Order approves $40 million in attorneys' fees

By Tom Blakey

Transcript Staff Writer

Cleveland County District Judge Tom Lucas has granted final approval to a $640 million consolidated class action lawsuit settlement concerning computers with defective parts sold by the Compaq Computer Corporation and Hewlett-Packard Company.

The settlement agreement, signed by the judge May 9, follows an April 29 hearing in Cleveland County District Court.

In the agreement, the settling defendants agreed to pay $40 million in attorneys' fees, independent of the class action settlement, plus $8.25 million in expenses. Prosecution of the case over a period of eight years involved in excess of 70,000 hours of billable time by 58 lawyers, 27 legal assistants and other staff. The case produced or featured about 4 million paper documents, 122 depositions, 78 different experts, 1,229 pleadings, 376 orders, 100 hearings and 88 appellate briefs, according to the settlement agreement.

The consolidated action in Oklahoma claimed the defendants, Compaq and HP, sold computers with a defective part that could cause the loss or corruption of data written to or read from a floppy disk. The 3.9 million class members will be entitled to remedies under warranty, according to the settlement.

Buddy Pendarvis, an attorney for Crowe -- Dunlevy, local counsel for Compaq and HP, said a preliminary settlement was entered Dec. 11, 2007, followed by notice to the class members.

"It came back for final approval on April 29. At that time, everything was combined from the various jurisdictions and a settlement reached" in combination with other cases, he said.

"Just like with any lawsuit, there was extensive mediation. From Hewlett Packard's standpoint, we felt it was best to reach a settlement, although we obviously did not admit any liability or wrongdoing," Pendarvis said.

Testimony at the April 29 hearing in Cleveland County District Court included that of Arthur R. Miller, a renowned legal scholar and commentator on civil litigation, copyright and privacy laws. Miller, a professor to the faculty of the New York University School of Law and the NYU School of Continuing and Professional Studies, estimated the coupon redemption rate would be as high as 30 percent -- more than double the average redemption rate in settlement cases.

Also present at the hearing were Philadelphia attorney John F. Schultz, attorney for HP and Compaq.

Plaintiffs' attorneys included John C. Niemeyer, Linda G. Alexander, Harris A. Phillips and N. Frank Austin of Oklahoma City; Gilbert I. Low, Gary Neale Reger, Jack P. Carroll, Wayne A. Reaud, L. DeWayne Layfield, Olen Kenneth Dodd and Hubert Oxford III, all of Beaumont, Texas; James Belford Brown and Herum Crabtree Brown of Stockton, Calif.; and G. Kip Edwards of Kings Beach, Calif.

According to the settlement agreement, the court did not rule in favor of plaintiffs or defendants. "Instead, the parties agreed to a proposed settlement in order to avoid the expense and risks of continuing the lawsuit," according to a statement placed on the Barrett/Grider vs. HP/Compaq Settlement Web site, www.barrettgrider-v-hpcompaq.com/index.html.

The settlement provides for benefits to be sent to eligible class members who complete and send in a valid claim form and proof of purchase. If the claim form is approved, owners will receive a redemption certificate that can be used to purchase a new HP or Compaq computer on-line that will come with one year of free telephone technical support. The value of the redemption certificate depends on how much owners paid for their Compaq or HP computer. Owners also can obtain an alternative storage device in the form of a 256MB USB flash drive if: (a) they still own the computer that is affected by the lawsuit; (b) they already have installed Compaq's software patch intended to address the alleged defect at issue in the lawsuits; and (c) owners certify under penalty of perjury they are dissatisfied with the patch.