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NOTICE TO PURCHASERS OF SEAGATE BRAND HARD DISC DRIVES FROM
MARCH 22, 2001 TO SEPTEMBER 26, 2007 This notice may affect your rights.
Please read it carefully. A proposed settlement has been reached in a class action lawsuit between plaintiff, who purchased a hard drive, and Seagate, which manufactured the hard drive. Plaintiff claims that Seagate stated that its hard drives had more usable storage capacity than they actually contained. Seagate denies these claims. Plaintiff brought suit on behalf of herself and a proposed class of purchasers. You are a member of the Settlement Class if, between March 22, 2001, and September 26, 2007, you purchased in the United States a new Seagate Retail Hard Drive. A "Retail Hard Drive" is a Seagate brand hard disc drive that you purchased from an authorized Seagate retailer or distributor, separately as a Seagate product that was not pre-installed into and sold bundled with a personal computer or other electronic device. Plaintiff claims that Seagate's use of the decimal definition of the storage capacity term "gigabyte" (or GB), whereby 1 GB = 109 (1 billion) bytes, misleads consumers because computer operating systems report hard drive capacity using a binary definition of GB, whereby 1 GB = 230 (1,073,741,824) bytes, a difference of approximately seven percent. The purpose of this notice is to inform you of the proposed settlement, and of a hearing to consider the settlement to be held on February 7, 2008, at 1:30 p.m., before the Honorable Mary E. Wiss, Department 504, San Francisco Superior Court; how to participate in the settlement; how to object to it if you wish; and how to get more information. (Capitalized terms not defined in this notice have the meanings assigned to them in the Settlement Agreement, available here.) On April 28, 2005, plaintiff Sara Cho commenced an action against Seagate entitled Cho v. Seagate Technology (US) Holdings, Inc. (Central District of California, Case No. CV-05-3180-JFW) (the "Federal Action"), which was brought as a putative nationwide class action and which asserted claims for violation of the Unfair Competition Law, California Business and Professions Code sections 17200, et seq., violation of the False Advertising Law, California Business and Professions Code sections 17500, et seq., and violation of the California Consumers Legal Remedies Act, California Civil Code sections 1750, et seq. Plaintiff dismissed the Federal Action and on August 5, 2005, she refiled her claims in Los Angeles Superior Court, Case No. BC337875 (the "Action"). The Action was transferred to San Francisco Superior Court, Case No. 453195, as of June 16, 2006. Seagate denies the allegations made in plaintiff's complaint and denies any and all liability with respect to the facts alleged therein, and denies that anyone has suffered damage or is entitled to any relief whatsoever. The Court has not decided whether plaintiff or Seagate is correct. B. The Settlement Class Members For purposes of settlement only, the Court has certified a class consisting of all persons and entities who, between March 22, 2001 and September 26, 2007, purchased in the United States a new Seagate Brand hard disc drive from an authorized Seagate retailer or distributor, separately as a Seagate product that was not pre-installed into and bundled with a personal computer or other electronic device. If you fit within this definition, you will be considered a member of the settlement class ("Settlement Class Member"), unless you request to be excluded. As part of the settlement, Seagate will include language substantially similar to the following on Seagate's Website and, after its current packaging supply is depleted, but no later than six (6) months following the Effective Date (defined in the Settlement Agreement), on its new product packaging and marketing materials for Retail Hard Drives: "1 gigabyte (GB) = 1 billion bytes when referring to hard drive capacity. Your computer's operating system may use a different standard of measurement and report a lower capacity. In addition, some of the listed capacity is used for formatting and other functions, and thus will not be available for data storage." In addition, Seagate has agreed to make the following benefits available to Settlement Class Members who submit a valid Claim Form, with adequate documentation (as defined in the Claim Form), establishing the requirements for membership in the Settlement Class and the requirements for Settlement Class Members to obtain one or more of the following types of relief: (1) Eligible claimants who purchased a Retail Hard Drive before January 1, 2006 will receive, at their election, either: (a) a cash payment equal to five percent (5%) of the actual amount paid for each Retail Hard Drive, net of taxes, rebates and other price reductions (the "Cash Payment Benefit"); or (b) one transferable license and download of the Seagate Software Suite (the "Software Benefit") for each Retail Hard Drive purchased. A full description of the Software Benefit is provided in the Settlement Agreement. An otherwise eligible claimant who fails to satisfy the Proof of Purchase requirement (defined in the Claim Form) for the Cash Payment Benefit may receive the Software Benefit. (2) Eligible claimants who purchased a Retail Hard Drive January 1, 2006 or later will receive one Software Benefit for each Retail Hard Drive purchased. Claims must be submitted using the Claim Form and must be submitted within three months of the date of this Notice, or within 30 days after Final Approval (defined in the Settlement Agreement), whichever is later. Claims for the Cash Payment Benefit must be submitted by mail using this Mail-in Claim Form. Claims for the Software Benefit may be submitted by mail using this Mail-in Claim Form or electronically using this Online Claim Form, pursuant to the instructions on each form. No Settlement Class Member may submit more than one claim with respect to each Retail Hard Drive purchased by the Settlement Class Member, and each claim must relate to a separate Retail Hard Drive. Only one Cash Payment Benefit or Software Benefit will be provided with respect to any Retail Hard Drive bearing the same serial number. All claims are subject to verification by Seagate or its designee. Claims will not be processed until after Final Approval. 2. Award to Plaintiff's Counsel and Incentive Awards Under the terms of the settlement, the plaintiff's lawyers will apply to the Court for an award of attorneys' fees not to exceed $1,750,000, plus incentive awards to plaintiff in the amount of $5,000 and to Michael Lazar (plaintiff in a related case entitled Lazar v. Seagate Technology LLC, et al., San Francisco Superior Court, Case No. 439700; and California Court of Appeal, Case No. A116350) in the amount of $1,500, for the time and effort undertaken in and risks of pursuing this litigation, including the risk of liability for the parties' costs of suit, plus actual costs and expenses up to $35,500. No award of attorneys' fees, costs, expenses or incentive awards made by the Court will decrease or have any other effect on the relief to be provided to Settlement Class Members. 3. Rights That Settlement Class Members Give Up Under the terms of the settlement, plaintiff has agreed to dismiss the Action in its entirety, including the claims of the Settlement Class Members, with prejudice, which dismissal will be incorporated into a final judgment approving the settlement. All Settlement Class Members who have not excluded themselves will be bound by the final judgment entered by the Court. All claims of Settlement Class Members which were or could have been asserted in the Action, based upon the facts alleged in the Action (as well the related Lazar case), will be released as provided in the Settlement Agreement, and Settlement Class Members will be forever barred from seeking other or further relief on such claims. Plaintiff's counsel believe that the provision of the Cash Payment Benefit and Software Benefit adequately compensates Settlement Class Members for the harm they allegedly suffered, in light of the risks of litigation. There are numerous risks in continuing with this Litigation, including the possibility of being unable to: (1) certify a class of purchasers for purposes of litigation; (2) demonstrate that Seagate's use of the decimal definition was misleading to consumers or otherwise constituted an unfair trade practice; and (3) secure monetary relief on behalf of the Settlement Class. Even if plaintiff's claims were successful, plaintiff's counsel estimate that the average recovery per Retail Hard Drive purchased would be only about $9.80 (before deduction of attorney's fees, costs and expenses), which is seven percent of the approximately $140 average purchase price. Using the same average purchase price, the average Settlement Class Member who makes a claim would receive approximately $7.00 in cash (five percent of the average purchase price) or Software valued at approximately $40. This means that the average Settlement Class Member has the right to obtain a cash recovery of 71.4% of the expected recovery at trial, or a product worth 408% of the expected recovery at trial. (Because no attorneys' fees, costs or expenses are being deducted from any award, as they might in some circumstances be after trial, the effective recovery per settlement class member may be an even higher percentage.) Given the risks associated with this litigation, plaintiff's counsel believe that this recovery is excellent. E. Right to Object, Seek to Intervene or Opt Out Any Settlement Class Members who object to the settlement and who have not excluded themselves from the settlement may file written objections with the Court. ANY SUCH OBJECTIONS MUST BE FILED WITH THE CLERK OF THE COURT AND SERVED ON THE ATTORNEYS FOR THE SETTLEMENT CLASS AND SEAGATE, AT THE ADDRESSES SET OUT BELOW ON OR BEFORE DECEMBER 21, 2007. All objections must state the objector's name, address and telephone number, shall establish membership in the Settlement Class, and shall provide a detailed written statement of each objection asserted, including all grounds for the objection and any request to appear and be heard at the final approval hearing. Objections must be filed with the Clerk of the Court, San Francisco Superior Court, 400 McAllister Street, San Francisco, CA 94102, with copies sent to plaintiff's counsel: Brian R. Strange/Gretchen Carpenter, Strange & Carpenter, 12100 Wilshire Boulevard, Suite 1900, Los Angeles, CA 90025; and Seagate's counsel: Peter S. Hecker/Neil A.F. Popovic, Heller Ehrman LLP, 333 Bush Street, San Francisco, CA 94104. Any Settlement Class Members who wish to intervene in the Action and who have not excluded themselves from the settlement, may file a motion to intervene with the Court. ANY SUCH MOTION TO INTERVENE MUST BE FILED WITH THE CLERK OF THE COURT AND SERVED ON THE ATTORNEYS FOR THE SETTLEMENT CLASS AND SEAGATE, AT THE ADDRESSES SET OUT BELOW ON OR BEFORE DECEMBER 21, 2007. Any motion or request to intervene must state the requesting party's name, address and telephone number, shall provide documents to establish membership in the Settlement Class, and shall provide all arguments and documents in support of the intervention request. Motions or requests for intervention must be filed with the Clerk of the Court, San Francisco Superior Court, 400 McAllister Street, San Francisco, CA 94102, with copies sent to plaintiff's counsel: Brian R. Strange/Gretchen Carpenter, Strange & Carpenter, 12100 Wilshire Boulevard, Suite 1900, Los Angeles, CA 90025; and Seagate's counsel: Peter S. Hecker/Neil A.F. Popovic, Heller Ehrman LLP, 333 Bush Street, San Francisco, CA 94104. If you do not wish to be a member of the Settlement Class, you must exclude yourself by mailing a written request to be excluded-which must be received no later than December 21, 2007-addressed to Hard Drive Settlement, c/o Rust Consulting, Inc., P.O. Box 1240, Minneapolis, MN 5540-1240. The request should state your name and address. If you choose to exclude yourself from the class, you will not be affected by the Action, and you will not be able to object, intervene or participate in the settlement. Any Settlement Class Member who fails to properly or timely file or serve any of the requested information and/or documents required to object to the settlement, request to intervene or be excluded, will be forever precluded from doing so. F. Court Hearing and Final Approval The proposed Settlement Agreement must be finally approved by the Court. On February 7, 2008, at 1:30 p.m., in Department 504, San Francisco Superior Court, 400 McAllister Street, San Francisco, CA 94102, a hearing will be held on whether the proposed settlement should be approved as fair, reasonable and adequate. Any written objections to the settlement, requests to intervene and notices of intent to appear at the final approval hearing must be filed with the Clerk of the Court at the address listed above on or before December 21, 2007. You may inspect many of the documents connected with this case on this Settlement Website. Other papers filed in this lawsuit are available at the office of the Clerk of the Superior Court, 400 McAllister Street, San Francisco, CA 94102, during its regular business hours. DO NOT CALL OR CONTACT THE COURT OR SEAGATE CONCERNING THIS NOTICE, THE SETTLEMENT OR THE LAWSUIT. If you have questions contact your own attorney, or, if you would like more information about this notice or the case, you may contact: Brian R. Strange/Gretchen Carpenter
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