High Court Rejects Hewlett-Packard's Efforts to Block Class Action Suit

The Associated Press

October 10, 2007

The Supreme Court on Tuesday allowed a class action lawsuit to proceed against Hewlett-Packard Co. that alleges Compaq, now a part of HP, sold defective computers.

The Supreme Court's action lets stand a 2005 ruling by an Oklahoma state court.

The case involves a lawsuit by two Oklahoma residents, Stephen and Beverly Grider, who allege that Compaq Computer Corp. sold them a defective computer and didn't repair or replace it, as called for in the company's warranty.

The Griders sued in June 2003 and their lawyers asked the state court to certify a class of 1.7 million people who had bought similar computers. Their request was granted in 2005.

Compaq was purchased by Hewlett-Packard in 2002.

Compaq argued in court papers filed with the Supreme Court that a virtually identical lawsuit was brought in Texas in 2000. In that case, the Texas Supreme Court refused to certify a class action, ruling that Texas law shouldn't apply to out-of-state members of the class.

Nevertheless, Oklahoma's highest court not only certified the class, but said that Texas law should be applied in the case because, among other things, Compaq was headquartered in Texas.

Compaq's lawyers said that under the full faith and credit clause of the Constitution, which requires states to honor each others' laws and court rulings, Oklahoma shouldn't be able to apply Texas law when Texas' highest court has reached the opposite conclusion.

Hewlett-Packard shares rose 43 cents to close at $52.46 Tuesday.