenman v. Yuba Power Products, 59 Cal. 2d 57, 377 P.2d 897, the California Supreme Court became the first court to adopt strict tort liability for defective products. Injured plaintiffs have to prove the product caused the harm but do not have to prove exactly how the manufacturer was careless. Purchasers of the product, as well as injured guests, bystanders, and others with no direct relationship with the product, may sue for damages caused by the product.
An injured party must prove that the item was defective, that the defect proximately caused the injury, and that the defect rendered the product unreasonably dangerous. A plaintiff may recover damages even if the seller has exercised all possible care in the preparation and sale of the product.

Product Liability Waivers

A product liability disclaimer usually doesn’t shield a manufacturer from liability in a typical case where the customer purchases the product from a store. For customers, the law guarantees that the product will be safe when used in a reasonably foreseeable way. Manufacturers often try to avoid this responsibility by inserting written disclaimer. However, these disclaimers usually don’t count for much since, as a customer, you haven’t bargained for the loss of your warranty rights.

Assumption of Risk

What does a specific disclaimer do for a manufacturer, then? In a way, the specific disclaimer such as the one stated above warns customers about product misuse. One defense to product liability claims is assumption of risk. When a manufacturer makes such a defense, it is arguing that the customers knew that the way they used the product might be unsafe and lead to injury. If the customers knew that their particular use of the product would lead to injury, then they cannot make a valid product liability claim.

Cell Phone Insurance

What insurance covers (usually): Accidental damage including drops, cracks, liquid spills, liquid submersion, any damage caused by accident.
Mechanical and electronic failures, if your manufacturer’s warranty has expired and the failure would have been covered under this warranty.
Loss or theft of your phone.

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