TCS Daily


Lawyer Feeding Frenzy

By James Freeman - February 23, 2000 12:00 AM

American consumers are about to get hit with a new tax. And no legislature ever voted for it. Instead, millionaire lawyers are trying to impose this tax on everyone who uses Microsoft products.

The lawyers have swooped in to grab a ticket to the legal lottery known as the Microsoft anti-trust suit. The feeding frenzy began when a Federal judge issued findings accusing the company of monopolistic behavior.

Now, using the Judge's findings as ammunition, private attorneys are filing their own suits against Microsoft in various courts. Who are the clients in these private suits against Microsoft? You are, if you use any Microsoft software. Using a bizarre legal tool called the class-action suit, lawyers can represent millions of people they've never met and who don't even know they're involved in a court case.

If a lawyer can convince a judge to certify a case as a class-action, then the attorney gains the right to represent you, even without your consent. And that means that the lawyer has a powerful tool to force a settlement on the company. When the settlement deals in the Microsoft cases come down, expect to see large cash payments to the lawyers and small payments, possibly in the form of coupons, to each of the people they claim to represent.

These new Microsoft suits raise an interesting question: what is the purpose of a lawsuit, if not simply to enrich lawyers?

Let's assume that the government was right to sue Microsoft. Personally, I think it was dead wrong, but let's assume for a moment that Microsoft is really mean to all of us consumers and the free market can't do anything about it.

Even if you think that courts need to "fix" the software industry, why do we need the private suits? The government has already sued the company on behalf of consumers, and a Federal judge has largely bought the government's analysis.

As for the private attorneys, they didn't root out corporate wrongdoing, or find a poor victim whose case no one else would take. They didn't discover toxic sludge in a landfill. (The same goes for state attorneys general who filed copycat suits.) Even if you think that lawsuits are useful to punish corporations, the Federal suit is already serving that purpose.

So what is the purpose of the private suits, if not to enrich attorneys? The private suits have been filed by people like Stanley "The Master of Disaster" Chesley, who got rich on breast implant cases and air crash litigation. Now I guess he's an expert on software. On its website, his firm proclaims: "The work of Stanley M.Chesley and his select group of litigators has set a new standard in the legal profession." Notice they're not claiming it's a higher standard, just a new one. Lawyers are very careful with language.

Judging from recent history, settlements of the Microsoft cases would yield tens of millions of dollars to the plaintiff attorneys. If the company decides to settle, someone will have to pay that bill -- ultimately, the customer who buys Microsoft products.

Let's not pay the lawyer tax on software. No matter what you think of Microsoft, its customers shouldn't have to provide a payday for attorneys hopping on the anti-trust bandwagon. Judges should toss these cases out, and Congress should move class-action reform to the top of its agenda.

Check out James Freeman's weekly column for Forbes.com.
http://www.forbes.com/columnists/freeman/
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