MS judge opts for damage control with Supremes order

Stay of final judgement gazumps appeal court

MS on Trial The Gang of Seven judges in the Court of Appeals have been outflanked by Judge Jackson. Tucked away in his Order certifying the joint case to the Supremes is the news that his Final Judgement of 7 June be "stayed in its entirety" (meaning the conduct remedies as well as the breakup) until the appeal is heard and decided, unless the stay is vacated by an appellate court.

The Final Judgement did include a provision to stay the breakup until any appeal was decided, but the judge's decision about the conduct remedies was not generally expected. At first this may seem like rather bad news for users and the industry, but it's worth further consideration because there are some very interesting complexities and a few clues that are worth noting.

First, Microsoft is denied an appellate victory over staying the conduct remedies, and judging by the pushing and shoving by the Gang of Seven it seems likely that they would have stayed the conduct remedies. There would have been far more mileage had the decision come from the Appellates, since this would have allowed Microsoft to proceed further with its blackening of what it has begun to characterise as the hanging judge.

Judge Jackson probably realised that there was little hope of supervising Microsoft's conduct during the appeal, as Microsoft would carry on with its monopolisation-as-usual business. The supervision of the case is now with the Supreme Court, which is not likely to act swiftly should Microsoft misbehave while they're out of term ("gone fishing", probably) for three months. So perhaps not much is lost in reality. Curiously, it gives Microsoft a chance to provide more evidence to the DoJ of its incorrigible behaviour, which the DoJ could use on some future occasion.

Any anti-competitive Microsoft misbehaviour at this stage would be a very bad move, considering it will simultaneously be playing the role of the innocent virgin, so in practice it may be more restrictive for Microsoft not to be bound by conduct remedies. We think that Judge Jackson may have considered this, and that it was one reason for his decision.

There is another reason too, we would suggest. The behaviour of the Gang of Seven has been judicially discourteous to the point of near-hooliganism, so keen were they to see the match without a ticket, as it were. Judge Jackson was made a victim of Microsoft's procedural moves, since he could not certify the case to the Supremes unless Microsoft appealed in his court, and when this finally happened after a delay by Microsoft, he was told that Microsoft would be submitting a Response to the DoJ's Motion to move the case to the Supremes, so he had to wait for that.

Meanwhile, it looks very much as though Microsoft had been tipped off that the Gang of Seven would be issuing additional Orders to seize the case and not wait for Judge Jackson's decision. There is further evidence for this in that Microsoft did not file its Response in the District Court until late on Monday - after the Court of Appeals' Order. The DoJ played a clean game, proposing to the Court of Appeals that it defer to the District Court referee and await Judge Jackson's decision about staying the remedies.

The rushed-out second Order from the Gang of Seven leant heavily towards Microsoft, by allowing its overlength motion, although the DoJ was allowed equal length. It could not have occurred to the Gang that their manoeuvring would result in their being frustrated by Judge Jackson. Incidentally, if you see reports sourced to Reuters saying the Court of Appeals sided with the DoJ and rejected Microsoft's argument for separation of the Plaintiff States and the DoJ, it's an error - there has been no ruling yet on combining the cases.

Of the six detailed orders in the second Order, five-and-a-half were made moot by Judge Jackson's action, and all that remains is half-an-order that pleadings would have to be served "by hand" delivery, if the case does get back to the Court of Appeals. The only reason that occurs to us to explain this strange requirement is that the DoJ's filing with the Court of Appeals last Friday had an Exhibit consisting of a December 1998 Microsoft procedural brief that completely demolished arguments Microsoft had made advocating it be allowed "supplemental examination" (which most people would call a re-trial).

The certificate of service said that service had been by Federal Express next-day delivery: could it be that Microsoft had complained about this delay, and the oh-so-sympathetic Court of Appeals had therefore added the hand-service requirement? If so - and it's hard to think of any other reason - the relationship between the Court of Appeals and Microsoft seems just a little too cosy for comfort.

The question remains as to why the Gang of Seven should be acting this way. Chief Judge Harry Edwards has publicly stated at length his position about the procedures of the Court of Appeals, and there is nothing at all unreasonable in what he said. It is therefore a considerable surprise to find the court en banc (the whole crew, apart from three disqualified for having Microsoft shares or something similar) acting as it has.

Microsoft's Monday filing in the District Court objecting to the direct appeal to the Supremes attempted novel interpretations of the law that had already been covered by the DoJ. It's amusing that Microsoft denies that the case is "important", but the gem is that Microsoft says that the Court of Appeals took "less than one hour" before it issued its first Order. Only the best customers get service like this.

We would not be surprised if the Supremes decide to seek what they have previously referred to as "the valuable assistance of the Court of Appeals" in order to avoid "a great burden on the [Supreme] Court", and therefore send the matter back to the Gang with some instructions to clarify some legal issues for decision by the Supreme Court. There are 13,466 pages of transcript, 2,695 exhibits, and a vast number of briefs. No court is going to wade through it all again. It is pretty clear from the Gang's body language that it is leaning to Microsoft. What would then remain is to see what the Supreme Court does. ®

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