SAN FRANCISCO — Nvidia can put "bumpgate" in the rearview mirror.
The U.S. Court of Appeals for the Ninth Circuit on Wednesday signed off on a first-of-its-kind class action settlement, including a $13 million fee award for class counsel led by Milberg, arising from defective Nvidia computer chips. The defects relate to the solder on the chips, known as bumps.
"Although the award is large, it is proportional to the time spent by counsel under the lodestar method that the district court used," the court stated in an unpublished per curiam opinion. The amount also reflected "the vigor and length of litigation, the complexity of issues, the risk that plaintiffs would have recovered less or nothing through further litigation, [and] the significant benefits to class members."
Nvidia Corp. announced problems with laptop and notebook computer chips in 2008. The company, led by counsel at Orrick, Herrington & Sutcliffe, worked out a deal through Apple, Dell and Hewlett-Packard to repair or replace all of the affected computers. It was said to be the first time an upstream computer component maker had reached through retailers to settle consumer claims.
But nine objectors complained among other things that the settlement was unfair to consumers who'd given up and thrown away their computers or couldn't provide proof of purchase.
The Ninth Circuit brushed aside those objections Wednesday. Consumers who threw out their computers could have opted out of the litigation, the court wrote.
"We note that the record shows only five objectors who asserted that they had abandoned their computers, after individual notice was given to about 5 million consumers," stated the opinion in Nakash v. Nvidia, signed by Judges Susan Graber, Carlos Bea and Andrew Hurwitz.
As for the proof-of-purchase requirement, "This is a reasonable requirement to prevent fraud," the opinion stated. "Similarly, the requirement that class members send in a computer for replacement or repair is a reasonable method of preventing fraud."
Orrick partner Robert Varian argued the appeal last month for Nvidia. Milberg was represented by partner Nicole Duckett. Dallas attorney Thomas Cox and San Francisco's Marcus Merchasin argued for the objectors.
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