Judge to DOJ, Microsoft: Make Up!

District Judge Colleen Kollar-Kotelly gives Microsoft and the government just two weeks to reach a settlement in the antitrust case by themselves before she appoints a mediator to assist them.

Microsoft Corp. and the Department of Justice have just two weeks to reach a negotiated settlement in the antitrust case by themselves, otherwise U.S. District Judge Colleen Kollar-Kotelly will appoint an external mediator to assist.

In an order posted late Friday, Kollar-Kotelly told the parties they have until Oct. 12 to settle the antitrust case by themselves and out of court. If they fail, she said, she will appoint a mediator.

The judge, who was randomly assigned the case after the D.C. Appeals Court returned it to the District Court for further hearings, on Friday ordered the parties to engage in settlement talks 24 hours a day, seven days a week. It was the first face-to-face meeting Kollar-Kotelly has had with the parties.

In the past, Microsoft and the government have indicated they would not want a mediator appointed.

But in her order, Kollar-Kotelly said, "It has been three months since the appellate court rendered its decision with no resolution reached by the parties.

"The Court will give the parties until October 12, 2001, to settle the cases on their own," she said. "However, if at the end of that time, they have not been fully successful, the parties shall submit to Chambers, on October 12, 2001, the name of an agreed-upon individual to act as facilitator/mediator to assist the parties in their efforts. If the parties cannot agree upon an individual, then the Court will appoint such an individual to act as their facilitator/mediator."

If that happens, it will not be the first time a mediator has refereed the case. In November 1999 District Judge Thomas Penfield Jackson, who was hearing the case, proposed a process mediated by Seventh Circuit Court of Appeals Chief Judge Richard Posner.

The process was unsuccessful, and in April 2000 Posner announced that his endeavor to find common ground between the two sides had "proved fruitless."

"After more than four months, it is apparent that the disagreements among the parties concerning the likely course, outcome and consequences of continued litigation, as well as the implications and ramifications of alternative terms of settlement, are too deep-seated to be bridged," he said at the time. "This result is disappointing … because the public interest would be served by avoiding further litigation, with its potential for unsettling a key industry in the global economy. I believed when I undertook this assignment that it was in the national interest that the case be settled, and I believe it even more strongly today."

Today, some remain skeptical of court-appointed mediation.

"I think it is unlikely that she will get the parties to settle or that mediation will effectively resolve the issues in the case," said Dana Hayter, an antitrust expert at Fenwick & West LLP in San Francisco and a former attorney with the Justice Department who worked on the Microsoft antitrust case in 1997. "Given how far apart the camps were on every substantive issue in the joint status report filed recently, I believe the remedy phase will ultimately have to be tried."

Last week, Kollar-Kotelly also told the parties in her order that if a mediator were appointed, every 10 days thereafter, "without disclosing or discussing the contents of the settlement discussion, the parties shall participate in a conference call to apprize the Court of their progress in settling the cases. The Court will not entertain any requests for extensions of the deadlines."

But settlement talks and mediation notwithstanding, Kollar-Kotelly kept up the pace of the case, setting a schedule to keep the trial moving quickly. "If the cases have not been fully resolved through settlement by November 2, 2001, then the Court will proceed with the scheduling order," she said. The schedule said briefs would be due in December and the hearing to start March 11, 2002, if a settlement is not reached.

Microsoft spokesman Jim Desler said the company remains interested in and open to the settlement process as a way of quickly resolving these issues. "Were going to comply with the court order and will be working very intensely and in very good faith with the government over the next few weeks, and well see where we are on Oct. 12. All parties have previously said we would prefer to avoid mediation, and that still applies," Desler said.

But the parties are going forward with a "sense of open mindedness and optimism, so I dont think thats something were automatically talking about at this point," he added.