Microsoft seeks antitrust hearing delay

U.S. District Judge Colleen Kollar-Kotelly had scheduled the hearing for March 11, but Microsoft argued that because of the gravity of the remedy nine states are asking for, the company should get more preparation time. The hearing would help the judge determine what sanctions to make against Microsoft for its antitrust violations.

"The states' far-reaching proposal and broad expansion of this case made today's motion necessary," said Microsoft spokesman Jim Desler.

In their remedy proposal the nine states said Microsoft should be compelled to open up the source code to the Internet Explorer browser, license Office for competing operating systems and carry Java in Windows for 10 years, among other things.

"If there is one thing that characterizes Microsoft's conduct in this case even more than denial, it is delay, delay, delay," Tom Miller, Iowa attorney general and one of the states' leaders, said in a statement.

"The states are ready to move ahead," he continued. "We have proposed reasonable and fair remedies consistent with the Court of Appeals' decision, and Judge Kollar-Kotelly has established a reasonable and expeditious schedule to determine the remedies. Let's get on to the conclusion of this case."

Microsoft filed its remedy proposal weeks ago, basically resubmitting the proposed settlement deal it cut with the Justice Department and nine other states. That deal would not force Microsoft to open up any of its code, other than to disclose limited information for developers creating products that run on Windows. The agreement restricts Microsoft's business practices more than changes how the company deploys technology. The deal is undergoing a 60-day period of public comment as dictated by the Tunney Act.

In Friday's 19-page legal filing, Microsoft argued that the original schedule put forth by Kollar-Kotelly no longer made sense because of "the non-settling states' dramatic expansion of the scope of the litigation beyond what the Court reasonably could have anticipated three months ago."

The company said it could not properly prepare for the hearing based on the original schedule.

"In requesting an extension of the current schedule, Microsoft cannot be accused of seeking to delay the imposition of a remedy in this case because Microsoft began complying with the RPFJ (revised proposed final judgment)," the legal brief states. "The fault for any delay instead lies with the non-settling States, which have effectively initiated an entirely new case under the guise of pursuing a remedy for the specific acts found to be anticompetitive by the Court of Appeals."

But the software maker ran aground making this kind of argument in the past, to U.S. District Judge Thomas Penfield Jackson. Legal experts say that's likely to happen again.

"This is similar to an argument that Microsoft tried before Judge Jackson," said Rich Gray, a Silicon Valley-based attorney closely watching the trial. "It didn't work then, and I don't think it's going to work now."

While the litigating states' remedy proposal is much stiffer than the Justice Department settlement and Microsoft's proposed remedy, Gray doesn't see it as excessive.

"The nature of the remedies are something that are clearly within a judge's exercising equitable jurisdiction," Gray said. "For that reason, I don't think the judge will give them additional time."

Nine states--California, Connecticut, Florida, Iowa, Kansas, Massachusetts, Minnesota, Utah and West Virginia--and the District of Columbia are continuing the litigation. Signing on to the settlement with the Justice Department were Illinois, Kentucky, Louisiana, Maryland, Michigan, New York, North Carolina, Ohio and Wisconsin.

In June, the U.S. Court of Appeals of the District of Columbia Circuit upheld eight separate antitrust claims against Microsoft. The court found that Microsoft used anticompetitive means to maintain a monopoly in Intel-based operating systems. In their unanimous decision, the seven appellate judges also threw out a remedy that would have broken Microsoft into two separate companies--one for operating systems and one for software applications.

In its Friday filing, Microsoft charged that the litigating states had placed too many demands on the company in preparing for the hearing on the new remedy.

Both parties are undergoing discovery in preparation for the proceeding. The litigating states are exceeding "the limited discovery" as mandated by Kollar-Kotelly, Microsoft claimed in its brief. The states asked for 118 documents--vs. 12 requested by Microsoft--which the company claims would require the review of "3.7 million pages of additional documents."

Microsoft accused the nine states of trying to construct a new case, leading to a remedy hearing "that will be very different" from the one agreed to when the judge issued her scheduling order in September.

Regardless of when the hearing takes place, both sides are preparing a vastly different list of potential witnesses.

The litigating states' preliminary list of 14 witnesses includes Larry Pearson, a product-design manager for SBC Operations, and Nokia Vice President William Plummer. Executives from America Online, Oracle and Sun Microsystems, long-time Microsoft rivals, also are scheduled to testify.

Microsoft's preliminary witness list includes six company executives: CEO Steve Ballmer; Jeff Raikes, a group vice president; Richard Fade, a senior vice president over PC maker relations; Chris Jones and Rob Short, corporate vice presidents from the Windows group; and Yusuf Mehdi, corporate vice president with MSN.

Microsoft's attack on the nine states comes just more than a week after Senate leaders slammed the proposed settlement deal the company cut with the Justice Department and nine other states.

During a raucous hearing before the Senate's powerful Judiciary Committee, Patrick Leahy, D-Vt., described the proposed settlement as an "invitation to the next chapter of litigation."

Microsoft could not defend the proposed settlement because of unrelated political maneuvering in the senate forcing an early close to all committee hearings. Only U.S. Assistant Attorney General Charles James testified before the hearing's abrupt end.