Apple Watch not covered when still under warranty

I bought my friend an Apple Watch SE and it recently stopped booting. The apple logo still appears randomly so the screen still works. We sent the watch to apple to fix it and they are saying the watch will be $200 to fix. They say because there is a scratch on the screen that they can't fix the booting issue although it's still under warranty. So I either pay $200 to fix it or get it back with it unable to boot. The watch is not even 90 days old and apple won't cover it. Ridiculous. Not buying another watch after this.