A federal judge has thrown out Zurich
American Insurance Co.'s lawsuit against Microsoft Corp. Zurich sought
protection from paying the software giant's legal bills arising from
137 private antitrust lawsuits.
| "We look forward to pursuing these claims out here in Seattle." |
Zurich sued Microsoft in April in U.S. District Court in Washington, D.C., claiming Microsoft's liability insurance
does not cover antitrust issues. Four days later, Microsoft countersued
in federal court in Seattle. The case remains active, leaving the
liability question in a judge's hands.
On June 2, U.S.
District Judge Royce C. Lamberth ruled that Zurich improperly filed its
lawsuit. "Zurich filed this preemptive first strike here, before it
even advised Microsoft of its decision to deny coverage, in a
transparent effort to deprive Microsoft of its choice of forum" to
pursue legal claims, Lamberth states in the decision.
Zurich contends Microsoft's liability insurance
does not cover antitrust issues. Fidelity and Guaranty Insurance Co.,
which provides Microsoft with liability insurance, also is refusing to
cover the company's legal costs.
Both insurers, as well
as 11 others with Microsoft liability insurance policies, now will have
to defend their position in federal court in Seattle. In its own
lawsuit, Microsoft says the insurers are obligated to pay the legal
bills for the private antitrust lawsuits.
Microsoft
spokesperson Jim Cullinan says his company is pleased with the judge's
decision. "We look forward to pursuing these claims out here in
Seattle, which we believe is the appropriate venue," he says.
The
antitrust lawsuits filed in 38 states against Microsoft stem from the
federal court rulings that Microsoft acted anticompetitively in
violation of antitrust law. Most of the lawsuits, filed on behalf of
consumers, allege Microsoft overpriced its Windows operating software,
a charge Cullinan denies. Microsoft could lose millions of dollars even
if only a few suits are successful, because the private suits are
seeking triple damages. Microsoft is not seeking insurance coverage for
its antitrust battle with the U.S. Justice Department. Zurich spokesperson Pat Schnably declines to comment because the litigation is still pending.
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