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Microsoft Judge Says Ruling At Risk; Every Trial Decision Called 'Vulnerable'

BY James V. Grimaldi
by James V. Grimaldi on 9/29/00.

The federal judge who ordered Microsoft Corp. split in two said yesterday that "virtually everything" he did in the antitrust case may be vulnerable on appeal, and he blamed the software giant's "intransigence" for his breakup decision.

U.S. District Judge Thomas Penfield Jackson, in a candid and self-effacing luncheon speech to an antitrust seminar, also said "public misperceptions" fueled by "public-relations campaigns" spurred him to speak out to the media and the public on the historic case and assure observers that he does not want to regulate the software industry.

Jackson portrayed himself as a judge who came reluctantly to the Microsoft case, at first saying to himself, "I don't need this."

He said he also came reluctantly to a verdict against the software giant and reluctantly to the decision to break the company into competing enterprises, one making Windows operating systems and the other centered around applications such as Microsoft Office.

"The structural remedy was never my remedy of choice, and is not even so today," Jackson said. "It was always my preference that the market itself be allowed to rectify the dysfunction disclosed to me by the evidence, failing which a negotiated settlement was next-best."

In the end, he said, he decided on a breakup because he thought Microsoft had been responsible for the failure of out-of-court settlement talks.

"Judicial intervention--forcible application of law--became a last resort," Jackson said. "And in my judgment, Microsoft's intransigence was the reason."

But Jackson said he held no ill will against the company or its co-founder and chairman, Bill Gates. "I have never conceived of this case as a contest of wills between me and Mr. Gates," he said.

Jackson ruled in April that Microsoft had done damage to the competitive process by using its monopoly power in personal-computer operating systems to stymie competition, stifle innovation and harm consumers. Then, in June, he accepted the government's breakup proposal and approved the case for expedited appeal to the U.S. Supreme Court. On Tuesday the high court sent the case back to the U.S. Court of Appeals for the District of Columbia.

In his speech, Jackson said the public-relations efforts that troubled him were initiated by "one or more of the parties" in the lawsuit and "other interested persons." He named no names, but, in repeating a criticism of the breakup plan often uttered by Microsoft's spokesmen and supporters, Jackson clearly was referring to the software giant rather than the plaintiffs--the U.S. Justice Department, 18 states and the District of Columbia.

"I believed, and still believe, that it is vitally important to public confidence in the judicial system that my role be fully understood," Jackson said. "In particular, it should be clearly understood that I do not and have never aspired to be a federal regulator of the software industry, nor for that matter to enable the U.S. government to become one."

Throughout the trial, a number of tax-exempt trade groups, think tanks and foundations, which received more than $ 750,000 from Microsoft, have strongly advocated the software corporation's point of view and have been critical of the judge. One of those groups, Citizens for a Sound Economy, has been particularly critical and currently is spending more than $ 100,000 in North Carolina to try to influence candidates for attorney general to drop the case, said Erick Gustafson, a coordinator for the group. Both the Democratic and Republican candidates have indicated they would reconsider the state's role if elected.

Gustafson said he has been critical of Jackson's judgments, but not the judge personally.

"Maybe we are who he is talking about," Gustafson said. "I think what we've been trying to do is highlight that Judge Jackson is in a very important position in the history of the software industry and he has the ability to become very controlling of the software industry."

Speaking to a seminar sponsored by the Howrey Simon Arnold & White law firm and Fulcrum Information Services, Jackson did not comment directly about Tuesday 's Supreme Court decision not to hear the direct appeal of his order. He did, however, refer to appeals courts, appellate judges and Justice Stephen G. Breyer, the lone dissenter in the decision to send the appeal to the lower court.

Jackson, famous for telling jokes during the Microsoft trial, began the speech with a "parable": A law professor, an appeals-court judge and a trial judge were duck hunting. A bird flew by, and the professor analyzed its aeronautics, trajectory and position before determining whether to shoot; the professor missed. Another bird flew by and the appeals-court judge mulled previous court opinions and Supreme Court footnotes before deciding whether to shoot; the appellate judge also missed.

"The third bird comes over the horizon, the district judge looks up. 'Bang!' He fires and the bird falls into the water," Jackson said. "The district judge says, 'I sure hope that was a duck.' "

Jackson later referred to the duck joke in a serious vein in relation to the Microsoft case.

"I have absolutely no predictions as to what the outcome on appeal will be," Jackson said. "In the course of the proceedings, I shot a lot of birds, and I hope most of them turn out to have been ducks.

"Virtually everything I did," the judge said, "may be vulnerable on appeal."

The vulnerabilities, Jackson suggested, include not only his final order, but also his attempts to conduct the trial quickly by having written direct testimony and curtailed discovery.

"If I called my 'shots' correctly," he said, "we may have found a way to enable the ponderous machinery of an antitrust trial to work efficiently in the age of the new--and global--economy."