The reason for today's beating?
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Compaq Asks Judge to Seal Public Record in
Faulty Computer Case
2/14/00 3:25:00 PM
Source: Bloomberg News
Beaumont, Texas, Feb. 14 (Bloomberg) -- Compaq Computer Corp., the
No. 1 personal computer maker, has asked a federal judge to gag the
parties and their lawyers and close the public record in a class-action
suit similar to one Toshiba Corp. recently settled for a record $2.1 billion.
The suit, filed by a customer with the help
of a group of plaintiffs' lawyers pursuing
cases against several of the world's
leading computer companies, alleges that
Compaq knowingly sold machines with
faulty floppy disk controllers that can lose
or ruin data.
Houston-based Compaq says in one
motion that information the plaintiffs have
requested must be kept secret from
competitors. Another motion asks that the
lawyers be barred from speaking to news
organizations and the public about the
suit.
That request is accompanied by articles
favorable to the plaintiffs that ran in a
newspaper owned by their lead counsel,
Beaumont lawyer Wayne Reaud. The
headline on a story about the Compaq suit -- which did not include
comments from the company, its lawyers or its court documents -- read
'David vs. Goliath.'
'This case will likely attract media attention,' Compaq's motion says.
'Plaintiffs' counsel have already made statements to the media that serve
to prejudice Compaq's right to a fair trial in this forum.'
Plaintiffs Object
The plaintiffs object to barring lawyers from public comment, arguing that
Compaq is merely trying to 'hide one simple fact from the public: The
corporation has known that it has been using defective microcode in its
products for over a decade.'
If 'Compaq is blameless, truthful and interested in quality control of its
product, then it should welcome the scrutiny of open court proceedings,'
the objection says.
The lawyers claim in the same court filing that they conducted tests on
Compaq computers with company officials present that found the alleged
defect in a 'large percentage' of the tested machines.
In the one settled case, Toshiba agreed to repay customers with
allegedly defective computers, while admitting no liability. The settlement,
which includes what experts bill as a record $147.5 million in attorneys'
fees, was approved last month by U.S. District Judge Thad Heartfield.
Customers can receive cash for a new controller or free repairs.
The case against Compaq is among several in federal court in Beaumont
involving floppy disk controllers in personal computers. Plaintiffs
represented by the same legal team are suing Packard Bell, NEC Corp.,
eMachines Inc. and Hewlett Packard Co.
Compaq shares fell 1 to 24 5/8 today on the New York Stock Exchange.
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