Judge Will OK Apple’s $53M iPod/iPhone Warranty Settlement

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The judge overseeing the Apple iPod/iPhone warranty litigation indicated Wednesday that he would grant preliminary approval to a $53 million class action settlement between Apple Inc. and 4,000 iPod Touch and iPhone users who allege Apple failed to provide warranty coverage for their devices.
While U.S. District Court Judge Richard Seeborg has not formally ruled on the settlement, he indicated at a June 19 hearing that he would soon approve the deal, certify the class of 4,000 Apple customers, and consolidate a similar case filed last month that accused Apple of denying warranty coverage on devices based on liquid detectors that did not necessarily indicate water damage. Apple’s warranty does not cover devices that have experienced water damage.

One issue that Judge Seeborg has is with the method of notifying Class Members about the Apple warranty class action settlement. The plaintiffs’ attorneys suggested emailing Class Members because anyone with an Apple warranty issue would have provided their email address when scheduling an appointment with a customer service representative. Judge Seeborg was concerned that Class Members may assume that the email was a phishing attempt and delete it.

The plaintiffs’ attorney believes that iPhone and iPod Touch owners tend to be “pretty sophisticated” and would quickly find out that the emails are legitimate. Under the terms of the Apple warranty class action settlement, plaintiffs would receive $1,000 each and Class Members would receive between $100 and $300 if they tried to repair or replace their iPod Touch or iPhone and were denied based on Apple’s former Liquid Damage Policy.

The class action lawsuit was first filed in April 2010. Plaintiffs alleged that Apple rejected warranty coverage requests for certain iPhone and iPod Touch products with liquid detectors that were manufactured by 3M Co. These detectors consisted of small pieces of white tape that would turn pink or red after exposure to liquid. However, according to literature from 3M Co., pink only indicates possible exposure to humidity, not liquid.

The plaintiffs in the class action lawsuit alleged that the indicators were sometimes triggered by temperature changes and other circumstances that do not damage the devices. They accused Apple of concealing the truth about these liquid indicators and intended to rely on “false-positive” results of the indicators to deny warranty coverage.

In the case that will be consolidated with this class action lawsuit, Sean Pennington and a co-plaintiff initially filed their complaint in a California state court in January 2010 and refilled it in California federal court in May. They alleged that Apple refused to repair or replace their broken devices that died from normal use. They accuse Apple of having a bait-and-switch policy by relying on these indicators to deny warranty coverage.

Apple agreed to the $53 million settlement in April 2013. Last month, we reported that the plaintiffs had requested a June 28 hearing to approve the Apple warranty class action settlement.

The cases are In re: Apple iPhone/iPod Warranty Litigation, Case No. 10-cv-01610, and Pennington et al v. Apple Inc., Case No. 13-cv-02375, in the U.S. District Court for the Northern District of California.

Plaintiffs in the class action lawsuit are represented by Fazio Micheletti LLP, Chimicles & Tikellis LLP, Cafferty Clobes Meriwether & Sprengel LLP and Chavez & Gertler LLP.

UPDATE 1: The Apple iPhone/iPod warranty class action lawsuit settlement has won preliminary approval. See how to file a claim.

UPDATE 2: A federal Court granted final approval to the Apple iPhone/iPod warranty class action settlement on May 8, 2014. The Settlement Administrator announced in August that it will begin distribution of the settlement money in the next couple weeks. If you get a check, let us know!