Apple to Pay $53 Million to Settle Wet iPhone Warranty Lawsuit

If Apple wrongly refused to honor your warranty for a iPhone or iPod Touch, you could be eligible for a $200 payment.

I know this is icky, but some of you out there have dropped your iPhones into the toilet. Not surprisingly, it kills them and voids the warranty. If by some chance you dried it out and tried to get it replaced under warranty, Apple would notice that the little strip of paper inside the phone had turned pink and you'd be out of luck, as well as embarrassed.

That paper is there for a reason. When it gets damp, it changes color and alerts anyone in the know that the phone has gotten wet. That important because Apple and most phone manufacturers won’t honor a warranty if a dead phone has apparently taken a swim.

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It turns out, though, that the little strip of paper isn’t always accurate. In fact, the tape's maker, 3M, said humidity, and not water contact, could have caused the tape to change color. And that's the nub of a class action suit directed at Apple, claiming that the company wrongly denied warranty payments to thousands of owners of the iPhone 3G, 3Gs and the first three generations of the iPhone Touch.

Rather than fight it out in federal court, Apple has agreed to settle. Owners of those products who actually filed a warranty claim and had it denied because of the wet phone issue should be eligible for payments of about $200 each, depending on the type and size of the device.

We know this because someone gave a copy of the settlement agreement to Wired, which put the Apple agreement online Saturday evening. Neither Apple nor the plaintiffs would comment, but the document appears genuine. In any case, Apple has not admitted wrongdoing, the court filing states.

What's going to happen is this: Assuming the judge signs off on the settlement, Apple will search its records and send notices to users whose warranty claims were denied. If you get one of those in the mail, you’ll have a couple of months to respond.  

Apple, by the way, didn’t give up without a fight. According to the agreement, the company produced 265,000 pages of documents. The longest book I’ve ever read, War and Peace, weighs in at about 1,200 pages, which means this issue of wet iPhones generated 220 times more verbiage than Tolstoy’s masterpiece.

Excess verbiage aside, this is a victory for consumers. It's all too easy for a company to blow off a warranty claim, saying the consumer was at fault, not the device. Not many product owners have the time or the money to pursue a remedy, but in this case someone did.

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