Microsoft challenges attorney fees in Iowa case

Microsoft Corp. is disputing lawyer fees for the plaintiffs in class action suits against the software company in Iowa and Wisconsin.

In both cases the parties agreed to a settlement that included the plaintiff's attorney fees up to a certain amount. In the Iowa case, that fee was US$75 million, said Rich Wallis, associate general counsel for Microsoft. However, in late April during a preliminary hearing on approval of the settlement, the lawyers for the plaintiffs asked for $75.5 million. "Which was kind of shocking," Wallis said. "Because they had an explicit agreement that they wouldn't ask for more."

Microsoft also recently had a fee dispute with the same lawyers for a similar case in Wisconsin. In that instance, Wallis said it became clear that the firm was charging for work that was done on the Iowa case, not the Wisconsin case. Included in the fee were charges related to a deposition taken in connection with the Iowa trial at the time that the Wisconsin case was essentially settled, he said.

That made Microsoft begin to wonder if the firm might be charging it repeatedly for the same work. "You can only collect for one hour's work once. You can't work on multiple cases and say bill the hour in Iowa and Wisconsin," he said.

Microsoft has asked for backup information on the fees in both cases so that it can determine whether it thinks the fees are fair. The court in Wisconsin has already approved Microsoft's request to investigate the matter.

"It's our view that court needs to know the facts and then the court will make determination of what's reasonable," Wallis said. Microsoft is now asking for a similar discovery process regarding the fees in Iowa.

Microsoft agreed to settle the Iowa suit in February, pledging to pay up to $179.95 million to Microsoft software customers.