U.S. District Court rejects AAI motion for preliminary injunction in Microsoft Tunney Act proceeding, but says disclosures must be sufficient before settlement can be approved

Feb 20 2002
Testimony and Interventions

Release Date: February 20, 2002 Contact: Albert Foer, 202-244-9800 or Robert Lande, 301-585-5229

District Court Rejects AAI Preliminary Injunction Request But Will Not Approve DOJ-Microsoft Settlement Unless All Disclosures Are Correctly Made

Reference: American Antitrust Institute v. Microsoft Corporation, et al, Civil Action No. 02-138 (CKK). AAI papers at www.antitrustinstitute.org.

Washington, D.C. U.S. District Court Judge Colleen Kollar-Kotelly ruled today on the American Antitrust Institute's Motion for a Preliminary Injunction, which is a part of its suit claiming that both the U.S. Department of Justice and Microsoft Corporation failed fully to comply with the disclosure requirements of the Tunney Act (which apply to their proposed settlement of the landmark Microsoft antitrust case). The Court held that the Tunney Act does not provide private parties such as the AAI with a cause of action to complain about a violation of the Act's requirements, hence it is unlikely that AAI would prevail on the merits as to this critical point. The Court left open the possibility, however, that the AAI may have standing to continue its case against the Department of Justice under the Administrative Procedures Act and the Mandamus Act.

AAI President Albert A. Foer said, "Although we have failed to establish with this Court the point that the Tunney Act provides a right for the public to challenge inadequate disclosures in an antitrust settlement, the Court has taken several steps that are very heartening. First, shortly after we filed our complaint, Judge Kollar-Kotelly ordered Microsoft and the DOJ to file briefs explaining what disclosures the Tunney Act requires and how they complied with these provisions. These are due within the next week. Second, she held in our case that she cannot legally approve the Microsoft settlement until she determines that the disclosures are sufficient. Her exact words are:

[T]he Court cannot approve the proposed consent decree without first addressing the sufficiency of Defendants' Tunney Act disclosures. If the Court determines that the disclosures were insufficient, the proposed consent decree cannot be approved ... [T]here is no risk that the Court will enter judgment without addressing Plaintiff's claims."

Robert Lande, Senior Research Fellow of the AAI and a Professor of Law at the University of Baltimore, added, "This extremely important statement represents a clear and, we believe, unprecedented judicial commitment to examine carefully the standards under which disclosures must be made and to determine whether full compliance occurred. In addition, the Court's rejection of AAI's standing to file for relief under the Tunney Act was premised on the assumption that we have an adequate remedy elsewhere, namely by filing comments and seeking to intervene or otherwise participate in the settlement hearing. We filed comments (along with 29,999 others), although without the benefits of the disclosures to which we believe the public was entitled, and we moved (prior to the Court's ruling) for leave to participate as amicus curiae for the limited purpose of discussing the Tunney Act's requirements in the Microsoft case."

The AAI does not plan to appeal the rejection of the preliminary injunction. "We are hopeful," says Foer, "that we will be given an opportunity to press our arguments within the context of the hearings on the settlement."