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Court Rules in Favor of Microsoft

April 8, 2002

A Connecticut consumer didn’t have the right to sue Microsoft Corp. in state court alleging anticompetitive conduct, because the harm to him was too remote and indirect, the state Supreme Court ruled Monday.

The court tossed out the lawsuit filed by Andrew Vacco of Wallingford, who claimed a Microsoft monopoly forced him to pay too much to have the Windows operating system installed on his computer.

Vacco chose to sue in state court rather than join a federal class-action lawsuit because he believed that Connecticut law allowed individual consumers to sue, said Ben Solnit, Vacco’s attorney. A U.S. Supreme Court decision prohibited such suits in federal court, he said.

Attorney General Richard Blumenthal, who had supported Vacco, said the ruling showed the need for stronger laws so that consumers can recover damages whether they buy a product directly from a manufacturer or through a retailer.

The ruling does not affect a lawsuit against Microsoft by Connecticut and other states in Washington, D.C., Blumenthal said.

James Sicilian, an attorney for Microsoft, said there are several similar claims against Microsoft in different states by consumers. Microsoft denies the allegations, he said.

``This is the first of the Microsoft cases to have gone to the highest court in a state,″ Sicilian said. ``I’m very happy and particularly gratified that it was a unanimous ruling by the Connecticut Supreme Court.″

Vacco bought an Intel computer in September 1999 from a Staples store in Wallingford. He entered an agreement with Microsoft specifying that the company’s Windows 98 software, which was preinstalled in the computer, was licensed, rather than sold, to him.

Vacco’s lawsuit alleged that Microsoft wielded monopoly power in the computer operating systems market by licensing its Windows 98 system at a higher price than it would have been able to charge in a competitive market.

But the high court upheld a lower court decision that Vacco, as an indirect purchaser of Microsoft’s software, is barred from bringing a claim under the Connecticut Unfair Trade Practices Act or state Antitrust Act because his alleged injuries were too remote from Microsoft’s conduct.

The court cited ``numerous links″ between Microsoft’s conduct and the consumer’s alleged harm, including manufacturers and retailers. The court said awarding damages in such cases would lead to a ``quagmire″ in which courts would be required to adopt complicated rules apportioning damages involving different levels of injuries.

The court said state law was designed to mirror federal law, which bars an indirect purchaser from making such claims.

``The plaintiff’s complaint is bereft of any facts tending to demonstrate that the plaintiff’s injuries were a direct result of the defendant’s conduct,″ the court said.

The court cited a similar ruling it issued against the city of Bridgeport when it sued manufacturers of firearms for costs associated with gun-related deaths.

The court said in that case the city lacked standing to sue because its injuries were too remote from the defendants’ conduct.

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