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http://www.zdnet.com/intweek/stories/news/0,4164,2235340,00.html

Judge's Move Appears To Push For
Settlement

By Will Rodger
April 1, 1999 8:45 AM ET

The judge overseeing the Microsoft antitrust trial gave both sides
an unusual timetable this week. It means one thing for sure, legal
experts said: Settle or else.

"It's beautiful," said John Chapman, an antitrust attorney who
led litigation against IBM during the Carter administration. "It's
like putting all the cards on the table. The government won't
likely get what it wants, but I think Microsoft will be shocked
by what it sees. I've never seen this done before."

Under routine courtroom procedure, judges who must rule
without a jury ask attorneys to submit in writing what they
think the facts are, and what law should apply to them. That
process begins once testimony is over and ends with the judge's
decision. When the decision finally emerges, the judge addresses
the two parts separately.

But Judge Thomas Penfield Jackson did something extraordinary
this week. Instead of promising the two parts the same day, he
said he would rule on the facts first. Only then, he said, would
he ask the two sides for their opinion of what the law said.
Sometime later - weeks, if not months - he would issue his final
ruling.

"He's trying to get them to settle," said Herb Hovenkamp, an
antitrust specialist and law professor at the University of Iowa.
By telegraphing his intentions through findings of fact,
Hovenkamp said, Jackson will give both sides fair warning of
what's to come if they don't work things out themselves.

On one hand, the states and the U.S. Department of Justice have
scored numerous points with Jackson by forcing Microsoft
witnesses to say things at odds with the plain-English meaning
of internal documents before the court. As evidence mounts that
Microsoft tried to kill off competition from Netscape
Communications and Sun Microsystems, they said, victory
appears all but certain.

Yet, Microsoft lawyers remain emphatic that the law is on their
side. No matter what "theatrics" the government may generate
inside the courtroom, they said, their company faces vigorous
competition everyday. Since they have competition, they
reason, there can be no finding they have violated antitrust law.

If Jackson wants a settlement, Hovenkamp said, he needs to
remove the uncertainty that leads many to predict settlement
talks will go nowhere.

"The general rule of settlement is, the more certain the parties are
about what the outcome will be, the more likely a settlement will
be," Hovenkamp said.

Rich Gray, a partner at the San Jose law firm of Bergeson,
Eliopoulos, Grady & Gray, said the judge's decision will depend
largely on his interpretation of past courts' rulings. In that sense,
he said, Microsoft is right when it says allegations that it has
acted to exclude rivals or illegally tied purchase of Windows to
its browser are a matter of interpretation. Then again, he said:
"Once the judge has issued his findings of fact, the conclusions
of law should almost write themselves."

William Kovacic, professor of law at George Washington
University in Washington, D.C., said Jackson may also be trying
to strengthen his own work by separating facts from law.

If both sides understand what his view of the facts is, then they
will have to tailor their views of the law accordingly, he said.
That in turn, will produce a clearer ruling. Even so, he said, the
pressure Jackson's move places on both sides is unmistakable. If
he times his pitch right, he said, Jackson will "throw a ball at the
heads of [Microsoft Vice President for Legal and Corporate
Affairs William] Neukom and [the government's lead attorney,
David] Boies. You want to make them each a bit nervous so
they'll want to settle."

Neither Microsoft nor the DOJ would comment on the effect
Jackson's schedule might have on settlement talks.




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