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Fujitsu HDD fiasco to end in $42.5m pay-out

Defendants settle out of court

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Lawyers fighting a class action brought against Fujitsu, HP, Gateway and others over allegedly faulty hard drives have successfully forced the defendants to settle out of court.

The settlement centres on the foundation of a $42.5 million pool of cash to be used to pay "any consumers and other end users who bought certain Fujitsu desktop 3.5in IDE hard disk drives or personal computers or other systems containing these hard disk drives", according to papers filed with the California Superior Court in Santa Clara.

The lawsuit, launched last year, alleged that the drives, supplied by Fujitsu and included in systems sold by the other defendants, contained faulty chips and firmware bugs that caused the drives to fail and lose data. The suit also claimed Fujitsu and its partners knew about the problem but sold the drives anyway, and "misled end users about the product".

The action was brought by US legal firm Shepherd Finklemann Miller & Shah (SFMS) and centred on Fujitsu's MPG3xx family of drives. Last October, SFMS lodged its complaint with the US Supreme Court, naming Fujitsu (obviously), but also HP (as the seller of the Pavilion 7845 PC, which the complain states contained MPG3xx drives) and 100 other unnamed defendants, presumably US PC makers. Gateway was named as a defendant this past June.

The story - quickly dubbed the 'Great Fujitsu HDD Fiasco' - starts back in September 2002, when Japanese newswires, along with Bloomberg, reported that Fujitsu was recalling 300,000 hard drives in Japan. The drives, made between September 2000 and September 2001, contain a faulty controller chip, Fujitsu told Bloomberg at the time.

It quickly emerged that the drives were to be found in PCs in Europe and the US, as well as Japan, though Fujitsu later said that there was no recall programme in place.

To this day, the defendants admit no liability and deny the claims detailed in the suit. They have agreed to the settlement simply to end the legal action brought against them.

At this stage, the settlement is a proposal, and the Court is asking for interested parties to submit claims or to write and object to the settlement. The terms of the agreement involve the payment of $45 per HDD to class members who can prove that they owned one of the faulty drives in question and incurred expenses to replace it/them.

Anyone who claims they lost data can submit a statement to that effect to the Court and, after offering "proof that the Settlement Administrator may reasonably require", be entitled to up to $1200 per HDD.

In the meantime, a hearing has been scheduled for 2 March 2004 at which the Court will approve the settlement, providing there are no significant objections from interested parties. ®

Full terms of the settlement can be downloaded here

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