WASHINGTON – Thomas Penfield Jackson is not merely a federal judge with a soft spot for government prosecutors and an undisguised contempt for Microsoft executives.
He's also a media blabbermouth, whose private chats with reporters wound up costing the Justice Department its biggest victory in a generation.
On Thursday, the U.S. Court of Appeals for the D.C. Circuit ruled that Jackson's bad habit of trash-talking Microsoft honchos – likening them to gangland killers and stubborn mules who should be walloped with a 2-by-4 – was ample reason to overturn his breakup order and return the case to a different judge.
In stentorian language seldom heard in discussions of a fellow jurist, the appeals court unanimously condemned Jackson's "rampant disregard for the judiciary's ethical obligations," and said he'd no longer be permitted anywhere near this case.
During a hearing in February, the judges went even further, suggesting that Jackson engaged in more out-of-court chatter than any other judge in U.S. history. "The system would be a sham if all judges went around doing this," complained Chief Judge Harry Edwards.
Microsoft's adversaries were left fuming on Thursday, insisting that if Jackson had held his tongue, the breakup order would have remained intact.
"I wish he hadn't spoken out of turn the way he did because I truly believe that if he had exercised better judgment, we wouldn't have seen his remedies vacated," said Norm Hawker, a research fellow at the American Antitrust Institute, which advocates aggressive use of the antitrust laws.
"He essentially pulled the carpet out from under his own findings," Hawker said.
Remaining silent were Jackson's fans in the Washington establishment, who cheered the rotund jurist last year when he was denouncing Microsoft chairman Bill Gates as unethical and compared him to a "drug trafficker" and Napoleon.
Last June, Time magazine columnist Margaret Carlson proclaimed that "the country is fortunate that there are people like Joel Klein and Judge Thomas Penfield Jackson willing to take on this icon of the dot-com IPO world, these, you know, rich guys who don't think that there's any place in America for regulation."
In a Washington Post column, David Ignatius wrote: "Most of the plaudits in this case so far have gone to the Justice Department's lawyer, David Boies. But the real hero, I think, was Judge Jackson."
By the time the 78-day antitrust trial started, it was clear that Jackson was permanently biased toward the Justice Department's view of Bill Gates as a recidivist monopolist.
Jackson repeatedly cut Microsoft attorneys short during cross-examination, while treating David Boies, who argued the case for the government, with visible deference. He appointed Larry Lessig, a prominent liberal law professor and Microsoft critic, as a special master over objections from defense lawyers.
He ordered a dismemberment of the largest software company in the world without holding one hearing on the topic, a move that seemed to shock the appeals court. Most antitrust trials of any substance take years to prepare: Jackson gave Microsoft six months.
The irony is that Jackson's intransigence has handed Microsoft at least a temporary victory. His preliminary decisions, starting in late 1997 and continuing in fall 1999, were so breathtakingly favorable to the government that the rulings were not surprising: They emboldened Joel Klein, Clinton's antitrust chief, and other prosecutors.
The DOJ refused to settle the case on terms that gave Microsoft flexibility in the design of future products. In fact, they were so pleased with Jackson's "findings of fact" – to which appeals courts, as a general rule, offer great deference – that they gambled on winning even after the appeals process was complete.
Their case now a shambles and with an uncertain future before a judge not yet named, Justice Department officials nevertheless put on a good face for the cameras. Attorney General John Ashcroft even offered this credulity-straining claim: "This is a significant victory."
To be sure, it wasn't a complete win for Microsoft – far from it. The 125-page opinion (PDF file) is welcome news for investors fretting about the immediate threat of the breakup order – which is now toast – but bad news for anyone who hoped Microsoft would escape with no punishment at all.
The appeals court did say that Microsoft had a monopoly, "behaved anticompetitively," and should be held liable for its actions. While giving away Internet Explorer for free or even paying sites to take it did "not violate the Sherman Act," the judges said, Microsoft's Windows-only deals with computer makers did.
On the other hand, Jackson's decision that Microsoft had illegally "tied" the browser is history, as is his finding that Microsoft tried to monopolize the browser market to the detriment of Netscape Navigator.
That means more hearings, more delays and more uncertainty in the stock market, which perked up quickly on Thursday on news of the decision. Hearings on what punishment is appropriate and another round of appeals promise to delay the proceedings for at least a year, and Microsoft is sure to point to emerging threats to its dominant position such as Linux and AOL Time Warner as evidence that a breakup is unjustified.
It also means the pressure is on for a settlement, which is how Microsoft unceremoniously ended a previous case in which the Justice Department accused it of antitrust wrongdoing.
Gates explicitly invited the Justice Department and state attorneys general to compromise, telling reporters on Thursday, "Microsoft has always wanted to settle this case."
Attorney General John Ashcroft was noticeably more cautious. He said: "We will pursue the best interests of the American people and of America. And to the extent that we can get that done, we will explore all kinds of avenues to do that."
Not so the states. Iowa Attorney General Tom Miller – who may not speak for all his colleagues (and one state has already dropped out of the Microsoft suit) – seems to be in the breakup-or-bust category.
"The states believe that recent activities by Microsoft will only strengthen our argument for strong remedies, including a possible break-up," Miller said. "The company's recent announcements regarding XP and Hailstorm indicate to us that Microsoft may be repeating its efforts to maintain and extend its monopoly even more broadly into the Internet."
And as for Jackson, the cause of much of this week's fuss?
He'll probably lie low for a while. After all, federal law requires that a judge be disqualified when his or her "impartiality might reasonably be questioned" – and Jackson's no longer involved with the case.
This isn't the first time Jackson has been slammed for telling the world how strong he thought the government's case was.
In a 1991 prosecution of former D.C. mayor-for-life Marion Barry, Jackson told a gathering at Harvard Law School that he had never seen a stronger government case and was upset that some jurors would not vote to convict.
A majority of the appeals court at the time decided not to reprimand Jackson, but a sharply worded dissent said: "It is worth noting that the district court judge could have recused himself in this case.... The recusal option was a compelling one."
