In a surprising defeat for the Justice Department (DOJ) and 19 states, the U.S. Court of Appeals for the District of Columbia Circuit denied a request that would easily have cleared the way for a direct appeal to the Supreme Court.
But the appeals court's order also affirmed U.S. District Judge Thomas Penfield Jackson's authority to decide what happens next in the case, which the government claimed as a victory.
The court also set a schedule for addressing a Microsoft motion to stay restrictions on its business practices set to go into effect Sept. 5. The government must file a reply brief in 10 days and Microsoft another a week later.
The DOJ last week argued Microsoft was wrong to take its motion for stay directly to the appeals court without first giving Jackson an opportunity to rule on it. Because the government had also filed a petition for the direct appeal, which Jackson could certify this week, government lawyers asked the appeals court to take no further action in the case.
The appeals court decision could partially prevent a government end run that delayed Jackson's ruling on the motion for stay. By rejecting the government's argument that Microsoft should have waited for Jackson's ruling, the appeals court is saying the judge should have acted quicker, especially given the time-sensitive nature of the request, said George Washington University School of Law professor Bill Kovacic.
"The limited message they've sent is they do not think it was premature for Microsoft to have asked them for a stay," he said.
But the court also left control of the case with the judge. "What the appeals court has told Jackson is that if you want to control this process, you should act in the next 10 days," Kovacic added.
The appeals court did not deliver Microsoft a decisive victory. The Redmond, Wash.-based software giant had wanted the court to take full jurisdiction at least over the stay motion, even if Jackson, as expected, certified the case for direct appeal to the Supreme Court.
In a blow to Microsoft, the appeals court said the briefing schedule would then be put on hold while the high court decided whether it would take the case.
"What the D.C. Circuit Court is saying is, 'If you're not happy with what he does, your recourse will be to the Supreme Court,'" Kovacic said. "Microsoft then would have to ask the Supreme Court for a further stay or a stay-all, because the appeals court won't act until the Supreme Court decides jurisdiction."
The appeals court's decision had both Microsoft and the government claiming victory.
"The appeals court did not accept the government's invitation to delay, which we are pleased about," said Microsoft spokesperson Jim Cullinan. "We are pleased about this because we want to get this appeal process moving as quickly as possible, which is contrary to what the government's strategy seems to be."
"We are very pleased with the court's ruling that it would stay further proceedings if the district court certifies the case for direct appeal to the Supreme Court," said DOJ spokesperson Gina Talamona.
Microsoft is expected later today to file a response to the government's petition for direct appeal, arguing, among other things, that federal law does not allow the states' portion of the case to be taken directly to the Supreme Court.
Legal experts say that argument has merit, but that ultimately the Supreme Court and not the appeals court would need to decide on it.
If Jackson does certify the case for direct appeal, he would likely do so this week, Kovacic said. The Supreme Court is under no compulsion to accept the case and could still send it back to the appellate level. The high court is expected to make a decision on hearing the case by the first week of October.