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California public entities failed to file their antitrust suit against Microsoft Corp. within the statute of limitations, a Maryland federal court ruled Monday. While U.S. District Judge J. Frederick Motz granted Microsoft’s motion to dismiss the suit, he gave the public entities — led by the city and county of San Francisco and Santa Clara County — a chance to amend their complaint to limit their request for damages to a four-year period. They had sought damages going back to 1990. “We’ll plead with greater particularity the conduct we alleged more generally,” said the plaintiffs’ attorney, Eugene Crew, of Townsend and Townsend and Crew. “We’re happy to do that.” Microsoft settled a California consumer class action in January 2003, agreeing to pay $1.1 billion in vouchers. Excluded from the settlement, the public entities filed their own action against Microsoft in August 2004. They claimed that they, too, had been denied competitive prices and a free choice of software as a result of Microsoft’s anti-competitive behavior and demanded monetary damages rather than vouchers. The case was filed in San Francisco Superior Court but then moved to Baltimore federal court, which is handling all multidistrict antitrust litigation against Microsoft. The plaintiffs argued they were exempt from the statute of limitations under a doctrine that exempts a sovereign from the statute unless the Legislature specifies otherwise. Counties and municipalities have only been able to apply this doctrine “in cases where they are seeking to vindicate their public rights (as opposed to their private rights), such as recovering public land to which they hold title,” Motz wrote. “In this case it is clear that the rights plaintiffs are seeking to assert are private in nature.” Microsoft also had argued that governmental entities had no standing to file suit under California’s unfair competition law. Motz said the law was unclear on that point, but he came down on Microsoft’s side. “Just as counties and municipalities cannot be used under the UCL [unfair competition law], so, too, they cannot file suit under the statute,” the judge wrote. But he said the plaintiffs could amend their complaint to pursue the claims under a California antitrust law, the Cartwright Act. Microsoft said it was pleased with the court’s ruling. “Today’s decision granting Microsoft’s motion to dismiss is welcome news,” said Microsoft spokeswoman Stacy Drake. “We look forward to continuing to work with California government agencies to help deliver technology solutions to their communities.”

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