Louis Vuitton's Paris flagship.

A Paris appeals court will rule today whether to uphold a gross misconduct verdict against Morgan Stanley on its equity research about LVMH.

PARIS — The appeals court here will rule today whether to uphold a ruling of “gross misconduct” on the part of Morgan Stanley related to its equity research about LVMH Moët Hennessy Louis Vuitton.

The bias suit, which has been grinding its way through the French courts since 2002, is said to hinge on professional responsibility, and whether Morgan Stanley analyst Claire Kent committed fault with research that LVMH characterized as a premeditated smear campaign. The French luxury group has argued Kent was biased toward rival Gucci Group, a client of Morgan Stanley.

The investment firm has argued that its research was accurate and honest, and that LVMH’s case is groundless and opportunistic. That’s the basis of its counterclaim seeking 10 million euros, or $12.5 million, in damages caused by the proceedings.

Today’s hearing is expected to be a brief pronouncement of the judges’ decision, with each side given a document explaining the rationale and particulars.

LVMH is seeking an additional 182.9 million euros, or $228.6 million, in material damages. The commercial court, which delivered its decision in January 2004, appointed an expert to tabulate damages, but the process was extended pending the outcome of Morgan Stanley’s appeal.

The court could uphold or reject, partially or completely, the original decision, which ordered Morgan Stanley to pay 30 million euros, or $37.5 million, for “moral prejudice.”

But since either side has the right to appeal to France’s highest court, the Court of Cassation, it could be several years before the case’s final denouement.

LVMH is active on many legal fronts. Earlier this week, Louis Vuitton triumphed in a case against Google, which was ordered to pay Vuitton 300,000 euros, or $375,000, for misleading advertising, unfair competition and trademark counterfeiting.

Also on Thursday, Vuitton, fighting to keep its Champs-Elysées flagship open on Sundays, said it would be able to remain open that day pending a decision in the appeals court here. The store has been shuttered for two Sundays and is expected to resume seven-day operations on July 9.

This story first appeared in the June 30, 2006 issue of WWD. Subscribe Today.

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