Sometimes I will read a story, and put it aside to fully process it in my mind, or look into additional information, because it is more involved than a quick and simple reply.

A piece in Maximum PC, with the subject of class action lawsuits was like that, as I have seen, and participated in, a couple of these. One of them was as part of a class where I worked, selling cellular phones, phone plans, and accessories, and one involving Microsoft software. (Microsoft seems to have been involved in several of these.)

It does seem, through careful manipulation, that Microsoft has, several times negotiated itself into the very best position it could, actually giving up very little for a crushing defeat.

Class action lawsuits lately seem a dime-a-dozen. Someone, on behalf of a nebulously defined ‘harmed class’ is suing a manufacturer because diagonal screen sizes or hard drive capacities are misleading. The goal seems reasonable: rectifying a wrong done to a group of similarly situated people. But the end result seems little more than the manufacturer getting off the hook, a big pay day for a law firm, and the harmed class getting little more than a pat on the head.

Take for example Microsoft’s price-fixing case in Wisconsin. Microsoft was ordered to cough up $234 million to Wisconsin consumers and businesses, according to the settlement. The distribution was in the form of vouchers, with values dependent upon what Microsoft products were purchased. For example, if you had bought a copy of Office you’d get a voucher for $23.

Except, of course, the vouchers are redeemable only for Microsoft products. It would seem that purchasers got nothing of real value from the deal, while Microsoft made off like a bandit. You’d either buy more Microsoft product, for which you were over-charged in the first place, or round-file the voucher, saving Microsoft any expense, save the printing.

How useful are such settlements? No word is yet in on redemption in Wisconsin, but in a similar deal in California, where $1 billion in vouchers were distributed, fewer than one million of the 14 million vouchers were redeemed.

But, law firms don’t get vouchers for their work. They get cold, hard cash. In the Wisconsin case a Court of Appeals recently upheld a lower court’s order that Microsoft pay the law firm, Zelle, Hofmann, Voebel & Mason LLP, $5.6 million for their work in defending the interests of the harmed class. Not a bad payday, considering how their clients made out.

So the lawyers love this kind of suit, because they make out, no matter what. They are 90% certain they will achieve a good result, otherwise they would not be trying the case.

The claimants seem to get a good result, and, if the judgement is the point, then they win. However, I think it is a pyrrhic victory, because they have taken their time and effort, and their grievances, and put them at the door of the attorneys, and while they receive compensation, the compensation does little to harm Microsoft. Nothing has been done to remove the ability of Microsoft to do the same thing again, because it has done so, over and over.

What has not been done is to strike a blow (and after all, that is what this type of suit is trying to do) that will cause the offender to never do this again, and also show other would-be offenders that it is a bad decision to think they can get away with this behavior. Having Microsoft give money toward a purchase of more of their goods really does no good in the long run. The only way that lasting good could come is if Microsoft were forced to pay cash to the claimants. This would eliminate the uncertainty of the voucher method, and also the effect of rewarding Microsoft with more sales, albeit at a reduced profit. (Perhaps the best result, while not forcing Microsoft to give up dollars, would be for the company to have to send a copy of Windows 7 Ultimate and a copy of Office 2007 Professional to each of the claimants, effectively removing those possible sales for the near future.)

Truly striking that blow would seem to be an impossibility, as in each case, the offender seems to get off very cheaply. In each case the court always puts out a statement using terms like “not wanting to cause undue harm” to the party being sued. Until it is made clear that “undue harmis the only thing that will get through to companies like this, it will continue. The news has been full of cases such as this over the last year, led by the Intel-AMD suit. In the end, the fines and changes forced upon Intel really does little more than send a message. It does not deal the crippling blow that would make the company think three times before setting out upon a similar effort.

In what way does the public at large start getting results that are to its greater benefit? That seems to be the question of this age, for in each of these cases, far too much care is taken to not overly punish the offender, at the expense of the public. I fear that as long as lawyers work for money, it will continue to be the way things flow.


And in the end it’s not the years in your life that count. It is the life in your years.

Abraham Lincoln

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