Posted on 12/19/2001 11:03:50 AM PST by GeneD
NEW YORK - Microsoft's settlement of the private antitrust actions filed against it "makes a mockery of class actions" because it deliberately fails to compensate plaintiffs and is likely to be rejected by the court perhaps in the next couple of days.
The "mockery" comment comes not from Microsoft, nor from a critic of class-action lawsuits, but from a plaintiffs' lawyer involved in the case against the software colossus. The proposed settlement has deeply divided the class-action bar itself. Attorneys representing plaintiffs in the case have weighed in with powerful objections to the idea of settling the case by having Microsoft give computers and software to needy schools. They have urged Maryland federal court judge J. Frederick Motz to reject it and start all over.
The proposed settlement raises questions about how class actions are prosecuted. There are always issues of whether class-action lawyers truly serve the interests of class members; but those questions become sharper in this case, where none of the relief is going to class members.
Most of the discussion of the settlement plan so far has focused on objections by Apple Computer, Red Hat, Linux advocates and others, who say that the plan will only help Microsoft extend its monopoly by gaining strength in school systems, where Apple remains the leader.
But plaintiffs' lawyers raise more fundamental problems. They say the lead lawyers on the case tricked others into signing off on a proposal that serves the Microsoft public-relations engine and lawyers' egos, but their clients not at all. They also say the lawyers who negotiated the settlement failed even to calculate damages to the class members they represent.
Jim Dessler, a Microsoft spokesman, calls the deal "reasonable, fair, even generous," and adds, "This is the chance to do something positive in the context of litigation." He says the case that led to the settlement is worthless anyway, as Microsoft never overcharged anyone.
The latter statement is what one might expect a defendant to say; what's surprising is the lead plaintiffs' lawyer agrees. Stanley Chesley, a Cincinnati lawyer leading the charge for the settlement, now says many computer makers "threw the software in" when they sold the machines at retail. Larger companies or organizations may not make a claim at all. And if there are no damages, any settlement looks better.
In a joint statement issued on Nov. 20, Microsoft and a committee of plaintiffs' lawyers described the deal: "Microsoft will provide more than $1 billion in cash, training, support and software to help make computer technology more accessible to public schools serving nearly 7 million of America's most economically disadvantaged children."
Others say the deal, in which Microsoft will provide refurbished computers and its own software as well as cash, is worth much less. However, Michael Hausfield, one of the lead lawyers pushing the settlement, says it's actually worth even more: $1.6 billion, or maybe $3 billion to $4 billion if the school children get laptops that they can bring home and let their parents use.
But the real point is that the deal will benefit schools, which may be a good idea, but one that that has nothing to do with the case; consumers who supposedly suffered--how much, if at all, is unproven--get zip.
Lawyers objecting to the settlement say the proposal is flawed also by the fact that it treats all plaintiffs alike, no matter where they reside. But the law is different in different states, making claim values vary widely. Some state laws, like federal law, permit recovery in antitrust cases only for "direct purchasers" of a monopolist's product. Others, such as California, allow recovery by indirect purchasers. Thus a plaintiff who bought Microsoft Windows software along with a computer made by Dell or IBM still has a viable claim. As a result, California lawyers have been particularly vocal in opposition to the settlement.
The settlement assures, of course, that all claimants get nothing. It's not unusual for part of the relief in class action to be what lawyers call cy pres, which means "near to." For instance, if some members of a class cannot be found and there is money in a settlement left over, the leftovers might be given to a charitable fund that comes close to the interests of the class members. it is unusual, however, for a case to be settled on a cy pres basis without even attempting to compensate the plaintiffs directly, objecting lawyers say.
Objecting lawyers contend also that the lawyers who negotiated the deal with Microsoft had made no real effort to assess the amount of damages. The committee members "admitted they had no...figure and therefore, it did not matter to them whether potential damage figures were $5, $10, or $20 billion," says one court filing.
Hausfield rejects his colleagues' particular complaints. He calls the general idea that the entire settlement makes a farce of class actions "absurd." The other lawyers don't get it, he says, because "Their kids already have computers."
Gee, ya think it's becoming too obvious?
You mean the settlement must also supply relief to the plaintiffs? Not just enrich the lawyers?
What a concept!
The lawyers consider their cut a "mockery", the lawyers want to milk this cash cow a lot more.
Our legal system is a joke! Lawyers are only for themselves, no one else!
Who supposedly won this case?
Class actions make a MOCKERY of the Judicial System!!! The only people who win these cases are the attorneys.
Oh, I get it - This lawyer was tricked by a lawyer on his own side - ergo, the settlement must be voided.
"There are always issues of whether class-action lawyers truly serve the interests of class members; but those questions become sharper in this case, where none of the relief is going to class members."
Gee, ya think it's becoming too obvious?
You mean the settlement must also supply relief to the plaintiffs? Not just enrich the lawyers?
What a concept!
To add insult to injury...
"But the real point is that the deal will benefit schools, which may be a good idea, but one that that has nothing to do with the case; consumers who supposedly suffered--how much, if at all, is unproven--get zip."
And this little gem goes on to further The Point...
"Objecting lawyers contend also that the lawyers who negotiated the deal with Microsoft had made no real effort to assess the amount of damages. The committee members "admitted they had no...figure and therefore, it did not matter to them whether potential damage figures were $5, $10, or $20 billion," says one court filing."
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