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Microsoft disputes $258 million legal fee

Lawyers seeking $258 million in legal fees from Micrsoft's $1.1 billion class action settlement in California are asking for too much, the software giant said on Thursday.
/ Source: Reuters

Lawyers seeking $258 million in legal fees from Microsoft Corp.’s $1.1 billion class action settlement in California are asking for too much, the world’s largest software maker said Thursday.

The fees, the largest ever in an antitrust settlement, work out to $3,019 per hour for Eugene Crew, the class action’s lead attorney, and more than $2,000 per hour for other attorneys as well as hourly fees of $1,000 for administrative work. (MSNBC is a Microsoft - NBC joint venture.)

Microsoft, which will have to pay the fees on top of the settlement, told San Francisco County Superior Court Judge Paul Alvarado Wednesday that the fees did not justify the work involved in the case.

"Somebody ends up paying for this," said Microsoft lawyer Robert Rosenfeld, "these large fee awards get passed on to consumers."

The lead attorney in the class action case, which brought its suit against Microsoft for abusing its dominant market position to overcharge California consumers for software, did not immediately return calls seeking comment.

Crew argued in court documents that the fees were justified, considering the scope of the case against "the most powerful corporation in America."

Under the terms of the settlement struck between Microsoft and the class action last year, the Redmond, Washington company agreed to pay vouchers to 13 million California businesses and consumers, with any unclaimed amount going to the state’s school system.

Microsoft attorney Rosenfeld said that currently, Microsoft payout to consumers is about $100 million, which would result in the plaintiff’s attorney’s fees being higher than the actual money that Microsoft pays to consumers.

A court decision the fees is expected after several more months of discussion, Rosenfeld said.