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In a class action lawsuit filed in San Jose, California last week, Florida resident Debra Hilton claims that Apple was aware of a flaw in the flex cable that controls the power button on the iPhone 4, but chose to stay quiet about it to sell more handsets.

Hilton is seeking more than $5 million in damages from the Cupertino company on behalf of thousands of iPhone 4 owners she believes bought devices with defective power buttons. Allegedly, Apple knew about the issue, but did nothing to fix it…

GigaOm points us to the lawsuit, which looks like it was filed on May 10 under the RICO (Racketeer influenced and Corrupt Organizations) act. The site explains that this is a federal racketeering law that has become a popular route for class action suits.

In the filing, Hilton highlights a thread in Apple’s support forums, which is nearing a million views, as evidence to the issue. In the thread, users complained of ‘wiggly’ power buttons on their iPhone 4 handsets that would neither lock, nor power down.

The issue seems to, more often than not, pop up after the device is well past a year old, meaning that folks without AppleCare plans are left out of warranty. And judging by the comments, it’s an expensive problem to fix—most reported paying $150 in repairs.

It’ll be interesting to see how this plays out. Apple just started mailing out checks to plaintiffs in a class action lawsuit over antennagate. And it also recently reached a pricey ($53 million) settlement in another suit over its iPhone/iPod touch warranties.