Toshiba, Sony Settle With Allstate Over Laptop Fire

June 26, 2009 – Media Coverage

Law360, New York (June 26, 2009, 12:00 AM EDT) -- Toshiba America Information Systems Inc. and Sony Electronics Inc. have settled a reimbursement dispute brought by Allstate Insurance Co. alleging that a defective Sony battery in a Toshiba laptop set fire to a home insured by Allstate. 

Allstate asked Judge Beverly B. Martin of the U.S. District Court for the Northern District of Georgia on Thursday to dismiss the case as all matters in dispute have been settled under undisclosed terms. 

Allstate filed suit in June 2008, alleging that a fire that tore through a home in Marietta, Ga., on Christmas 2006, causing more than $255,000 of damage, was caused by a Toshiba laptop computer that contained a defective lithium ion battery made by Sony. 

“The Toshiba laptop computer, its parts and components, including the lithium ion battery, were unreasonably dangerous and defective in light of its foreseeable and intended use at the time in which it left the control of Toshiba,” the complaint said. 

Allstate covered the cost of the fire damage and sought reimbursement from the manufacturers of the faulty computer, accusing the defendants of negligence and product liability. 

As a result of the defendants’ failure to warn of the defective and dangerous condition of the lithium ion battery, the insurer suffered roughly $258,000 in damage related to the house fire, the complaint said. 

Representatives for Sony and Toshiba did not respond to calls for comment. 

The terms of the settlement are not known, but the lawsuit sought reimbursement for the insurance outlay, attorneys’ fees and other relief. 

In February, a State Farm unit similarly sued Dell Inc. and Sony for the payment to a homeowner after a fire erupted in a house. 

Toshiba and Sony, as well as other major electronics companies, have been hounded by product liability suits and the fire hazards associated with their laptop computers and components. 

In September, Sony recalled nearly half a million of its Vaio laptop computers amid concerns that faulty wiring could cause overheating and in 2007, similar fears of fire hazards led Toshiba to recall more than $14,000 lithium ion batteries made by Sony. 

Allstate is represented by Drew Eckl & Farnham LLP and Grotefeld & Hoffman LLP. 

Toshiba is represented by Hawkins Parnell & Young. Sony is represented by Eckert Seamans Cherin & Mellott LLC and Swift Currie McGhee & Hiers LLP. 

The case is Allstate Insurance Co. v. Toshiba America Information Systems Inc. et al., case number 1:08-cv-01928, in the U.S. District Court for the District of Georgia.