Earlier today, the U.S. Court of Appeals for the District of Columbia Circuit set a briefing schedule for hearing Microsoft's motion to stay business restrictions set to go into place on Sept. 5. The government had asked the appellate court to take no action in the case, pending its certification for direct appeal to the Supreme Court, which it refused to do.
Microsoft's short but punchy legal brief attacked the government's petition on a number of fronts, arguing the direct appeal would rob it of due process in having any appeal heard and that the law governing the request does not apply to the states' portion of the case.
The Justice Department (DOJ) and 19 states filed separate cases in May 1998 that Judge Thomas Penfield Jackson later treated as one case. For direct appeal, the government would also like the cases consolidated.
But the 1974 Expediting Act, which authorizes such an appeal, predates the 1976 statute that authorizes states to bring cases under federal antitrust law.
"There is no real answer from the statute, when you have a case where the states are the complainant and the United States is a complainant," said Lars Liebeler, an antitrust attorney with Washington, D.C. firm Thaler Liebeler Machado & Rasmussen. "It looks like Microsoft has a point."
Since it filed a lengthy legal brief last Monday, the government has been maneuvering to get the entire case--including Microsoft's motion for a stay on conduct restrictions--to the Supreme Court. Microsoft has resisted, winning nominal support from the appeals court.
"You can't manufacture jurisdiction to just get everything in the same place," Liebeler said. "This rule doesn't provide for that, and it's an odd situation."
"The government's efforts to circumvent the normal appellate process will deprive the Supreme Court of the obvious benefits of a review by the Court of Appeals," said Microsoft spokesman Jim Cullinan. "The government seems afraid of review by the Court of Appeals."
Microsoft's argument against combining the states' case, which it also made in a legal brief filed last week, may have been the reason the appellate court today decided to step back from the case if Jackson certifies the case for direct appeal.
"Certainly the appeals court would not want to be put in the position where they are viewed as telling the Supreme Court what to do about the Expediting Act," said Bill Kovacic, an antitrust professor with George Washington University School of Law.
For now, Jackson will decide what happens next, Liebeler said. As early as tomorrow, the judge is expected to certify the government's direct appeal, which the Supreme Court is under no obligation to accept.
In fact, before the high court decides to accept the case, it will have to grapple with whether Microsoft has a valid argument against the states' case that cannot be included in the direct appeal, Kovacic said.
Microsoft's argument that the government's maneuvering would rob it of due process is a compelling one, said Andy Gavil, an antitrust professor with Howard University Law School. Jackson's judgment orders that conduct restrictions go into effect 90 days from its issuance, or Sept. 5.
"It is wholly unlikely under any conceivable scenario the Supreme Court will decide the question of jurisdiction before the first week of September," Gavil said. "The rock-and-a-hard-place argument is Microsoft's compelling one."
Gavil, who is an expert in antitrust procedural law, faulted the government for being entangled into a war of jurisdiction that needlessly undermined its position.
"If they had thought through the timeline problem and thought of Microsoft's immediate reaction to the stay, they might have realized the 90 days would be insufficient to get to the Supreme Court, and they would have this jurisdictional battle on their hands," Gavil said. "The easy solution is in front of the district court right now, which is to extend the 90 days."
The Redmond, Wash.-based software maker also contends the case is not of enough "general importance" to warrant the direct appeal and that procedural problems warrant a review by the appeals court.
Cullinan emphasized Microsoft's appeal would "include a vast array of procedural, factual and legal errors made by the district court, not just a few specific issues of law as the government contends. The Supreme Court itself has said many times that it prefers to have such cases first reviewed by the Court of Appeals."
"The more of these procedural complexities you pack into the case," Kovacic said, "the more likely it is the Supreme Court will say, 'send it all back; let the Court of Appeals sort it out.'"
Jackson ordered less than two weeks ago that Microsoft be broken into separate operating systems and software applications companies, but he stayed such action pending appeal. The judge earlier found Microsoft had violated two sections of the 1890 Sherman Act by illegally maintaining its operating systems monopoly and trying to unlawfully extend it into Web browsers.