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iPod nano scratch lawsuit checks are in the mail

According to Engadget, people are finally starting to receive settlement checks for the iPod nano class action lawsuit that was filed shortly after the first-gen nano's release in 2005. Only days after the first nano debuted, people started noticing that the iPod nano's screen was about as easy to scratch as a block of butter. Apple quickly tried to claim that nano screen scratching wasn't a widespread issue, but the lawyers smelled blood and swarmed in; less than three weeks after the class action suit began in the US, the iPod nano suit went international.

Apple agreed to pay a $22.5 million dollar settlement in early 2009. The settlement terms indicated that people would receive refunds in the amount of $15 to $25, depending on whether the iPod nano had a protective slip case included with it or not. However, Engadget's story shows an unidentified submitter receiving a check for $37.50. The settlement terms indicate that the $22.5 million is split up amongst those who participated in the class action lawsuit, regardless of how many applied, and that the ultimate settlement can't exceed 150% of the per-claimant settlement. In the Engadget reader's case, he would have received $25, but since there apparently weren't all that many actual claimants in the case, he received the maximum settlement possible of $37.50.

This is an interesting study of the class action system at work. First, although the suit was filed in late 2005, it took over three years before it was finally resolved. Apple agreed to pay out $22.5 million in consumer refunds in early 2009 -- refunds which are only now arriving in claimants' mailboxes -- and another $4 million in attorney fees. Those $37.50 check claimants are receiving a pittance compared to what Steve Berman, lead attorney in the class action case, likely received in his mailbox.

Far more important than the money being thrown around is a practical side-effect of the case: Apple's portables are much less prone to scratches than the first-gen iPod nano. Perhaps, learning its lesson from the nano brouhaha, Apple changed its mind at the last second and decided to use glass instead of plastic for the iPhone's screen -- a decision that greatly improved the durability of the screen and very likely spared the company from yet another lawsuit.