October 30, 1999
Toshiba Corporation has agreed to spent
about $1 billion to settle a class action lawsuit that charges the
company sold five million defective laptop computers in the U.S. since
1987.
The defect in the floppy-disc drive
controller could result in loss of data under certain
circumstances. There were reports that Toshiba had known of the
defect for years but had done nothing to fix it. Toshiba denied
that.
The suit was brought by two Beaumont,
Texas, consumers last March. Although Toshiba said no one had ever
complained about the defect, it agreed to settle the suit because it
feared that a jury might have awarded consumers as much as $9 billion.
Customers who bought Toshiba laptops after
March 5, 1988 will be entitled to cash rebates ranging from $210 to
$443. In addition, owners of machines covered by a warrantyu as of
last March will be entitled to coupons worth $200 or more towards the
purchase of other Toshiba products. Owners of laptops no longer
covered by a warranty will get $100.
Toshiba said unclaimed awards will be given
to a charity that will provide Toshiba laptops to schools and
libraries. A judge must still accept the settlement.
The case against Toshiba was prosecuted by Orgain, Bell & Tucker of Beaumont.
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