2 appeals in Microsoft antitrust case will be heard

A federal court has agreed to hear two separate appeals of the government's antitrust suit against Microsoft Corp., signaling that the software maker's antitrust woes still aren't at an end in the 5-year-old case.

The U.S. Court of Appeals for the District of Columbia said it will hear both appeals "en banc" -- that is, with the entire court sitting rather than just one or three judges, as usual -- and on an expedited basis, meaning the timetable will be cut to accelerate resolution.

Those unusual provisions mean the court "thinks the appeals are pretty important -- and that does give the appealing parties some basis for optimism," said University of Baltimore law professor Bob Lande.

But he said neither appeal has a good chance of success.

The court on Wednesday agreed to hear an appeal by two computer-industry trade associations: the Computer and Communications Industry Association and the Software and Information Industry Association.

Those associations, which include many of Microsoft's business rivals, asked a lower-court judge in January to say she erred in her Nov. 12, 2002, ruling that a settlement reached between Microsoft and the Justice Department and nine states was "in the public interest," as required by the federal Tunney Act.

They told U.S. District Judge Colleen Kollar-Kotelly that the economic welfare of their members "hinges on whether Microsoft's unlawful monopolization has been appropriately ended."

When she disagreed that she had erred and refused to reverse her ruling on the settlement, they asked the appeals court to consider both that refusal and the Nov. 12, 2002, ruling.

On Wednesday, it agreed to do so.

The appeals court on its own initiative agreed to sit en banc, which courts typically do only for difficult or important cases.

In this case, U.S. v. Microsoft, final briefs are due by Aug. 6 and oral argument is scheduled for Nov. 4.

In a second, related case, New York v. Microsoft, the same appeals court said March 13 that it will sit en banc to hear a different complaint about Kollar-Kotelly's ruling.

Massachusetts and West Virginia, two of the nine states that declined to participate in the settlement and pressed Kollar-Kotelly to impose harsher remedies on Microsoft, will argue that she erred by declining to include any of those harsher provisions in the settlement.

That case also is scheduled for argument Nov. 4.

Seven other states -- California, Connecticut, Florida, Iowa, Kansas, Minnesota and Utah -- agreed to settle the case.

Microsoft spokesman Jim Desler called the two appeals "procedural matters" and said, "Our focus continues to be on fair and full compliance with the terms of the court's final judgment."

The odds of either appeal's success are low, Lande said.

Kollar-Kotelly's decision to exclude the nine non-settling states' proposed remedies from her settlement need only have been "within the reaches of the public interest," Lande said. "That is a low standard, and it's very, very unlikely the appeals court will say she didn't meet it," he said. "She let them have a hearing, let them present experts, and then just didn't buy their arguments."

The trade associations' appeal has a better chance, Lande said, because their arguments are stronger.

Ed Black, president of the Computer and Communications Industry Association, said that "it's possible the appeals court will say Kollar-Kotelly's decision really didn't carry through what (it) intended. It could come up with a final decision itself, without referring it back to her."

But Lande said he doubts that will happen.

THE STORY SO FAR

In July 1994, Justice Department sued Microsoft, accusing it of maintaining a monopoly in operating systems.

On May 18, 1998, Justice and 20 states, plus District of Columbia, claimed Microsoft violated Sherman Act. U.S. District Judge Thomas Penfield Jackson, on June 7, 2000, ordered controls on its conduct and that it be broken into two companies.

U.S. Court of Appeals for D.C. Circuit on June 28, 2001, struck down Jackson's orders; removed him from case.

On Nov. 12, 2002, U.S. District Judge Colleen Kollar-Kotelly approved a settlement without harsher penalties sought by nine states.

P-I reporter Dan Richman can be reached at 206-448-8032 or danrichman@seattlepi.com

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