Stella Case No. 002, Originally Published: 4 September 2002
Advertising for Palm Inc.’s m130 said the handheld computer supports “more than 65,000 colors.” Oops: it actually “only” supports 58,621 colors.
“The company is working on a plan to compensate customers,” announced a company spokeswoman, but they’re too late: a lawsuit has already been filed — and given class action status — alleging the missing 6,380 or so colors demonstrates Palm’s “unfair competition, and fraudulent, unfair, deceptive and false advertising.”
No wonder litigation is so expensive: you have to pay the lawyers to count!
Once it discovered the mistake the company started to work toward fixing it. But that wasn’t good enough for lawyers who could only see the potential for grabbing a big fee by jumping in where they weren’t needed.
- “Suit: Palm Overstates Color Feature,” Associated Press, 27 August 2002.
After fighting back for a few weeks saying it was an honest mistake and didn’t matter, Palm bit the bullet in September (2002): “We want to do the right thing,” it said (emphasis from the original). “In addition to apologizing for this issue regarding the range of color capabilities of the Palm m130 handheld and working to change our marketing and packaging materials, we offer m130 owners their choice of one the following:
- “A free download of the popular SimCity game, a $29.95 value. Click here to register your device, and be ready to input your device’s serial number. We will send you an email with download instructions.
- “A cash refund for purchase price and tax, if the performance of your handheld hasn’t met your expectations.”
A very generous offer to be sure. I especially like the “if” (the performance didn’t meet expectations) part. It’s unclear exactly what happened regarding the lawsuit specifically.
Source: Palm’s web site, 5 August 2002.
Many have written to ask if I’m aware of the OverLawyered site, and do I consider them “competition”? I am indeed aware of them; I haven’t spent much time there yet, but I don’t really consider them competition, exactly, since there is plenty of room for debate on this issue. We also have extremely different styles; Stella is more chatty and “entertaining” while OverLawyered (an awesome name, by the way!) has more raw data. If you want to see brief summaries of case after case of “OverLawyering”, they are an excellent resource. [See update in next section. -rc]
Alia in California: “I positively love your Stella Awards for an unusual reason: my husband’s a lawyer! He has his own practice and does criminal defense and civil litigation. Sadly, many of his criminal defense clients (even the guilty ones) have more integrity than the civil clients. We prefer the criminals. At least with them we know we are upholding the justice system and the U.S. Constitution by offering a competent defense! Otherwise, he spends a third of his day listening to, and then escorting out, folks looking to make a easy buck on every bump and scrape. Usually, they’re easy to spot. The tough part is when you have a case with good merits and apparently good facts that actually isn’t. As you begin intensive investigative work on the case (which can’t happen without spending some money first), only then will some discrepancies come to light. Problem is, by that point you are the attorney of record and only the client or the judge can release you from the case. Additionally, only the client (not his or her lawyer) can make a decision to settle, dismiss, etc., so thank you for referring back to the clients as the ones who are ultimately responsible for their actions.”
My 2020 Thoughts on the Case
First, in ironic timing: OverLawyered shut down May 31 (2020).
As for this case, you’d think the tech companies would learn to be much more precise about their claims after this expensive debacle, but no. In 2006, Western Digital settled a class action lawsuit by offering free backup software to ~1 million customers who bought its hard drives between 2001 and 2006, though it denied wrongdoing: its 80GB hard drives actually stored 74.4GB — depending on how capacity is measured.
The issue was the definition of a gigabyte: WD (and other hard-drive makers) used the decimal definition (1 GB = 1 billion bytes), while Windows and Macintosh OS used the binary definition (1 GB = 1,073,741,824 bytes), so customers didn’t have as much storage capacity “as they believed,” the suit claimed. While the former “definition is used in all contexts of science, engineering, business, and many areas of computing, including hard drive, solid state drive, and tape capacities, as well as data transmission speeds,” Wikipedia says.
Well, tell it to the lawyers: San Francisco attorneys Adam Gutride and Seth Safier were approved to receive fees “of up to $485,000,” plus expenses of “up to $15,000.” That wasn’t the end of them, though: it was noted at the time that they filed a similar lawsuit against Seagate Technology.
Source: “Western Digital Settles Hard-Drive Capacity Lawsuit,” CRN, 28 June 2006.
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