Antitrust Delay Bid

Judge might grant Microsoft a delay, but not as long as the company wants.

A federal judge is expected this week to reject Microsoft Corp.s bid for a lengthy delay in its ongoing antitrust case, according to some legal experts, many of whom panned the request as a transparent tactic without legal merit.

In a hearing set for Monday, U.S. District Judge Colleen Kollar-Kotelly will likely give Microsoft a brief delay but one well short of the four months requested by the Redmond, Wash., software maker, according to observers.

The bid is the latest move in what has been a busy holiday season in the proceedings brought by the nine states dissatisfied with a recent federal settlement with Microsoft. The two sides have also been busy outside the court, issuing subpoenas and document requests from high-tech vendors as well as organizations that have supported Microsofts position.

In its request for a delay, Microsoft argued that the litigating states are expanding the scope of the suit by signaling their intent to include emerging technologies in their case for tougher remedies.

The states are likely to argue that they are looking at the way Microsoft, under the settlement agreement with the Department of Justice, could continue to use its power to reassert the same monopolistic tactics on emerging technologies.

John Soma, who was part of the Justice Departments legal team on the IBM antitrust case and is now a law professor at the University of Denver, said the issues raised by the dissenting states do not change the fundamentals of the case and simply demonstrate that this is a "continuing act of monopolization. They are simply asking to show proof of that."

The dissenting states said in their latest filing, "It is no surprise that Microsoft would like to continue to delay the proceeding that most threatens to deprive it of the ability to engage in the practices condemned as unlawful by the Court of Appeals.

"As the Court of Appeals noted, it has been over six years since Microsoft first began its extensive illegal campaign, and six years seems like an eternity in the computer industry," the states wrote.

Many legal observers saw the expected rejection of Microsofts request for a four-month delay as fitting. "This is just another instance of Microsoft pushing to delay, delay, delay," Soma said.

"Microsoft has known that that kind of [emerging technology] was going to be on the table from the very beginning. There was no surprise here," said Robert Lande, professor of law at the University of Baltimore Law School. "You have an evolving market. By definition, you have to keep up with the market. The point of the remedy is for the future, to bring competition to the marketplace. Its bread-and-butter Supreme Court law."

Microsoft spokesman Jim Desler disagreed, saying the discovery requests and proposed remedies signal an "absolute expansion of the case. The requests in this regard go beyond the pale, and fundamental fairness makes it appropriate that the scheduling order be amended."

Other settlement proponents agree that the volume of documents already requested from Microsoft by the states illustrates an expansion of the case warranting a four-month delay.

"This is about 3.5 million pages of material [that the states are initially requesting]," said Tom Schatz, president of Citizens Against Government Waste, in Washington. "It takes a long time to respond to document production requests like that. This is going far beyond remedies limited to the scope of Microsofts liability."

Those who support the states litigation said a four-month delay could mean the difference between success and failure for the litigating states because it would likely give the court more reason to make a quick final ruling on the settlement deal that the DOJ and nine other states agreed to in November.

Under the current schedule, the dissenting states hearing begins in early March, at approximately the same time that the filing period in the settlement approval process (known as the Tunney Act proceeding) closes.

The judge faces no official deadline for ruling on the settlement following the filing period, but if the time frame coincides with the states litigation, it would be logical for Kollar-Kotelly to postpone the ruling until after she has heard the states arguments, according to several legal experts.

"This is absolutely crucial because [Kollar-Kotelly] is much more likely to make a Tunney Act determination in February, March or April [prior to hearing the states full case] if there is a four-month delay. Microsoft has only one chance at success: All along, theyve done their best to delay," Lande said.

Meanwhile, both Microsoft and the states have issued subpoenas to third parties. Microsoft has requested documents from competitors on the states preliminary witness list, including Sun Microsystems Inc. and Oracle Corp., according to industry sources. The states sent subpoenas to several organizations that have supported Microsofts position, including Citizens Against Government Waste.

The states have asked Citizens Against Government Waste to turn over documents going back five years, including internal e-mail, according to Schatz.