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Vista Class Action Reaches End of the Road

Judge denies amended class, prohibits additional filings

By Jon Hood
ConsumerAffairs.com

April 13, 2009

The long-running suit alleges that Microsoft allowed computer manufacturers to label machines as “Vista capable,” thereby leading consumers to believe that the computers were capable of operating any version of the Microsoft operating system. In fact, according to the suit, the machines were only compatible with Vista Basic, which lacks a number of features included in higher-priced versions.

A little over a month ago, Judge Marsha Pechman decertified the original class of plaintiffs, which had originally been certified in February 2008. In that ruling, which initially seemed like a death blow for the suit, the judge ruled that the plaintiffs had not proven that Microsoft’s labeling computers as “Vista capable” had increased demand for the machines.

The plaintiffs pled a “price inflation” theory, which essentially alleged that, by allowing computers to be labeled “Vista capable,” Microsoft drove up demand for the machines and caused consumers to pay more than they would for a computer only able to run Vista Basic. While the class was originally certified on the condition that the plaintiffs prove class-wide causation, their failure to do so led to Pechman’s order stripping the class a year later.

That ruling was a major blow, given that attorneys for the class had estimated Microsoft’s potential liability at $8.5 billion just a few weeks earlier.

Refusing to throw in the towel, the plaintiffs refiled, alleging a more narrowly-defined class that they said would solve any problems with causation. This amended class included two distinct groups: consumers who bought their computers through a program that allows owners of XP-equipped machines to upgrade when Vista became available, and those whose computers didn’t support advanced Vista graphics.

In her latest decision, Pechman ruled that the newly-defined class suffers from the same causation-based flaws that led to the February decertification. Pechman wrote that because the plaintiffs’ “underlying claim is that they were deceived by the Vista marketing campaign,” each class member would have to prove that the campaign was the cause of his purchase, making a class action so costly and time-consuming as to render it impossible.

Pechman specifically constrained the plaintiffs’ options going forward to either appealing her decision, or proceeding with individual suits on behalf of the six named plaintiffs. This prevents the plaintiffs from narrowing the class even further, and effectively renders the class action dead in the water unless Pechman is overturned on appeal.

In statements made before the latest ruling, attorneys with Gordon Murray Tilden LLP, which represents the plaintiffs, said that they would appeal an adverse ruling to the Ninth Circuit Court of Appeals.

Individual suits would have a much better chance of succeeding, since each plaintiff could presumably show that he or she bought the computer because of its status as “Vista capable.” While this might be of some comfort to the named plaintiffs, damages resulting from these suits would be negligible, especially when compared to the billions of dollars that plaintiffs for the class had hoped to recover.

One of the main justifications for a class action lawsuit is that damages for each plaintiff are small enough to make individual suits futile, since the time and money spent prosecuting them may exceed the amount eventually recovered. For this reason, unless plaintiffs’ appeal is successful, Microsoft is unlikely to pay much of a price for the Vista marketing campaign.

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