Mac Musings

Class Action Madness: Applying Common Sense to the iPod Battery and Volume Level Cases

Daniel Knight - 2006.03.31

It's time to stop the insanity of class-action lawsuits that make lawyers rich, reshape next generation products, and scarcely benefit the members of the class at all.

iPod Batteries

One example is the iPod Battery Settlement. As you probably know, rechargeable batteries don't last forever, and to top it off, it's not self-evident that the iPod can be taken apart so the battery can be replaced.

After about two years, most rechargeables are a shadow of their former selves, and Apple charges US$99 to replace an iPod's battery. Well, more precisely, to take your iPod and probably exchange it for the same model with a fresh battery - and the replacement won't have your songs, your data, or the same amount of wear as the one you sent in.

So someone decides to create a class-action lawsuit against Apple covering the millions of G1 to G3 iPod owners in the class - many of whom have already paid for a new battery by this time or simply bought a newer, more feature-laden iPod that also includes a new battery.

In the end, it looks like millions of dollars to the law firm behind the suit and $50 in Apple Store credit for iPod owners who actually kept all of their receipts and filed all of their paperwork properly.

Objections

My first objection is a common characteristic of suits like this, such as the one over Kodak's instant cameras. Rather than giving members of the class cash for their inconvenience, they end up with discount coupons or rebate vouchers. (In the Kodak case, coupons for non-instant Kodak film. But what if the former Kodak instant shooter has switched to Polaroid? The settlement would do them no good at all.)

In the iPod Battery Settlement, the $50 store credit could be used to buy iTunes or applied to anything else sold by the Apple Store. As with the Kodak case and myriad others, the settlement requires that the class members remain loyal customers to benefit. (In the case of 1G and 2G iPods, there's also the option of a $25 check.)

For the record, Apple makes a good profit on their $99 iPod battery replacement program. Third-party batteries are available for US$25-40 with greater capacity than Apple's batteries, and iPodResQ (as just one example) charged US$54 to replace the battery in a 1G/2G iPod.

In cases where users paid Apple for a new battery, the company probably breaks even and possibly turns a bit of a profit even after the $50 credit is issued. And that store credit doesn't cost Apple $50, since there is a profit built into every transaction.

Because some users may have bought third-party batteries and others may have switched to non-Apple MP3 players, the settlement should benefit them even if they never purchase another Apple product in their lives. Allowing a company to get away with offering credit at the company store is a sham.

My second objection is that iPod owners don't automatically receive the settlement. They have to prove that they paid for an iPod with a printed receipt - even if they bought it through Apple's online store. Companies should be required to provide the settlement to every registered user, not just those who have heard about the lawsuit, kept their receipts, and taken the time to file a claim.

Of perhaps 2 million 1G/2G iPod buyers, how many do you think filed? I'm guessing well under 50% - maybe as few as 10%. The class doesn't benefit if the company is not required to provide it to all registered customers without requiring any additional paperwork. (Paperwork should be available for those who don't register.)

My third objection is the lawyers, who are drawn to class action lawsuit riches as piranhas are drawn to blood. The settlement includes fees for the legal team, which are generally tied to the size of the class and the per-member settlement. If 2 million iPod owners are eligible for $50 in store credit, perhaps the lawyers will receive $10-20 million - even if no member of the class ever files a claim or benefits from the suit.

That's just wrong. Apple may spend more money lining the lawyer's pockets than taking care of their "wronged" customers. Lawyers should only benefit from class action lawsuits over consumer products based on the number of class members who receive a settlement.

In short, the sensible way to handle suits like this is to require the company to provide a cash settlement (not just company store credit or coupons), require them to automatically settle with every registered customer of the covered product, and only pay the legal team based on the number of claims settled.

This would benefit consumers, since those who register wouldn't even have to be aware of the lawsuit to benefit from the settlement, nor would they have to remain Apple customers to benefit. This would hurt the lawyers, since they would no longer be able to extort companies based on the size of the class, but only based on the number of members of the class who receive a settlement.

Would this benefit Apple or hurt the company? On the one hand, there would be a lot more settlements based on product registration. On the other hand, it might cut the portion going to lawyers by half or more.

I suspect it would cost Apple more in the long run, benefit more consumers, and make sure that the lawyers actually took into account the need for consumers to benefit from the suit in creating the settlement.

In the end, we would all win with common sense settlements to class-action lawsuits.

And Now, Hearing Damage

I don't know about you, but I'm sick to death of people claiming a product flaw or defect if something can be used in such a way as to cause damage. If you play your music too loud, it can damage your hearing, and here in the United States there's no law prohibiting such stupid behavior as cranking the volume as loud as you want. (There is in France, where people have create hacks that allow them to turn their iPods past the 100 dB limit imposed by law. The French and their Big Brother laws....)

If lawyers had their way, all audio devices would have volume limiters, sitting within 100' of the speakers at a rock concert would be illegal, and cars would have speed limiters to prevent you from exceeding the posted speed limit, among other things.

Yes, there is a class action lawsuit against Apple over the fact that a user can crank up the volume of an iPod to unsafe levels. And now that Apple has offered a software update for 5G iPods and iPod nanos that includes the option of limiting output volume, they are taking this as evidence that the iPod is flawed.

Sorry, but you can't make stupidity illegal, and if people want to listen to their music too loud, they should be allowed to (so long as the neighbors don't complain - and that rarely happens with headphones). We have a right to make our own choices, wise or stupid, and a responsibility to accept the consequences for our actions.

I applaud Apple for adding a volume limiter with this software update. It doesn't address a flaw in the iPod's design. Instead, it recognizes human behavior for what it is and allows users to set their own volume limit if they want to. (This could be a great tool for parents to protect the ears of their children.)

Apple has done the right thing, and if they include a brochure on hearing damage with each iPod they sell, I believe they have done enough.

A class-action lawsuit based on potential (not real) damage is ridiculous, and I hope the judge throws this one out of court before it makes yet another lawyer ridiculously rich while not really benefiting the 30-40 million iPod owners in the United States.

Let's put a stop the the class-action madness and push our legislators for common sense reform. Settlements should be in cash. All registered owners of the product should automatically receive the settlement. Lawyers should only benefit in proportion to the number of members of the class who receive the settlement. And people should be responsible for their actions, rather than sue over potential damages.