April 5, 2000 12:50 PM PDT

Remedy to come in 60 days in Microsoft case

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Now the hard work starts: Choosing remedies

April 4, 2000
WASHINGTON--A ruling on the penalties to be levied against Microsoft for its antitrust violations will come within 60 days, with a hearing set for May 24, officials said today.

The announcement came following a 10-minute meeting this morning between U.S. District Judge Thomas Penfield Jackson and lawyers in the case.

Lawyers for the Department of Justice told reporters this morning that the next phases of the case have been placed on an accelerated calendar. The acceleration strongly indicates that the judge will not break up the company, legal experts said.

Jackson set April 25, or at the latest April 28, for a filing of proposed remedies by the Justice Department and states, the Reuters news agency reported. Microsoft is to reply by May 10, and the Justice Department and the states are to reply by May 17.

Jackson will issue a ruling on remedies within 60 days, said U.S. Assistant Attorney General Joel Klein. Furthermore, Jackson will support a motion to send any appeal directly to the U.S. Supreme Court, a move that could cut a year or more off the appeals process.

"The court set an agreed-upon schedule for completion of the remedy phase on an expedited basis. It is a schedule that all the parties agreed to," said Klein. "It was motivated by everyone's shared interest that (things) move forward in a fair and reasonable manner."

John Warden, Microsoft's lead counsel in the case, and representatives from essentially all of the 19 states involved in the case attended the brief meeting.

The sudden urgency in a case that has gone on for years comes amid a flurry of disorder in financial markets. On Saturday, mediator Richard Posner, in a surprise announcement, resigned from the case because the two parties were too far apart in settlement talks. On Monday, Jackson issued a 43-page ruling that largely concluded Microsoft broke antitrust law.

The decision has since sparked wild volatility on Wall Street. The Nasdaq suffered one of its biggest one-day losses in anticipation of the decision. On Tuesday, it appeared an even a bigger loss was coming, until a late recovery.

"My transcended objective is to get this thing before an appellate tribunal--one or another--as quickly as possible because I don't want to disrupt the economy or waste any more of your or my time on a remedy if it's going to come back here," Jackson told the parties yesterday, according to a released court transcript.

The expedited schedule also strongly indicates that Jackson will not break up the company. "You can gauge the judge's intention about breaking up Microsoft by the amount of time he allots for remedy hearings," said University of Baltimore School of Law professor Bob Lande. "If there's going to be a strong remedy, it would have to be a careful, deliberate process."

Bill Kovacic, a law professor at George Washington University Law School, said, "If you're going to ask for restructuring of the company, you don't want to do that on the run."

Along with expediting the proceedings, the judge also plans to take the "best and final offers" from the failed settlement talks and use them as a basis for working out a remedy. Jackson also plans to make transcripts available of his private meetings with the attorneys because of the number of leaks surrounding settlement talks.

While Jackson said he would be willing to seal the settlement proposals from public view, he also made it clear he wanted "to find out the parameters of where you have gone so far."

The move is uncommon because settlement talks usually prompt parties to make concessions they might not otherwise offer in open court, say legal experts.

"It's very unusual for a judge to encourage them to disclose their last settlement offers," Kovacic said. "Settlement negotiations are effective to a large degree because the parties have an expectation the content will not be disclosed."

Reuters contributed to this report

 

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