Will MS case fast track to Supreme Court?

During the appeals process "it's very important that further harm to the market ... not take place," Joel Klein, head of the Justice Department's Antitrust Division, said Thursday, justifying the interim conduct remedies to be placed on Microsoft's (msft) business practices. Those restrictions were contained in Wednesday's final ruling by Judge Thomas Penfield Jackson which ordered breaking the company into two parts for violating antitrust laws. (Microsoft is a partner in MSNBC.)

Keeping Microsoft from further harming the market is the goal behind asking for direct review by the Supreme Court, Klein said.

Microsoft Thursday asked Jackson to postpone all the provisions of his final order. In that order, the Justice Department voluntarily agreed to put off the actual breakup of the company until all appeals were exhausted. However, in the interim, government lawyers want business restrictions put on Microsoft to hold the company in check.

Microsoft has already said it will appeal Jackson's decision; the company has 60 days to officially file those papers. That step by Microsoft starts a legal chain reaction that could, within a month of that filing, end up on the marble steps of the Supreme Court.

After Microsoft files notice with Jackson that it will appeal, the government has 15 days to request that the appeal go right to the Supreme Court and bypass the federal appeals court. Judge Jackson must officially grant that expedited or "fast-track" request. By law, that entire process can take no longer than 30 days.

The Supreme Court then decides whether to actually hear the case or send it back to appeals court.

Klein said Thursday he believes there's enough evidence on the record to satisfy the Supreme Court that it can bypass the appeals court. And he believes the case, if heard by the Supreme Court, would be finished early in 2001.

But Robert Lande, an antitrust professor at the University of Baltimore School of Law and a self-avowed Microsoft critic, doesn't hold Klein's optimism. Lande thinks Jackson hurt the case's chances of being taken immediately by the Supreme Court because the breakup ruling contained no legal reasoning.

"You'll find one sentence where it says this remedy serves the goal of the relief portion, which is to prevent further violations and restore competition," Lande said. Jackson should have bullet-proofed his breakup ruling with 20 pages of legal precedent, Lande said. "All he had to do was take the Department of Justice's brief and kind of cut and paste."

Microsoft also should have been given at least a "token remedy hearing," Lande said. "If Jackson had said, 'You get three witnesses, three days each,' that would have at least been something," Lande said, "but he got lazy, he got disgusted with Microsoft, said he doesn't believe a word they say."

Richard Gray, an antitrust lawyer and principal of the firm Outside General Counsel Silicon Valley, also believes there's little chance that the court will directly take the case, noting that the normal path through the appeals court would give the justices the "benefit of some additional judicial thinking on these very complex issues."

Gray also notes that if the government "argues too hard" that a swift decision is needed owing to the dynamic changes in the industry, "it somewhat plays into the Microsoft argument that the market is vibrant, highly competitive and will solve any problems on its own if the government just keeps its hands off."

But a former Federal Trade Commission official, Kevin Arquit, now in private practice, believes the Supreme Court has to hear the case because of its magnitude.

"This is the ultimate remedy against the biggest company in the world. If the Supreme Court didn't take this case [on an expedited basis], what case would it take?" said Arquit, who also has worked for a group that supports the government's case.

The fact that Jackson noted in his ruling that Microsoft is still trying to "expand its empire into new areas" is another reason the case needs to be resolved quickly, Arquit said.

And there's the specific antitrust statute that allows the fast-tracking procedure, Arquit said. If the court doesn't exercise its discretion to take the case immediately, "then that means this expedited statute is essentially meaningless," Arquit said.

The Supreme Court may feel there's a sense of "institutional deference" to be weighed in this case, said Andrew Gavil, an antitrust law professor at the Howard University School of Law. "When the solicitor general of the United States and the Antitrust Division show up at your door and say, 'We think this of great importance, we think you ought to take it.'"

But if the Supreme Court is jammed up with other heavyweight cases, such deference may fly out the window, Gavil said. "I wouldn't handicap [the Supreme Court taking the case] at anything better than 50-50," he said. "I wouldn't say it's doubtful, but I wouldn't say it's certain, either."

The Supreme Court, by necessity, "is removed from political and other pressures," said Sue Mota, a professor of legal and international business at Bowling Green State University. The court won't "be swayed by the urgency of the matter," Mota said. However, the justices will be cognizant that the case was fast tracked because of a special law.

Mota also notes another high-profile case that dealt with a fast-moving industry, the Internet, that was fast-tracked to the Supreme Court. That case was the Communications Decency Act (CDA), which was passed by Congress as part of the 1996 Telecommunications Reform Act.

CDA had nothing to with antitrust laws, but it's important in considering the Supreme Court's inclination to hear a case in which it has had little experience or in one that breaks new ground.

A federal district court ruled the CDA as unconstitutional because it would have restricted constitutionally protected speech on the Internet.

The Department of Justice, fighting for the CDA against the American Civil Liberties Union and 12 Internet content providers, appealed the case directly to the Supreme Court, as allowed by the legislation that passed the act into law.

Although the Supreme Court had never had an Internet-related case before it, the factual record as laid out by the district court was so complete the justices took the case without need for an appeals court record.

"And the government lost," Mota notes.