UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION

I.                   INTRODUCTION

Defendant Western Digital Corporation (�Western Digital� or �Defendant�) submits this memorandum in support of Plaintiff Orin Safier�s (�Plaintiff�) motion, filed February 1, 2006, for preliminary approval of the proposed settlement of this action (�Settlement�).[1]� The Settlement complies in all respects with the requirements for approval of a class action settlement.� Accordingly, Western Digital respectfully submits that it should be preliminarily approved and submitted to the Class for consideration.

II.                OVERVIEW OF THE CLAIMS AND DEFENSES

Plaintiff�s claims are set forth in detail in Plaintiff�s motion and in Plaintiff�s complaint (�Complaint�). �Western Digital denied and continues to deny each and all of Plaintiff�s claims.�

Plaintiff�s claims all have the same core factual basis:� Plaintiff�s allegation that the way in which Western Digital represents the storage capacity of its hard disk drives (�HDD�s�) is false and misleading.� (See generally Complaint (Declaration of Lisa M. Sharrock (�Sharrock Decl.�) Ex. A.)� As Plaintiff acknowledges, however, Western Digital has consistently represented the storage capacity of its HDD�s using the definition of gigabyte (GB) that derives from the metric-decimal system, under which one gigabyte equals one billion bytes.� As Plaintiff admits, the definition that Western Digital uses is the same definition that �virtually all� other HDD manufacturers and �virtually all� computer manufacturers use to measure and describe HDD storage capacity.� (Complaint, �� 60-63.)� Moreover, Plaintiff admits that worldwide organizations for standardization in electronics explicitly have endorsed the decimal definition used by Western Digital and the rest of the HDD industry as the correct definition.� (Id., �� 45-48.)� Those same standards organizations have urged software companies that use the binary definition of gigabyte to cease their misuse of the term.� (Id.)� As Plaintiff�s own complaint shows, Western Digital�s consistent use of the indisputably correct industry standard for measuring and describing storage capacity is not false or misleading.

Plaintiff also alleges that some of Western Digital�s competitors disclose, in places such as their websites, that one gigabyte is equal to one billion bytes, whereas Western Digital does not.� This is incorrect.� Western Digital specifically states on its website (and has done so since long before this lawsuit was filed) that the definition of a gigabyte is one billion bytes.� (See, e.g., Sharrock Decl. Ex. B (2003 glossary printout from wdc.com).)� In any event, Western Digital has no legal obligation to do so.� As noted above, Plaintiff admits that Western Digital is using the historically correct, industry standard definition of gigabyte.� A manufacturer of a product has no legal duty to explain that it is using the proper terminology to describe its products.�

Surely Western Digital cannot be blamed for how software companies use the term �gigabyte��a binary usage which, according to Plaintiff�s complaint, ignores both the historical meaning of the term and the teachings of the industry standards bodies.� In describing its HDD�s, Western Digital uses the term properly.� Western Digital cannot be expected to reform the software industry.[2]� Furthermore, there is no conceivable reason that consumers would perceive the size of Western Digital�s HDD�s as different in any respect from the size of other HDD�s on the market.� All major HDD manufacturers offer HDD�s in the same, industry standard, decimal-defined storage capacities (e.g., 80 GB, 120 GB, 250 GB).� Thus, a consumer buying an HDD is comparing decimal gigabytes from one HDD company to decimal gigabytes from another HDD company�regardless of what software companies may be doing.� Accordingly, price and reliability, not storage capacity nomenclature, are determinative of a customer�s decision to purchase from one HDD manufacturer over another.� In short, Plaintiff�s claims are meritless.�

Notwithstanding the fecklessness of Plaintiff�s claims, Western Digital recognizes not only the inherent risks and uncertainties of litigation, but also that the litigation would be an undesirable distraction and would require significant investment in employee time, attorneys� fees, and costs.� Taking into account these considerations and Western Digital�s desire to put this matter to rest, Western Digital believes that settlement on the terms set forth in the Settlement Agreement is in its best interests. �

III.              THE PROPOSED SETTLEMENT SHOULD BE PRELIMINARILY APPROVED

A.������� The Legal Standard for Preliminary Approval

����������� Preliminary approval of a proposed class action settlement should be granted if there are no �grounds to doubt its fairness or other obvious deficiencies, such as unduly preferential treatment of class representatives or segments of the class, or excessive compensation for attorneys, and appears to fall within the range of possible approval.�� Manual for Complex Litigation �30.41 (3d ed. 1995).� See also, e.g., In re NASDAQ Market-Makers Antitrust Litig., 176 F.R.D. 99, 102 (S.D.N.Y. 1997) (�Where the proposed settlement appears to be the product of serious, informed, non-collusive negotiations, has no obvious deficiencies, does not improperly grant preferential treatment to class representatives or segments of the class and falls within the range of possible approval, preliminary approval is granted�). ��

����������� B.������� The Proposed Settlement Resulted from Arm�s-Length Negotiations.

The proposed settlement is the product of many hours of arm�s-length negotiations over the course of several months between counsel for Western Digital and counsel for Plaintiff, including mediation before the Hon. Justice Steven Stone (Ret.).� (Sharrock Decl. � 4.)�

C.������� There Are No Grounds To Doubt The Fairness Of The Settlement.

In exchange for a release of liability, Western Digital has agreed to include language substantially similar to the following on its website and, as soon as its current packaging supply is depleted, but no later than six (6) months following final approval, on its product packaging:

�1 gigabyte (GB) = 1 billion bytes.�� Total accessible capacity varies depending on operating environment.�

In addition, for all Class Members who timely complete a user-friendly Claim Form, Western Digital will provide free hard disk backup and recovery software (the �Class Benefit�), which can be used in connection with Class Members� hard disk drives.[3]�� ��

The consideration to be provided by Western Digital pursuant to the proposed settlement falls well within the requisite �range of approval.� �Absent the settlement, Plaintiff�s counsel would face many obstacles, including establishing that Western Digital�s use of the industry standard decimal meaning of �gigabyte� somehow was fraudulent or misleading, certifying a class, and proving damages.� Among other things, the consistent use by Western Digital�s competitors and �virtually all� computer companies of the same industry standard used by Western Digital would make it extremely difficult for Plaintiff to overcome these obstacles. �Even if Plaintiff could do so, moreover, it would be years before the Class Members possibly could receive any recovery.� Under the settlement, Class Members will receive, within days of the Effective Date, backup and recovery software that can be used with their hard disk drives.

In addition to the injunctive relief and Class Benefit provided for in the Settlement Agreement, Western Digital has agreed not to contest an award of attorneys� fees of up to $485,000 and expenses of up to $15,000, to the extent approved by the Court. �The Settlement Agreement provides that the Class Benefit is entirely independent of Class Counsel�s fees, that Class Members shall not be required to pay any portion of Class Counsel�s fees, and that �denial, downward modification, or failure to grant the request for attorneys� fees and costs shall not constitute grounds for termination of the settlement.�� (Settlement Agreement, Sec. 11.2.)�

IV.              THE CLASS SHOULD BE PRELIMINARILY CERTIFIED FOR PURPOSES OF SETTLEMENT

����������� Although Western Digital does not concede the appropriateness of class issues, the Parties have agreed to stipulate to the following, for settlement purposes only:

1.�� Certification of a Class consisting of all persons and entities who purchased in the United States an Aftermarket Western Digital Corporation hard disk drive between March 22, 2001 and February 15, 2005 (excluded from the Class are Western Digital Corporation, its directors, officers, and employees, Judge Zimmerman and his immediate family, and any person who opts out);

2.�� Appointment of Orin Safier as the Class Representative; and

3.�� Appointment of the law firm of Gutride Safier LLP as Class Counsel.

V.                 THE COURT SHOULD APPROVE THE PROPOSED NOTICE

Pursuant to Federal Rule of Civil Procedure 23, notice must be provided in �plain, easily understood language,� and must inform potential class members of the nature of the action, the definition of the class, the class claims, issues, or defenses, the binding effect of a class judgment on class members, and of class members� rights to opt out or to enter an appearance through separate counsel.� Fed. R. Civ. P. 23(c)(2)(B).� Notice must be disseminated in the best manner �practicable under the circumstances,� including �direct notice to all members who can be identified through reasonable effort.�� Id.��

The proposed notice satisfies each of these requirements.� Specifically, Western Digital will provide (i) e-mail notice to registered purchasers for whom it has an e-mail address, and (ii) mail notice to registered purchasers for whom it has a mail address but no e-mail address.� Western Digital also will provide notice by publication, through two advertisements in the USA Today, and will post a settlement link on the homepage of its website.� Each of the notices describes, among other things, the nature of the lawsuit and the definition of the class, and explains that class members have the right to opt out or to object to the settlement.� Finally, each provides a link to a website, hosted by Western Digital at www.wdc.com/settlement, which will contain more detailed information and a copy of the Settlement Agreement.�

VI.              A FINAL APPROVAL HEARING SHOULD BE SCHEDULED FOR MAY 17, 2006, OR AS SOON THEREAFTER AS THE COURT�S CALENDAR PERMITS

The proposed Preliminary Approval Order sets the following schedule:

����������� Deadline for mailing notices to the Class:� ten (10) days after Preliminary Approval;

����������� Deadline for requesting exclusion from the Class:� April 21, 2006

����������� Deadline for filing objections to the settlement:� April 26, 2006;

����������� Settlement Fairness Hearing:� May 17, 2006; and

����������� Deadline for submission of Claim Form:� thirty (30) days after Final Approval.�

This schedule complies with the Class Action Fairness Act and comports with due process. �

VII.           CONCLUSION

Western Digital respectfully requests that the Court enter the proposed Preliminary Approval Order.

Date:� February 1, 2006____________________ IRELL & MANELLA LLP
Scott D. Baskin, P.C.

����������������������������������������������������������������������������� Lisa M. Sharrock

By: ���������� /s/ Scott D. Baskin, P.C.