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Let the distribution begin. The California Supreme Court on Wednesday let stand a trial court settlement requiring Microsoft Corp. to pay out about $1.1 billion in vouchers that 14 million Californians can use to purchase computing products of all types. The high court’s 5-2 decision to deny review in Microsoft v. Jakob, S141268, also opens the doors to the release of more than $112 million in attorneys fees to about 30 law firms. Only Justices Ming Chin and Carol Corrigan voted to grant review. “We can now go about implementing the settlement, which has been held up for quite a while,” Heller Ehrman partner Jessica Pers, who represented Microsoft, said Wednesday. In settling the class action in January 2003, Microsoft had agreed to pay out vouchers to any Californians who had bought its software from other companies between 1995 and 2001. Two-thirds of unclaimed funds were to be allocated to schools for underprivileged children in the form of “general purpose” or “software vouchers.” But one objector, Sacramento lawyer Charles Jakob, held up the settlement by objecting to the so-called cy pres distribution in which the class members who brought the suit got no monetary proceeds. He argued that state statutes required the distribution of unclaimed funds and that handing out vouchers would have no deterrent effect on Microsoft. In their underlying suit, class members had claimed that “exclusionary and restrictive practices” by Microsoft had resulted in software overcharges and the loss of a competitive market for software. San Francisco’s First District Court of Appeal brushed off Jakob’s objections on Jan. 9 and upheld the settlement in a 27-page ruling. Jakob couldn’t be reached for comment on Wednesday. But in his petition for review, he argued that class members “should get more from antitrust class action attorneys receiving handsome compensation, especially when, with the possible exception of lead counsel, the plaintiff firms seemed to see the litigation against Microsoft as nothing but an arbitrage opportunity.” Jakob also noted that the appellate court’s ruling had been considered by some as “government for sale.” “It is a fair bet a sizeable portion of the public believes defendant’s wealth is giving it the ability to ‘buy’ justice through a payoff to the California government,” he wrote. “Even assuming the best intentions by the defendant, this case is startling.” Microsoft and the lead plaintiffs’ lawyers at Townsend and Townsend and Crew filed separate briefs, asking the high court to deny review and let the settlement stand. Pers noted that the First District’s ruling was “fully consistent with relevant case law” and legislative history, while Townsend partner Richard Grossman argued that Supreme Court review wasn’t warranted. “[Jakob] has not identified any unsettled, important question of law,” Grossman wrote. “[Jakob] simply disagrees with the current state of the law and is improperly petitioning this court, rather than the Legislature, to change it.” In a telephone message, Grossman, who with Townsend partner Eugene Crew had worked on the case for about seven years, said he was “gratified” by the court’s action. “We look forward to a day in the very, very near future,” he said, “where we’ll be able to begin to distribute the settlement benefits that the class has been waiting for during this extended appeal period.” According to earlier reports, Townsend alone was eligible for about $33 million in attorneys fees.

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