A law firm representing a group of users of America Online Inc. [NYSE:AOL] version 5.0 software said today that the giant online service has filed a legal brief asserting that users of the software have no claim for compensation.

A statement from Milberg Weiss Bershad Hynes & Lerach LLP, one of several law firms representing disgruntled users, said consumer damages allegedly include the inability to connect to the Web through ISPs other than AOL, repeated system crashes and other instability and operating problems.

But, the lawyers said, in its reply brief filed with the US District Court in Miami last Friday, AOL requested the court throw out all claims related to AOL 5.0, contending subscribers contracted away their legal remedies and arguing that consumers who installed AOL 5.0 on their computers for a free trial period are precluded from any relief under AOL's "Terms of Service" agreement (TOS). Oral arguments on the motion to dismiss are scheduled to be heard in the Miami US District Court on Mar. 2.

AOL further argued in its brief that subscribers' "sole right and remedy with respect to any dispute with AOL" is cancellation of their account, claiming that TOS provisions state consumers "use of... AOL software... is at the member's sole risk." But, said the attorneys, the TOS agreement does not appear until after AOL 5.0 installs on the computer and modifies systems and settings.

The statement added that AOL also argued that claims under the federal Computer Fraud and Abuse Act (CFAA) must also be dismissed because subscribers purportedly "authorized" AOL's actions that may have resulted in damaged computers. AOL maintains that a minimum of $5,000 in damages must occur before the CFAA applies. Thus, AOL cannot be held liable under CFAA if AOL 5.0 caused $4,999 worth of damage to each computer of its 27 million subscribers, potentially more than $134 billion dollars in damages.

The statement said that consolidated actions stem from over 40 cases filed nationwide by consumers and ISPs purporting AOL 5.0-related damages. Last April, plaintiffs in one of the Miami actions, Kelly v. American Online, Inc., moved to enjoin or stop the company from distributing AOL 5.0. On May 10, Judge Alan S. Gold entered a stipulated order in which AOL agreed to correct one problem and to publicize those corrections to subscribers. On June 2 last year, the Judicial Panel on Multidistrict Litigation consolidated and sent all the federal cases to Judge Gold. The consolidated complaint states that AOL 5.0, distributed to millions of consumers, was marketed as "risk free" and "easy to use," and as providing "superior benefits," when in fact the program actually harmed computers by causing material instability and applications resulting in system crashes, the law firm said.

The plaintiffs contend AOL 5.0 prevented consumers from connecting to the Net via competing ISPs, disrupted local area network connections, and caused numerous confusing instructions or messages to pop up, which inhibited or interfered with the use of alternative ISPs.

According to the complaint, AOL still refuses to publicize the corrections promised in May or to place a warning on its disks, Milberg, et al., said.