U.S. District Court Judge J. Frederick Motz ruled that the government agencies could sue under only one of two laws that they sought to invoke, and further that the statute of limitations had expired on many of the claims covered in the suit. Motz dismissed the suit, but said the cities could file an amended claim for some recent purchases.
"Microsoft has filed a motion to dismiss, contending that all plaintiffs' claims are barred by limitations and that the claims asserted under (California's Unfair Competition Law) are barred because plaintiffs, as municipal corporations, lack standing to sue. Microsoft's motion will be granted in all respects," Motz wrote in his ruling.
"However, because plaintiffs argue that Microsoft has continued to engage in anticompetitive behavior up to the present, plaintiffs will be granted leave to amend to assert claims under the Cartwright Act for damages they have allegedly suffered within four years of the filing of the complaint," Motz added.
The lawsuit was, after the of a similar class action suit that covered consumer and business purchases of Office and Windows, but excluded government deals.
Microsoft praised the ruling.
"Today's decision granting Microsoft's motion to dismiss is welcome news," spokeswoman Stacy Drake wrote in an e-mail. "We look forward to continuing to work with California government agencies to help deliver technology solutions to their communities."
A representative for the city of San Francisco, which is one of the lead plaintiffs, said it plans to confer with the other municipalities and then amend its complaint as allowed by the judge's ruling.
"We fully intend to go forward with our complaint," said Matt Dorsey, press secretary to City Attorney Dennis Herrera. "We would characterize this is a minor setback. We are still confident in the ultimate success of our case."