New Microsoft Lawsuit Adds to Trial’s Fallout

Another class-action suit was filed Monday in California against Microsoft Corp., as part of a building wave of consumer lawsuits following U.S. District Judge Thomas Penfield Jackson’s finding of fact that Microsoft is a predatory monopoly.

At least six class-action suits have been filed in the last 10 months in California alone, all claiming that the software giant split, used its monopoly power to overcharge consumers for its Windows 95 and 98 computer operating systems, according to attorneys.

The latest suit was filed Monday in San Francisco Superior Court by lawyers Terry Gross and Francis Scarpulla of San Francisco and Timothy Cohelan and Daniel Mogin of San Diego.

The suit was filed on behalf of plaintiffs Lilian Lea, a tax specialist, and Tortola Restaurants, a small chain in San Francisco, Mogin said.

The attorneys are seeking to expand the list of plaintiffs to include all consumers in California who purchased Windows 95 or 98, Mogin said. The case follows a similar class-action filing on Nov. 15 in Orange County.

“People are trying to jump on the anti-Microsoft bandwagon,” said Eugene Volokh, a professor of Internet law at UCLA. “But you have to remember that Microsoft is a very heavy body and it’s going to be hard to move.”

None of the suits list specific damages, but they do ask for triple damages if they are successful--a feature that could drive the awards into the hundreds of millions of dollars.

Microsoft spokesman Tom Pilla called the suits “baseless.”

The threat of numerous class-action suits across the country creates a greater incentive for Microsoft to settle the government’s antitrust case, because a deal could prevent Jackson’s findings from being used in other cases.

But Alan M. Mansfield, the attorney with Milberg Weiss Bershad Hynes & Lerach who filed the Orange County suit, said he intends to continue with his case even if Microsoft settles its federal antitrust case.

Pilla said these consumer suits make no sense because Microsoft’s Windows operating system is priced below those of most competitors.

He said the price to upgrade Windows is now $89, compared with $149 for IBM’s OS/2 and $99 for Apple Computer’s Mac OS.

The six California class-action lawsuits have been brought under the state’s antitrust laws. California is one of 18 states that diverge from federal practice and give consumers the right to sue a manufacturer for overcharging them, even though a product was obtained from a retail store or other third party. Many consumers receive Microsoft’s Windows programs because they are bundled into new personal computers.

Jackson’s finding of fact on Nov. 5 has given new impetus to the consumer suits because of the firmness of his belief that Microsoft is a monopolist that had stifled competition.

“The findings clearly establish the credibility of the claim,” Mansfield said.

But USC law professor W. David Slawson said the findings cannot be used in a private lawsuit until the judge issues a final decision that Microsoft violated the law or if Microsoft pleads guilty.

Ronald A. Cass, a onetime Microsoft consultant who is dean of Boston University School of Law, said these consumer suits do not necessarily portend a repeat of the massive litigation that engulfed the tobacco industry in recent years.

“My sense is that there was a lot of public sympathy for the tobacco litigation,” Cass said. “Here, it’s hard to see that, because there is not a real public sense of having been abused, hurt or damaged by Microsoft.”

Microsoft shares surged $3.81 to $89.81 in Nasdaq trading Monday. Late Friday, Jackson appointed a mediator to try to reach a settlement in the antitrust case.

* JUDICIAL CONCERN: The Microsoft case judge called discord among lawyers “disturbing.” C10