Nov. 24 (Bloomberg) -- Microsoft Corp. Chief Executive Officer Steven Ballmer must answer questions under oath in a lawsuit claiming consumers were misled about which computers could fully run Vista, the company’s current operating system.

U.S. District Judge Marsha Pechman in Seattle denied Microsoft’s request to block consumers’ lawyers from questioning Ballmer, ruling that he may have first-hand knowledge of facts relevant to the case based in part on a conversation with Intel Corp.’s top executive.

“Plaintiffs point to a phone call between Intel’s CEO, Paul Otellini, and Mr. Ballmer where the executives supposedly discussed a change in the Vista capable requirements,” Pechman said in the Nov. 21 ruling.

Microsoft, the world’s biggest software maker, faces an April 13 trial on allegations that, when development of its Vista operating system was delayed, it allowed computer manufacturers to label existing stock as “Vista capable” even though they could run only the most basic version of the system and not a premium edition that provides better graphics.

Microsoft, based in Redmond, Washington, began selling its Vista operating system in January 2007. Consumers sued in March 2007. Pechman certified the case as a class-action, or group, lawsuit in February.

Intel makes microprocessors that run software and computer chips that store data. The Santa Clara, California-based company controls 81 percent of the market for the processors that run personal computers, according to researcher IDC Corp. in Framingham, Massachusetts.

‘Ballmer’s Knowledge’

“We will of course comply with the court’s order,” Microsoft spokesman David Bowermaster said today in an e-mailed statement. “Mr. Ballmer’s knowledge about the Windows Vista Capable program comes from the executives he empowered to run the program and make decisions, and two of those executives already testified in this case.”

The judge limited Ballmer’s deposition to three hours in duration and said it must be conducted within 30 days of her ruling at a place of his convenience.

“We believe Mr. Ballmer is a key witness in this case and is, among other things, privy to conversations and decisions that we are entitled to know about,” Mark Wilner, an attorney for the consumers, told Microsoft’s lawyers in a Sept. 26 letter seeking to set a deposition date, that is now part of the court’s file.

On Oct. 3, the company asked Pechman for an order blocking the examination.

Sworn Testimony

“We believe we have the right to take his deposition,” the plaintiffs’ lead lawyer, Jeffrey Thomas of Seattle’s Gordon Tilden Thomas & Cordell, said today in a phone interview. “We’ll find out the rest when we get to ask him our questions under oath.”

Pechman on Feb. 22 certified a class that can pursue its claims under Washington’s state consumer protection laws.

She ruled that the plaintiffs can’t claim they bought computers they wouldn’t have otherwise bought, only that they paid more than for those machines because Microsoft’s “Windows Vista Capable” marketing campaign had increased demand for them.

In April, a federal appeals court in San Francisco rejected the company’s request for permission to challenge the trial judge’s decision. On Nov. 20, the company filed papers asking Pechman to reverse her certification order, arguing that the consumers couldn’t prove people paid more money.

Microsoft also has asked the judge to throw out the case on similar grounds.

“We believe the motions are without merit and we look forward to their resolution so we can proceed to trial,” Thomas said.

The case is Kelley v. Microsoft Corp., 07cv475, U.S. District Court, Western District of Washington (Seattle).

To contact the reporter on this story: Andrew Harris at the federal court in Chicago at aharris16@bloomberg.net.

Last Updated: November 24, 2008 20:40 EST