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Tech Check
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] iPod nano will be getting a little relief, in the form of a $22 million class-action suit filed against the company because the devices scratched too easily. The settlement calls for Apple to set aside that $22 million, and while nano users who apply for an Apple refund stand to receive at most $25, the rainmakers in the case will bank $4 million for their efforts.
The case has a murky beginning, dating back to October 2005 when lead plaintiff Jason Tomczak complained on various Apple-centric blogs that his nano screen scratched easily, and that it quickly became unreadable. He said then that he was contacted by attorneys at Meyer and Associates who had also received similar complaints. That firm joined forces with Hagens Berman Sobol Shapiro LLP, who contacted Tomczak to try to sign him as a client as part of this case.
In the ensuing months, Tomczak claimed he was the target of numerous online attacks for his lead role in what some perceived as a "frivolous" suit, and he reportedly tried to have his name removed from the action. Instead, the original law firms filed actions against Tomczak to keep his name attached to the suit, forcing Tomczak to retain his own attorney to fight the original lawyers. Follow?
Anyhow, I tried reaching Tomczak this morning for his reaction but haven't heard back yet. Apple confirmed the settlement this morning but had no comment beyond that.
Meantime, back to the suit itself. It centers on the first-generation iPod nano, that cute little MP3 player that immediately became part of the social consciousness the moment Apple CEO Steve Jobs pulled the device from that tiny fifth pocket in his Levis 501 jeans back in September 2005. (Whoops! Watch those rivets. Don't wanna scratch that screen!) The problem, according to the suit, is that some of those nanos weren't "coated." And because they weren't "coated," the suit alleged, they were subject to "excessive scratching."
According to a notice sent out to nano owners this week, "Apple has agreed to provide a cash settlement fund of $22.5 million," and for those consumers who did not receive a "slip case from Apple when you purchased your iPod nano, you may be entitled to a cash payment of $25. If you received a slip case, you may be entitled to a cash payment of $15."
While Apple has apparently agreed to the terms of the settlement, a judge still needs to sign off on it, and a hearing has been scheduled for April 28. Here are the details that the attorneys say Apple has agreed not to oppose: The $22.5 million includes attorneys' fees of $4.5 million and litigation expenses of up to $200,000.
"Right on! Every penny counts," said Pacific Crest Securities Apple analyst Andy Hargreaves, laughing. (Full disclosure: he's a first-generation iPod nano owner so he might be puttin' in for his $25.) He also offers a little perspective, by pointing out that with $28 billion in cash in the bank, the $22.5 million works out to less than 1/10th of 1 percent of Apple's available cash. A pittance for the company, but a juicy settlement for a law firm.
To find out if you're eligible for any of this, you can get more information at www.ipodnanosettlement.com.
I know, I know. Fine, chalk it up to a slow news day.
Questions? Comments?
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