$22.5 million cash settlement for Apple iPod nano owners

Apple has settled a $22.5 million class-action suit filed against the company after receiving complaints from early Apple iPod nano owners that the devices scratched too easily.

Apple iPod nano

Apple has settled a $22.5 million class-action suit filed against the company after receiving complaints from early Apple iPod nano owners that the devices scratched too easily.

The settlement calls for Apple to set aside the $22.5 million. Nano users who apply for a refund stand to receive, at most, $25.

(The rainmakers in the case will net $4 million for their efforts, however.)

The case dates back to October 2005 when lead plaintiff Jason Tomczak complained on various Apple-centric blogs that his nano screen scratched easily, rendering it unreadable. Attorneys from Meyer and Associates joined forces with those at Hagens Berman Sobol Shapiro LLP, and away it went.

Tomczak was chastised online for what some deemed a "frivolous" suit, and he reportedly tried to have his name removed from the action. Instead, the original law firms filed actions against Tomczak to keep his name attached to the suit, forcing Tomczak to retain his own attorney.

According to the suit, some of those nanos weren't "coated," and were subject to "excessive scratching."

A notice was sent out to nano owners this week. Customers who didn't receive a slip case from Apple upon purchase of their iPod nano may be entitled to a cash payment of $25, while those who did receive a slip case "may be entitled to a cash payment of $15."

A judge still needs to sign off on the settlement, and a hearing has been scheduled for April 28. The $22.5 million includes attorneys' fees of $4.5 million and litigation expenses of up to $200,000. Ouch.

On the other hand, with $28 billion in cash in the bank, $22.5 million works out to less than 1/10th of 1 percent of Apple's available cash. C'est la vie.

The settlement covers uncoated First Generation iPod nanos. These iPod nanos were first sold beginning in September 2005, and have a black or white plastic front and a stainless steel back.

To determine eligibility, head to www.ipodnanosettlement.com. [via CNBC]

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