Judge rules against Microsoft motion to dismiss

ITworld.com –

A U.S. District Court judge Wednesday denied Microsoft Corp.'s motion that she dismiss the antitrust case of nine states and the District of Columbia against the software maker, ruling that the company has no legal basis to seek the dismissal.

In a 35-page memorandum opinion Judge Colleen Kollar-Kotelly detailed her reasons for denying Microsoft's motion, acknowledging that "this case has been unique from its inception and has continued to distinguish itself from its predecessors." Jurisdictional issues have created some of the uniqueness and were at the heart of Microsoft's motion to dismiss.

The original case, filed in May 1998, involved 20 plaintiff states, the District of Columbia and the U.S. Department of Justice (DOJ), with one state eventually withdrawing and one settling its claims. A different District Court judge ruled in favor of the 18 states and the DOJ that Microsoft is a monopoly and used that status illegally to try to squelch competition. A U.S. Court of Appeals remanded various aspects of the case, including the judge's order that the company be split in two, back to the District Court and the case went to Kollar-Kotelly. The Appeals Court upheld the finding the Microsoft is a monopoly and had behaved anticompetitively.

Nine states and the DOJ eventually reached a proposed settlement agreement with Microsoft, so the case was split into two tracks with the remaining nine states and the District of Columbia continuing to pursue remedies to curb Microsoft's anticompetitive behavior.

Microsoft's motion to dismiss the case of the remaining states and the District of Columbia argued that the DOJ should solely set federal antitrust policies and further argued that the states involved in the ongoing litigation were attempting to take over that role. In the flurry of court documents filed by both sides about the Microsoft motion, 24 states weighed in with opposition in a brief of their own and so did the DOJ.

In her ruling Wednesday, Kollar-Kotelly wrote that the states have the right under federal antitrust law to pursue their own remedies even though the DOJ has reached a settlement agreement. She also found that the jurisdictional issues had been appropriately considered by the Appeals Court and so Microsoft has no basis to raise them at this point in the case.

As for Microsoft's contention in its motion that allowing the states to seek their own relief in the case undermines the enforcement aspects of federal antitrust laws, the judge sided with arguments from the states and the DOJ that "Microsoft quotes selectively from a number of cases with the effect of mischaracterizing their holdings.... The Court finds this tactic unpersuasive."

Closing arguments in the remedy portion of the case, which is being heard in the U.S. District Court for the District of Columbia, are scheduled for next Wednesday. Kollar-Kotelly will then take time to decide what remedy to impose on Microsoft.

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