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Microsoft files appeal brief

Microsoft tells a federal appeals court that a lower court judge erred in ordering it to separate Web browsing software from its operating system.

Microsoft today told a federal appeals court that the lower court judge handling its antitrust dispute with the Justice Department erred in ordering the software giant to separate Web browsing software from its operating system.

Microsoft's 51-page brief, filed with the U.S. Court of Appeals for the District of Columbia, See special coverage: Microsoft case keeps growing outlines a number of ways in which U.S. District Judge Thomas Penfield Jackson allegedly overstepped his authority when he issued a preliminary injunction against the company in mid-December. The injunction came in an order that also denied the government's motion, made last October, to fine Microsoft $1 million a day for allegedly violating a 1995 antitrust settlement.

In its brief filed today, Microsoft asked the appeals court to overturn the injunction and to order Jackson to dismiss the case. The company based its request on numerous incidents in which Jackson allegedly failed to follow federal guidelines and case law precedents in handling the case.

The Redmond, Washington, company argued that Jackson issued his order in spite of the fact that the government had not asked for one, thereby violating a procedural rule requiring an adverse party to receive prior notice that a preliminary injunction is being considered.

"Because of the complete lack of notice, Microsoft had no opportunity to argue that a preliminary injunction was inappropriate in this procedural context," Microsoft attorneys wrote. "The prerequisites for entering a preliminary injunction are not simply procedural niceties that the district court was free to disregard; they are grounded in core elements of due process."

Microsoft argued that Jackson also had violated other procedural rules, including one that requires the holding of an evidentiary hearing to smooth out disputes about factual issues surrounding the case. The software giant also argued that, contrary to established rules preventing a preliminary injunction from upsetting the status quo pending the resolution of a case, Jackson's order "radically alters" the current state of affairs. Similarly, the brief argued that, in applying the injunction to Windows 98--the successor to Windows 95--the injunction reached well beyond issues raised by the government, also in violation of court procedure.

Microsoft went on to argue the entire dispute should have ended when Jackson ruled that Microsoft was not in contempt of court. Jackson made that finding after ruling that Microsoft's interpretation of the contested 1995 consent decree was "plausible" but not necessarily "correct." The judge went on to appoint a special master charged with studying the case and making a recommendation on the dispute by May 31.

"In so doing, the district court essentially commenced, on its own motion, a different proceeding, presumably to clarify or interpret the purportedly ambiguous language [in the consent decree]," the filing states. "By...commencing a new proceeding not requested by the DOJ, the district court clearly exceeded its proper role, contravening well-accepted principles of judicial restraint."

Legal observers note that the procedural burdens placed on a party appealing a preliminary injunction put Microsoft at a severe disadvantage, but at least one of them said Microsoft's brief makes a good argument that Jackson didn't follow the proper procedures in issuing his order.

"It is pretty well-accepted that a preliminary injunction is an extraordinary power of a court," said Rich Gray, an antitrust attorney at Bergeson, Eliopoulos, Grady, & Gray. "The rules governing when it may be used are very specific and are designed to make sure that the party who is potentially subject to the injunction has their day in court."

Other attorneys sounded more doubtful of Microsoft's chances of succeeding. "The prospect of getting an injunction overturned on any grounds is very difficult," said Henry Bunsow, a technology litigator at San Francisco's Keker & Van Nest. He took issue with a number of the arguments Microsoft raised, including its contention that Jackson lost all authority in the matter after ruling that Microsoft was not in violation of the decree.

"It's totally appropriate for him to clarify the order that was previously subject to the motion for contempt, so that the parties understand it and clear decisions can be made subsequently," he explained.

Microsoft's brief is only the latest controversy involving Jackson's preliminary injunction. Just six days after the order was issued, the government filed a new motion to find Microsoft in contempt of court, arguing that its plan of separating Internet Explorer from commercially worthless versions of Windows "flouted" the injunction. The issue generated a war of words that culminated in a two-day hearing earlier this month. At the last minute, the parties resolved the matter in a surprise settlement announced last week.

Today's brief is the first of three that will be filed in Microsoft's appeal of the preliminary injunction. The government is scheduled to file a response on March 2, and Microsoft will then file its reply on March 9. A hearing on the matter is scheduled for April 21.