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MIAMI — A group of national law firms that failed to recover significant damages in federal antitrust suits against Microsoft is demanding a cut of the $15.5 million in fees awarded to plaintiffs lawyers in a Florida class action against the software giant. During oral arguments Thursday before the state’s Third District Court of Appeal in Miami, a Washington, D.C., lawyer representing 31 law firms involved in the federal litigation against Microsoft argued that they should share in the attorneys fees awarded in the Miami-Dade Circuit Court action. The lawyer, Daniel Small, argued that the firms he represents are entitled to fees in the $200 million settlement of the Miami-Dade class action because the Florida lawyers relied on documents, expert reports and depositions they had collected for the federal cases. “We’re not asking for a free ride,” said Small, a partner at Cohen, Milstein, Hausfeld & Toll in Washington, D.C., one of the firms involved in the federal litigation against Microsoft. “There was a tremendous amount of work done and they benefited from it.” But the three-judge panel of the Third District seemed unsympathetic. “You got paid for your case in federal court and now you want to get paid for their case?” Judge Juan Ramirez Jr. asked. “How is that fair?” The lawyers in the federal case did not have retainer agreements with any of the Florida class members or a written agreement to share fees. But Small argued that his clients are entitled to recovery under the theory of quantum meruit, which enables a party to receive payment for a benefit he or she provided even when there wasn’t a written contract with the recipient. But Coral Gables, Fla., lawyer Robert Parks, arguing on behalf of the law firms that handled the Miami-Dade class action, said Florida Bar rules prohibit lawyers from sharing fees without written permission from their clients. The Miami-Dade suit, filed in 1999 on behalf of Florida consumers, alleged that the Redmond, Wash., software maker used monopoly power to kill competition in the operating systems and software markets and charge customers inflated prices. In April 2003, Microsoft agreed to pay $200 million to resolve a class action brought on behalf of millions of Florida consumers alleging that it had violated the state’s Deceptive and Unfair Trade Practices Act. As part of the settlement, Microsoft agreed to pay all reasonable attorneys fees and costs “to counsel for the Florida settlement class.” After a four-day hearing last month, Miami-Dade Circuit Judge Henry Harnage awarded the seven firms that handled the Miami-Dade suit $15.5 million in attorneys fees. The plaintiffs team included five out-of-state firms from New York, San Francisco, Alabama and Texas, as well as two South Florida firms. In December, the attorneys in the federal cases filed a motion to intervene in the awarding of attorneys fees. But the motion was denied by Harnage. The lawyers appealed Harnage’s ruling to the Third District. The Miami-Dade class action was one of 130 cases filed against Microsoft in state and federal courts across the country after the U.S. Department of Justice sued Microsoft for violating federal antitrust law in 1999. The Justice Department settled a major antitrust case with Microsoft in 2001. But the remaining federal and state actions filed by private firms on behalf of competitors and consumers of Microsoft’s software and operating systems continued. In April 2000, the federal cases were consolidated into one suit and assigned to Chief Judge J. Frederick Motz of the U.S. district court in Maryland. Because of the complexity of the cases, Judge Motz entered an order in which the law firms in all of the state and federal actions agreed to share all discovery, expert reports and depositions to prevent redundancy. The materials were placed in an Internet-based depository so that everyone had access to the information. In the consolidated federal case, most claims were dismissed and two requests for class certification were denied. In April 2003, a small class was certified. Five months later, Microsoft and the plaintiffs lawyers settled the case for $10.5 million. The lawyers were awarded an additional $10.5 million in attorneys fees. On Thursday, Microsoft lawyer Daryl Libow told the Third District panel that because they had fared so poorly in federal court, the federal lawyers sought a cut of the attorneys fees awarded in the state actions. “The federal lawyers were spectacularly unsuccessful and only got one small class certified,” said Libow, a partner at Sullivan & Cromwell in New York City. “They weren’t satisfied with the fees, so they started roaming the country to see if they could get more.” Last month, state court judges in Tennessee and North Carolina denied motions filed by the lawyers in the federal case to collect a portion of attorneys fees awarded in Microsoft settlements in those states. Parks told the Third District that the motion to intervene in the Miami-Dade case should be denied as well because there was nothing in writing either with the Florida class members or their lawyers that entitled the lawyers from the federal cases to share the attorneys fees. On rebuttal, Small tried to explain that his clients didn’t need a written contract under the theory of quantum meruit. But Chief Judge Alan Schwartz shut him down. “You just don’t get it,” Schwartz told him. “Should I continue, your honor?” Small asked. “That’s up to you,” Judge John Fletcher interjected. “Well then, I think I’ll sit down,” Small said. Laurie Cunningham is a reporter with the Miami Daily Business Review , a Recorder affiliate.

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