Seagate settles suit over capacity of hard drives

Seagate Technology has agreed to reimburse potentially millions of customers and pay as much as $1.79 million in plaintiffs’ attorney fees to settle a lawsuit accusing the world’s largest maker of hard drives of overstating the data storage capacity of those devices, court records show.

The Scotts Valley, Calif.-based company will refund 5% of the purchase price to people who bought Seagate hard drives in the United States from March 22, 2001, to Dec. 31, 2005, and submit a claim demanding repayment, according to the settlement agreement filed in San Francisco County Superior Court.

Seagate sold 3.3 million hard drives in U.S. retail stores during that period.

The average purchase price was $140. That means the average cash refund would be about $7 each, according to the lawsuit.

In lieu of payment, those customers are also eligible for a Seagate software upgrade package worth $40.

In addition, people who bought Seagate hard drives in the U.S. from Jan. 1, 2006, to Sept. 26 of this year are also entitled to a benefit from the settlement, although their reimbursement isn’t cash and can come only in the form of the software package.

Seagate sold about 2.9 million hard drives in U.S. retail stores from Jan. 1, 2006 to March 31, 2007.

The false-advertising and unfair-business-practice lawsuit, filed in 2005, accuses Seagate of misleading consumers about the storage capabilities of its devices, promising 7% more capacity than the devices provide.