California Class Dismissed

UPDATED: A federal judge dismissed a suit filed by five California governments on Monday, leaving the door open for an amended complaint.

The City and County of San Francisco, the County of Santa Clara, the City and County of Los Angeles, the County of San Mateo and the County of Contra Costa alleged that, 15 years ago, Microsoft began to engage in monopolistic practices that led to higher prices for its software. The suit had similar complaints to the separate class action suit that led to a $1.1 billion settlement with Microsoft in January 2003.

But both the Cartwright Act and the Unfair Competition Law have four-year statutes of limitations. The plaintiffs argued that the limitations didn’t apply, but U.S. District Judge J. Frederick Motz disagreed.

Microsoft also argued that the Unfair Competition Law didn’t apply to transactions with government entities, and the judge agreed.

The five California cities and counties sued Microsoft in August 2004, charging violations of two different laws: the Cartwright Act and the Unfair Competition Law. They sued not only on behalf of themselves but also on behalf of all other California governmental entities.

Microsoft asked the judge to dismiss all charges, and he did so on Monday.

However, the Californians alleged that Microsoft continued the practices in question, so the judge granted them leave to amend the complaint to include only damages they allege to have suffered in the last four years and only under the Cartwright Act.

“Today’s decision granting Microsoft’s motion to dismiss is welcome news,” Microsoft spokeswoman Stacy Drake said in an e-mail. “We look forward to continuing to work with California government agencies to help deliver technology solutions to their communities.”

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