I don't know if there was actually any validity in this charge.
Competing at that absolute, el-stinko dirt-cheap rock botton of the market, it would not be unreasonable to expect that they would salvage usable components from either their own unsold units, or surplus from other manufacturers. Does that make the computer "used"???
Heck, I dunno. It definetly was a crapola machine, but it also sold at a crapola price. Ya get what you pay for, but the stinking lawyers expected more.