Hood: State to get $40M from Microsoft

JACKSON – Attorney General Jim Hood announced Thursday the settlement of a lawsuit with computer software titan Microsoft that will provide the state an extra $40 million.
Hood said the money could be used to help solve the current budget impasse that pits the House Democrats against the Republican Senate leadership and Gov. Haley Barbour.
Both House and Senate leaders also expressed optimism that the extra cash could be used to solve the disagreement that caused the Legislature to end the 2009 session last week without a budget.
“It gives us a tremendous opportunity to solve some of the points of contention in the budget negotiations,” House Speaker Billy McCoy, D-Renzi said.
Senate Appropriations Committee Chairman Alan Nunnelee, R-Tupelo, said, “I think it is important that we understand this is one-time revenue. We don’t need to begin new programs that will depend on this revenue in the future. But we know we will get it this year, and we will use it.”
Budget talks between House and Senate leaders will resume today in hopes of reaching an accord on a budget to fund the next fiscal year, which starts in less than a month on July 1. Barbour has said he would call the Legislature back in special session when an agreement is reached.
Barbour spokesman Dan Turner said the settlement will not solve the impasse on its own.
“It’s a good time have the money, but the budget is more complicated than that and the problem is larger. Hopefully, this will not cause anyone to take his eye off the ball,” Turner said.
The lawsuit is an offshoot of the federal lawsuit from the 1990s when Microsoft was accused of violating antitrust laws by packaging its software in a way that prevented it from being compatible with the software of its competitors.
With the acceptance of the settlement Thursday by Hinds County Chancellor Denise Owens, Microsoft now has settled with 21 states. Mississippi received the largest cash settlement. Microsoft recently completed a jury trial with Iowa, which was awarded $5 million.
The Mississippi settlement has the potential to reach $100 million, including $60 million in vouchers, Hood said. Local governments, school districts and individuals can file claims and get vouchers for up to $12 if they purchased computers since 1995 that had Microsoft software, such as Windows 95, Windows 98 and Windows ME or $5 vouchers for software such as Window 2000, MS-DOS, Office, Word, Excel and others.
Microsoft will pay claims administrators to distribute information about the vouchers that can be used to purchase any brand of software. People can fill out an affidavit to receive vouchers for up to five purchases without providing any proof.
The state is supposed to receive the $40 million in about 40 days. The state can receive up to another $8 million in a year – depending on the number of vouchers that are claimed.
Hood said the vouchers could provide a real boon for local governments and school systems that made multiple purchases.
Many states that settled received primarily vouchers. Hood said his case was bolstered by Mississippi resident Jim Barksdale, who as founder of Netscape, a Microsoft competitor, was impacted by Microsoft’s business practices. When Hood first filed the lawsuit, he said, he received a call from Barksdale telling him that Mississippi should demand a cash settlement.
Hood said Barksdale would have been a witness if the case had gone to court.
This marks the second time Hood has reached a large lawsuit settlement in the midst of a budget impasse. In 2005 – the only other time the Legislature ended the regular session without a budget – Hood announced a $100 million settlement with MCI that helped lead to an agreement.
Hood said he worked hard to reach an agreement and praised Microsoft for its willingness to negotiate. But he said his primarily goal was not to reach a settlement to help solve the budget impasse, but to get the best deal possible for Mississippi. He said he was prepared for a lengthy court trial.
“Microsoft is pleased to reach this resolution with the state of Mississippi and with our customers in Mississippi,” Steve Aeschbacher, Microsoft general counsel, said in a statement. “We look forward to working with the state on issues of mutual concern going forward.”
Hood said the case was brought to him by Jackson attorney Brent Hazard, with whom he contracted to pursue the lawsuit. Hazard also associated firms with expertise in the area from Houston, Texas, and New York. He said the three firms would be awarded about $8 million by Microsoft – separate from the state settlement. He said the firms spent more than $2 million in pursuit of the lawsuit,
Hood said his office did not have the resources to pursue the case without outside legal counsel. He said Hazard donated $250 to him at one time, but did not think the out-of-state firms had donated to his campaigns.

Contact Bobby Harrison at (601) 353-3119 or bobby.harrison@djournal.com.

Bobby Harrison/NEMS Daily Journal