SE Texas Record

Thursday, December 5, 2019

HP case brings to mind 1999 Toshiba suit

By Marilyn Tennissen | Sep 25, 2007

Wayne Reaud

Hewlett-Packard argued the merits of a class action suit before the Ninth Court of Appeals on Sept. 27, but that wasn't the first time the Beaumont firm of Read, Morgan & Quinn has represented plaintiffs against a computer company in a class action.

Wayne Reaud was one of the attorneys in a well-publisized March 1999 suit against Toshiba, in which two Texas owners of Toshiba laptops claimed they had been sold a defective product.

The suit alleged that a floppy disk controller in the Toshiba laptops could cause data corruption or data loss under certain conditions.

The plaintiffs never claimed to have lost any data or suffered any damages from the defect, but Toshiba settled the case for around $2 billion. The settlement covered owners of five million Toshiba laptops purchased in the U.S. since 1987. The computer company gave cash rebates of around $100 to $200 and free software patches to laptop owners. Any rebates not claimed were put into a fund to provide Toshiba computers to schools and libraries.

Toshiba claimed no wrongdoing in the settlement, but wanted to avoid a potentially lengthy and even costlier trial. The company officials said that in the 12 years that the lawsuit covered it had not received a single report from any customer affected by the alleged problem.

According to a Technical News article from November 1999, the Toshiba case was unlike traditional class-action lawsuits in which large numbers of people have been negatively affected. The Toshiba case had two "national representatives" – Ethan Shaw, a Beaumont attorney, and Clive Moon, a retired Texas businessman. The national representatives did not have to experience the problem in question.

Moon and Shaw received $25,000 in the settlement. It was estimated that attorneys from Reaud, Morgan & Quinn and Orgain, Bell & Tucker received around $147 million from the Toshiba settlement.

Within a month of the settlement, four more suits were filed in U.S. District Court in Beaumont against HP, Compaq, Packard Bell and e-Machines by Reaud, Morgan & Quinn.

In a Technology News article dated Nov. 2, 1999, Compaq called the class action suit "vague" and claimed the law firm was trying to cash in on its recent win. "The complaint filed against Compaq appears to be a copycat suit filed in an attempt to exploit the recent settlement by Toshiba," said Compaq.

The federal case against Compaq was later dismissed by U.S. District Judge Thad Heartfield.

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