Office Depot Settles Y2K Product Suit
Office Depot has broken ranks with some of the nation’s top computer retailers and settled the first Y2K lawsuit targeting firms that market computer products.
Under the settlement, the Delray Beach, Fla.-based retailer agreed to pay an undisclosed amount of money and post notices on its Web site and signs in its 100 California stores urging consumers to investigate whether their computer systems are Y2K-compliant.
Office Depot’s decision could force other retailers to settle, attorneys in the case say. The suit accuses Office Depot, Circuit City, Good Guys, Fry’s Electronics, CompUSA, Staples and OfficeMax of failing to tell consumers that their computer products might not work next year.
The remaining retailers are fighting the suit. One, Fry’s, has filed court papers seeking to have some hardware and software manufacturers named as defendants.
Office Depot did not admit that the computers it sold were defective. Instead it said through an attorney that settling the case was a “business decision.”
The settlement comes as state and federal legislators debate how to stop a massive wave of lawsuits expected to arise from New Year’s computer glitches. Many computer systems originally programmed to recognize only the last two digits of a year may not work properly beginning Jan. 1, 2000, when they could read the year as 1900.
This month the U.S. Senate passed legislation that would restrict class-action lawsuits and put a cap on punitive damages in Y2K cases. State legislators are considering similar measures. President Clinton has threatened to veto the federal legislation, saying it would deter legitimate consumer claims.
The suit against the retailers was filed on behalf of Tom Johnson, a Concord, Calif., swim coach who sought legal advice after store clerks could not tell him whether their products were Y2K-compliant.
The suit, filed in Contra Costa County Superior Court, alleges that retailers gave out false information by claiming Y2K problems would not affect home computer systems. Sales staff, it said, also failed to tell consumers they needn’t buy upgrades, since free fixes were available from manufacturers.
An attorney for Office Depot, Timothy Crudo, said the retailer contacted Johnson’s attorneys three weeks ago to discuss a settlement.
“Office Depot feels it has been dealing aboveboard with all its consumers,” Crudo said. “But it prefers to spend its energies working with customers rather than dealing with lawsuits.”
Still, Office Depot agreed to post a notice on its Web site declaring that older computer systems “and certain products sold today” may not work properly next year.
Under the agreement, reached last week, the retailer will include Y2K information in its Sunday advertisements and provide customers with an informational brochure and manufacturers’ Web addresses and phone numbers.
Ken Jones, a Walnut Creek, Calif., attorney who represented Johnson, said he and his partners plan to meet with lawyers for the six other retail chains July 15 to discuss a broader settlement.
“We’re not asking them to do anything outrageous,” Jones said. “All we’re asking is for them to give accurate information to consumers.”
