Copyright 2000 The Chronicle Publishing Co.
The San Francisco Chronicle
JUNE 8, 2000, THURSDAY, FINAL EDITION
SECTION: BUSINESS; Pg. B1
LENGTH: 1701 words
HEADLINE: THE MICROSOFT RULING; Workers Take It in Stride; Gates Seeks Friendlier Legal Turf
BYLINE: Carolyn Lochhead, Chronicle Washington Bureau
Faced with U.S. District Judge Thomas Penfield Jackson's damning antitrust verdict and breakup order, Microsoft will move quickly to shift its case to what it hopes will be the friendlier turf of the U.S. Court of Appeals in the District of Columbia.
Indeed, the appeals court is considered potentially so much friendlier that the Department of Justice -- with Judge Jackson's encouragement -- may attempt to invoke a little-used procedure to bypass the appeals court and take the case directly to the U.S. Supreme Court.
Microsoft Chairman Bill Gates seemed almost relieved that the case was finally out of Jackson's court, calling yesterday's ruling "the first day of the rest of this case."
Gates announced that he will immediately request a stay on the so-called conduct remedies.
How the appeals court rules on that request could signal its posture toward the case. More important, legal experts said, a stay could quash any effort to short-circuit the case to the Supreme Court.
"The logic of a stay is that it is less likely that the Supreme Court will take the case if the D.C. appeals court is engaged substantively in the matter," said Daniel M. Wall, a partner at the San Francisco law firm Latham & Watkins.
But legal experts said it is unlikely the case will go directly to the high court, given its focus on narrow issues of law and distaste for taking huge cases that have not already been thoroughly sifted by the lower courts.
The 10-member appeals court -- from which a three-judge panel would be drawn at random to hear the Microsoft case -- is considered one of the country's most conservative. A majority of its judges were appointed by Republican presidents Ronald Reagan and George Bush.
The court includes Judge Douglas H. Ginsberg, schooled at the University of Chicago, the academic nerve center of free-market antitrust thinking that has shifted antitrust law in a much less interventionist direction over the past three decades.
The D.C. Court of Appeals is also considered one of the nation's most sophisticated, handling many cases dealing with the arcane technicalities and applications of federal regulation.
"This is a court which has, even more so than other courts of appeal, a roster of highly intelligent judges used to dealing with pretty complicated factual and legal issues," said Joe Sims, a partner at the Washington law firm Jones, Day. "So if you're interested in getting the right answer, assuming there is one, this is the court you'd like to see it go to, which is more likely than most to produce the legally correct answer."
The D.C. Court of Appeals also is the court that overturned Judge Jackson in a 3-to-2 ruling for Microsoft in 1998 -- just before the current case began.
The appeals court held that Microsoft did not violate a 1995 consent decree by incorporating its Web browser, Internet Explorer, into its Windows operating system -- the very heart of the current antitrust case.
"It's a pretty conservative court," Wall said. "I think the betting is that Microsoft would be very unlikely on appeal to draw a panel that didn't contain at least one quite conservative judge that the government would have little prospect of persuading."
Still, if the Microsoft case has demonstrated anything, ideology is a poor predictor of how people view the company's behavior. Judge Jackson was a Reagan appointee. Judge Robert Bork, a Chicago-school antitrust scholar, is among Microsoft's most vociferous critics.
Moreover, Jackson's ruling was so unambiguous that the software giant faces an uphill battle on appeal, even though Gates insists that Microsoft will ultimately prevail.
Appeals courts seldom overturn a lower court's findings of fact unless they are clearly erroneous, and Judge Jackson's fact findings hold that Microsoft illegally abused its monopoly in the Windows computer operating system to foist its other products on consumers and elbow out competitors.
"One of the most important things is the record," said Ed Black, president of the Computer and Communications Industry Association, a vocal Microsoft critic. "And here we have a very exhaustive 412 findings of fact, so there is a very, very powerful record, and Microsoft has lost on the facts overwhelmingly."
Microsoft's chief line of attack will focus on Judge Jackson's findings of law, which are more open to re-examination.
"On legal conclusions, courts reverse all the time, and that would not be horribly surprising," Sims said.
Arguments could focus on such questions as whether a breakup is workable, whether it is properly aimed at Microsoft's contested behavior, and whether it is "disruptive or disabling to the defendant" in reaching that goal, Sims said. "If that's the standard they use, you can see there's a lot of room for argument on all those points."
One of Microsoft's chief arguments -- won at the D.C. Appeals Court once before -- is that it should not be illegal to incorporate new products, such as its Web browser, into Windows.
Wall called that argument "the strongest point without a doubt," noting that Judge Jackson went so far as to state that the appeals court had wrongly overturned him on that point.
"That is very central to this case," Wall said. "It's not some backwater issue, and here the odds favor Microsoft. The whole notion that integrating new functions into a product could be illegal is contrary to most existing authority."
But Black contends that Microsoft's chances on appeal are dim because it will not have an opportunity to reargue the entire case. Black said the appellate court need only find that Judge Jackson "did a sensible job of using facts and judgment," and if that is the case, "the presumption is his ruling stands."
Some contend that Jackson's brusque dismissal of hearings on the proposal to break up the company -- the most radical remedy in antitrust law -- could invite scrutiny.
THOSE WHO SIT IN JUDGMENT
The District of Columbia Court of Appeals will be the next court to hear pleas in the Microsoft antitrust case. It is among the country's most conservative courts and is considered one of the most sophisticated as well, regularly handling complex litigation in federal regulation and antitrust.
-- Republican Appointees
-- Laurence H. Silberman, appointed by President Reagan in 1985, graduate of Harvard Law School, worked as a banker in San Francisco and a lawyer in Honolulu and Washington. Served as ambassador to Yugoslavia, undersecretary of Labor and on the General Advisory Committee on Arms Control and Disarmament.
-- Stephen F. Williams, appointed by President Reagan in 1986, graduate of Harvard Law School. Served as visiting professor at University of Chicago, the leading center on the combined study of law and economics that approaches antitrust from a free-market perspective and has heavily influenced antitrust theory over the previous three decades. Considered, along with Douglas H. Ginsberg, one of the two judges most likely to favor Microsoft. Was one of two judges, along with A. Raymond Randolph, on three-judge panel that overturned a 1998 ruling against Microsoft by U.S. District Judge Thomas Penfield Jackson.
-- Douglas H. Ginsberg, an antitrust expert appointed by President Reagan in 1986. Was nominated for the Supreme Court in 1987 after the Senate failed to confirm Judge Robert Bork. Ginsberg withdrew his nomination after he admitted to having smoked marijuana during the 1960s and 1970s; Judge Anthony Kennedy filled the opening. Ginsberg graduated from the University of Chicago Law School and served as assistant attorney general in the antitrust division of the Department of Justice from 1985 to 1986.
-- David B. Sentelle, appointed by President Reagan in 1987. Graduate of University of North Carolina School of Law. Was presiding judge of the special division that appointed independent counsels.
-- Karen Lecraft Henderson, appointed by President Bush in 1990. Graduate of the University of North Carolina School of Law. Was a U.S. district judge in South Carolina.
-- A. Raymond Randolph, appointed by President Bush in 1990. Graduated summa cum laude from the University of Pennsylvania. Was one of two judges, along with Williams, on the three-judge panel that overturned an earlier ruling against Microsoft from Judge Jackson. Randolph served as a special counsel to the House of Representatives' Ethics Committee and as a special assistant attorney general for Utah, Montana and New Mexico. He has taught at Georgetown University law school and is a distinguished professor at George Mason law school, teaching advanced constitutional law. Also served as chairman of U.S. Judicial Conference Codes of Conduct committee from 1995 to 1998.
-- Democratic Appointees .-- Harry T. Edwards, chief judge, appointed by President Carter in 1980. Graduate of the University of Michigan Law School. Has taught at Harvard Law School, was also chairman of Amtrak and a labor arbitrator during the 1970s. Edwards has written extensively on labor law, higher-education law, federal courts, professionalism and judicial administration.
-- Judith W. Rogers, appointed by President Clinton in 1994. Graduate of Harvard Law School and the University of Virginia School of Law. Served as an assistant U.S. attorney for the District of Columbia and as a trial attorney in the Justice Department.
-- David S. Tatel, appointed by President Clinton in 1994. Graduate of the University of Chicago Law School and specializes in civil rights law. Served as director of the National Lawyers' Committee for Civil Rights Under Law, general counsel for the Legal Services Corp. and director of the office of civil rights at the Department of Health, Education and Welfare.
-- Merrick B. Garland, appointed by President Clinton in 1997. Graduated magna cum laude from Harvard Law School, where he has also taught antitrust law. Clerked for Supreme Court Justice William J. Brennan. Served as deputy assistant attorney general in the criminal division of the Justice Department and supervised the Oklahoma City bombing and Unabomber prosecutions.