Opinion ID: 185418
Heading Depth: 2
Heading Rank: 5

Heading: Modification of Liability

Text: 259 Quite apart from its procedural difficulties, we vacate the District Court's final judgment in its entirety for the additional, independent reason that we have modified the underlying bases of liability. Of the three antitrust violations originally identified by the District Court, one is no longer viable: attempted monopolization of the browser market in violation of Sherman Act 2. One will be remanded for liability proceedings under a different legal standard: unlawful tying in violation of 1. Only liability for the 2 monopolymaintenance violation has been affirmed--and even that we have revised. Ordinarily, of course, we review the grant or denial of equitable relief under the abuse of discretion standard. See, e.g., Doran v. Salem Inn, Inc., 422 U.S. 922, 93132 (1975) ([T]he standard of appellate review is simply whether the issuance of the injunction, in the light of the applicable standard, constituted an abuse of discretion.). For obvious reasons, the application of that standard is not sufficient to sustain the remedy in the case before us. We cannot determine whether the District Court has abused its discretion in remedying a wrong where the court did not exercise that discretion in order to remedy the properly determined wrong. That is, the District Court determined that the conduct restrictions and the pervasive structural remedy were together appropriate to remedy the three antitrust violations set forth above. The court did not exercise its discretion to determine whether all, or for that matter, any, of those equitable remedies were required to rectify a 2 monopoly maintenance violation taken alone. We therefore cannot sustain an exercise of discretion not yet made. 260 By way of comparison, in Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447 (1993), the Supreme Court reviewed a damages award in a Sherman Act case. In that case, the trial court entered judgment upon a jury verdict which did not differentiate among multiple possible theories of liability under 2. The Supreme Court ultimately determined that the trial record could not legally support a finding that the defendant had committed an illegal attempt to monopolize, and that the trial instructions allowed the jury to infer specific intent and dangerous probability of success from the defendants' predatory conduct, without any proof of the relevant market or of a realistic probability that the defendants could achieve monopoly power in that market. Id. at 459. Therefore, the High Court reversed the Ninth Circuit's judgment affirming the District Court and remanded for further proceedings, expressly because the jury's verdict did not negate the possibility that the 2 verdict rested on the attempt to monopolize grounds alone.... Id. Similarly, here, we cannot presume that a District Court would exercise its discretion to fashion the same remedy where the erroneous grounds of liability were stripped from its consideration. 261 The Eighth Circuit confronted a similar problem in Concord Boat Corp. v. Brunswick Corp., 207 F.3d 1039 (8th Cir.), cert. denied, 121 S. Ct. 428 (2000). In that case, a group of boat builders brought an action against an engine manufacturer alleging violations of Sherman Act 1 and 2, and Clayton Act 7. After a 10-week trial, the jury found Brunswick liable on all three counts and returned a verdict for over $44 million. On appeal, the Eighth Circuit reversed the Clayton Act claim. Id. at 1053. That court held that, as a consequence, it was required to vacate the jury's remedy in its entirety. Because the verdict form did not require the jury to consider what damages resulted from each type of violation, the court could not know what damages it found to have been caused by the acquisitions upon which the Section 7 claims were based. Id. at 1054. The court rejected the proposition that the entire damage award may be upheld based on Brunswick's Sherman Act liability alone, id. at 1053, holding that, because there is no way to know what damages the jury assigned to the Section 7 claims, the defendant would be entitled at the very least to a new damages trial on the boat builders' Sherman Act claims, id. at 1054. 262 Spectrum Sports and Concord Boat are distinguishable from the case before us in that both involved the award of money damages rather than equitable relief. Nonetheless, their reasoning is instructive. A court in both contexts must base its relief on some clear indication of a significant causal connection between the conduct enjoined or mandated and the violation found directed toward the remedial goal intended. 3 Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law p 653(b), at 91-92 (1996). In a case such as the one before us where sweeping equitable relief is employed to remedy multiple violations, and some--indeed most--of the findings of remediable violations do not withstand appellate scrutiny, it is necessary to vacate the remedy decree since the implicit findings of causal connection no longer exist to warrant our deferential affirmance. 263 In short, we must vacate the remedies decree in its entirety and remand the case for a new determination. This court has drastically altered the District Court's conclusions on liability. On remand, the District Court, after affording the parties a proper opportunity to be heard, can fashion an appropriate remedy for Microsoft's antitrust violations. In particular, the court should consider which of the decree's conduct restrictions remain viable in light of our modification of the original liability decision. While the task of drafting the remedies decree is for the District Court in the first instance, because of the unusually convoluted nature of the proceedings thus far, and a desire to advance the ultimate resolution of this important controversy, we offer some further guidance for the exercise of that discretion.