Apple to Settle iPhone Water Damage Lawsuit for $53 Million

Apple to Settle iPhone Water Damage Lawsuit for $53 Million

Apple Inc. (AAPL) has agreed to pay $53 million to settle a class-action lawsuit associated with warranties for iPhones and iPods, according to lawyers representing plaintiffs in the litigation.

In documents filed with the United States District Court for the Northern District of California Tuesday, class-action attorneys said the money from Apple would be placed in a fund to be shared by roughly 153,000 customers who had been denied warranty coverage under an Apple policy associated with handling water damage. The papers seek court approval of the proposed settlement.

An Apple spokeswoman declined to comment beyond what is in the court’s records. Attorneys representing customers did not immediately respond to a request for comment.

The suit stemmed from technology Apple built into its iPhones and some iPod music players that was designed to indicate when the devices had come into contact with liquid, such as through submersion or a large spill.

According to the court documents, Apple had a “liquid damage policy,” which required Apple’s employees to deny warranty coverage for any device if the liquid indicator had been triggered by changing color. The plaintiffs alleged that the indicators, which were manufactured by 3M Co. (MMM), could be triggered by moisture or humidity during ordinary use. Apple disagreed, court documents showed.

Attorneys in the suit said potential damages in the case had ranged from at least $31.2 million to $147 million, depending on how much information Apple’s employees recorded in their dealings with affected customers.

The water damage lawsuit is not the first time Apple has come under fire for its warranty practices. The company has also sparred with customers over how easily the screens of its first-generation iPod Nano music players could be scratched and the quality of batteries in its iPods in general.

More recently, the company was criticized by China’s state-run media for its replacement and repair process for the iPhone. Two of the country’s most powerful media companies accused Apple of skirting warranty periods, discriminating against Chinese customers and inadequately responding to complaints. In April, Tim Cook, Apple’s chief executive, apologized in a letter on the company’s website and promised a revamp of its customer-service policies in the country.

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