The Joseph Saveri Law Firm filed a class action lawsuit on behalf of U.S. consumers against HP Inc. in the U.S. District Court for the Northern District of California.
The suit charges HP with designing and implementing a malicious firmware update, Dynamic Security, to disable printers using competitors’ ink cartridges on affected computers to gain an advantage in the market. The update created an error message that falsely claimed the third-party cartridges were damaged or missing, and should be replaced.
Customers blame HP for the loss of time, money, and energy spent troubleshooting and replacing equipment that was perfectly functional. HP has said that it may introduce similar updates in the future to disable cartridges made by HP’s competitors.
“HP’s practices have harmed many people by causing undue stress and financial loss, while limiting their purchasing options,” says Kyla Gibboney, antitrust counsel on the case. “HP acted intentionally and illegally to exploit its own customers in order to extract greater profits from the ink cartridge market.”
The suit, In re HP Printer Firmware Update Litigation, No. 5:16-cv-05820-EJD-SVK, seeks damages, restitution, injunctive, and other relief for HP printer owners affected by the update.
On November 19, 2018, the Court granted preliminary approval of a proposed settlement. The Court appointed the Firm and two other firms to represent the settlement Class. It found that the proposed Class met the Federal Rules of Civil Procedure 23(a) and 23(b)(3) requirements for settlement purposes, preliminarily approved the settlement terms as fair, reasonable, and adequate, and directed notice to the Class. The settlement prohibits HP from reinstalling or reactivating Dynamic Security in the printers at issue and creates a $1.5 million cash fund to reimburse owners of affected printers for their lost money or time. In addition to the non-monetary relief and money for class members, HP agreed to pay (and has paid) for all notice and administration costs required to effect the settlement. The Court also scheduled an April 25, 2019 final approval hearing.
On February 7, 2019, Plaintiffs asked the Court to enter an order granting final settlement approval. Class counsel have also applied for an award of attorneys’ fees of $2.75 million—less than the value of their hours expended in prosecuting and resolving these claims—to be paid by HP separately from the $1.5 million Class fund and the notice of administration costs.