- The Washington Times - Thursday, August 31, 2000

SAN FRANCISCO (AP) A judge allowed the first class-action suit to proceed against Microsoft Corp. on accusations that the software giant's market dominance harmed California consumers. Dozens of similar suits are pending nationwide.

San Francisco Superior Court Judge Stuart R. Pollak said an untold number of California consumers could be represented in one trial to determine whether they were forced to pay unreasonably high costs for Microsoft products. He said denying the suit "could result in repetitious litigation."

"This case involves a very large number of claimants with relatively small amounts at stake," Judge Pollak said in his opinion released late Tuesday. "Most consumers have little incentive to litigate independently since the costs of litigation undoubtedly would overwhelm their potential recovery."

Microsoft spokesman James W. Cullinan said the Redmond, Wash., company is reviewing the ruling.

"This is just one step in a long process in this case," Mr. Cullinan said. He declined further comment.

Attorneys in the case are scheduled to meet with Judge Pollak on Oct. 4 to prepare for a trial. No trial date has been set yet.

The products at issue are Microsoft's Windows operating system, its MS-DOS operating system, Word programs and Excel software purchased on or after May 18, 1994.

Microsoft urged Judge Pollak on Aug. 4 not to allow the case to proceed because it would be nearly impossible to determine damages. Microsoft attorney Charles B. Casper argued that the company markets its products to thousands of companies who resell them at different prices, adding that the judge would have to weigh each consumer's claim on a case-by-case basis.

Lawyers seeking class-action status said that Microsoft was trying to shield itself behind its size.

"Just make your business large enough that you can overcharge and get away with it," San Francisco lawyer Daniel J. Furniss argued.

Judge Pollak's decision came three weeks after Microsoft asked a federal judge in Baltimore to dismiss or at least consolidate 62 pending federal and state class-action suits. That action is pending and, so far, none have been able to proceed.

Courts in Hawaii, Iowa, Kentucky, Nevada, Oregon, Rhode Island and Texas have dismissed similar class-action lawsuits on grounds that laws in those states don't allow them.

The majority of the cases nationwide were filed after U.S. District Judge Thomas Penfield Jackson in the District of Columbia, ruled that the company violated federal antitrust laws. Microsoft is appealing Judge Jackson's ruling and his order to split the software giant into two companies.

Three weeks ago, Judge Pollak suggested that it would be a Herculean task for lawyers to demonstrate how consumers were hurt.

"If they can't do it, they'll lose the case," Judge Pollak said.

Microsoft has argued that, even if it was a monopoly, consumers in many instances benefited and were not harmed. For instance, Microsoft says Netscape, now a division of America Online Inc., dropped its roughly $50 charge for a Web browser after Microsoft began giving its browser away for free.

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