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HP to Settle Cartridge Monopoly Class Action For $1.5 Million

In a settlement proposed on September 18, 2018, in the United States District Court for the Northern District of California, Hewlett Packard Co. ("HP" or the "Company") agreed to pay a class of printer consumers $1.5 million to resolve claims that HP caused phony error messages to pop up when consumers used third-party ink cartridges.

Thousands of HP customers experienced the dilemma in September 2016, when, after installing off-brand ink cartridges, their various models of HP printers displayed messages that the cartridges were "damaged or missing" because of a firmware update, forcing consumers to buy HP-brand ink.

The third-party ink cartridges, blocked by HP's secret "dynamic security" technology, had previously been compatible with the printers, and were three to six times less expensive than the HP-branded ink. To solve the problem, customers were left to download and install HP's corrective firmware on their own.

Class representatives expect a payout to approximately 50,000 customers, and the settlement also prohibits HP from installing the "dynamic security" that led certain printers to be incompatible with inkjet cartridges manufactured by HP competitors.

Expressing their satisfaction, plaintiffs explained that the settlement "avoids protracted litigation while delivering all or most of the relief class members could expect to obtain at trial. First, the settlement achieves the goal of the litigation by eliminating the threat of forcible printer disablement for all members of the class. Second, just as they would have been able to come forward to claim individual damages had they prevailed on common liability issues at trial, the settlement allows class members who lost money or time because of HP's printer disablements to make a claim for full recovery of their losses."

Under the terms of the settlement, none of the $1.5 million will revert to HP, and the Company will also separately pay the class representatives' legal fees.

Counsel for plaintiffs noted that "[t]he main objective of the litigation was to ensure that people with the printers at issue would be able to use competing cartridges, and they will be able to do that. And we expect that the fund will be sufficient to pay valid claims."

The class includes anyone who owned one of HP's 18 different OfficeJet printers between March 2015 and December 2017 and who "experienced a print interruption while using a non-HP ink cartridge in a class printer." Payment per class member is expected to average $150.

The legal team at Shepherd, Finkelman, Miller & Shah, LLP ("SFMS") has significant experience litigating class action and consumer protection matters. If you have any questions regarding this subject or this posting, please contact Nick Lussier ([email protected]) or Chiharu Sekino ([email protected]). We can also be reached toll-free at (866) 540-5505.

SFMS is a nationwide law firm with offices in California, Connecticut, Florida, New Jersey, New York, and Pennsylvania. SFMS is an active member of Integrated Advisory Group (www.iaginternational.org), which provides us with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about SFMS, please visit us at www.sfmslaw.com.

Sources

Koenig, Bryan. "HP Inks $1.5M Deal In Cartridge Monopoly Suit." Law 360. Last modified on September 20, 2018.

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