Attorneys who pursued a class action lawsuit against Microsoft
Corp. could see a record payday in Iowa if the settlement gets final
approval in Polk County District Court today.
Des Moines attorney Roxanne Conlin and Richard Hagstrom, an
attorney with a Minneapolis law firm, are seeking $75 million in
fees and costs, an amount believed by some legal experts to be a
record in the state.
The lawsuit was filed in 2000 and has gone to the Iowa Supreme
Court three times for various legal issues.
The lawsuit sought more than $330 million on behalf of Iowans who
bought Microsoft computer software between 1994 and 2006. The
lawsuit claimed Microsoft engaged in anticompetitive conduct that
caused customers to pay more for software than they would have if
there had been competition.
Microsoft settled the Iowa case for $179.95 million in April.
In court documents, Conlin and Hagstrom justify the amount of
their compensation by saying they obtained a "unique" settlement for
Iowans. The Iowa case includes significant cash payments while most
other state settlements provided vouchers for computer equipment.
The estimated settlement amount per resident -- $61.49 -- is higher
than that of any other state, Conlin and Hagstrom said in court
papers.
"In light of the complexity and difficulty of the case and the
excellent result obtained, the proposed settlement is fair,
reasonable and adequate, and therefore deserves final approval,"
they wrote in their motion for approval.
Conlin said the law firms involved had $8 million in costs
invested in the case and 117,000 hours of work over seven years. The
payment, in part, compensates law firms for the risk, she said.
"We took the risk of walking away $8 million in debt," she said
Thursday in a telephone interview.
The fee request has prompted eight Iowans to file letters of
opposition with the court.
Betty Klingenborg of Parkersburg compared the $26 she would get
from the court settlement to the attorney fees of $75 million.
"How in the name of all that is sacred can you even imagine that
to be equitable?" she wrote in her letter stamped by the court on
June 7. "I also do not like how this makes Iowa look. Where will
these lawsuits end?"
Mike DeWitt of Gladbrook, in a letter stamped May 31, called the
attorney fees "an obscene amount of money to pay to Roxanne Conlin
for bothering the court with this witch hunt."
Conlin said she's surprised only eight objections were filed. She
passionately defends class action cases.
"It's a very important legal device to permit people to get
justice when what's at stake for each individual may be very small,"
she said.
Although Microsoft has agreed not to protest the $75 million fee
in Iowa, Judge Scott Rosenberg has the final say in whether to
accept it. He has scheduled the final settlement hearing in the case
for today in Polk County District Court in Des Moines.
Hagstrom, who also filed a similar lawsuit against Microsoft in
Wisconsin, is seeking $24 million in fees there. Hagstrom's case was
one of three filed against Microsoft in Wisconsin. Attorneys for the
other two clients, which had filed their cases more than three years
prior to Hagstrom and obtained class action certification, accepted
$5 million each in fees.
Hagstrom did not obtain class action status and continues to seek
$24 million. Microsoft is aggressively fighting back.
At that amount, Hagstrom and a colleague would each be paid
$4,702 per hour, Microsoft wrote in court documents.
"This is grossly excessive by any measure, and truly proves the
maxim that human greed has no bounds," the company's attorneys said
in the document.
Microsoft has challenged the 6,820 hours Hagstrom and others at
the law firm claimed to have spent in the Wisconsin case, saying it
is nearly impossible for the lawyers to have spent even 20 percent
of that time on the lawsuit.
Many of the documents filed in the Wisconsin case are being kept
secret at Hagstrom's request.
At a hearing Aug. 25, rulings published by Judge Richard
Sankovitz suggest that Microsoft continues to question some of the
timekeeping entries submitted by Hagstrom and his legal team.
The judge said he would not permit expert testimony on the legal
fees or the ethical implications of changes made in the timekeeping
entries filed by Hagstrom's legal team.
"The parties are free to argue any inferences the court should
draw from such editing," he said.
Sankovitz set the next hearing in the Wisconsin case for Sept. 5.
Conlin, who had sought $2,812 for 3.75 hours of work on the
Wisconsin case, has dropped her request for payment there, she said.
Conlin and attorneys from Hagstrom's firm, Zelle, Hofmann,
Voelbel, Mason & Gette, also represented plaintiffs in a similar
Microsoft lawsuit in Minnesota.
Attorney fees of about $48 million were approved in that case,
which was settled for $174.5 million.
Microsoft attorney Rich Wallis said Wednesday that the company
was pleased to resolve the three lawsuits in Wisconsin and
successfully reach an agreement with attorneys in two of the cases.
"The lawyers in the third case have demanded an amount far in
excess of what the other two lawyers were paid together," Wallis
said. "We think it's wildly excessive and we've objected. The court
will decide reasonable attorneys fees."
Calls to Hagstrom on Thursday were not immediately returned.
In the Iowa case, customers who bought Microsoft Windows or
MS-DOS can claim $16 for each copy. Microsoft Excel is worth $25 a
copy and Microsoft Office, $29 a copy. For Word, Works and Home
Essential software, consumers can claim $10 a copy, according to the
agreement.
The claim period for the estimated one million class members ends
Dec. 14.
By mid-August, slightly more than 61,000 Iowans had filed claims.