State
Class Action Crisis Continues With Microsoft
The
nation is currently engulfed in a huge state class action crisis,
which continues to get worse. Following in the wake of the millions
of dollars "earned" by lawyers in the tobacco cases, lawyers
are lining up in front of courthouses to file consumer class action
cases against Microsoft. Surely it is no coincidence that before
the U.S. Justice Departments lawsuit against Microsoft was
filed, few private class action suits against Microsoft existed,
but following Judge Thomas Penfield Jacksons decision ordering
the break-up of Microsoft and restrictions on certain of its business
practices, over 100 consumer state class actions have been filed.
Earlier
this month, a Minnesota state judge granted class action status
in a consumer antitrust suit accusing Microsoft of overcharging
customers who bought the Windows operating systems through middlemen
and violating Minnesotas antitrust laws by illegally creating
and maintaining a monopoly in the computer operating system market.
This case mirrors similar class-action suits pending in California,
Maine, Wisconsin, South Dakota and Michigan (all states that have
recently passed tailor-made legislation to allow indirect purchasers
to recover damages in antitrust suits).
The
explosion in state class action filings as a means of effectuating
social reform is increasingly becoming a means to "blackmail"
corporate defendants as private class action suits piggyback on
government litigation. The single most important event of class
certification becomes the fulcrum to shakedown a corporation to
settle the case. Although the federal courts have indicated an increased
tendency to refuse class certification in mass tort and product
liability cases, state judges seem lax in applying class certification
standards. The irresponsible manner in which state courts are adjudicating
these suits perhaps prompted Judge Richard Posner in 1995 to deny
class certification, to encourage the courts to think long and hard
before assuming the "undue and unnecessary risk of a monumental
industry-busting error in entrusting the determination of potential
multibillion dollar liabilities to a single jury . . .." (In
re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293, 1304 (7th
Cir. 1995).
The
class action suit, designed to improve access to courts and facilitate
efficiency of resolution of claims, has become unwieldy and ineffective
with an increase in lawsuits actually causing a decrease in judicial
efficiency. The cost of this lawsuit abuse undoubtedly will higher
prices for consumer products, lost business expansion and product
development. The larger issue, however, is whether private state
class action lawsuits that piggyback on government litigation really
serve the public good or merely enrich lawyers.
UPDATE:
Judge
to Rule on Microsoft Antitrust Settlement
U.S.
District Judge J. Frederick Motz, who is overseeing the class-action
lawsuit brought by consumers against Microsoft, indicated he will
rule by the middle of December on the embattled software makers
proposed antitrust settlement
Microsofts
controversial proposal to end the consumer driven class-action lawsuit
calls for the company to provide software, computers and other resources
valued at more than $1 billion to thousands of needy school systems
throughout the country. According to Microsoft attorney David Tulchin,
"The settlement is a great settlement for the kids and the
county. It helps 7 or 8 million kids in the poorest schools get
the benefits they wouldnt otherwise have." Attorneys
for Microsoft will continue to make their case for the settlement
at a hearing on December 10, 2001.
Critics
of the deal argue that it would only strengthen the very monopoly
and abuses that the lawsuit is attempting to remedy. Apple Computers
Steve Job released a statement harshly criticizing the proposal:
"Were baffled that a settlement imposed against Microsoft
for breaking the law should allow, even encourage, them to unfairly
make inroads into education one of the few markets left where
they dont have monopoly power."
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read more on the Microsoft anti-trust lawsuit please click on:
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