FOR IMMEDIATE RELEASE
FRIDAY, OCTOBER 13, 2000
TDD (202) 514-1888
TOSHIBA PAYS U.S. $23 MILLION TO SETTLE DEFECTIVE COMPUTERS CASE
WASHINGTON, D.C. - Toshiba Corporation has reached a settlement with the United States as part of a class action suit in connection with the company's sale of defective laptop computers to government agencies, the Justice Department announced today. The settlement also releases Toshiba from liability under the False Claims Act for the sale of defective laptop computers. In addition to paying the United States $23 million, Toshiba will provide the government with $10.5 million in coupons from the company for the purchase of Toshiba products. Today's settlement announcement follows an investigation that arose following allegations that a defect in the floppy disk controllers (FDC) contained in Toshiba's laptops periodically cause undetected data corruption when the FDC, a microchip located on the computer's motherboard, is transferring data to and from a floppy disk. The risk of data corruption increases when multiple software applications are running. "This settlement is an example of the Justice Department's determination to ensure that goods and services provided to the United States government meet the highest possible standards and are free of defect," said Assistant Attorney General David W. Ogden, in charge of the Justice Department's Civil Division. The class action suit against Toshiba was filed in 1999 in the Eastern District of Texas. The United States opted into the settlement reached in the class action and settled all potential government claims arising from the allegations. "This settlement provides proper compensation to the United States government for defects in laptop computers purchased from Toshiba," stated Mike Bradford, United States Attorney for the Eastern District of Texas. "We will continue to vigorously enforce the False Claims Act for the protection of the taxpayers and the United States government."
The investigation and settlement were jointly handled by the Office of the United States Attorney for the Eastern District of Texas and the Civil Division of the United States Department of Justice.