Microsoft Asks Court to Intervene in Massachusetts Legal Fee Dispute

As expected, Microsoft is refusing to pay the legal fees incurred by the State of Massachusetts during its pursuit of the software giant in Microsoft's antitrust case. Before any of the states allied against the company had agreed to settle the case, Microsoft notified them that it would only pay legal fees for the states that did settle, though there is no clear legal precedent defining what fees a settling entity must pay. Massachusetts and West Virginia are the only two states that ultimately turned down the Microsoft settlement, and both states are appealing the settlement. Now, Microsoft is complaining that Massachusetts kept inadequate records during the case, and the company is asking US District Judge Colleen Kollar-Kotelly to deny Massachusetts at least some of its fees.

Massachusetts had requested $1.8 million from Microsoft, to cover the costs of lawyers and other legal fees. And though the company says the state is entitled to no fees, Microsoft suggested in a legal filing late last week that it would award the state between $158,569 and $177,598 to cover these fees. Because Microsoft had already warned Massachusetts that it would challenge any fees claim, a spokesperson from Attorney General Thomas Reilly's office said the response wasn't unexpected. ''We will respond directly to the court next month in our own filing," the spokesperson said.

Microsoft says that Massachusetts' legal fees should be cut drastically for three reasons. First, the state "won little" in its claim that the software giant violated antitrust laws by harming competition, and odd claim given that this is exactly what Microsoft was found guilty of. Second, the state "won nothing," remedy-wise, for the claim that Microsoft unlawfully maintained its Windows monopoly. And finally, Massachusetts allegedly failed to keep accurate time records for its lawyers, relying instead on estimates.

Not coincidentally, Microsoft is also asking the court to consider sharp cuts in the legal fees sought by West Virginia, the other remaining non-settling state. However, cash-strapped West Virginia incurred far lower fees than most of the other states. The Massachusetts and West Virginia appeal of the Microsoft decision will proceed in early November.