Dell refutes withholding evidence in faulty-PC case

A motion seeking sanctions was filed against Dell in the faulty PC case

Dell on Friday refuted accusations that it was withholding evidence in connection with a long-running case charging the PC maker of willingly selling faulty PCs.

Web hosting service provider Advanced Internet Technologies Thursday filed a motion accusing Dell of withholding evidence and failing to produce documents in its possession, according to a court filing. AIT's motion sought sanctions against Dell.

"We disagree with AIT's contention that we violated the discovery order and will be filing our response with the Court soon. Dell takes all court orders and our obligations to comply with them very seriously," said David Frink, a Dell spokesman.

The documents sought by AIT are in connection with a case accusing the PC maker of selling thousands of desktop PCs despite knowing the machines contained faulty components.

AIT filed the case against Dell in the U.S. District Court for the Eastern District of North Carolina in 2007 and is seeking US$75,000 and punitive damages from breach of contract, fraud and deceptive business practices.

Earlier documents unsealed in connection with the case showed some Dell employees having prior knowledge that the company's OptiPlex PCs were likely to break, according to a New York Times report in June.

AIT's attorney did not return a call seeking comment.

According to the documents, Dell employees knowingly tried to play down component problems, which put customers at risk. Salespeople were told to say "don't bring this to customer's attention proactively," in an effort to conceal system problems.

Dell shipped around 11.8 million OptiPlex computers between May 2003 to July 2005 that were at risk due to faulty components. The desktops were sold to business customers including Wal-Mart and Wells Fargo.

The problems stemmed mainly from some bad capacitors on the motherboards supplied by a company called Nichicon. The same issue affected many PC makers, but the problem has now been resolved, Dell has said. The company fixed the computers, and extended the warranty of systems containing faulty motherboards. The current PCs are not affected by the problem.

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