Judge Kills Class-Action Status in 'Vista Capable' Suit

A federal judge late Friday refused to restore class-action status to the Vista Capable lawsuit, handing Microsoft Corp. its second major victory in the case in the last two months.

U.S. District Court Judge Marsh Pechman denied a motion by the plaintiffs to recertify a smaller group of consumers in the suit that has accused Microsoft of misleading PC buyers in 2006-07 by letting computer makers slap the "Vista Capable" sticker on machines that could run only Home Basic.

Her order was the second since Feb. 18 denying class-action status to the lawsuit, and limits the plaintiffs' options to appealing her decision or moving forward with a trial of the half-dozen individual claims.

It was also the second time in as many months that Pechman's ruling went Microsoft's way. By rejecting class action status, Pechman again narrowed the pool of potential plaintiffs from thousands to the six now involved. That, in turn, would dramatically slash Microsoft's financial exposure -- which had been estimated as high as $8.5 billion -- if it eventually loses the case.

On Friday, she dismissed plaintiffs' arguments to grant class-action status to two new groups: people who had purchased PCs during Microsoft's Express Upgrade program and those who bought Vista Capable machines that wouldn't run the new operating system's Aero graphical user interface.

"Plaintiffs proposed Express Upgrade class suffers from the same flaws as its original deception-theory based Vista Capable class," Pechman wrote in her order, referring to the upgrade program Microsoft ran with its OEM partners from October 2006 to March 2007 to give PC buyers free or discounted copies of Vista. "As before, Plaintiffs underlying claim is that they were deceived by the Vista marketing campaign. Because evidence relating to each Plaintiffs' consumer choice is not amenable to class-wide analysis, an Express Upgrade class is inappropriate."

She also rejected the plaintiffs' move to create a new class out of consumers who bought Windows XP systems that later would be able to run only the lowest-priced version of Vista, Home Basic. For much of the two-year-old case, lawyers for the plaintiffs have argued that because Home Basic lacked many of the flashy features Microsoft had promoted in Vista -- most importantly, the Aero interface -- it was not really Vista.

"[Plaintiffs' claims] all center on the claim that computers lacking WDDM compatibility cannot achieve full Vista Basic functionality," said Pechman. "This is only potentially deceptive in the contest of Microsoft's 'Vista Capable' label. Without the label there is nothing deceptive or unfair about selling non-WDDM compatible computers. Because the fulcrum of Plaintiffs' claim is the label and because the label is most accurately characterized as an affirmative representation, Plaintiffs case does not 'primarily' allege omissions."

WDDM, or Windows Display Driver Model, is the display driver standard Microsoft introduced in Vista. The new standard has played a prominent part in the case; Internal Microsoft e-mails released by the court revealed arguments within the company before it decided to ditch WDDM as a requirement for Vista Capable PCs. Other insider e-mails showed that Microsoft seemed to relent on the WDDM requirement because of pressure from Intel Corp., which during 2006 was still selling large numbers of graphics chip sets that could not handle Vista drivers, though they could run Windows XP's.

The plaintiffs have claimed that Microsoft kept the decision to ditch WDDM a secret from consumers, who then could not know that some of the PCs with Vista Capable labels would not be able to run the new operating system's full feature set. Microsoft has countered that it made clear to potential buyers that Home Basic would omit some features that would be included in the more expensive editions.

Microsoft declined to comment Saturday on Pechman's order.

Previously, attorneys for the plaintiffs have said that they would appeal Pechman's decision to the U.S. Court of Appeals for the Ninth Circuit if it went against their clients. They were not available for comment today.

In her order, Pechman told lawyers for both parties to decide whether they wanted to reset a trial date for the six individual claims, or if they wanted to wait until an appeal is made and resolved.

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