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November 2, 1999

Fresh From Toshiba Settlement, Lawyers Sue Four More OEMs

By CBR Staff Writer

Industry fears that the $1bn settlement Toshiba Corp made last week would inspire copy-cat suits (CI No 3,780) have proved well- founded. Lawyers have sued four more PC manufacturers for selling laptops with defective floppy disk controllers (FDCs). The new defendants are the Hewlett-Packard Co, Packard Bell NEC Inc, eMachines Inc and Compaq Computer Corp. Compaq says that in spite of Toshiba’s example, it won’t settle. We believe the vague claims that are outlined in the complaint are completely baseless and without merit, spokesperson Alan Holdel told AP. Executives for eMachines were simply bewildered by the charges: their company doesn’t even sell laptops.

But the OEMs can’t afford to become complacent about the suit. One of the plaintiff’s attorneys is Wayne Reuad, most famous for representing the state of Texas in its lawsuits against the tobacco industry. Toshiba settled precisely because it feared the financial and intangible repercussions of a drawn-out jury trial. The new suits accuse the four OEMs of selling computers equipped with floppy drives they knew could corrupt users’ files. The plaintiffs seek unspecified damages and an injunction halting production of the hardware in question.

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