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Author: sjhurst Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 156927  
Subject: Jackson's Break-Up Opinion: A Judicial Failure Date: 6/12/2000 11:33 PM
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Judge Jackson's decision to break-up Microsoft resulted from a serious neglect of judicial duty. I know this is a harsh assessment. But the facts are compelling.

Jackson Failed To Address, Much Less Resolve, The Controlling Legal Issues

In deciding to rip apart one of the largest and most successful companies in the world – a company often credited with igniting this country's current economic prosperity – Jackson issued a six-page opinion with no meaningful legal analysis. He failed to cite one case, not one precedent.

The Government and Microsoft filed detailed legal briefs, citing many cases, analyzing the legal issues and disputing the controlling law. Jackson failed to even mention, much less resolve, the legal disputes between the parties – an astonishing failure considering that Jackson imposed the antitrust equivalent of the death penalty.

Jackson Improperly Penalized Microsoft For Asserting Its Right To Appeal

To justify breaking up the company, Jackson improperly relied on Microsoft's assertion of its appellate rights:

"[I have] reluctantly come to the conclusion . . . that a structural remedy has become imperative: Microsoft as it is presently organized and led is unwilling to accept the notion that it broke the law or accede to an order amending its conduct.

. . . [d]espite the Court's Findings of Fact and Conclusions of Law, Microsoft does not yet concede that any of its business practices violated the Sherman Act. Microsoft officials have recently been quoted publicly to the effect that the company has 'done nothing wrong' and that it will be vindicated on appeal.”


This strikes me as highly unprofessional: “I have ruled. Microsoft has failed to agree that my decree was just and right. This annoys me. I shall thus impose the harshest and most radical remedy.” What did Judge Jackson expect? “Yes, your honor, you are right and we are wrong. We feel shame. We admit that we violated the antitrust laws.”

Admitting a Sherman Act violation would be tantamount to abandoning the right to appeal. Microsoft, however, has an absolute right to appeal and, in fact, has a substantial appeal. Jackson himself recognized that his tying ruling arguably contradicts controlling precedent from the Court of Appeals for the D.C. Circuit. I'm sure that Jackson would have liked to avoid appellate review. But that's not how our judicial system works. Microsoft cannot be penalized for choosing to appeal a questionable ruling.

Jackson Improperly Penalized Microsoft For Declining To Settle

Jackson also chastised Microsoft for failing to settle, which, again, would have required Microsoft to give up its appellate rights. Jackson stated that the “final judgment proposed by plaintiffs is perhaps more radical than might have resulted had mediation been successful and terminated in a consent decree.” He likewise stated that a break-up was justified, in part, by Microsoft's failure to “accede to an order amending its conduct . . . .”

This reasoning could not be more flawed. Parties are not required to settle lawsuits. That's why we have courts to resolve lawsuits. I've never heard of a district court punishing a party for failing to settle, at least not so openly in a published opinion. It's abusive. Court decisions are supposed to be based on the facts and law, not on an individual judge's frustration with a party's decision not to settle.

Jackson Ignored His Duty To Conduct An Independent Analysis

Judge Jackson also failed to independently analyze the issues, which is a serious breach of a basic judicial responsibility. Judges are supposed to make decisions based on a fair and objective analysis of the facts and law. Judges are not supposed to simply adopt one party's view without analysis.

But that's exactly what Judge Jackson did here. Without independent analysis, Jackson simply adopted the Government's proposed remedy because, he reasoned, the Government lawyers presumably were acting in the “public interest:”

”[P]laintiffs' proposed final judgment is the collective work product of senior antitrust law enforcement officials of the United States Department of Justice and the Attorneys General of 19 states, in conjunction with multiple consultants. These officials are by reason of office obliged and expected to consider – and to act in – the public interest; Microsoft is not.”

This is astounding. The Government is routinely involved in lawsuits against private litigants. Courts do not abandon their duty to conduct an independent analysis in these cases. Otherwise, courts would merely rubber-stamp the Government's view, which is contrary to the entire premise of our “checks and balances” system of government. Think about it. I mean, why even have criminal trials? Can't we simply assume that the Government prosecutors are fulfilling their duty to uphold justice? No, we cannot. Courts are supposed to independently evaluate and analyze the issues – not merely assume without analysis that the Government is right.

Jackson attempted to justify his lack of analysis by pointing to the difficulty of predicting the impact of the proposed remedies. Nonsense. Jackson's responsibility to independently analyze the issues is not excused by complexity. Courts make difficult decisions all the time.

The Appellate Court Will Analyze The Facts And Law

A few weeks ago, after reading the legal briefs, I confidently predicted that Judge Jackson would not break up Microsoft: "Judge Jackson will not be the first jurist since 1890 to break up a company in a non-merger case."

http://boards.fool.com/Message.asp?id=1180128007483000

I was dead wrong. My mistake was to assume that Jackson would conduct a serious review of the facts and law before ruling. I failed to anticipate that Judge Jackson would conduct no meaningful analysis, and never imagined that he would punish Microsoft for asserting its appellate rights. Let's hope that the appellate court actually conducts a legal analysis before ruling. It's the least we can expect from our judicial system.
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