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Microsoft rejects argument against appeal

The software giant slams the government's position that the Supreme Court should reject the company's request for appeal.

Microsoft on Wednesday slammed the government's argument that the Supreme Court should reject the company's request for appeal.

In its legal brief, Microsoft countered eight points made by government lawyers in a 26-page document filed at the end of August.

But Bob Lande, an antitrust professor with the University of Baltimore School of Law, said that he would be shocked if the Supreme Court agreed to hear the appeal in the 3-year-old antitrust case against Microsoft.

"The chances are astronomical," he said.

Because of a court-mandated schedule, Microsoft spokesman Jim Desler said, Microsoft made the filing Wednesday after having held off a day out of respect for the victims of Tuesday's terrorist attacks in New York and in Washington, D.C.

"My understanding is that we needed to submit it to ensure that it was part of the record," he said.

Microsoft and the government also are scheduled to file a status report with U.S. District Judge Colleen Kollar-Kotelly on Friday. It is unclear whether that filing might be delayed because of the attacks, which caused massive destruction and which have put the country into a state of grave uncertainty.

In an Aug. 31 brief, the Justice Department and 18 states had asked the Supreme Court to reject Microsoft's appeals bid. Microsoft's request to the high court had continued the software maker's attacks on the behavior of U.S. District Judge Thomas Penfield Jackson, rather than appealing on the merits of the case.

In June, a federal appeals court removed Jackson from the case because of statements he made to the media during the landmark antitrust trial. Microsoft had argued that because Jackson started holding his out-of-court discussions before delivering his two-part ruling--the findings of fact and conclusions of law--the Supreme Court should consider throwing out both documents.

In its June 28 ruling upholding eight separate antitrust violations against Microsoft, the Court of Appeals found merit in throwing out Jackson but not his ruling.

In its Wednesday legal brief, Microsoft reiterated its contention that Jackson's violation of the codes of conduct governing judges' behavior warrants Supreme Court review.

"Tainted findings"
Microsoft faulted the Court of Appeals for not throwing out the ruling, arguing that the action "cannot be reconciled with decisions of other circuits that have ordered new trials for far less egregious violations" of the codes of conduct governing judges' behavior.

The software giant asked the Supreme Court to "grant review now before further proceedings" at the district court level, to which the appeals court had remanded the case and which would rely on "tainted findings of fact and conclusions of law that must be vacated."

But legal experts questioned whether the high court would want to tackle this issue.

"Was Judge Jackson's conduct so bad it warranted not only requiring his removal but starting the whole proceeding over?" Lande said. "That's a fact-based analysis, and the Supreme Court does not like to engage in fact-based analysis."

While Microsoft asks for consideration from the nation's highest court, the company is preparing for proceedings to resume before the U.S. District Court for the District of Columbia. Microsoft and the government are expected to meet with Kollar-Kotelly on Sept. 21.

Legal experts also expect the judge to ask the two sides to file a joint status report to facilitate settlement discussions.

"After all, both sides have to talk to draft the joint proposal," said Rich Gray, a Silicon Valley-based antitrust lawyer closely following the trial. "That certainly can't hurt."

Even as legal proceedings continue, the possibility of a settlement in the case remains open. Speculation about settlement talks increased last week after the Justice Department said that it would not pursue a breakup of Microsoft as a punishment for anticompetitive activities and that it would not retry the claim that Microsoft illegally integrated its Internet Explorer Web browser with Windows 95 and 98.

If Microsoft were to successfully negotiate a settlement with the government, antitrust issues would not completely disappear. Private litigants--including consumers and competitors--could use Jackson's ruling to help bolster their cases.

"Settlement won't make all those private lawsuits go away," Gray said.

Microsoft also faces another challenge on that front: New York Attorney General Elliot Spitzer and California Attorney General Bill Lockyer last week warned that they would be willing to seek separate sanctions if they feel the Justice Department is too soft on Microsoft.

Besides having the resources to pursue independent remedies against Microsoft, the two states are home to some of the company's biggest competitors such as AOL Time Warner and Sun Microsystems.

Also, when the case returns to court, the Justice Department and the 18 states are expected to ask for additional discovery to probe new Microsoft technologies. The government seems particularly interested in Windows XP, Passport authentication and Microsoft's .Net software-as-a-service strategy.