The complaint describes the December outages -- chronicled on blogs and elsewhere -- that kept people from "accessing online play for several weeks. ... Xbox Live continues to deny subscribers access and has even issued apologies for their failure to correct server problems."
Wasn't that just a 'local' outage? I have never experienced xbox live not working here in Norway. Guessing perhaps there has been problems with the US part of the network but Europe?
I have no clue but I found this article http://www.wired.com/gamelife/2008/01/lawyer-explains/ in which the lawyer explains they don't want money, they just want Microsoft to fix the problem so I guess nothing came out of the lawsuit.
Here is the suit if you want to read it and do more research (PDF):
The complaint describes the December outages -- chronicled on blogs and elsewhere -- that kept people from "accessing online play for several weeks. ... Xbox Live continues to deny subscribers access and has even issued apologies for their failure to correct server problems."