Appeals Court Agrees to Hear Microsoft Case

The U.S. Court of Appeals on Tuesday agreed to hear Microsoft Corp.’s appeal of the landmark antitrust case, while the Justice Department called it “an ill-conceived attempt to end-run” government efforts to send the case directly to the Supreme Court.

The appeals court decision is the latest fallout in an intense legal battle between Microsoft and the government over whether the Supreme Court or the Court of Appeals for the District of Columbia Circuit will next handle the case.

The appeals court agreed to hear Microsoft’s arguments for a stay of tough restrictions on Microsoft’s business practices imposed last week by U.S. District Judge Thomas Penfield Jackson.

The appeals court move was generally seen by legal experts as a tactical victory for the software giant that was found guilty of being an abusive monopolist last month.

Microsoft wants to move its case to the appeals court, rather than the Supreme Court, because the panel has ruled in its favor on a prior antitrust issue and the conservative jurists are thought to be sympathetic to its arguments. Meanwhile, the Justice Department and 17 states and the District of Columbia are maneuvering to prevent that outcome and get any appeal fast-tracked to the Supreme Court.

The Court of Appeals said in a terse one-page order that it was acting “in view of the exceptional importance of these cases.” And in an unusual step, the appeals court also said its entire roster of seven available judges would hear Microsoft’s appeal, after three other judges had to excuse themselves because of unstated conflicts.

It is not clear, though, that the appeals court will retain jurisdiction over the case. The Justice Department said late Tuesday that it was filing a request that Jackson certify the case for an immediate review by the Supreme Court.

“It’s really a [legal] tug of war,” said William E. Kovacic, a George Washington University law professor and antitrust expert.

“The Justice Department wants the Supreme Court to hear the case on its merits,” Kovacic said. “They don’t want the Court of Appeals to have any role in this matter because no decision the Court of Appeals would issue would help” the government’s case.

The circuit court’s quick acceptance of Microsoft’s appeal of Jackson’s sanctions was seen by many antitrust analysts as a sign that the appeals court believes it should play a role in reviewing the landmark antitrust case.

That could bolster odds that the Supreme Court will defer an appeal to the circuit court and give the appellate panel an opportunity to review the entire case by denying the government’s request for an expedited Supreme Court review.

Microsoft hailed the circuit court’s move and said it would lead to a quick resolution of the case.

“It is certainly important that the Court of Appeals recognizes that this case is very important, and it appears [it is] going to move expeditiously with the appeals process,” Microsoft spokesman Jim Cullinan said. “We believe this is in the best interest of all parties.”

Microsoft’s case will be heard by a seven-judge panel headed by Chief Judge Harry T. Edwards of the Court of Appeals, who was appointed by ex-President Carter.

Robert Lande, a law professor at the University of Baltimore, said the appeals panel lineup favored Microsoft. He noted that “of the seven judges, four are Republicans and three are Democrats. Of the four Republicans,” he added, “three are archconservatives. This is very good news for Microsoft.”

The circuit court acted after Microsoft filed a notice of appeal with Jackson, who presided over the 78-day antitrust trial in U.S. District Court.

The legal jousting between Microsoft and the government came nearly a week after Jackson ordered that Microsoft be broken into two companies, and that tough restrictions be placed on the firm’s business practices.

Jackson’s sanctions require Microsoft to offer the same licensing terms for its software to all computer makers, give outside software developers greater details about the Windows software code and allow PC makers to alter the start-up sequence of Windows. These restrictions would begin by September unless they are stayed or overturned by another court.

Microsoft, in its appeal papers, called the sanctions ordered by Jackson “radical” and criticized the jurist for “an astounding abdication of the judicial function.” The company said that it should have been given more time to argue against being sanctioned. Microsoft also cited several comments Jackson made to the media during and after the trial, saying his comments were “shocking” and showed bias.

Microsoft officials denied they were trying to delay the case to prevent the Justice Department from seeking an expedited review.

“We are simply trying to move this case along,” said Microsoft spokesman Cullinan. “We gave time for Judge [Jackson] to consider our motion” and he declined to rule. “We decided to move ahead quickly because we only have 90 days [before the penalties take effect], and each day is important” for us to get the business restrictions stayed.

But Rob Enderle, an analyst for Giga Information Group, said the odds are running against Microsoft because most legal experts seem to agree that at least some of Jackson’s findings will be upheld.