HP 2010 Annual Report Download - page 151

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 18: Litigation and Contingencies (Continued)
court denied all three motions. On March 30, 2009, the plaintiffs filed a renewed motion for
class certification. A hearing on the plaintiffs’ motion for class certification scheduled for
April 9, 2010 was postponed.
• A lawsuit captioned Blennis v. HP was filed on January 17, 2007 in the United States District
Court for the Northern District of California where the plaintiffs are seeking class certification,
restitution, damages (including enhanced damages), injunctive relief, interest, costs, and
attorneys’ fees. A class certification hearing was scheduled for May 21, 2010 but was taken off
the calendar.
• A lawsuit captioned Rich v. HP was filed against HP on May 22, 2006 in the United States
District Court for the Northern District of California. The suit alleges that HP designed its color
inkjet printers to unnecessarily use color ink in addition to black ink when printing black and
white images and text. The plaintiffs are seeking to certify a nationwide injunctive class and a
California-only damages class. A class certification hearing was scheduled for May 7, 2010 but
was taken off the calendar.
• Four class actions against HP and its subsidiary, Hewlett-Packard (Canada) Co., are pending in
Canada, one commenced in British Columbia in February 2006, two commenced in Quebec in
April 2006 and May 2006, respectively, and one commenced in Ontario in June 2006, where the
plaintiffs are seeking class certification, restitution, declaratory relief, injunctive relief and
unspecified statutory, compensatory and punitive damages. In March 2010, one of the Quebec
cases was voluntarily dismissed by the plaintiff.
On August 25, 2010, HP and the plaintiffs in In re HP Inkjet Printer Litigation, Blennis v. HP and
Rich v. HP entered into an agreement to settle those lawsuits on behalf of the proposed classes, which
agreement is subject to approval of the court before it becomes final. Under the terms of the proposed
settlement, the lawsuits will be consolidated, and eligible class members will each have the right to
obtain e-credits not to exceed $5 million in the aggregate for use in purchasing printers or printer
supplies through HP’s website. As part of the proposed settlement, HP also agreed to provide class
members with additional information regarding HP inkjet printer functionality and to change the
content of certain software and user guide messaging provided to users regarding the life of inkjet
printer cartridges. In addition, class counsel and the class representatives will be paid attorneys’ fees
and expenses and stipends in an amount that is yet to be approved by the court. On October 1, 2010,
the court granted preliminary approval of the proposed settlement. The court has scheduled a fairness
hearing on January 28, 2011 to determine whether to grant final approval of the proposed settlement.
Baggett v. HP is a consumer class action filed against HP on June 6, 2007 in the United States
District Court for the Central District of California alleging that HP employs a technology in its
LaserJet color printers whereby the printing process shuts down prematurely, thus preventing customers
from using the toner that is allegedly left in the cartridge. The plaintiffs also allege that HP fails to
disclose to consumers that they will be unable to utilize the toner remaining in the cartridge after the
printer shuts down. The complaint seeks certification of a nationwide class of purchasers of all HP
LaserJet color printers and seeks unspecified damages, restitution, disgorgement, injunctive relief,
attorneys’ fees and costs. On September 29, 2009, the court granted HP’s motion for summary
judgment against the named plaintiff and denied plaintiff’s motion for class certification as moot. On
November 3, 2009, the court entered judgment against the named plaintiff. On November 17, 2009,
plaintiff filed an appeal of the court’s summary judgment ruling with the United States Court of
Appeals for the Ninth Circuit. On August 25, 2010, HP and the plaintiff entered into an agreement to
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