Meet the Mediator

By ADAM COHEN

The Microsoft media pack was out in force last week outside Chicago's prestigious Standard Club. Its target was Judge Richard Posner, the recently appointed mediator in the government's landmark antitrust lawsuit. When reporters fired questions at Posner just before his first meeting with the parties, he had a crisp answer: "Get out of my way, please."

It's a new day in the Microsoft case. Judge Thomas Penfield Jackson last month appointed Posner to try to mediate the case, and the action has now moved from Jackson's courthouse in Washington to Chicago, where Posner is presiding over closed-door conferences intended to push Microsoft and the Justice Department toward settlement. It's a daunting task: the government seems to want a lot more than Microsoft is willing to give up. But if anyone can get an agreement, it may be the brilliant and insanely workaholic Posner.

Posner has the kind of jaw-dropping resume that makes resolving the Microsoft case seem like a plausible Christmas vacation project. He is the chief judge of the federal appeals court in Chicago, where he pens about 100 decisions a year, and he teaches law at the University of Chicago. He also finds time to churn out scores of law-review articles, speeches, op-ed pieces and, oh yes, a book or two a year. (His latest: An Affair of State, a scathing account of President Bill Clinton's impeachment woes; and the less reader-friendly The Problematics of Moral and Legal Theory.) "Dick is sort of a legendary intellect," says law-school colleague Randal Picker. "He is one of the great legal minds of the 20th century."

He's also one of the most conservative. A leader of the law-and-economics school, Posner believes the market should be allowed to resolve many of society's thorniest problems. His dollars-and-cents approach has led him in some controversial directions. Posner famously suggested that the adoption system might be improved by allowing babies to be sold. And he has written that whether abortion should be banned can be evaluated by some mathematical formula in which V is the value of a fetus' life and N is the average number of abortions that would be performed without a ban.

Posner's decidedly free-market views mean that he starts out as an antitrust skeptic. He's argued that regulation of monopolies is often a mistake, and that in many cases government intervention does more harm than good. But he has also shown an inclination to follow established law and has written approvingly of the AT&T breakup. His admirers say he won't approach this case with ideological preconceptions. "Labels are meaningless," insists University of Chicago Law School Dean Daniel Fischel. "He's completely unpredictable in his views."

By appointing Posner, Jackson gave something to each side. Microsoft gets a mediator who is close to its thinking about government intervention. Posner may be reluctant to back some of the more extreme remedies Microsoft's critics are calling for. At the very least, he's likely to give the software giant a friendlier hearing than Jackson, whose findings of fact last month were a down-the-line rebuff.

The Justice Department, for its part, gets a mediator who will have credibility when he lays down the law for Microsoft. Trial watchers have conjectured that Gates & Co. may already have given up hope of prevailing before Jackson, and may be counting on getting him reversed on appeal. The conservative Posner is in sync with many of the judges in Washington who would hear that appeal. "He's going to be able to tell Microsoft that if they're counting on the Court of Appeals and the Supreme Court to vindicate them completely, that's not going to happen," says George Washington University law professor William Kovacic.

In other words, Posner may be the perfect mediator: someone each side is a little afraid of. What happens next? Posner will probably meet with the parties together and separately to hunt for common ground. (One question: Will Posner and Bill Gates be sitting down for a chat?) Count on the parties to be closemouthed throughout the negotiations. "We're not even going to talk about the food we ate," Justice Department lawyer David Boies said after the first day's meeting. If talks fail, it's back to court in late February for the next phase: arguments over Judge Jackson's conclusions of law, a search for remedies and, quite likely, years of appeals.

It's possible, however, that Posner could make all that unnecessary. One path the negotiations are likely to explore is spinning off Microsoft's operating-systems division, which makes Windows, into its own company. That would track the logic of Judge Jackson's findings of fact: that it's not illegal for Microsoft to have an operating-systems monopoly, but it is illegal to leverage the monopoly to gain an unfair advantage in other markets. Carving Windows out of Microsoft would probably be sufficiently dramatic to please the Justice Department. It might not thrill Microsoft, but it would be preferable to any remedy that required ongoing government supervision of its actions and products. And it's a solution that could find favor with Posner: a surgical strike by government that creates a more competitive market.

--With reporting by Julie Grace/Chicago

With reporting by Julie Grace/Chicago