Second State Court Dismisses Suit Against MS

FRAMINGHAM (06/21/2000) - A Nevada judge this week dismissed a class-action lawsuit against Microsoft Corp. that sought damages for what the plaintiffs claimed are inflated prices charged by the software vendor because of its control of the desktop operating system market, making it two down and 135 to go for Microsoft in similar suits spurred by the U.S. government's antitrust case.

Judge Gene Porter of the Clark County District Court in Las Vegas granted Microsoft's motion to dismiss the Nevada case based on precedent from a 1977 U.S. Supreme Court ruling in a case known as "Illinois vs. Brick." In that case, the high court ruled that consumers can't sue a company on pricing issues under antitrust law if it didn't directly sell them the product in question.

The dismissal was the second state-court victory for Microsoft in as many weeks. Last week, a judge in Portland, Oregon, cited the same Supreme Court precedent in dismissing a similar pricing suit that was filed in that state.

A Microsoft spokesman yesterday said the company hopes the decisions in Nevada and Oregon will help Microsoft build momentum against the mountain of class-action lawsuits - 137 in all, counting the two dismissed ones - that have been filed against the software vendor since last fall. "We believe that (the dismissals) will impact many cases throughout the country," the spokesman said.

But Hillard Sterling, an attorney at Chicago law firm Gordon & Glickson P.C., said he expects "a plethora" of the class-action suits to survive Microsoft's dismissal motions.

"Many of these cases will fall, but some will survive," Sterling said. "Many states have more flexible rules on consumer lawsuits (than Oregon and Nevada do)." As a result, he added, some state courts may permit the class-action plaintiffs to press their cases despite the Supreme Court's 1977 ruling.

Sterling predicted that "dozens" of the class-action suits are likely to advance at least to the pretrial discovery stage. But even if that happens, he said, convincing a judge or jury that Microsoft's pricing was unfairly high won't be easy. The class-action suits "face significant problems," Sterling said. "There are many hurdles for these plaintiffs, notwithstanding the (government's antitrust) success thus far."

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