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Thursday, June 02, 2005, 11:00 am PT (02:00 pm ET)

First on AI: Settlement proposed in iPod class action suit

Users disgruntled with Apple's iPod battery claims may soon have relief.

A court has conditionally approved a settlement in a class action suit brought against Apple Computer by several consumers who claim their iPod batteries did not live up to the company's representation.

Approved by the Superior Court of California for San Mateo County, the settlement covers all consumers (class members) who purchased a first-, second-, or third-generation iPod model on or before May 31, 2004 and experienced "battery failure." Apple has agreed to the settlement without admitting fault or misrepresentation.

According to the published settlement notice, "battery failure" is when "the capacity of an iPod's battery to hold an electrical charge has dropped to four hours or less of continuous audio playback, with earbuds attached, with respect to the Third Generation iPod, or five hours or less of continuous audio playback, with earbuds attached, with respect to the First Generation iPod and the Second Generation iPod."

A fairness hearing is slated for Thursday, August 25, 2005, at 1:30 p.m., before the Honorable Beth Labson Freeman to determine whether the requested settlement should be granted and, if so, on what terms.

Settlement Benefits

Under the terms of the proposed settlement, class members who purchased or obtained a new third-generation iPod would be eligible for a one-year limited warranty extension on that iPod to cover battery failures. If the iPod experiences or has experienced battery failure during the one-year extension period, consumers who submit a valid claim have the option of returning the iPod to Apple for a replacement or receiving a Apple Store credit in the amount of $50.00.

Class members who purchased or obtained a new first- or second-generation iPod on or before May 31, 2004 and experienced battery failure within two years of purchase would receive a $50 credit at the online or retail Apple Store or a $25 reimbursement check.

Anyone who purchased or obtained one of the first three generation iPods on or before May 31, 2004 and paid for battery-related services under Apple's Battery Replacement Program before June 3, 2005, is also eligible to receive a reimbursement check for 50 percent of the cost of the service. iPod users must submit a claim to receive compensation.

Additionally, any user who also purchased an AppleCare Protection Plan (APP) for their iPod before June 3, 2005 and used the extended service warranty to obtain a replacement battery would be entitled to a $25 reimbursement.

The program also protects all class members going forward. The proposed settlement requires that Apple maintain its Battery Replacement Program for the covered class members through September 30, 2006. Furthermore, it prevents Apple from imposing any price increases on the service (and shipping charges) for covered purchases during that term.

Making a Claim

Only one settlement benefit is available for each qualifying iPod; users must submit individual claim forms for each iPod they own. To make a claim, class members can complete and submit the published claim form; as instructed and along with any required documentation.

For third-generation iPod claims, the postmark deadline for submitting a claim is two years after the original purchase date of the iPod or September 30, 2005, whichever is later. For all other claims, the postmark deadline for submitting a claim is September 30, 2005.

Attorney Compensation

If the Court approves the proposed settlement, the plaintiffs' counsel will ask the Court to award attorneys' fees and out-of-pocket expenses in the amount of $2,768,000. Apple has agreed not to oppose an award that does not exceed this figure. In addition, plaintiffs' counsel will ask the Court to award a $1,500 incentive payment to each of the class representatives for their time and effort related to the litigation—in addition to the benefits to which they are entitled under the settlement.

Apple has also agreed to pay all costs of mailed and published notices, as well as the costs of administering the settlement, but has denied and continues to deny any wrongdoing or liability as alleged by the suite.