Expected judge's orders could speed Microsoft appeal

A federal judge is expected to issue two orders that could drastically accelerate the software giant's antitrust appeal, the latest wrinkle in the fight for control of the case.

4 min read
WASHINGTON--A federal judge today is expected to issue two orders that could drastically accelerate Microsoft's antitrust appeal.

The move is the latest wrinkle in the landmark antitrust trial, as Microsoft and a local appeals court wrestle with U.S. District Judge Thomas Penfield Jackson and the government for control of the case. Who ultimately gains jurisdiction could determine the appeal's outcome.

Two issues are before Jackson today: Microsoft's request that Jackson stay restrictions on its business conduct set to go into effect in about 83 days, and the government's motion that he certify the case for direct appeal to the Supreme Court.

Jackson had been expected to certify the case for direct appeal, but that could be viewed as a snub to the U.S. Court of Appeals for the District of Columbia Circuit, which would normally hear the case.

In an unexpected twist yesterday, the appeals court issued an order right after Microsoft filed its motion of appeal to hear the case en banc, or before the full panel, minus those judges recusing themselves for various reasons, such as conflict of interest.

The en banc order alone was an "unprecedented action," said George Washington University School of Law professor Bill Kovacic. "The appeals court almost never hears a case before the full panel." Most appeals go before a panel of three judges.

Apparently, that order had been drafted ahead of time and was ready for Microsoft when it filed a stay motion with the appeals court yesterday, said sources familiar with the matter.

Bob Lande
Professor, University of Baltimore Law School
Discussing how the case could quickly go to the Supreme Court.
"That is amazing and unprecedented," said Rich Gray, an intellectual property attorney with Outside General Counsel Silicon Valley in Menlo Park, Calif.

The appeals court's actions underscore its serious intention to hear the case, rather than the appeal being bumped directly to the Supreme Court, said University of Baltimore Law School professor Bob Lande.

"They've sent a message to the Supreme Court: 'We're ready to jump on this thing,'" he said.

Should Jackson certify the case for direct review and the Supreme Court decide not to take it, the tactical error could cause trouble for the government later on, Kovacic said.

Already the appellate court had been expected to favor Microsoft in the appeal process. In 1998, the appellate court overturned Jackson's ruling forcing Microsoft to separate Internet Explorer from Windows 95. That "tying" issue returned in the current case, where Jackson again ruled Microsoft's bundling the two products together is an illegal act.

But antitrust experts handicapping the trial expect the tying claim to be thrown out on appeal, weakening the government's case and grounds for breaking up Microsoft.

"I expect the appeals court will likely reject the tying claim," said Glenn Manishin, an antitrust attorney with Patton Boggs in McLean, Va.

The makeup of the appeals court panel of seven judges--Douglas Ginsburg, Stephen Williams, David Sentelle, Raymond Randolph, Harry Edwards, David Tatel and Judith Rogers--is "extremely good for Microsoft," Kovacic said.

Legal experts still generally expect Jackson to certify the appeal for direct petition to the Supreme Court, but they say he has serious reason to rethink such an action. With the appellate court willing to expedite the appeal and hear it before a full panel, the Supreme Court is less likely to take the case directly.

"I think odds are pretty good the Supreme Court will, at this time anyway, refuse the case," Lande said.

Breaking the giant: Special Coverage The other matter before Jackson today is Microsoft's motion to stay conduct restrictions. The judge had been expected to reject the motion--and most likely still will, say legal experts. But Microsoft's filing of a stay with the appeals court reflects poorly on the judge.

Yesterday morning, Jackson issued an order withholding his ruling on a stay motion Microsoft filed last week until he received the larger appeal. On Monday, the government in a legal brief had argued Microsoft should be forced to file its larger appeal before getting Jackson's ruling on the lesser matter. Such action would facilitate the government's petition the Supreme Court take the case directly.

Jackson's options are limited as he addresses the stay motion. One option is to deny it and let the appeals court handle the matter. But this is something the government does not want. In its request for an expedited appeal to the Supreme Court, the government made it clear it would like the Supreme Court to handle the stay request.

Jackson could try to move the entire appeal to the Supreme Court, but it is uncertain whether he has such authority, Kovacic said. Such an action would unfairly penalize Microsoft.

"If they try to do that, there is no way the Supreme Court can decide the stay issue before the 90-day waiting period runs out," he said. "Any measure that would have the effect of denying Microsoft appellate review before they take effect would be deficient."

But letting the appeals court decide on the stay motion could undermine the government's case, he added, particularly if the court decides to stay most or all of the conduct restrictions.

Generally, the appeals court's reaction to the stay is viewed as a litmus test of the eventual outcome.