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DoJ, MS wrangle over road to appeal

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MS on Trial Microsoft's Motion for a stay in the Final Judgement has been robustly criticised by the DoJ on two main grounds: it "fails entirely to make any of the showings required to obtain such a stay"; and Microsoft's delay in filing its notice of appeal was "simply an attempt to manipulate the Court and thwart the operation of the Expediting Act". By not filing its appeal, which it had said it would do "promptly", Microsoft was knowingly delaying the DoJ's stated intention to invoke the Expediting Act, since the DoJ cannot file a Motion for certification of the case until Microsoft has appealed.

DoJ antitrust chief Joel Klein has said that the US solicitor general planned to ask Judge Jackson to seek an expedited review by the Supreme Court, and Judge Jackson has confirmed that his "inclination was to certify" the case. However, Judge Bork, who was a consultant to the anti-Microsoft trade group ProComp, and who advised Netscape, is sceptical about whether the Supremes would agree to hear the case. Connecticut attorney general Richard Blumenthal said he was confident the case would go straight to the Supreme Court, and come before it in its fall session. There have been two previous instances of direct appeal to the Supremes, both in connection with the AT&T break-up - and of course this did happen. The DoJ says that resolution would be faster this way, and that the public would suffer less.

The DoJ is very critical of Microsoft's failure to include in its "perfunctory" Motion "any of the showings required to obtain such a stay", which are that it is likely to prevail on the merits"; irreparable injury absent a stay; a lack of substantial harm to other parties from a stay; and serving the public interest by granting the stay". Consequently, the DoJ is asking the judge to impose a strict timetable and not to rule on Microsoft's Motion for a stay until Microsoft has appealed. Bill Neukom, Microsoft's head lawyer, said last week that Microsoft would file its Notice of Appeal "a very few days" after the Judge Jackson had rejected the stay Motion. In the past, Microsoft has followed the formal Notice of Appeal with a detailed brief some time later. Neukom described the stay Motion in the District Court as "pro forma", implying that it was not fully argued, and said that "a much more substantial submission will be made to the Court of Appeals just as soon as possible".

As a result the DoJ has asked Judge Jackson, in a proposed scheduling order, to reply by this evening to the DoJ's Response, and the DoJ would then file its Motion for Certification of Direct Appeal to the Supreme Court a day later (the DoJ produced a draft of that Motion as a courtesy to Microsoft). The next step would then be that Microsoft would have four business days to file any response to this, and the DoJ would respond a day later. Finally, the plaintiffs asked Judge Jackson not to rule on the Microsoft request for a stay until Microsoft had filed its notice of appeal. The outcome would then be that Judge Jackson could certify the direct appeal to the Supremes, but reserve his ruling on the stay (which of course means deny it, but the DoJ could not say this directly) until Microsoft has filed its appeal. The DoJ prepared a proposed scheduling order to make this easy for the judge, adding at the bottom a proposed order that "all filings... shall be on the public record".

A few interesting things have come to light. It turns out that the Final Judgement automatically allows a stay on the break-up pending the result of an appeal, so Microsoft's Motion for a stay is really a formality in the District Court, since had it been intended to allow a stay on the conduct remedies, this would have been mentioned in the judgement. It is also noteworthy that the DoJ has started talking up the importance of the case internationally, mentioning the importance of quick decisions to "businesses throughout the world" and for the "global economy", as well as for "the economic welfare of this nation". The plaintiffs are also countering Microsoft's propaganda about innovation by pushing that Microsoft's actions were having a "serious an adverse effect on competition and innovation". The DoJ says that another reason for a review by the Supremes would be to stop Microsoft's insistence that it has done nothing wrong.

Microsoft's reliance on salvation from the Court of Appeals, because it previously ruled against Judge Jackson, may be misplaced. The appellate court found that if there were some "plausible" benefit to consumers by integrating products, there was no violation of antitrust law, but Judge Jackson said that the appellate court was inconsistent with "pertinent Supreme Court precedents", and also suggested that the view was "undemanding". Since the appellate court did not examine the facts, in effect, its previous decision is now unreliable and it would be foolish for Microsoft to lean on this during its appeal.

The US appellate courts remain politically-based institutions. Political issues are frequently mentioned in any serious discussion of the judicial process - whether the judges were appointed by a Democrat or Republican administration. In the case of the eleven judges in the DC appellate Circuit, it's 11-4 in favour of Republicans. Republicans are normally more opposed to enforcing antitrust law than Democrats. But so far as Microsoft is concerned, its main desire must be to delay the appeals procedure as much as possible, and its desire to go the Court of Appeals first is a manifestation of this. ®

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