Antitrust Class Actions Filed Against Microsoft

(December 1, 1999) U.S. District Court Judge Jackson's findings of fact in the government's antitrust suit against Microsoft has produced an avalanche of lawsuits by class action lawyers seeking to cash in on Microsoft's troubles with the government.

The private lawyers in these lawsuits seek to represent the class of businesses and individuals who purchased Microsoft Windows 95 or 98 PC operating systems since 1995. Although, some suits also go back earlier, or extend to other operating systems.

Judge Jackson's November 5 document reads like a wish list of findings for any lawyer seeking to impose civil liability on Microsoft. Consequently, the complaints borrow liberally from Judge Jackson's work.

Moreover, two class actions suits have been filed in U.S. District Court in Washington DC, even though the plaintiffs reside elsewhere. Both of these suits list the governments' suits as related actions, and have thus assigned to Judge Jackson.

The suits seek various remedies, including:

• a finding that Microsoft has monopolized, or attempted to monopolize, the market of PC operating systems.
• an order enjoining Microsoft from continuing any such monopoly.
• damages compensating purchasers for having paid monopoly prices.
• treble damages.
• punitive damages.
• attorneys fees.
• costs.
• disgorgement of ill gotten gains.
• imposition of a trust or lien upon Microsoft.

Microsoft's Jim Cullinen told Tech Law Journal on December 1 that "baseless lawsuits have been filed." He added that the Plaintiffs' attorneys have "not tried to protect consumers, but simply to go after money."

"We will defend these cases," Cullinen concluded.

Joseph Saveri, a partner in the San Francisco class action law firm of Lieff Cabraser Heimann & Bernstein sees it differently. "Microsoft's suppression of competition and other misconduct forced consumers in California to pay substantially more for the Windows 95 and 98 operating systems than they would have had to pay in a competitive marketplace," Saveri said in a press release.

Lieff Cabraser filed a class action suit in California state court asserting representation of California residents. That suit, Fisher v. Microsoft, alleges that Microsoft violated the Cartwright Act, which is California's antitrust statute, and California's Unfair Competition Law.

Class actions are initiated by the filing of a complaint which alleges that one or more plaintiffs are suing on behalf of a much larger class of similarly situated persons. However, to proceed as a class action the court must certify that the suit meets the requirements of Federal Rule of Civil Procedure 23 (or the state equivilent).

Also, multiple law firms often file class action suits, and then compete for certification as the class representative. Numerous overlapping suits have been, and continue to be filed. Hence, there will be considerable competition among the lawyers to be certified as class representatives.

Microsoft is not forthcoming on the suits. Tech Law Journal spoke with Microsoft spokesman Jim Cullinen  He stated that suits have been filed in "California, Florida, Louisiana, Alabama, Ohio, and New York." However, he would not state who the parties to the suits are, or who is representing them. Several other Microsoft representatives either declined to discuss the cases, or did not return calls.

However, many of the plaintiffs' law offices contacted by Tech Law Journal also declined to discuss their cases, or did not returned calls.

The discussion below focuses on just three of the suits:

• eLeaders v. Microsoft, filed Nov. 19 in U.S. District Court in Washington DC.
• Fisher v. Microsoft, filed Nov. 24 in California Superior Court in San Francisco.
• DeJulius v. Microsoft, filed Nov. 29 in U.S. District Court in Washington DC.

eLeaders is a small Internet services company based in Mineola, New York. It provides web hosting, web site design, Internet access, e-commerce solutions, integrated database applications, new media, security solutions, web site promotion, and intellectual property protection software.

Its lawyers filed suit in federal court in Washington DC. eLeaders' sole connection to the District of Columbia may be its desire to have Judge Jackson preside over its case. The complaint alleges illegal monopolization (and attempt to monopolize) of the PC operating system market in violation of the Sherman Antitrust Act.

It seeks to include in its class all businesses and persons who bought Windows 95 or 98 since 1995. The suit seeks damages. It also seeks an injunction against Microsoft, but provides no details on what the nature of the injunction should be.

Summary of Three of the Antitrust Class Actions

DeJulius v. Microsoft is the other suit filed in the District of Columbia. The complaint was filed on November 29 on behalf of an Ohio resident. This suit has been assigned to Judge Jackson also. This suit is also based on the Sherman Act.

There is also a much different suit in California. The plaintiff in Fisher v. Microsoft seeks to represent only California residents. Also, this suit is based on California antitrust and fair competition law, not federal antitrust law.

Secretary of Commerce William Daley traveled to Seattle this week to attend the World Trade Organization conference. In a speech on November 30 he commented about Microsoft's legal troubles.

"And please tell Bill Gates I know some good lawyer jokes ..."