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Supreme Court will not hear Microsoft case

The nation's highest court today refuses to hear an appeal of the antitrust case that threatens to break the software giant in two.

WASHINGTON--The U.S. Supreme Court has sent Microsoft's antitrust case back to a lower court for review, a setback for the government that ends months of legal jockeying and speculation.

A court representative this morning confirmed the high court issued the order around 7 a.m. PT.

The Justice Department and 19 states had asked the Supreme Court to take the case directly under a 1974 revision of the Expediting Act. Only cases of national significance can bypass the normal appellate process and be heard directly by the nation's highest court.

"The direct appeal is denied and the case is remanded" to the appeals court, the court's order states.

Justice Stephen Breyer issued a dissenting opinion, writing "I would note probable cause in the case." While he acknowledged some benefit to having the appellate court review and prune the voluminous record, Breyer wrote: "I believe this Court can consider the issues fully now."

In another matter, Justice William Rehnquist refused to recuse himself from the case, even though his son works for a law firm handling another Microsoft matter.

With today's order, the U.S. Court of Appeals for the District of Columbia Circuit will assume jurisdiction in the case and set a schedule for further proceedings.

"People may write it up as something cosmic and significant, but this is a procedural step," Microsoft chief executive Steve Ballmer told CNET News.com. "It would have been OK to go to the Supreme Court. It would have been OK to go the court of appeals. We just want to get on with the case and get this appeal resolved positively as soon as possible."

The plaintiffs also had been looking for a swift resolution.

"We are disappointed that the Supreme Court declined to hear arguments in the Microsoft case at this time," Iowa attorney general Tom Miller said in a statement.

"We continue to believe that prompt and final resolution of this case is in the public interest, and that the Supreme Court is the most appropriate forum for that resolution," Miller's statement continued.

In the last 26 years, the government had asked the high court to take only two cases directly. In an Aug. 22 legal brief, government attorneys laid out several reasons the case warranted direct appeal.

The brief likened Microsoft's case to the breakup of AT&T, arguing the appeal was of "immense importance to our national economy."

For its part, Microsoft had argued that mistakes made by Jackson at trial, the size of the court and questions about how the Expediting Act applied to this case warranted lower-court review.

News.com's Wylie Wong and Stephen Shankland contributed to this report. Today's decision is viewed as a blow to the government, which had sought to avoid the lower court. The appeals court on two other occasions overturned Microsoft rulings.

Microsoft's stock jumped in trading today following news of the Supreme Court's decision.

In June, U.S. District Judge Thomas Penfield Jackson ordered that Microsoft be broken into Special coverage: Breakupseparate operating systems and software applications companies after earlier determining the company had violated U.S. antitrust law.

The Justice Department had little to say about the Supreme Court's decision.

"We look forward to presenting our case to the court of appeals as expeditiously as possible," said spokeswoman Gina Talamona.

The Court of Appeals is expected to set a briefing schedule with oral arguments before seven judges. But that schedule will not be set until after the Supreme Court physically returns records to the appellate level, say legal experts. That transfer should take place within a few days.

The appeals process is expected to take between nine and 12 months, after which the Supreme Court may get another crack at hearing the case. Most legal experts now predict a final ruling around June 2002.