Microsoft eyeing split - of state, federal cases

WASHINGTON — WASHINGTON - Microsoft Corp. maneuvered anew yesterday to keep at least part of its antitrust dispute in a supposedly friendly appeals court, even if another part of it shifts soon to the Supreme Court.

A new filing in the U.S. Circuit Court of Appeals here has made more complex the jousting over which court will next review a judge's ruling that Microsoft be split in two. The software company urged the appeals court to treat the matter as two cases, retaining at least one for a ruling, whether or not the other moves on to the justices.


Both sides appear to believe that the outcome of the case may depend on which court decides it first. The company is counting on a favorable ruling from the appeals court, and the Justice Department expects the Supreme Court to be more favorable to it than the appeals tribunal would be.

Microsoft was in fact sued in two cases for antitrust violations - by the Justice Department and separately by 19 states. Microsoft has now filed separate appeals of the two, even though U.S. District Judge Thomas Penfield Jackson put them together for trial and decided them as one. In the combined case, he ordered one remedy: a breakup of the company and tight restrictions on its business behavior.


The Justice Department this week asked Jackson to send the dispute as one consolidated case directly to the Supreme Court for a final ruling, bypassing the appeals court. The judge is considering that request but is awaiting the filing next week of Microsoft's objection to that route.

In Microsoft's new filing in the appeals court, where the overall dispute now sits at least temporarily, the company argued that federal law on direct appeals of antitrust cases to the Supreme Court would apply only to the Justice Department case.

Thus, it argued, even if the Justice Department succeeds in moving its case directly to the Supreme Court, the company's "appeal of the states' case will remain" with the appeals court. The department and the states disagree; they believe that if Jackson sends anything to the Supreme Court, he must send it all.

In the meantime, the two sides are divided over whether the appeals court should put a hold on the judge's entire remedy order while the appeals unfold. Microsoft wants all of that order blocked for several months at least; the Justice Department wants no part of it postponed.