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EDITOR'S VIEW
FoxPro and Y2K: The Microsoft Lawsuit
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
Eastern Division
)
RUTH H. KACZMAREK, individually and )
on behalf of all other similarly situated, )
)
Plaintiff, )
) No. 98 C 7921
v. )
) Jury Demand
MICROSOFT CORPORATION, ) Judge Castillo
)
Defendant. )
)
CLASS ACTION COMPLAINT
NOW COMES Plaintiff, Ruth H. Kaczmarek, by and through her attorneys, the law firm of GOLD & ROSENFELD and the law firm of GOGEL, PHILLIPS & GARCIA, LLP., and alleges as follows with respect to the above matter:
NATURE OF THE ACTION
1. This is a class action brought by Ruth H. Kaczmarek against Defendant for its sale of a non-year 2000 ("Y2K") compliant software product called FoxPro. FoxPro is a software development tool used by software developers and others for the development of software applications. Plaintiff, a software developer, purchased Defendant’s FoxPro product from an authorized reseller and used FoxPro in writing computer code for her clients. FoxPro has a latent Y2K defect that renders certain date sensitive codes incapable of accurately processing dates beyond December 31, 1999.
2. In this Complaint, Plaintiff seeks injunctive and compensatory relief. Plaintiff brings the following counts: a) injunctive relief in the form of immediate notice to Defendant’s customers of the latent Y2K defect contained in its software and providing its customers with a Y2K "patch" (Count I); violation of 815 ILCS 505/1 et seq., the Illinois Consumer Fraud and Deceptive Business Practices Act and 815 ILCS 510/1 et seq., the Illinois Uniform Deceptive Trade Practices Act (Count II); negligence (Count III); breach of express warranty (Count IV); breach of the implied warranty of merchantability (Count V); breach of the implied warranty of fitness for a particular purpose (Count VI).
PARTIES
3. Plaintiff is an individual who operates a computer software, development and consulting business located at 25W026 Malibu Court, Naperville, IL 60540.
4. Microsoft Corporation ("Microsoft") is a Washington corporation with its principal place of business located at One Microsoft Way, Redmond, WA. Microsoft designed and manufactured the FoxPro software at issue and marketed and sold said software to the public.
JURISDICTION AND VENUE
5. Jurisdiction is proper under 28 USC § 1332 because there exists complete diversity between Plaintiff and Defendant. Plaintiff resides and does business in Naperville, Illinois. Microsoft is a Washington corporation with its principal place of business in Redmond, WA.
6. Upon information and belief, the amount in controversy exceeds $75,000.00 for representative Plaintiff, exclusive of interest and costs, by virtue of the following:
a. Injunctive Relief -- For all individuals and businesses who purchased the defective versions of FoxPro, Plaintiff requests that the Court order Defendant to immediately notify all its FoxPro customers that the software contains a Y2K defect and provide each of its FoxPro customers with a software "patch" to correct FoxPro’s Y2K defect. Based on Defendant’s sales of FoxPro, it is likely that the cost of notice alone will exceed $75,000.
b. Compensatory, Incidental, and Consequential Damages -- Plaintiff is entitled to compensatory, incidental and consequential damages due to Defendant’s breach of express and implied warranties.
c. Punitive Damages -- Plaintiff is entitled to an undivided interest in any punitive damages assessed against Defendant pursuant to 815 ILCS 505/1 et seq. and 815 ILCS 510/1 et seq. or under the common law. Based on Defendant’s apparent knowledge of the Y2K defect in FoxPro, its continued marketing and sales of the defective FoxPro product, and its failure to timely notify its customers of the defect in FoxPro, punitive damages are warranted under the facts and the law.
7. Venue is properly laid in this District because Plaintiff resides in this district and a substantial portion of the events or omissions giving rise to these claims occurred within this District. Defendant advertised, promoted, sold, and distributed FoxPro in this District, and Defendant has received compensation from the sale of FoxPro products in this District.
FACTUAL ALLEGATIONS COMMON TO ALL COUNTS
8. Microsoft is in the business of designing, producing, manufacturing, promoting, marketing, distributing, and selling computer software to the public. Microsoft is the largest seller of computer software in the world.
9. In 1992, Microsoft purchased Fox Development Company ("Fox"). Fox designed, manufactured and distributed a product known as FoxPro. FoxPro is a software product designed to be used by software developers as a "tool" to customize DOS and Windows based database applications. FoxPro Version 2.5 was the first version of FoxPro available on the Windows platform. Versions prior to 2.5 were available on DOS.
10. After Microsoft purchased Fox, it began to manufacture, market, and sell the already existing FoxPro Version 2.5. Microsoft subsequently designed, manufactured, sold and distributed an updated version of FoxPro, Version 2.6. Microsoft later redesigned FoxPro and released a successor product called Visual FoxPro 3.0. Microsoft has since released Versions 5.0 and 6.0 of Visual FoxPro.
The FoxPro Version 2.x and Visual FoxPro 3.0 for Windows Y2K Defect
11. FoxPro versions 2.5 and 2.6 released by Microsoft and/or Fox, and Visual FoxPro 3.0 for Windows (hereinafter referred to as the "FoxPro Products") contain a certain similar Y2K defect.
12. In certain instances, and inherent to the FoxPro Products, the FoxPro Products cannot accurately process data when years are entered in two digits. Two digits to designate an entire year are commonly used by database entry persons. In "heads down" data entry methodology, it is standard practice to use two digits representing the year when entering dates in the corresponding date fields: that is because requiring four digit date fields for the year significantly increases the possibility of human error and slows down the data entry process.
13. The FoxPro Products include a feature known as data validation which purportedly prevents data entry personnel from entering invalid dates. For example, if an end user were to enter a date of February 30 for any year while using FoxPro Products, that entry should be rejected as invalid. Developers rely upon Microsoft’s representations with respect to this date validation.
14. Despite the statements made in the preceding paragraph, the FoxPro Products do not allow for the accurate use of two digit entries for years beyond December 31, 1999. If two digits are entered for the year when referring to a twenty-first century year, the entry is stored and/or processed as a twentieth century year. For example, if a data entry person types in "00", the software processes the date as 1900, rather than 2000.
15. The FoxPro Product software contains certain commands entitled "Set Century Off" (hereinafter referred to as "Century Off") and "Set Century On"(hereinafter referred to as "Century On"), which control how date fields for the year are to be defined, displayed on the computer monitor, stored, and/or processed. The FoxPro Products fail to account for accurate storing and/or processing when two digits are input to refer to a year in the twenty-first century.
16. The default function for the FoxPro Products is Century Off. "Default function" means the function of the software when the developer takes it "out of the box" from Microsoft Corporation. In the Century Off mode, two digits entered for the year are always stored and/or processed as twentieth century dates. In the Century Off mode, the end user is not allowed to enter more than two digits for the year.
17. Changing the default function from the Century Off to Century On mode allows the software to process, display and/or store the date for the year as a four digit, twenty-first century date. In the Century On mode, however, the FoxPro Products software still cannot store and/or process a two digit entry for the year as a twenty-first century year. Moreover, the FoxPro Software contains an inherent defective feature that cannot be disabled or modified by the developer, which allows the end user to enter via a keyboard, and the software to accept without appearance of any error message, a two digit entry for the year in spite of the fact that the command Century On has been enabled and a four digit date field has been defined.
18. The Century On command provides four spaces for a year entry to appear on the screen. This indicates to the developer that all twenty-first century entries will be processed accurately. In fact, all such entries will not be processed accurately. If two digits are entered for a year into the screen’s defined four digit field with the Century On command enabled, and the user then advances the screen focus to another field, an inaccurate storage or processing of a twenty-first century date has occurred. The two digit entry for the year is automatically stored and/or processed and unsuspectingly converted, without warning, to a twentieth century date.
19. The FoxPro Products’ ability to allow a user to enter a two digit entry for a twenty-first century year is a function that cannot be disabled, modified or deleted by the software developer. Rather, it is an inherent function built into the source code of the FoxPro Products. The date validation logic is built into the FoxPro Products’ date field function so that the software developer cannot implement any additional validation methodology prior to the FoxPro Product accepting the input information. The fact that all twenty-first century entries will not be processed accurately is contrary to data validation expectations of the developer as concerns date entries.
20. The above described Y2K defect is a material defect that Defendant failed to adequately disclose to its customers. Defendant knew, or reasonably should have known, of the defect. The computer industry has been aware of the Millenium Bug since the early 1980s. Others in the industry have identified the FoxPro Y2K bug in technical articles, yet Microsoft fails to notify all of its FoxPro developers and take responsibility for this defect.
21. Plaintiff, a software developer, puchased FoxPro Version 2.6 for use in her business. Visual FoxPro 3.0 is the successor product to FoxPro 2.6. Plaintiff used Defendant’s FoxPro Product to customize software for her clients. The customized applications Plaintiff developed for her clients with Defendant’s product contain the Y2K defect described above.
22. Plaintiff has suffered damages as a result of the defective nature of Defendant’s FoxPro Products.
CLASS ACTION ALLEGATIONS
23. Plaintiff brings this action on behalf of a class of similarly situated persons pursuant to Fed. R. Civ. P. 23(a) and (b). Plaintiff seeks to certify the following class: all persons, businesses, or entities who purchased FoxPro Versions 2.5 and 2.6 and/or Visual FoxPro 3.0 (the "Class").
24. The Class is so numerous as to make joinder impracticable. The exact number of Class Members is unknown but is estimated to be in the tens of thousands if not more. The exact number of Class Members can readily be determined from Defendant’s records and/or the records of Defendant’s dealers and/or resellers. Based on information and belief, a majority of the Class Members may be unaware of the defect contained in FoxPro Products. Whether or not they are aware, however, their claims have damages in amounts that, while significant when taken individually, may be too small to justify the expense of a separate lawsuit; aggregated, however, they make litigation financially feasible.
25. Plaintiff’s claims are typical of the claims she seeks to prosecute for the Class. Plaintiff and Class Members share the same common facts -- they all purchased defective software from Defendant. Plaintiff will fairly and adequately represent the members of the Class. Plaintiff has no interests that are antagonistic to putative Class Members. Plaintiff will vigorously pursue the claims that she asserts on behalf of the Class.
26. Plaintiff has retained counsel who are competent and experienced in complex federal court litigation and class action litigation, and who have represented other clients in complex federal court and class action litigation. Counsel are prepared to vigorously pursue this action on behalf of Plaintiff and the Class Members.
27. Common questions of law and fact exist as to all members of the Class, and predominate over any issues that may affect individual Class Members as all putative Class Members purchased FoxPro Products designed and manufactured by Defendant. The said products contained the same Y2K defect, and Defendant distributed the same manuals and product materials to all putative Class Members.
28. Among the common questions of law and fact with respect to the members of the Putative Class are the following:
a. whether Defendant designed, manufactured, distributed and/or sold computer software that contained a Y2K defect;
b. whether the alleged Y2K defect is material;
c. whether Defendant made misleading statements in its uniform sales and product literature regarding the products Y2K compliancy;
d. whether Defendant concealed and/or failed to disclose that its software was not Y2K compliant;
e. whether the defect in Defendant’s software warrants the issuance of a preliminary and permanent injunction requiring Defendant to notify its users of the Y2K defect and correct same in sufficient time, without cost, so as to avoid potential damage to Class Members;
f. whether Defendant’s conduct constitutes a breach of an express warranty;
g. whether Defendant’s conduct constitutes a breach of implied warranties;
h. whether Defendant’s uniform conduct warrants the imposition of punitive damages;
i. The appropriate measure of relief and damages.
29. A class action provides a fair, efficient and superior method, if not the only method, for adjudicating this controversy. The substantive claims are substantially the same and will require evidentiary proof of the same kind and application of same to a limited number of categories of law. Moreover, the immediate injunctive relief Plaintiff seeks can only be accomplished by utilization of the class action mechanism.
30. Plaintiff will seek to identify all members of the Class through such discovery procedures as may be appropriate and will provide the Class with such notice of this action as the Court may deem appropriate.
COUNT I
INJUNCTIVE RELIEF
Plaintiff realleges paragraphs 1 through 30 of the preceding pages as if fully set forth herein and further states:
31. The conduct described in paragraphs 1 through 28 above represents an immediate threat to Plaintiff and the members of the Class. Unless all Class Members are notified of the potential dangers associated with the defective nature of Defendant’s products, they will not have the requisite information to contact their clients to remedy or avert any potential damage that will be caused by Defendant’s defective products. Moreover, should Defendant not be required to provide a free "patch" before the Year 2000, Plaintiff and Class Members will be exposed to substantial liabilities including, but not limited to, legal liability associated with the loss of proprietary data and information and any and all consequential damages resulting from the total or partial failure of Plaintiff’s and Class Members’ software applications developed with Defendant’s FoxPro Products. Without notification and a patch, Class Members’ clients suffer the potential loss of invaluable proprietary data and information, or worse.
32. Defendant is the only one in the position to create and distribute a software patch in time to avert the damage that will be caused should the defect go uncorrected.
33. Plaintiff has no adequate remedy at law to notify Class Members of the defect and correct the problem prior to the Year 2000. A mandatory order of this Court is sought to require Defendants to notify all members of the Class of the Y2K defect inherent in the FoxPro Products and to correct same without additional costs to Class Members. Because of Defendant’s conduct as heretofore described, there is a substantial likelihood that Plaintiff and the putative Class will prevail on the merits of this lawsuit. Moreover, an injunction would promote the public good by averting a host of lawsuits that would be filed should Defendant not be required to remedy the defect contained in its products.
34. Furthermore, 815 ILCS 505/1 et seq. as well as 815 ILCS 510/1 et seq., which form the basis of Count II of this Complaint, permit the granting of injunctive relief in the Court’s discretion.
COUNT II
VIOLATION OF 815 ILCS 505/1 ET SEQ., THE ILLINOIS CONSUMER
FRAUD AND DECEPTIVE BUSINESS PRACTICES ACT AND
815 ILCS 510/1 ET SEQ., THE ILLINOIS UNIFORM DECEPTIVE TRADE
PRACTICES ACT
Plaintiff repeats and incorporates the allegations set forth in paragraphs 1 through 34 as if fully set forth herein and further states:
35. Defendant violated 815 ILCS 505/1 et. seq., and 815 ILCS 510/1 et. seq., by:
a) Misrepresenting that its computer software was Y2K compliant;
b) Concealing and/or failing to timely disclose that its computer software contained a Y2K defect.
36. Defendant had a duty to disclose known defects and not to misrepresent or conceal material information about its FoxPro Products. Plaintiff and Class Members relied on Defendant’s material misrepresentations.
37. Defendant’s failure to disclose, and its misrepresentation and/or concealment of the foregoing material facts, has caused damage to Plaintiff and Class Members and has placed Plaintiff and Class Members in a position of economic peril.
38. Defendant carried out this misconduct willfully, wantonly and with reckless disregard for Plaintiff and Class Members.
39. The unlawful, unfair or deceptive acts or practices of Defendant have directly and foreseeably caused damages and injuries to Plaintiff and Class Members and may cause yet untold damage to Plaintiff’s and Class Members’ businesses. Said violations warrant the imposition of punitive damages under 815 ILCS 505/1 et seq. and 815 ILCS 510/1 et seq.
COUNT III
NEGLIGENCE
Plaintiff repeats and incorporates the allegations set forth in paragraphs 1 through 39 as if fully set forth herein and further states:
40. Defendant had a duty to exercise reasonable care in designing, manufacturing, distributing and/or selling computer software to Plaintiff and the Class. Defendant further had a duty to exercise reasonable care in providing information to Plaintiff and the Class both before and after the sale of computer software to them.
41. The foregoing duties arise from Defendant’s contractual duties and/or other duties imposed upon Defendant by law.
42. Defendant breached its duties and was reckless, careless and/or negligent by:
a. Designing, manufacturing, distributing and/or selling software that could not perform all of its intended functions in that it could not accurately process four digit dates;
b. Creating, developing and disseminating product literature that falsely indicated that its computer software was Y2K compliant;
c. Creating, developing and disseminating product literature that concealed and/or omitted material facts;
d. Upon discovering the defect, concealing and/or failing to adequately disclose to Plaintiff and Class Members the material fact that its computer software was not Y2K compliant.
43. As a direct and proximate result of Defendant’s failure to exercise due care, Plaintiff and Class Members suffered damages.
COUNT IV
BREACH OF EXPRESS WARRANTY
Plaintiff repeats and incorporates the allegations set forth in paragraphs 1 through 43 above as though fully set forth at length herein and further states:
44. Defendant marketed and sold non-Y2K compliant FoxPro Products to Plaintiff and other members of the Class.
45. Plaintiff purchased FoxPro Version 2.6 pursuant to an express written warranty which states that it will "perform substantially in accordance with the accompanying printed materials for a period of ninety (90) days..."
46. Amongst other statements, the accompanying manual provides the following:
Why Use FoxPro?
FoxPro is an ideal business application development environment for several reasons. One reason is indicated by the word environment. FoxPro provides a complete workbench to design and build a database, construct indexes, create screens, write reports, and debug, maintain, and document complex applications.
47. The FoxPro Products purchased by Plaintiff and the Class contain the latent Y2K defects as alleged herein.
48. At all relevant times, Defendant knew, or should have known, that its FoxPro Products contained these latent Y2K defects.
49. No purchaser of FoxPro products would reasonably have been able to discover these latent defects through the exercise of reasonable diligence within the warranty period.
50. Defendant, fully aware of these Y2K defects, has failed to remedy the defective software free of charge. Defendant thus breached its express written warranty.
51. As a result of the above, Plaintiff and the Class have suffered damages.
COUNT V
BREACH OF IMPLIED WARRANTY OF
MERCHANTABILITY
Plaintiff repeats and incorporates the allegations set forth in paragraphs 1 through 51 above as though fully set forth at length herein and further states:
52. The FoxPro Products purchased by Plaintiff and the Class are subject to an implied warranty of merchantability. There has been no effective disclaimer of this warranty by Defendant.
53. Due to the Y2K defect alleged herein, FoxPro Products are not fit for the ordinary purpose for which they are to be used.
54. Defendant has breached its implied warranty of merchantability by selling non-Y2K compliant software and by failing to remedy the Y2K defect alleged herein within a reasonable time and without charge.
55. As a result of the foregoing, Plaintiff and the the Class have suffered damages.
COUNT VI
BREACH OF WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE
Plaintiff repeats and incorporates the allegations set forth in paragraphs 1 through 55 above as though fully set forth at length herein and further states:
56. The FoxPro Products purchased by Plaintiff and the Class are subject to an implied warranty of fitness for a particular purpose. There has been no effective disclaimer of this warranty by Defendant.
57. Defendant’s FoxPro Products were sold to fit the particular needs of software developers, to enable said software developers to develop fully functional, including Y2K complaint, software applications for their customers. Due to the Y2K defect alleged herein, FoxPro Products are not fit for the particular purpose for which they were sold.
58. Defendant has breached its implied warranty of fitness for a particular purpose by selling non-Y2K compliant software and by failing to remedy the Y2K defect alleged herein within a reasonable time and without charge.
59. As a result of the foregoing, Plaintiff and the Class have suffered damages.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff demands the following relief on behalf of herself and all others similarly situated:
a. An Order certifying this action as a class action and appointing Plaintiff and Plaintiff’s counsel representatives thereof;
b. A preliminary and permanent injunction requiring Defendant to notify all Class Members of the Y2K problem in their software and to cause same to be corrected, at no charge, to Class Members;
c. An award of punitive damages in an amount to be proven at trial;
d. An award of compensatory, incidental and consequential damages in an amount to be proven at trial;
e. Awarding Plaintiff reasonable attorneys’ fees, costs and expenses incurred in connection with this suit;
f. Pre-and post-judgment interest;
g. Such other and further relief as the Court may deem necessary or appropriate.
Respectfully submitted
On behalf of Plaintiff
By one of her attorneys
Gold & Rosenfeld
Attorneys at Law
A Partnership of Professional
and Limited Liability Corporations
11 S. LaSalle St., Ste. 2500
Chicago, IL 60603
(312) 372-0777
(312) 372-0778 Facsimile
Gogel, Phillips & Garcia, LLP
Attorneys at Law
13 Ventura Drive
North Dartmouth, MA 02747
(508) 998-0800
(508) 998-0919 Facsimile
c:\wp51\asg\classact\microsof\complain
ARTICLE INFO
 FREE ACCESS
Keyword Tags: Application Development, Development, Legal, Microsoft, Microsoft Visual FoxPro, Microsoft Visual FoxPro (VFP), Microsoft Windows, Windows 95/98, Windows NT, Year 2000
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