The fat judge sings: will the Supremes kick in?

Attention turns to appeals process

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MS on Trial Taking a seize-the-bull-by-the-horns approach, Judge Jackson says: "Microsoft officials have recently been quoted publicly to the effect that the company has done nothing wrong' and that it will be vindicated on appeal. He "is well aware that there is a substantial body of public opinion, some of it rational, that holds to a similar view. It is time to put that assertion to the test. If true, then an appellate tribunal should be given early opportunity to confirm it as promptly as possible, and to abort any remedial measures before they have become irreversible as a practical matter."

His reference to the judgement being "appealable" is a sensible move, but he must be confident that in the light of the evidence, his judgement would be upheld on appeal.
Judge Jackson has played the case in a legally-cool fashion, while Judge Sporkin, in the earlier consent decree case, found the attitude of the DoJ controversial, clashed with the then DoJ head of antitrust, and refused to enter the decree. It was Judge Jackson who signed the decree, at the instruction of the appellate court, although we do not know whether he was chosen by ballot, or assigned. The fact that his preliminary injunction three years ago was overruled by the Court of Appeals should not be taken as particularly strong evidence that the appellate court will be Microsoft-friendly this time, since it would very much depend on which judges are chosen by ballot to hear any appeal.

The next step may well be that Microsoft asks Judge Jackson's court to stay both the conduct and structural remedies pending appeal, with the near certainty that he would agree to the latter, but not the former. Microsoft would presumably then either ask the DC Circuit Court of Appeals to agree the staying of the conduct remedies as well, or file a broad appeal against the Findings of Fact, the Conclusion of Law, and the conduct of the case by Judge Jackson.

Although the intention of the DoJ to invoke the fast-track procedure and use the Antitrust Expediting Act to take the case directly to the Supreme Court (with Judge Jackson's approval), it is at the moment uncertain how the timing would work out, since the solicitor general has to certify that the case may be offered to the Supreme Court. In any event, it is unlikely that the Court of Appeals would decide anything while this was in progress. We can be sure that the Supremes will be involved - but it is not possible to forecast how they would act.

The Supreme Court has the option of accepting, declining, or referring the case to the Court of Appeals with some instructions. The snag with the Supremes hearing the appeal is that it would potentially have to sift through all the evidence and briefs if the case were appealed directly, and that would take a great deal of time. Furthermore, although the case has as a very high profile, it may not present sufficiently interesting legal issues for the Supremes.

They have not expressed much interest in antitrust cases in the recent past, with eight of the nine justices said to hold so-called Chicago School views opposed to antitrust enforcement. It is quite possible that it would refer the case, and ask to have certain legal issues narrowed for decision. If so, the most likely issue would be the appropriateness of the remedies, and not questions to do with the facts. It may also wish to express a view on the Findings of Law.

It is worth bearing in mind that IBM's decline in the 1980s (and Microsoft's ultimate control of DOS) follows directly from the paralysing effect of the three suits and two consent decrees. Of course, the cultures of IBM and Microsoft could hardly be more different: IBM scrupulously tried to abide by the Court's orders, with the result that efficiency was low, and the financial results poor), but many doubt that Microsoft would get out the sackcloth and ashes. Nonetheless, the appeal procedure will have a very great demoralising effect on Microsoft - especially if the share price stays at around half what it was less than six moths ago. Microsoft would lose key staff, and find it hard to recruit the best talent.

It should not be overlooked that this is not just a US case. The European Commission is watching the outcome, and if it is not to its liking, it could well take swift and effective action. The Plaintiff States have for the main part been a stiffener to the DoJ, and of course they harbour many of Microsoft's competitors. They could also bring separate cases under their state laws should Microsoft escape as a result of an appeal. The prospect of possibly having to defend a dozen or more simultaneous cases would be most formidable, even for Microsoft.

So far as the timing of the appeal process is concerned, nobody knows because there are too many options at present, but estimates of one to three years are quite possible. We do know that the Supreme Court takes a three-month summer vacation, and is most unlikely to consider taking the case until it returns. There are now two legal phases: a procedural one involving the preparation of the basic documentation, which could well take until after the summer - and this phase would probably include a stay on structural remedies being enforced during appeal. Microsoft of course will wish to make the substantive part of the process last as long as possible. There always remains the possibility of political interference next year, whoever becomes the new president.

The odds at present on the final outcome must be that there will be a dramatic ending with Microsoft upstaged: exeunt WinCo left, and AppCo right. Curtain. ®

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