Apple iPhone 4 Hit With Class Action Suit

July 1, 2010— -- Just a week after the international launch of Apple's iPhone 4, complaints over the new smartphone's reception problems have escalated to a class action lawsuit.

Maryland and Washington, DC law firms filed a suit against Apple and AT&T Wednesday, representing two iPhone 4 owners who accuse the companies of negligence, misrepresentation and other offenses.

The complaint, filed by Ward & Ward PLLC, based in Washington, DC, and Charles A. Gilman, LLC, based in Timonium, Maryland, alleges that Apple sold iPhone 4 owners "defective" devices.

The plaintiffs, Kevin McCaffrey and Linda Wrinn, both of Maryland, maintain that Apple should discontinue sales and marketing until the defect has been fixed. They seek an undisclosed amount of damages.

Apple did not immediately respond to a request for comment and when contacted by ABCNews.com, an A&T spokeswoman said the company did not have a comment at this time.

In the first three days of its launch last week, the iPhone 4 found its way into more than 1.7 million hands around the world. The device, touted by Apple CEO Steve Jobs as the "biggest leap" yet from the original iPhone, has had the most successful launch in Apple's history, the company said.

But the otherwise impressive launch has been marred by complaints from customers that holding the phone in a certain way blocks the external antenna, leading to dropped calls and reception issues.

While the old phone had an internal antenna, the new model has an external one. According to tech bloggers and iPhone users, call reception apparently drops when the user's palm covers the bottom left corner of the phone.

After the first complaints started surfacing online, Apple quickly responded, releasing a statement that said, "Gripping any phone will result in some attenuation of its antenna performance, depending on the placement of the antennas."

Law Firms Launch Investigations Into iPhone 4 Antenna Problems

Earlier this week, a California law firm raised the specter of a class action suit when it issued a call for customers experiencing the widely discussed antenna issue. The firm has not confirmed that it will take legal action, but on its blog it said that it has received responses from more than 1250 people since posting the inquiry Monday.

Daniel Ward, an attorney with Ward & Ward PLLC, told ABCNews.com that a similar inquiry preceded the lawsuit filed Wednesday.

Though only two people are named in the suit, he said the firm received responses from many others, though he declined to disclose a specific number.

"Apple, and most likely AT&T, knew that this product was defective when they marketed and sold it," Ward said. "We're looking for them to fix the phone or provide a suitable solution. …We hope to remedy the problem."

The new design, which features an external antenna, was a major Apple talking point when the company first unveiled the device. But he said that what was intended to be the phone's greatest benefit has turned out to be its greatest defect.

Analyst: Every iPhone Launch Has 'Teething Problems'

Ward, himself an iPhone 4 owner and Apple fan, said, "I know [Apple's] a brilliant company and I think the iPhone 4 is a brilliant product, it just happens to be an absolutely horrible phone."

Though he declined to specify how much his clients would seek in financial damages, he said that given the expense of the phone, plus the monthly data and voice plans from AT&T, they are "not insubstantial."

"We feel very strongly that Apple has done something wrong and AT&T was complicit," Ward said. "And collectively consumers can and are speaking and I hope Apple hears us and is willing to resolve it."

Despite the outcry from consumers and this latest legal complaint, tech analysts familiar with previous iPhone launches say Apple will find a way to work through this as they have in the past.

"With every launch of a new iPhone, we have teething problems," said Rob Enderle, principal analyst at the Enderle Group.

In 2005, Apple compensated some owners of first- and second-generation iPods with $50 of in-store credit or $25 cash to settle one of its earliest class-action suits over the batteries in an older edition of the iPod. It also faced lawsuits over its first-generation iPhone in 2007 and its 3G iPhone in 2008.

Apple Leads With Design, Follows With Engineering, Analyst Says

Apple typically leads with design and then follows with engineering, Enderle said, which can lead to glitches.

"This is one of the risks Apple takes with its approach and they're definitely willing to take that risk," he said.

Ultimately, Apple will find a way to address the problem, he said.

"I think Apple will work through this - they typically do - [though] this is a little tougher product launch than we've seen in the past," he said. "But a year from now, we'll probably forget it."