Microsoft is still facing a lawsuit after a number of Xbox 360 owners complained of scratched discs. Reuters

Microsoft can still face class action claims by Xbox 360 owners who say some of the seventh-generation consoles came with design defects that resulted in game discs being gouged and destroyed, a federal appeals court decided Wednesday. The 9th U.S. Circuit Court of Appeals claimed a lower court judge misapplied the law when he found that Xbox 360 owners in the U.S. weren’t allowed to sue for damages as a group.

Class action lawsuits can lead to more damages than individual cases, which are often expensive to pursue.

The Xbox 360 launched in November 2005 and was replaced by the Xbox One in November 2013. The device has sold more than 80 million units worldwide as of late 2013.

Still, a number of Xbox 360 owners claim that the device’s optical disc drive isn’t durable enough to survive minor disruptions, leading to game discs spinning out of control and enduring scratches under typical playing conditions. The damage to discs leaves them unplayable.

Microsoft said that class certification was improper, arguing that just 0.4 percent of Xbox 360 owners reported scratches. The case was dismissed in March 2012 by U.S. District Judge Ricardo Martinez in Seattle. Now, that decision has been reversed by the 9th Circuit.

"Plaintiffs’ breach of express warranty claim presents a common factual question -- is there a defect? -- and a common mixed question of law and fact -- does that defect breach the express warranty?" Circuit Judge Johnnie Rawlinson said to the appeals court, according to Reuters. "The district court erred in finding that individual issues of causation predominate over these common questions."

However, Microsoft is battling the lawsuit, believing the claims to be unfounded.

"We've won in the lower court previously and believe the facts are on our side," a spokesperson for the Redmond, Washington, multimedia conglomerate told Reuters.