The Microsoft Trial, Feb. 27, 2001

Jackson’s Hole

Watching the concluding oral argument in U.S. v. Microsoft at the D.C. Circuit Court of Appeal, you can almost hear this faint, high-pitched whine of despair coming from the Department of Justice attorneys:

But they didit. And we proved they did it. Read the internal e-mails. Why isn’t everyone more outraged? What more did we have to do here?

But try as they may to invoke for the panel the litany of bad acts, nasty threats, outrageous deals, and misdeeds of the Death Star Corp., the government lawyers cannot arouse the judges. The focus today is on three very narrow legal questions: 1) Microsoft’s attempted monopolization; 2) the viability of Judge Thomas Penfield Jackson’s remedy; and 3) the severity of Jackson’s misconduct in talking to the press. I once heard a court of appeals judge say, if you want to tell your sob story, don’t take it to the appellate courts. This panel has proved that, evincing almost no outrage over the past two days, with the exception of their vociferous disgust over Jackson’s extra-judicial case commentary. They ask both sides hard questions, although they are (like yesterday) far harder on the government side. But they don’t seem to be crying into their beers over injustices done to Netscape or Sun. Whether it is truly a more conservative court than Jackson’s or just a less easily shocked court remains to be seen.

The morning opens with Microsoft’s Richard Urowsky explaining that Microsoft is not guilty of attempted monopolization, and with only two interruptions from the panel he is permitted to explain why. Then, the first DOJ lawyer, David Frederick (who suffers unduly for the congenital condition of just-not-being-David-Boies), concedes that there is “some lack of clarity” concerning what happened at a June 1995 meeting between Microsoft and Netscape in which a plan to divide markets between the two companies was discussed. Frederick goes on to use the word “concede” six more times today, at least by my count. Conceding to Chief Judge Edwards that the district court’s findings reflect confusion between the browser and platform markets, and later conceding to the same point from Sentelle, he adds, “If you’d like me to repeat my earlier concession, I’ll do so.”

“No,” says Sentelle, who always sounds like his mouth has two great wads of tobacco in it. “I’d like you to expand it.” Everyone laughs.

Steven Holley argues next for the Microsoft team, on the issue of the breakup remedy ordered by Jackson last summer. Holley, who was always good at trial, reads from a deathly dry prepared speech about the indignities suffered by Microsoft, doing so with all the animation of the little Dutch Boy android at the “It’s a Small World” ride. Santelle even reminds him, after many, many long uninterrupted moments of reading, that the rules prohibit reading. Holley seems to read his apology. In effect, he argues, breaking up the company without a hearing will ruin Microsoft, destroy Microsoft products, and harm consumers.

The one point he makes that does seem to resonate with the panel is that breaking up a single unitary company that has not grown as a result of acquisitions is completely without precedent in U.S. history.

Then DOJ’s Frederick is back on his feet explaining that Microsoft was never entitled to a whole new trial on remedy, and they knew perfectly well last April that a remedy like this one was likely. Then, he and Sentelle get down to it: What happens if the court vacates or reverses the lower court on the tying claim (Section 1 of the Sherman Act) but agrees with the government on the monopoly or attempted monopoly claims (Section 2 of the act). Well, what then? After much scuffling to-and-fro, Frederick maintains that divestiture would still be the appropriate remedy and tumbles down a manhole with Judge Edwards when he cites the wrong case and is busted on it. He also takes the position that splitting Microsoft will actually benefit shareholders. Which should doubtless drive Microsoft up another three points tonight.

Judge Randolph suggests that it makes more sense to bust up Microsoft into “three companies that each get Windows and all compete with each other,” as opposed to one company that gets the applications while the other gets the operating system.

Finally, after a brief break, it’s time for Judge Jackson to be voted off the island. Urowsky opens with the list of Jackson’s publications and speeches since the trial. The New Yorker, the Wall Street Journal, the New York Times, speeches at major universities …

Citing both the Judicial Canon’s proscription on ex parte statements and conversations and the federal rule demanding recusal in the case of bias, Urowsky urges the panel to … well, he doesn’t quite say what he wants them to do about it, but you can bet he’d be pretty darn happy if they vacated the whole ruling.

Ken Auletta, whose book World War 3.0 is being invoked with some disgust by the panel, sits calmly in front of me, pen in hand, this thought balloon over his head: Everyone says Judge Jackson is a moron. But I don’t think he’s a moron. He gave me 10 hours of taped interviews.

Tatel gives the impression that the timing of Jackson’s outpourings is significant. The only comment he made before issuing his “Findings of Fact” was that he was “not a fan of integration,” and Tatel suggests this may not compromise him. The real problem, says Randolph, is that every one of these statements is hearsay, none of it has been sworn upon or tested in a judicial proceeding.

Then poor John Roberts, lawyer for the states that are suing Microsoft, is placed in the miserable position of having to spend 30 minutes trying to defend Jackson’s egregious behavior. He argues from between a rock and a hard place, attempting to both condemn Jackson’s behavior while urging the panel that it wasn’t bad enough to show prejudice or bias. He does this by willfully ignoring the distinction between actual prejudice and the appearance of prejudice, until the judges appear ready to throttle him.

Here’s where the judges go crazy:

Edwards: “We are not entrusted to run off our mouths. The system would be a sham!”

Sentelle: “What possible legitimate reason could there be for a judge going to reporters, unless he’s biased? He has a court forum to do legitimate business … to have secret conferences in chambers. … He shouldn’t be doing it!”

Edwards: “It’s so beyond the pale.”

Edwards (again): “He went on and on … with preferred reporters, taking their views, showing them all his notes.”

Sentelle: “I’m not sure how you can look at me with a straight face and say we should remand to this judge.”

Urowsky finishes off, urging the panel that the very appearance of bias in the eyes of the public is sufficient grounds to reverse Jackson. I keep wondering how the public would feel if they knew the judges must loathe this man for talking down to them as if they were all very small, very drunken dwarfs.

The court takes a moment to thank both sides for providing exhibits on CD-ROM. I notice six of the seven judges have been glued to their laptops both days (Judge Tatel is blind) and wonder if the difference in their sympathies is as simple as the difference between their dependence on their computers and Jackson’s determined use of the shabby green notebook throughout the months of trial.

Why did Jackson feel the need to trash Gates and Microsoft and Sullivan & Cromwell and the D.C. Circuit Court of Appeals and countless others, in print, in private, and in full knowledge that it would compromise him? Auletta uses the words “livid,” “fury,” and “rage” in describing Jackson, almost as much as he does to describe Bill Gates. For Jackson, this was personal.

Ultimately, the only thing worse than an “arrogant,” “Napoleonic” little boy with “power and unalloyed success” (Jackson on Gates) is an arrogant Napoleonic little judge who thinks he has the power to punish him.

I feel bad for the DOJ. It took them four years, but they put on a hell of a case. With a vast Chex Mix of judicial remedies (remand, vacate, more fact-finding, reversal, remand-in-part, reverse-in-part …) available to the court of appeals and tepid support from the Bush administration, they may have won every battle and lost the war.