The Wall Street Journal: Tribunal Supremo rechaza a Microsoft

Supreme Court Rejects Microsoft,Best Buy Appeal in Fraud Lawsuit
Justices to Decide on Money-Laundering Case

By MARK H. ANDERSONOctober 15, 2007 11:46 a.m.
WASHINGTON -- The U.S. Supreme Court on Monday rejected an appeal from Microsoft Corp. and a unit of Best Buy Co., ending a bid by the two companies to stop a class-action lawsuit over a joint marketing campaign for MSN Internet Access service.

The companies had appealed a lower court ruling that allowed them to be sued under federal racketeering laws, a development that could open them up to tripled damages if they were to lose the class-action case.

The lawsuit challenges a part of a $200 million marketing agreement between the companies where, among other things, Best Buy agreed to sign up customers for a trial membership in the Microsoft Internet service, allegedly without obtaining their prior consent.

The legal issue in the case is whether the joint agreement between the two companies qualifies as an "enterprise" under the Racketeer Influenced and Corrupt Organizations Act. The law was enacted to combat organized crime, but plaintiffs have sought to use civil remedies under the RICO statute to sue companies.

"The rule in effect would make a broad range of routine corporate conduct actionable under RICO," the companies said in the appeal. "This dramatic increase in potential corporate RICO liability with its draconian remedies warrants review."

The companies urged the high court to take up their appeal, citing disagreement among the federal court circuits regarding the corporate "enterprise" question.

Attorneys for the class of plaintiffs acknowledged the circuit split -- a common reason the Supreme Court accepts an appeal -- but argued there wasn't a need to resolve it now. "Microsoft fails to show why a circuit split that has existed for over two decades needs to be resolved now," the attorneys said.

The case now goes back to lower courts for additional litigation. Chief Justice John Roberts Jr. recused himself from the case but didn't provide a reason. Justice Roberts has in the past reported stock holdings in both companies. (Microsoft Corp. v. Odom)

Court to Consider Money-Laundering Case
The High Court also agreed to decide whether merely hiding money can constitute money laundering.

The case involves the conviction of a man arrested in Texas while traveling toward Mexico with a large sum of cash hidden in his car. Humberto Fidel Regalado Cuellar was sentenced to 78 months in prison for international money laundering.

Federal law makes it a crime to engage in a financial transaction with proceeds from an unlawful activity in order to conceal the illicit source of the money.

A three-judge panel reversed Mr. Cuellar's conviction on a 2-1 vote, saying that prosecutors had to show that the defendant's activities were designed to create the appearance of legitimate wealth.

The full Fifth U.S. Circuit Court of Appeals rejected that decision and affirmed the conviction, declaring that it makes no sense to say that Congress chose the word "conceal" to apply only in a certain way.

In asking the justices to take the case, Mr. Cuellar's lawyers said the appeals court decision incorrectly expands the scope of the money laundering law. (Cuellar v. U.S.)
After Monday, the court will not be in session for the next two weeks. The justices will return to the bench the last week in October.

--The Associated Press contributed to this article.
Write to Mark H. Anderson at mark.anderson@dowjones.com