palmOne Settles Class Action Lawsuit

[Barry]

palmOne has settled a consumer class action lawsuit brought against it a number of years ago. The suit alleged that certain Palm handhelds were defective and could transfer a damaging static charge to a PC serial port.

On August 7, 2001, a purported consumer class action lawsuit was filed against then Palm Inc and 3Com in California Superior Court, San Francisco County, entitled Connelly v. Palm and 3Com. An amended complaint alleging breach of warranty and violation of California?s Unfair Competition Law was filed and served on Palm on August 15, 2001. The lawsuit alleged that the Palm III, IIIc, V, and Vx models were defective, and that under certain circumstances, a build-up of static electricity would cause damage to the serial port of desktop computers when users would synchronize the data from their handhelds. This could potentially cause damage to PC motherboards by permitting an electrical charge, or floating voltage, from either the handheld or the cradle to be introduced into the PC via the serial and/or USB port on the PC due to a design defect in the Palm products.

PalmOne has denied any wrongdoing or liability in the settlement, but agreed to pay affected consumers either $200 in cash, or an $80- or $20-credit toward a palmOne product, depending on the level of proof of damage the consumer provided. Half of the 1,500 member class qualified for some kind of reimbursement. The terms of the settlement will resulted in a resolution that is not material to palmOne's financial position.

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