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Apple paying $53 million to settle warranty class-action suit, according to leaked agreement

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Apple Store SoHo STOCK
Apple Store SoHo STOCK

Wired reports that Apple has agreed to pay out $53 million to settle a class-action suit over its failure to repair some of its mobile devices while they were still covered under warranty. According to a leaked copy of the settlement agreement— signed by Apple chief litigation counsel Noreen Krall — the payout covers previous-generation iPhone and iPod touch owners who were denied repairs because the liquid contact indicator tape had been activated. This tape, used to determine if a device has been exposed to water, was manufactured by 3M; Wired reports that 3M has since indicated that humidity alone could activate the tape in some cases.

The settlement covers the original iPhone, the iPhone 3G, and the 3GS, along with the first through third generations of the iPod touch. Apple has since changed its warranty policy so that activation of the indicator strip alone isn't enough to deny a warranty repair.

The agreement mandates that Apple take out an ad in both USA Today and Macworld to provide the website and contact information needed to file a claim. Potentially-affected customers will also be contacted directly by mail. As for how much each affected customer will be paid, it's not entirely clear. Customers will receive proportional amounts — the more people join in, the less each affected user will receive — using the average replacement cost of their particular device at the time as a baseline. According to the agreement, that runs from $160 for the 8GB variant of the original iPod touch, all the way up to $300 for the 16GB iPhone. In any case, no affected user will receive more than twice that baseline figure.

It's important to note that the agreement still needs to be signed by the remaining parties and be approved by the court before it will go into effect. In any case, Apple is not agreeing with the claims made against it as part of the settlement. In fact, the agreement is quite clear in this regard, stating that "Apple has agreed to enter into this Settlement Agreement to avoid the further expense, inconvenience, and distraction of burdensome litigation." We've reached out to Apple for comment on the story.