Microsoft trial judge pressed for mediator, settlement

Jackson proposed use of appellate judge

Antitrust case

November 24, 1999|By BLOOMBERG NEWS

WASHINGTON -- The judge who declared Microsoft Corp. a monopoly pressed government and company lawyers to accept the help of an outside mediator to seek an out-of-court settlement of the landmark antitrust case, a transcript of their discussions shows.

U.S. District Judge Thomas Penfield Jackson urged the lawyers to respond promptly to his proposal that appellate Judge Richard Posner, a noted antitrust scholar and advocate of free market economics, help both sides find common ground for a settlement, according to a transcript of the Nov. 18 meeting in the judge's chambers.

Microsoft, the U.S. Justice Department and 19 states suing the software giant quickly accepted the judge's plan and Posner's appointment was announced the next day in a brief court order.

"I would hope that you would all accede to it. It is voluntary. I am not going to order it, but I think it would be a very useful thing to do," Jackson said during the private meeting recorded by a court stenographer and now made public. "Could you do it by tomorrow?"

Jackson, who on Nov. 5 found that Microsoft used its monopoly over personal computer operating software to bully competitors and computer makers, told lawyers, "This is probably as propitious a time for any possible negotiated outcome as you could have."

Microsoft hasn't made any overtures to the government since the judge's Nov. 5 findings, and previous moves toward a negotiated settlement were considered inadequate by antitrust enforcers, people familiar with the talks said.

Posner, chief judge of the 7th U.S. Circuit Court of Appeals based in Chicago, is not "going to be prepared to waste a whole lot of time if it looks from the outset that it's not promising," Jackson said at the Nov. 18 meeting.

The judge said he would be willing to delay legal proceedings in the case if Posner "seems to think that more time is needed."

"Is there any one among you who thinks that you would not be willing to let Judge Posner take a shot at it?" Jackson asked.

Microsoft's defense lawyer, John Warden, said he wanted to consult with his client, adding, "But I certainly would not object."

"You would be willing to recommend it?" the judge said.

Warden said he would recommend that Microsoft enter mediation. Posner "is one of the smartest guys alive," he remarked.

`Willing to recommend?'

Jackson pushed harder when David Boies, the Justice Department's chief trial lawyer in the case, said he wanted to consult with department lawyers because "there are some issues about the use of mediation in a government case raising certain public policy issues. But I will do it very promptly."

"And I take it that it would be your recommendation, if there are no insuperable complications, that you would be willing to recommend it?" Jackson said.

Boies said he would, "with the qualification that I just have never thought through the issue of how you mediate some issues that raise sort of law enforcement and the kind of public policy issues that we have here."

Unlike commercial disputes where private parties ask a court to award monetary damages or interpret a contract, the government is seeking court-imposed remedies, or sanctions, to stop some of Microsoft's business practices it alleges are illegal.

State and federal antitrust enforcers have said they are considering remedies that include the possible breakup of the software giant to dilute its market power over operating software. The Windows operating system powers 95 percent of the world's PCs.

Meet in Chicago

Jackson said he was concerned by "somewhat disturbing" press reports that the Justice Department and the states might be proceeding on "parallel tracks" in considering remedies.

"The harmony between the states" and the U.S. government "has been enormously helpful," Jackson said. "And I would like to see it continue. I would not like to have to deal with divergent points of view."

State officials quickly disavowed the news reports, as they had when they first appeared. "I think those reports of divergent views were somewhat exaggerated," Connecticut Attorney General Richard Blumenthal told Jackson.

The judge told the lawyers that he wanted mediation to begin "sooner rather than later." Posner wants to meet both sides in Chicago, Jackson told the lawyers.

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