DOJ asks court to overturn MS request

WASHINGTON -- The Justice Department urged a federal judge Monday to reject Microsoft Corp.'s motion to stay the antitrust penalties imposed on the software giant, arguing that delaying the order "would greatly damage the public interest."

But the department's antitrust division asked U.S. District Judge Thomas Penfield Jackson to briefly delay denying the stay, a strategy designed to thwart what the government called Microsoft's (msft) bid to manipulate the court. It urged Judge Jackson not to rule on the stay until Microsoft files its promised notice of appeal and then to rule on both together.

The government said the Redmond, Wash., company is trying to maneuver part of the case into the U.S. Court of Appeals for the District of Columbia, where it won an earlier battle in the case.

The Justice Department wants Microsoft's appeal to go directly to the Supreme Court, bypassing the circuit court. But it can't file that motion until the company files its notice of appeal -- something Microsoft hasn't done.

So far, Microsoft has filed only a motion to stay Judge Jackson's ruling. After finding that the company abused its monopoly over operating-system software to harm consumers and thwart innovation, Judge Jackson ordered the company split into two and imposed restrictions on Microsoft's business conduct while it appeals the dismemberment.

The government said Microsoft's lawyers have told department lawyers that the company won't file the notice of appeal until after Judge Jackson rules on the stay, "so that it can then simultaneously file a lengthy and detailed motion for a stay in the Court of Appeals."

This plan, the government said, was designed by Microsoft to put the question of a stay before the circuit court while Judge Jackson was still ruling on the government's bid to send the appeal directly to the Supreme Court. The move "is simply an attempt to manipulate the court and thwart the operation of the Expediting Act," which allows a direct appeal to the Supreme Court, the government told Judge Jackson.

Microsoft, the government contended, "cannot be entitled to a premature stay pending appeal while it purposefully avoids filing a notice of appeal."

In an effort to speed simultaneous consideration by Judge Jackson of the stay and its bid to bypass the circuit court, the Justice Department attached a copy of the motion it intends to file for expedited appeal.

That document said Judge Jackson should send the case directly to the Supreme Court, a move that Microsoft opposes, because "consumers should not have to wait too long for the benefits of competition to be restored."

Even if Microsoft were to win the appeal, the government said the public interest would be served by jumping straight to the Supreme Court because a "prompt decision .. would end uncertainty about the remedy facing Microsoft's employees, stockholders and firms in the technology industry and throughout the economy that do business with it."

The government's argument for denying the stay said that Microsoft's one-page stay motion didn't even address two of the four points required for the stay -- a likelihood that it would win the appeal and the public interest.

The company did argue that denial of a stay would harm Microsoft and wouldn't harm the plaintiffs, but the government said the company asserted those claims "without offering any evidentiary support."

"The deficiencies of even the limited showing Microsoft has attempted in its motion reveal the absence of any basis for granting a stay." the government said.

The company had argued that such radical changes as Judge Jackson ordered in a major company ought to be stayed until appeals courts decide whether the company did abuse its monopoly and whether the remedy is appropriate.

But the government noted that the division of Microsoft into two companies -- one for operating systems and the other for other software and Internet properties -- already was delayed by Judge Jackson until the outcome of the appeal, so the stay would apply only to the judge's interim restrictions on the company's business practices. Those restrictions are due to take effect in 90 days.

Microsoft spokesman Jim Cullinan said it was unclear why the government filed a 17-page response to its two-paragraph request for a stay.

"This is an extremely bizarre tactic by the government," Cullinan said. "These kind of stay requests are a normal part of the process, and every memo from the judge indicated he would deny that and move ahead. It's unclear why they would want to delay this."