Fujitsu faces lawsuits over HDD failures

Fujitsu faces a class action lawsuit alleging that it mishandled the replacement/recall of up to 300,000 faulty hard disk drives.

The class action, lodged by attorneys Shepherd, Finkelman, Miller and Shah on October 23 in the Superior Court of the State of California, names the defendants as Fujitsu Computer Products US, Hewlett-Packard (whose Pavilion 7845, the suit alleges, suffered multiple failures due to the problem) and up to 100 other (currently unknown) defendants.

The complaint alleges that both Fujitsu and HP knew of defects on the MPG3xx series of HDDs but continued to say they were of satisfactory quality, and failed to warn customers of their inherent faults or of the need to be vigilant about backing up data.

It alleges the defendants refused to remedy the problem, only replacing faulty drives still under guarantee and then offering only similar drives - which might also be subject to failure.

The action seeks actual and punitive damages, restitution, equitable relief - including the replacement and/or recall of the defective drives, civil penalties, costs and expenses of litigation and all further relief available.

System builders in the dark

Keith Warburton, executive director at UK system builders trade organisation the PC Association, warns that the case might also affect UK system builders, who might find themselves named in further lawsuits.

"Class actions are not a feature of the UK, or indeed many other European legal systems, however there are thousands of disgruntled users within the EU who'll be watching developments in California with interest," he warns in a letter to UK system builders. Warburton tells his members that if system builders fail to act they'll be leaving themselves "wide open" to lawsuits - particularly if the US class action succeeds.

Resellers have a "duty and responsibility" to advise customers of inherent defects in systems or products they sell but "Fujitsu's apparent lack of openness in this issue may well have impacted System Builders' ability to look after their customers and give them proper and timely advice".

Crisis? What crisis?
The class action lawsuit follows our extensive reports about a product recall of 300,000 faulty Fujitsu hard drives.

The fault, which is supposedly brought on by heat and prolonged use, lies in faulty controller chips used in the HDDs and is found in 2-3 per cent of the 10 million units made by Fujitsu between September 2000 and 2001, according to Japanese newspaper Nihon Keizai.

Writs fly

On October 19 2001 Cirrus Logic filed a separate $46 million lawsuit against Fujitsu over non-payment for its controller chips, which have been implicated in the Fujitsu HDDs failures. Fujitsu filed a counterclaim alleging that the chips were faulty, according to 10-Q forms (see page eight here) filed by Cirrus to the Securities and Exchange Commission after its second quarter this year.

Following our initial reports on the issue we were deluged with email on the subject, over 500 and counting from all over the world.

Time and again, we were told of failure rates of 30 per cent and above in machines fitted with 20GB Fujitsu HDDs. UK system builders report huge failure rates for 20GB Fujitsu drives - of the order of 30-50 per cent, and sometimes even higher. Fujitsu's 40GB and 10GB HDDs are also affected, we understand.

Dozens of Compaq corporate customers, collectively owning a few tens of thousands of Compaq Deskpros, also contacted us following our initial reports. When questioned HP gave us a guarded response that it was investigating the issue.

Meanwhile Fujitsu's response to customer enquiries on the matter is that it hasn't announced anything about the issue, so all the reports about the issue are speculative. Fujitsu is referring users of its defective HDDs to their PC vendor and saying all problems can be covered by normal warranty procedures.

Fujitsu isn't extending warranties automatically from one to three years.

We question whether that approach can be sustained, indeed there are signs Fujitsu is bending to the weight of public opinion, and reports suggest it has made provision to take a 25 billion yen charge as a result of the faulty hard disk drives.

Readers who've bought their PCs through system builders who've gone out of business tell us they are been offered replacement hard drives for faulty equipment, despite the fact their warranty is no longer valid.

We'd love to know whether Fujitsu was extending this move to others in the same situation but this is unclear, again because Fujitsu is declining to respond to questions. ®

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