January 31, 2001, 10:05 AM — A U.S. District judge in Maryland Friday dismissed damage claims attached to 38 of 62 class-action lawsuits that were filed against Microsoft Corp. in federal courts by plaintiffs claiming that the company had overpriced its software while violating federal antitrust laws.
Judge J. Frederick Motz's ruling cited a 1977 case that has also been used as a precedent by state-court judges who have thrown out similar suits against Microsoft. In that case, which involved a brick manufacturer, the U.S. Supreme Court found that consumers can't sue a company on pricing issues under antitrust law if it didn't directly sell them the product in question.
Motz wrote in his ruling that the 1977 case presumes that the distributors and dealers who sold Microsoft's software to the plaintiffs "likewise paid too much" for the products. "This is the death knell to [the] plaintiffs' claims, since the very purpose of the Illinois Brick rule is to prevent indirect purchasers . . . from recovering any portion of a passed-through overcharge," he added."
Microsoft had asked Motz to dismiss the cases in question last summer. Company spokesman Jim Cullinan Friday claimed that the suits weren't filed "to benefit the consumer," but the attorneys who he asserted "were clearly just going after a successful company."
Motz also said the plaintiffs lacked sufficient evidence that Microsoft had "intended to cause harm to consumers -- and succeeded in doing so -- by excluding improved products from the market." That sort of damage is "insufficient" to give the plaintiffs legal standing to make complaints against the company, he added.
The class-action suits were spawned by U.S. District Judge Thomas Penfield Jackson's ruling last year that Microsoft had violated federal antitrust laws. Altogether, more than 130 class-action suits were filed in various state and federal courts by plaintiffs claiming that desktop operating system monopoly found by Jackson had led users to pay inflated prices for Microsoft's software.
All the federal suits were consolidated before Motz, and Friday's ruling still leaves open 24 cases that were filed in states with laws that allow claims against third-party suppliers.