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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Brian Sullivan who wrote (50030)	9/26/2000 5:02:44 PM
From: johnd	Read Replies (2) \| Respond to of 74651

Experts see trouble for government's case By Will Rodger, USA TODAY.com The Supreme Court's decision not to hear a direct appeal of Judge Thomas Penfield Jackson's order to break up Microsoft signals serious trouble for the government's antitrust case, legal experts say. "The Supreme Court's decision suggests skepticism toward the government," Chicago antitrust lawyer and Microsoft supporter Hillard Sterling said. "This is a huge shot in the arm for Microsoft." For one thing, the 8-1 decision means the U.S. Court of Appeals for the District of Columbia Circuit, which earlier ruled against Jackson, will distill thousands of exhibits and more than 10,000 pages of courtroom testimony that arose from the eight-month trial before it reaches the high court. And that distillation, George Washington University law professor William Kovacic says, will color the deliberations of an always-busy Supreme Court. "The government is in for a rough ride the rest of the way," Kovacic said. "I don't think the (appeals court) is simply going to sweep aside the Jackson decision, but it means that the result is going to be much diminished from what the government actually achieved with Jackson." Microsoft spokesman Jim Cullinan said the company looked forward to proceeding with the appeal. The government had told the Supreme Court that a swift-moving, high-tech economy depended on a quick resolution of the case. The court needed to take up the case directly, government lawyers argued, or else risk permanent harm to competition in the PC software market. The government relied on a 1974 law that allows the Supreme Court to choose whether it will review major antitrust cases before they reach appeals courts. The court has reviewed similar cases directly only twice since 1974. But Microsoft argued that the Supreme Court should follow tradition and let the appeals court review the case first. That, the company said, would free the court from examining the voluminous records usually delegated to appeals courts. Supporters and opponents alike say history and personalities are leaning in Microsoft's favor. Of the seven appeals-court judges slated to hear the case, four - Stephen Williams, A. Raymond Randolph, David Sentelle and Douglas Ginsburg - are known as pro-market, anti-regulation judges skeptical of aggressive antitrust enforcement. Perhaps more ominous is the apparent feud that has erupted between Jackson, a conservative Republican appointed by President Reagan, and his more libertarian brethren on the appeals bench. Williams and Randolph ruled against Jackson after he told Microsoft to separate its browser from the operating system in a related trial in 1998. The judges said then that Jackson violated court rules when he ordered the separation without first hearing arguments on the matter from both sides. Williams and Randolph also signaled that they probably would rule against the government in a broader antitrust case, legal observers said. The judges said then that courts should defer to software design decisions as long as there was a "plausible" claim that those decisions helped consumers. Jackson went out of his way to attack that reasoning. In his ruling earlier this year, he wrote that the appeals court ruling was not just irrelevant to the larger antitrust case but wrong as a matter of law. And though he was never quoted during the trial, Jackson spoke to several news outlets before and after the trial. That, both sides say, does not endear him to the appeals court that is about to review his work. "Judge Jackson has engaged in some fairly unusual procedures," said Robert Levy, a fellow at the libertarian Cato Institute. "I think that is something the appeals court will want to look at." Robert Lande, a professor of law at the University of Baltimore, said: "Now you are going to have lots of conservative people shaping the issues. Jackson basically spit in the eye of the Court of Appeals when he wrote (his decision)." Lande said Jackson did an excellent job of keeping the trial moving for most of the eight months it lasted. But Microsoft lawyers at times seemed to go out of their way to alienate the judge, Lande said, whether by asking for more time than he wanted to give them or adopting sometimes arrogant postures during the trial. By the end of the trial, he said, Jackson was showing the strain. By speaking to the press, refusing to give Microsoft lawyers more time to argue against a breakup and comparing the company to imperial Japan, he said, he was inviting trouble. "He held it together for a long time, and then he broke down," he said. None of the legal experts interviewed for this article suggested that a stop at the court of appeals would undo all the penalties Jackson has imposed on the company. But they were unanimous in saying the intermediary step probably would weaken penalties the government does get. "I think this puts the possibility of a breakup relatively close to zero now," Kovacic said. "The crucial part of the whole strategy that certainly Jackson had in mind was to circumvent the court of appeals. Nothing particularly good will come from a reunion with that court here."