Gateway Computer Warranty Class Action Settlement Reached

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Gateway Inc. has agreed to extend its computer warranties as part of a class action settlement agreement submitted to the Court on Monday. The plaintiffs are requesting preliminary approval of the deal and Class certification, according to the May 12 motion.

The Gateway computer warranty settlement will cover an estimated 1.7 million consumers whose warranties became void when Gateway sold its company and later went bankrupt — a common occurrence in the wake of the dot com bubble bursting in the early 2000s, when many tech companies either went bankrupt or merged with their stronger competitors.

Lead plaintiff Peter Wilson alleges in the Gateway computer warranty class action lawsuit that he purchased an extended warranty for his laptop in 2005. When it stopped functioning in late 2008 or early 2009 he called the company for help, but Gateway allegedly told him that it had sold the division that made his computer to another company, MPC Corporation. When Wilson called MPC, he was told the company had gone bankrupt and was no longer in business.  According to the Gateway computer warranty class action lawsuit, Wilson was not alone: approximately 1.7 million extended warranties suddenly disappeared when MPC went bankrupt.

Wilson argues that Gateway should have known that MPC was in bad financial shape when it sold the business. As a result, the company failed to ensure that repairs and replacements would be made available to the 1.7 million customers it sold extended warranties to.

Under the terms of the Gateway computer warranty settlement, Gateway has agreed to provide an additional year of coverage for all people who bought extended service plans purchased for Gateway computers “on or before Dec. 1, 2008 that had not expired as of Dec. 1, 2008.” The value per consumer is reportedly $60.

The proposed class action settlement agreement reiterates the concerns that many litigators now have with respect to class action lawsuits. When the U.S. Supreme Court ruled in favor of arbitration in the landmark AT&T Mobility v. Concepcion, it permanently altered the landscape regarding the rights of plaintiffs. There was a potential appeal that Gateway was considering as a result of the decision but “arms-length negotiation” gave a result that both side were able to accept.

The legal team for Wilson and the others affected by the extended warranty therefore argued that he “secured injunctive relief with concrete benefits for a class of more than a million consumers who faced a real possibility of obtaining no relief whatsoever.”

The plaintiffs are requesting preliminary approval of the deal and Class certification at a June 9, 2014 hearing.

Details on how to file a claim for the proposed Gateway warranty class action settlement were not immediately available. Keep checking TopClassActions.com or sign up for our free newsletter for the latest updates. You can also mark this article as a “Favorite” using your free Top Class Actions account to receive notifications when this article is updated.

The plaintiffs are represented by class action lawsuit attorneys Robyn Crowther, Jeanne A. Fugate and Matthew O’Brien of Caldwell Leslie & Proctor PC.

The Gateway Computer Warranty Class Action Lawsuit is Peter Wilson et al. v. Gateway Inc. et al. , Case No. 09-cv-07960, in the U.S. District Court for the Central District of California.