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Dell ordered back to court in laptop dustup

'Unconscionable' arbitration overruled

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Dell has been ordered back into court to face claims it knowingly sold defective Inspiron 5160 and 1150 laptops.

In October 2006, three Inspiron owners - Michael Omstead, Melissa Malloy, and Lisa Smith - filed suit against the PC maker, charging the company with "misconduct in connection with the design, manufacture, warranting, advertising and selling of the affected computers."

The trio complained that their laptops' cooling systems were inadequate, that their power supplies and cooling systems failed prematurely under normal use, and that their batteries either failed to charge or would only hold a charge for a short time.

Omstead et al. were also steamed that the software patch Dell issued to fix the overheating Inspiron did so in part by slowing the clock speed of the allegedly defective Inspirons, and that "for some period of time presently unknown," Dell not only replaced defective parts with parts of the same design, but also charged customers for the parts and labor involved in those swap-outs.

United States District Judge Phyllis Hamilton, however, dismissed the suit in May 2008 because the plaintiffs refused to follow a court order sending them into arbitration.

Omstead, Malloy, and Smith filed an appeal a month later, and this Friday, Reuters reports, the US Ninth Circuit Court of Appeals in San Francisco agreed with them. Judge Lyle Strom said that the District Court should not have dismissed the case, and that it was in the public's interest to let it comtinue. Strom also said it was "unconscionable" to enforce a provision in customers' sales contracts requiring arbitration, according to Reuters.

And so it's back to square one for Michael Dell, Michael Omstead, Melissa Malloy, and Lisa Smith - although the plaintiffs now have a victory under their belts, and a judge's opinion that requiring the arbitration of individual cases of $1,200 to $1,500 laptops is "unconscionable." ®

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