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By | Cade Metz 15th October 2007 23:28

Supremes ignore appeal from Microsoft and Best Buy in gangsta case

Arm 'thermonuclear device'

The US Supreme Court has refused to dismiss a lawsuit that accuses Microsoft and Best Buy of behaving like gangsters.

No, this isn't the case where the Best Buy lawyer admitted to cooking court documents. But you're close.

There are two suits that accuse Microsoft and Best Buy of behaving like gangsters - one in federal court and one in state court - and both were brought by the same legal team.

Today, the Associated Press reports, the Supreme Court refused to dismiss the federal version of Odom v. Microsoft, a civil suit originally filed in 2003 by a northern California man who says that Microsoft and Best Buy tricked him into paying real money for MSN.

The suit claims that the two companies violated the Racketeer Influenced and Corrupt Organizations Act by conspiring to register thousands of consumers for Microsoft's online service without their knowledge. Yes, the same RICO Act that was designed to fight organized crime.

At one point, the Odom case was dismissed by a federal court in Seattle. Then it was reinstated by a federal appeals court in San Francisco. Then Microsoft and Best Buy wanted it dismissed again. But the highest court in the land said "no" - or words to that effect.

"The Supreme Court declined cert - which basically means they're refusing to deal with the issue," Robert Schwinger, a RICO specialist with the with law firm Chadbourne & Parke, told The Reg.

Not-so-free trial?

James Odom filed his suit after purchasing a laptop from a Best Buy store in Contra Costa County, California. According to his complaint, Best Buy electronically routed his credit card number to Microsoft, and Microsoft used it to sign him up a six-month free trial on MSN. When the trial expired, the suit alleges, Redmond started charging him for the service.

The suit insists that this constitutes wire fraud by the sort of ongoing criminal "enterprise" described by the RICO Act, which awards triple the damages in civil cases. But when the case reached that federal court in Seattle, a judge said otherwise.

"The court decided that the complaint failed to show that the joint agreement between Microsoft and Best Buy constituted a RICO enterprise," is the word from Sean Dwyer, a partner with the New York law firm Havkins, Rosenfeld, Ritzert & Varriale. "RICO requires that you show that there's an enterprise consisting of a group of individuals or companies working together in an organized and cohesive manner, and you have to show they function as a continuing unit."

According Schwinger, US appeals courts are split down the middle on whether the RICO Act should apply to cases like this. After the suit bounced up to the Supreme Court, the US Chamber of Commerce had hoped to finally bring things to a head, filing a brief urging the court to actually hear the case.

"RICO was designed to deter organized crime, not to be used as a tool to force legitimate companies to pay treble damages,” wrote Robin Conrad, executive vice president of the National Chamber Litigation Center. "Courts should prevent RICO from being turned into the litigation equivalent of a thermonuclear device."

But the Supremos failed to take the bait. They simply bounced the case back from whence it came.

Show us the money

According to Daniel Girard, the case's lead attorney, he and his team may pursue the matter in federal court, but they may opt for state court instead. While the federal version of Odom v. Microsoft was proceeding, the team also filed suit at the state level in King County, Washington. That's the case where the Best Buy lawyer admitted to falsifying documents.

Why the second suit? "We were concerned that there might be an attempt to settle around us in some other court, as happens frequently in class actions," Girard told The Reg. In other words, they didn't want settlement dollars going to another group of lawyers and plaintiffs.

Wherever the Odom case is tried, the plaintiffs are asking for tens of millions of dollars in damages. Times three. ®

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