Judge Jackson Excoriated at Microsoft Appeal

 
 
By Peter Galli  |  Posted 2001-02-27 Email Print this article Print
 
 
 
 
 
 
 

A visibly perturbed bench of U.S Court of Appeals justices today heard arguments here from both Microsoft Corp. and the government over whether District Judge Thomas Penfield Jackson should be removed from the landmark antitrust case going forward.

A visibly perturbed bench of U.S Court of Appeals justices today heard arguments here from both Microsoft Corp. and the government over whether District Judge Thomas Penfield Jackson should be removed from the landmark antitrust case going forward.

They also actively debated whether the nature of his comments to the media and others during and following the trial warranted sending the matter back to the District Court for a completely new trial.

The seven judges were hearing oral arguments for the second straight day as they weigh last years decision by Jackson to split Microsoft into two.

Longtime Microsoft attorney Richard Urowsky called for the entire judgement to be vacated given the "assault by Judge Jackson on a litigant [Microsoft] and the way he has defended his handling of the case. ... His comments reflect an animus towards the litigant and reflect actual bias."

John Roberts, who was arguing for the 18 states and the District of Columbia, had the unenviable task of having to defend Jackson. Roberts said he had no mandate to defend Jacksons decision to discuss the case while the trial was proceeding and while the appeal was pending.

But he argued that Jackson had not come into the case with any pre-bias and that any bias he may have displayed subsequently came from what he saw and learned during the trial. As such, there was never a need for him to recuse himself from the case or to be removed from hearing it going forward. There was also no legal justification for vacating his judgement and calling for a retrial, he said.

Lowering the boom

But his arguments did not sit well with the judges, who were clearly bothered by Jacksons behavior. Chief Judge Harry Edwards and Judge David Sentelle were the most vocal in their disapproval of his behavior.

"You do not run off your mouth. The system would be a sham if we all went around doing this," Edwards said.

"We need to be very careful about the metaphors we make. The integrity of the system is at stake. We just dont do it," a visibly annoyed Edwards added, referring to comments made by Jackson comparing Microsoft to drug traffickers and the Newton Street crew, a gang of racketeers, drug dealers and murderers.

Judge Sentelle added that a judge had the courtroom setting available to him. "What reason could Jackson have had to hold secret meetings and bad-mouth one of the litigants?" he asked Roberts.

"This is beyond the pale, extraordinary, how can we assume anything other than the worst?" Edwards asked.

The fact that Jackson had also asked the reporters not to publish what he had discussed with them before he issued his judgement made the whole situation "even worse," Edwards said.

While most of the judges questions revolved around whether Jacksons behavior indicated actual or perceived bias, whether he should have recused himself from the case and the consequences of his actions, the judges also repeatedly questioned the need to return the entire case for a new trial.

The seven judges were clearly divided on this issue themselves, as admitted by Judge David Tatel, who said "we may not be in agreement up here on the matter."

Bill Kovacic, an antitrust expert and professor of law at the George Washington University in Washington, said the appeals court had a number of options. It could remove Jackson from the case going forward; vacate everything he had done and send the case back for a retrial; refuse to defer to Jackson on his findings of fact; or examine those findings carefully and skeptically.

"Jackson is clearly off the case going forward," Kovacic said. "I also think there will be a review of his findings of fact, and some of those and the remedy package will be sent back to a new District Court judge for review. It is clear that several of the judges would like to start the case all over again, but I dont think thats going to happen as it would reduce two long years of hard work in the trial to nothing. But Jacksons behavior is clearly a supreme irritant to Chief Judge Edwards."

Roberts may also have undermined the governments integrity by telling the judges that Jackson had done nothing serious enough to justify even removing him from the case in the future.

Judge Kenneth Starr, the former Whitewater prosecutor who is assisting the governments legal team, also tried to downplay the appearance of bias by Jackson. In an address outside the courthouse, he said that while it was clear the court was concerned about Jacksons comments, "every comment Jackson made derived from trial evidence."

Breakup not in the cards?

In the course of the mornings session the judges also took a close look at the issue of Microsofts attempted monopolization of the market for Web browsers and Jacksons remedy proposal to break Microsoft into two separate companies.

They continued to take fire at the government, asking a range of questions about whether Netscape was significantly harmed by Microsofts actions in the browser market.

Several of the judges, including Chief Judge Edwards, Judge Sentelle and Judge Tatel, appeared to feel there was insufficient evidence to prove that Netscape wanted to create an Internet platform that would compete directly with Microsofts integrated Windows and Internet Explorer product.

The judges also repeatedly refered to the fact that Jackson had not defined which marketplace had been damaged by Microsofts actions. As such, it would be difficult for them to find that Microsofts actions had damaged the competitive marketplace, they said.

Judge Edwards told government attorney David Frederick that "the District Court flipped back and forth on the issue of which market was harmed. You have until now embraced its findings, yet run from them here. What market are we talking about here? The District Court made no finding as to what the relevant market was, which is essential."

GWs Kovacic said this was "unfortunate and careless of Jackson."

The two parties also vehemently disagreed on Jacksons remedy package, which includes the breakup of Microsoft.

Microsoft attorney Steve Holley argued that Jacksons order did not allow the company to challenge its assumptions, as there were no evidentiary hearings. It also relied on undocumented hearsay, which "was a clear abuse of discretion."

The court had also taken no account of the harm the decree would inflict on Microsoft and a wide range of third parties, Holley said. "The breakup is punitive and intended to punish Microsoft for refusing to concede to the notion that it had broken the law," he added.

However, Frederick said the remedy ordered ended Microsofts unlawful conduct and prevented its continuation, while restoring competition to the marketplace.

A number of judges also questioned whether the remedy package would stand as formulated if any of the monopoly maintenance, anti-competitive behavior and tying claims were overturned. Judge Sentelle suggested that if any of these findings were overturned, the remedy would have to be vacated back to the District Court for further consideration.

Judge Edwards also suggested that if the court found serious problems with the causation link, this would have a "major impact on the remedy. How the court treats the issue of monopoly maintenance is also essential to the remedy package. If we cannot find that Microsoft engaged in this, it would be a reason for vacating and reassessing the remedy."

Judge Douglas Ginsburg also made the point that the remedy was relevant to both the tying and monopoly maintenance findings. "If one is out, it will be very difficult to be confident about what the District Court would have done," he said.

Judge A. Raymond Randolph added that what was also clear was that even if the remedy were enacted as it currently stood, Microsoft would remain a monopoly. Judge Ginsburg agreed, stating that even after the proposed breakup, Microsoft could develop another version or type of Internet Explorer along with the Windows operating system, "which leaves us back where we started."

Microsofts Holley also questioned the governments claim that the breakup would do nothing to affect Microsofts position in any market. "If thats the case, whats the point of breaking it up?" he asked.

Kovacic of George Washington University said the extent of the judges questions of the governments case indicated where their concerns lay.

"There is no chance of a breakup, and I think enough pieces of Jacksons findings of fact will fall by the wayside that the remedy is likely to be revisited," he said. "The appeals court could send it back with specific instructions or allow a total review by a new judge."

 
 
 
 
Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at www.eweek.com.

 
 
 
 
 
 
 

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