MS/DOJ: Judge orders suing states, DOJ to formally part

The Department of Justice and nine states who have agreed to settle with Microsoft in the government's landmark antitrust case Friday officially parted ways with remaining state plaintiffs who are continuing to sue the company in search of stricter penalties.

In a court filing Friday, District Court Judge Colleen Kollar-Kotelly issued an order to "deconsolidate" the federal case headed up by the U.S. Department of Justice (DOJ) and the case that includes plaintiffs who are not participating in the settlement. Nine states and the District of Columbia have rejected the proposed settlement. Judge Kollar-Kotelly noted that the two tracks have drifted too far apart to share legal proceedings.

In May 1998, District Court Judge Thomas Penfield Jackson consolidated two antitrust lawsuits: one filed by the DOJ and another by 19 state attorneys general and the District of Columbia. The order was intended to streamline the two cases, which were seeking similar outcomes, by allowing court orders and pleadings that pertained to both cases to be entered only once. The judge concluded at the time that the two cases were "entirely parallel," and the order would avoid duplicating the legal process.

Since then, Jackson ruled that Microsoft illegally used its monopoly power in the market for desktop operating systems to hurt competitors in other industries, such as the Internet browser market. A Federal Appeals Court upheld the lower court ruling in June 2001 but sent the case back to a trial judge to come up with a new set of remedies.

Instead of pursuing a new remedy in court, New Mexico's attorney general agreed to cut a deal with the Redmond, Washington, software maker. The DOJ followed with its own settlement agreement in November, which nine state attorneys general have agreed to join. Kollar-Kotelly is expected to approve, deny or modify the Federal settlement proposal as early as Feb. 28.

Meanwhile, nine states -- Iowa, California, Massachusetts, Connecticut, Florida, Kansas, Minnesota, West Virginia and Utah, as well as the District of Columbia -- are continuing to push for harsher restrictions to be imposed on Microsoft. Remedy hearings in that case are scheduled to begin on March 11.

In her order Friday Kollar-Kotelly said that the rift between the case now pending a settlement and the states pursuing a new remedy has widened to the point in which keeping them consolidated "no longer serves the interest of economy and convenience." The split was agreed to by all the parties involved.

"While certainly the Court does not mean to suggest that the two cases no longer involve common questions of law and fact, the divergent nature of the two cases" appears to prevent any "advantage arising from consolidation," Kollar-Kotelly wrote.

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