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Apple introduced the slim, first-generation iPod Nano in 2005 to much fanfare, with Apple's CEO Steve Jobs pulling the gadget out of his pocket. Unfortunately for many consumers, the product quickly developed cracks and streaks in the screen as well as severe scratching that rendered the device unsightly and unreadable. Complaints about the scratching from angry purchasers were rampant after the product’s introduction.  (For example, see this story).

Consumer Watchdog and its co-counsel wrote Apple in November 2005 asking it to address these issues, but Apple never responded. So, Consumer Watchdog attorneys filed suit against Apple on behalf of affected customers in February 2006 aiming to reimburse affected customers and to correct Apple's practices of selling defective Nanos. Originally filed in San Mateo County, the suit was consolidated with a similar suit in Los Angeles County Superior Court - iPOD Nano Cases - Sioson v. Apple Computers, Inc. (JCCP No. 4469). Other suits were filed in federal court in California. You can read our press release in connection with the filing of the suit here.  Read the most recent version of the complaint here.

After providing extensive documents through the “discovery process,” Apple settled the case. Apple agreed to pay a total of $22.5 million into a settlement fund, from which money would be distributed to people who bought Nanos that were “uncoated” – those that did not have a protective coating that Apple began applying to the Nanos after receiving complaints about scratching – and who experienced scratching that “impaired your use or enjoyment” of the Nano.

The settlement calls for the money to be distributed as follows:

• Payments of $25 will be distributed to those who did not receive a free slip case from Apple with their original iPod Nano purchase.

• Payments of $15 will be distributed to those who received a free slip case from Apple with their original iPod Nano purchase.

• Depending upon how many people filed claims, the amount refunded may be higher or lower.
 
• Attorneys fees and expenses of $4,663,500.

The settlement was approved by the court on April 28, 2009. Claims were required to be filed by June 10, 2009.

Visit the official website for detailed information on the settlement. http://www.ipodnanosettlement.com/index.html

CASE UPDATE:

A lawyer from Texas filed a four-page objection to the settlement. The Los Angeles Superior Court overseeing the case rejected the objections. The lawyer has appealed the settlement to the California Court of Appeal.

In response, lawyers for the consumers who are entitled to payments under the settlement have filed a motion asking the Los Angeles Superior Court to authorize a deposition of the Texas lawyer, and to require the objector to post a bond. The deposition motion explains: “The circumstances surrounding Obregon’s appeal indicate it is solely intended to frustrate the distribution of the settlement in furtherance of the financial interest of Obregon and his law firm.” The bond motion further states: “Objector Obregon’s appeal has all the markings of the work of a professional objector attempting to hold up the settlement for ransom.”

Consumer Watchdog has long defended the right of consumers to have their day in court. Protecting the integrity of the judicial system against abuse is equally important – not just to Nano purchasers who will have to wait two years for the appeal to be resolved, but to all consumers.

Read the objection, and the motions for a deposition and bond.