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Business Impact

Microsoft to challenge $75.5M attorney fee in Iowa class-action lawsuit

DES MOINES, Iowa (AP) – Attorneys representing Microsoft Corp. in an Iowa class-action lawsuit said Thursday they plan to challenge the $75.5 million in fees and expenses sought by plaintiffs’ attorneys.

Microsoft attorney Rich Wallis said the company had agreed to pay attorney fees of up to $75 million. He said he was surprised when lawyers Roxanne Conlin of Des Moines and Richard Hagstrom of Minneapolis said at an April 19 preliminary settlement hearing that their request would exceed that by $500,000.

In class action cases, attorney fees are approved by the judge separately from the settlement and paid by the company in addition to the settlement amount.

The Iowa case was filed in Polk County District Court in Des Moines in 2000, accusing Microsoft of monopolistic and anticompetitive conduct that caused customers to overpay for software.

The case went to trial on Nov. 13, 2006. Attorneys announced on Feb. 14 that they had agreed to a $179.95 million settlement.

Wallis said the decision to challenge attorney fees came as the company fights the same group of attorneys over fees in a similar case in Wisconsin, which was settled before trial.

Conlin and Hagstrom also represented plaintiffs in a similar Microsoft lawsuit in Minnesota.

They received about $48 million in fees in Minnesota and are seeking $24.1 million in fees and expenses in Wisconsin for just a few weeks work, Wallis said.

Microsoft attorneys, looking through billing documents in the Wisconsin case, became concerned that they might be getting billed twice for the same work.

”They don’t get to work an hour and bill that hour to Iowa, Wisconsin and Minnesota,” Wallis said. ”Based on what little we’ve seen in Wisconsin, we felt the need to step back and see what the plaintiffs are really claiming in each of these cases for attorney’s fees.”

Wallis said Microsoft is now seeking documentation from the law firms of Conlin and Hagstrom in both Wisconsin and Iowa cases.

In court documents filed in the Wisconsin case, Microsoft called the fee request ”grossly excessive by any measure, and truly proves the maxim that human greed has no bounds.”

Hagstrom said Thursday that Wallis knows the law firms have not billed the same time in more than one state.

”It’s ludicrous. He knows that’s false and defamatory,” Hagstrom said. ”We have a written agreement. They’ve agreed to pay $75 million. That’s what we’re asking for and no more.”

Conlin said the additional $500,000 sought in the Iowa case was billing for a company that had prepared a database for their case.

She said she hoped the issue would be resolved without the need to dig through seven years of billing records.

”I think this may be the result of a misunderstanding,” she said. ”We think we can work this out without too much difficulty.”

She said 150 lawyers worked thousands of hours and the firms invested $50 million in the Iowa case.

”Consumers in Iowa are getting $180 million. It took us seven years and tens of thousands of hours, all of which was done on contingency,” she said.

Conlin said she had little involvement in the Wisconsin case and was seeking compensation for just a few hours work there.

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