HP 2012 Annual Report Download - page 160

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 18: Litigation and Contingencies (Continued)
Inkjet Printer Litigation. As described below, HP is involved in several lawsuits claiming breach of
express and implied warranty, unjust enrichment, deceptive advertising and unfair business practices
where the plaintiffs have alleged, among other things, that HP employed a ‘‘smart chip’’ in certain
inkjet printing products in order to register ink depletion prematurely and to render the cartridge
unusable through a built-in expiration date that is hidden, not documented in marketing materials to
consumers, or both. The plaintiffs have also contended that consumers received false ink depletion
warnings and that the smart chip limits the ability of consumers to use the cartridge to its full capacity
or to choose competitive products.
• A consolidated lawsuit captioned In re HP Inkjet Printer Litigation was filed in the United States
District Court for the Northern District of California seeking class certification, restitution,
damages (including enhanced damages), injunctive relief, interest, costs, and attorneys’ fees.
• A lawsuit captioned Blennis v. HP was filed on January 17, 2007 in the United States District
Court for the Northern District of California seeking class certification, restitution, damages
(including enhanced damages), injunctive relief, interest, costs, and attorneys’ fees.
• 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 alleging 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 and seeking to certify a nationwide injunctive class and a California-only
damages class.
• Two class actions against HP and its subsidiary, Hewlett-Packard (Canada) Co., are pending in
Canada, one commenced in British Columbia in February 2006 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.
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. Under
the terms of the settlement, the lawsuits were consolidated, and eligible class members 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 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, the settlement provides for class counsel and the class representatives to
be paid attorneys’ fees and expenses and stipends. On March 29, 2011, the court granted final approval
of the settlement. On April 27, 2011, certain class members who objected to the settlement filed an
appeal in the United States Court of Appeals for the Ninth Circuit of the court’s order granting final
approval of the settlement.
Fair Labor Standards Act Litigation. HP is involved in several lawsuits in which the plaintiffs are
seeking unpaid overtime compensation and other damages based on allegations that various employees
of EDS or HP have been misclassified as exempt employees under the Fair Labor Standards Act and/or
in violation of the California Labor Code or other state laws. Those matters include the following:
•Cunningham and Cunningham, et al. v. Electronic Data Systems Corporation is a purported
collective action filed on May 10, 2006 in the United States District Court for the Southern
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