The Ninth U.S. Circuit Court of Appeals has refused to hear Microsoft’s appeal against a ruling that a lawsuit accusing the company of misleading consumers with its “Vista Capable” marketing campaign in 2006 can have Class Action status.

The original ruling by U.S. District Court Judge Marsha Pechman in February said that the year-old lawsuit can have Class Action, meaning that potentially thousands of people can bring forward the claim that Microsoft misled them about the suitability of certain computers to run Windows Vista. The lawsuit centres around allegations that the “Vista Capable” stickers on machines does not actually ensure that a machine is capable of running more than Vista Basic, the entry-level version of the operating system that does not come with many of its more advanced features, such as Aero.

This lawsuit was halted when Microsoft brought its appeal to the Ninth Circuit appeals court, but it can now go ahead with lawyers continuing the process of discovery. Already hundreds of emails have been obtained by lawyers representing the individuals suing Microsoft that purport to show that Microsoft officials lowered the bar for Vista Capable machines so as to allow Intel to sell more hardware.

The emails also reveal that companies such as Dell and HP warned Microsoft that lowering the bar for Vista Capable stickers could lead to a great deal of confusion amongst consumers. In total 29 companies have been subpoenaed for more documents to do with the case.

"Plaintiffs are pleased that the Ninth Circuit has denied Microsoft’s petition for permission to appeal Judge Pechman’s class certification order," said Jeff Thomas, an attorney representing one of the original plaintiffs. "We look forward to the setting of a new trial date and proceeding with discovery."

Microsoft meanwhile was sounding cheery, with spokesman Jack Evan saying "The Ninth Circuit’s decision not to accept our request for interim review is not a ruling on the merits of our case. We look forward to presenting all of the facts on what the district court itself said is a novel claim."

Win or lose the case, this is yet another embarrassment for Microsoft in what has, ultimately, been a great disappointment. Windows Vista has well and truly bombed in many senses of the term.