From the WSJ:
Microsoft Judge Turns Up Heat,
Pressing for Negotiated Settlement
By JOHN R. WILKE and DAVID BANK
Staff Reporters of THE WALL STREET JOURNAL
WASHINGTON -- The federal judge in Microsoft Corp.'s antitrust trial
told both sides the time is right for a negotiated settlement of the historic
case.
"I think this is probably as propitious a time for
any possible negotiated outcome as you could
have," Judge Thomas Penfield Jackson told
lawyers for the software company, the Justice
Department and 19 states during a meeting in his chambers last week.
Saying that he had "something of a surprise," he told the group gathered
last Thursday that he wanted to name Richard Posner, a conservative
appeals-court judge, as a mediator. He issued the order Friday, calling any
talks "voluntary."
Judge Jackson said he "prevailed upon" Judge Posner, the chief judge of
the U.S. Court of Appeals in Chicago, "to see whether or not he can get
you all playing the same tune, if you are willing to take a shot at it,"
according to a transcript of the proceedings. He also asked whether Judge
Posner's effort should proceed "clandestinely," and then decided against it.
Concern Over 'Policy Issues'
Both sides agreed to the mediation Friday, though no talks have been
scheduled yet. In their discussion Thursday, David Boies, lead trial counsel
for the Justice Department, welcomed the move but expressed concern
that any mediation would raise broad "policy issues" likely to go beyond
the kinds of issues typically in play in mediations of private lawsuits. John
Warden, Microsoft's lead attorney, called Judge Posner "one of the
smartest guys alive."
Judge Jackson also asked Mr. Warden if he would object to an Internet
expert, Lawrence Lessig, participating again in the case as a "friend of the
court." The Harvard Law School professor, who earlier served as a law
clerk for Judge Posner, was removed last year from a more direct role as a
"special master" in the case after an appeal by Microsoft. Mr. Warden
reserved judgment.
In the brief conference, Judge Jackson added that his action was "partly
motivated by what I think are somewhat disturbing reports in the press that
the plaintiffs are proceeding on 'parallel tracks,' " he said, referring to
suggestions that the states and the Justice Department may seek different
remedies if Microsoft loses. "The harmony between the states and the DOJ
has been ... enormously helpful. And I would like to see it continue."
Tom Miller, Iowa's attorney general, assured the judge that "there will be
harmony on this issue, as there has been in the past." Attorney General
Richard Blumenthal of Connecticut added that the report of a split between
states and the U.S. was "exaggerated."
"There has been a lot exaggerated about this case," the judge replied.
More Suits Filed
Separately, two more private antitrust suits seeking class-action status
were filed against Microsoft, raising the stakes as the company prepares
for settlement talks. The suits, filed in a California state court and federal
court in Louisiana, allege that Microsoft overcharged buyers of Windows
or Office software, and cite a harsh preliminary ruling by Judge Jackson on
Nov. 5.
The first class-action suits were filed nearly a year ago, in state court in San
Francisco and federal court in Washington on Feb. 18. Since those suits
are well along in the judicial process, the people bringing them are likely to
be the lead plaintiffs if the cases are consolidated, as often happens in
class-action litigation.
Robert Hall, a Stanford University economics professor who specializes in
quantifying damages, estimated the price of a copy of Microsoft's
Windows 98 software might have been $10 lower were it not for the
misconduct described in Judge Jackson's findings. Multiplied by more than
100 million copies and tripled under antitrust law, damages in such suits
could amount to billions of dollars, he said.
The lead plaintiff in the San Francisco case is Charles Lingo, a California
resident and retired maintenance engineer who earlier this year joined a
protest outside Microsoft's Silicon Valley offices seeking a refund for the
price of Windows. Mr. Lingo said he never used the software that came
preinstalled on his laptop. Instead, he said, he installed a rival program,
OS/2, made by International Business Machines Corp.
The lead plaintiff in the Washington case is Gravity Inc., a Fort Worth,
Texas, maker of legal software. This case also cites as defendants
Compaq Computer Corp., Dell Computer Corp. and other PC makers;
they denied the charges and asked that the suit be dismissed. The case is
pending in the courthouse where Judge Jackson tried the Microsoft case.
Microsoft has rejected the charges in all the private suits, noting that the
price for Windows 98 is roughly the same as the price for Windows 95,
even though it contains many new features, while Office prices have
dropped 50% since 1990. A company spokesman Monday called the
lawsuits "misguided, because our operating system costs less than virtually
every one of our competitors'."
Ian |
