"Back to DOJ Antitrust Review of Thomson/West Merger Page"
Argued April 24, 1995 Decided June 16, 1995
No. 95-5037
United States of America,
Appellant
v.
Microsoft Corporation
No. 95-5039
United States of America
v.
Microsoft Corporation,
Appellant
Appeals from the United States District Court
for the District of Columbia
(94cv1564)
Joel I. Klein, Deputy Assistant Attorney General, U.S.
Department of Justice, argued the cause for appellant United
States of America. With him on the briefs were Anne K. Bingaman, Assistant Attorney General, Catherine G. O'Sullivan, Robert B. Nicholson, David Seidman and Mark S. Popofsky, Attorneys, U.S. Department of Justice.
Richard J. Urowsky argued the cause for appellant
Microsoft Corporation. With him on the briefs were Steven L.
Holley, Richard C. Pepperman, II, Andrew C. Hruska, William H.
Neukom, David A. Heiner, Jr., James R. Weiss and Donald
A. Kaplan. Margaret K. Pfeiffer entered an appearance.
John H. Chapman argued the cause and filed the briefs
for amicus curiae Computer & Communications Industry
Association.
Gary L. Reback argued the cause for amici curiae Computer Industry Parties. With him on the briefs were Susan A. Creighton, David A. Killam, Neil M. Nathanson and Irwin R. Gross.
Jeffrey S. Jacobovitz argued the cause for amicus curiae I.D.E. Corporation. With him on the briefs were Mark L. Rosenberg and Alan A.B. McDowell.
Before: Edwards, Chief Judge; Silberman and Buckley, Circuit Judges.
Opinion for the Court filed by Circuit Judge Silberman.
Silberman, Circuit Judge: Section 16(e) of the Antitrust Procedures and Penalties Act, known as the Tunney Act, requires the district court to determine whether entry of an antitrust consent decree is "in the public interest." 15 U.S.C. § 16(e) (1988). In this case, the district court refused to enter a proposed consent decree the Antitrust Division of the Department of Justice negotiated with Microsoft Corporation. We conclude that the proposed consent decree is in the public interest, and that the district court exceeded its authority in concluding to the contrary. We therefore reverse and remand with instructions to enter an order approving the decree.
Microsoft dominates the world market for operating
systems software that runs on IBM-compatible personal computers
("PCs"). Operating systems software controls the operation of
the computer and manages the interaction between the computer's
memory and attached devices such as keyboards, printers, display
screens and disk drives. In 1990, the Federal Trade Commission
began investigating Microsoft's acquisition and maintenance of
monopoly power in that market. When faced with the decision
whether to file a complaint against Microsoft, however, the
Commission deadlocked 2-2, thus suspending the agency's
investigation.
The Antitrust Division of the Department of Justice then
initiated its own investigation of Microsoft (apparently a rather
rare occurrence), using the FTC's extensive investigatory file as
its starting point. The Department issued 21 Civil Investigative
Demands to Microsoft and third parties, reviewed one million
pages of documents, and conducted over 100 interviews. The
Department also deposed 22 persons, including Microsoft Chairman
Bill Gates.
In July 1994, the Department filed a civil complaint
under the Sherman Act, 15 U.S.C. §§ 1 and 2 (1988),
charging Microsoft with unlawfully maintaining a monopoly of
operating systems for IBM-compatible PCs and unreasonably
restraining trade of the same through certain anticompetitive
marketing practices.
The key anticompetitive practice against which the
complaint is aimed is Microsoft's use of contract terms requiring
original equipment manufacturers ("OEMs") to pay Microsoft a
royalty for each computer the OEM sells containing a particular
microprocessor (in this case, an x86 class microprocessor),
whether or not the OEM has included a Microsoft operating system
with that computer. The practical effect of such "per processor
licenses," it is alleged, is to deter OEMs from using competing
operating systems during the life of their contracts with
Microsoft. The complaint further charges that Microsoft has
exacerbated the anticompetitive effect of the per processor
licenses by executing long-term contracts with major OEMs, and by
requiring minimum commitments and crediting unused balances to
future contracts, thereby extending the contract term and
creating an economic disincentive for an OEM to install a
non-Microsoft operating system.
The other anticompetitive device alleged in the
complaint is Microsoft's use of overly restrictive nondisclosure
agreements with certain independent software vendors ("ISVs").
Those ISVs provide applications software to run "on top of"
Microsoft's operating system, enabling the user to perform a
variety of tasks, such as wordprocessing. Microsoft provides
those ISVs with advance test versions of its newest operating
system so that the ISVs can develop their software to be
compatible with that operating system. The government alleged
that Microsoft, as a corollary, has imposed nondisclosure
agreements on some ISVs which would restrict their ability to
work with competing operating systems companies and to develop
competing products for an unreasonably long period of time.
The government did not allege and does not
contend--and this is of crucial significance to this
case--that Microsoft obtained its alleged monopoly
position in violation of the antitrust laws. The government
believes that Microsoft's initial acquisition of monopoly power
in the operating systems market was the somewhat fortuitous
result of IBM choosing for its PCs the operating system
introduced by Microsoft ("MS-DOS"), which, with Microsoft's
successful exploitation of that advantage, led Microsoft to
obtain an installed base on millions of IBM, and IBM-compatible,
PCs.
It is undisputed that the software market is
characterized by "increasing returns," resulting in natural
barriers to entry. Because the costs of producing software are
almost exclusively in its design, marginal production costs are
"virtually zero." Professor Arrow, the government's consultant
and a Nobel-prize winning economist, described the importance of
Microsoft's large installed base in an increasing returns market
as follows:
A software product with a large installed base has
several advantages relative to a new entrant. Consumers know
that such a product is likely to be supported by the vendor with
upgrades and service. Users of a product with a large installed
base are more likely to find that their products are compatible
with other products. They are more likely to be able
successfully to exchange work products with their peers, because
a large installed base makes it more likely that their peers will
use the same product or compatible products. Installed base is
particularly important to the economic success of an operating
system software product. The value of the operating system is in
its capability to run application software. The larger the
installed base of a particular operating system, the more likely
it is that independent software vendors will write programs that
run on that operating system, and, in this circular fashion, the
more valuable the operating system will be to consumers.
In a not uncommon technique, the Department of Justice
filed a proposed consent decree along with its complaint, which
embodied the Department's and Microsoft's settlement of the case.
The consent decree, which essentially tracks the complaint and is
effective for 78 months following its entry, prohibits Microsoft
from entering into per processor licenses, licenses with a term
exceeding one year (unless the customer opts to renew for another
year), licenses containing a minimum commitment, and unduly
restrictive nondisclosure agreements. To prevent Microsoft from
using other exclusionary practices to achieve effects similar to
those achieved by the practices challenged in the complaint, the
proposed decree also prohibits certain other arrangements such as
lump-sum pricing and variants of per processor licensing. The
decree applies to Microsoft's most popular operating systems
products (MS-DOS, Windows and Windows 95) and successor versions
or operating systems marketed as replacement products. The
decree does not, however, cover "Windows NT" products, which are
designed for sophisticated "high end users" and which do not
enjoy a substantial portion of the market for such products.
Pursuant to Section 16(b) of the Tunney Act, 15 U.S.C.
§ 16(b) (1988), the Department of Justice published the
proposed decree in the Federal Register, accompanied by a
competitive impact statement, and invited comment. See
59 Fed. Reg. 42,845 (1994). Only five comments were received
during the statutory period, to which the government responded on
October 31, 1994.
At the first substantive status conference on September
29, 1994, the district judge informed the parties that over the
summer he had read a book about Microsoft--Hard
Drive[FNR1]--because he "thought it would be a good idea
maybe to know as much about Microsoft as probably they're going
to know about me." Much of the ensuing discussion focused on
accusations against Microsoft contained in the book. The
district judge asked whether the government's lawyers had read
the book and whether they had investigated the allegations made
by its authors. In particular, the judge focused on the
allegation that Microsoft engages in "vaporware," which he
described in differing terms but ultimately defined as "the
public announcement of a computer product before it is ready for
market for the sole purpose of causing consumers not to purchase
a competitor's product that has been developed and is either
currently available for sale or momentarily about to enter the
market." United States v. Microsoft Corp., 159 F.R.D.
318, 334 (D.D.C. 1995) ("Opinion").[FNR2] (The judge
insisted that even truthful product preannouncements would
violate the securities laws, if not the antitrust laws.)
According to the district judge, Hard Drive
also claimed that Microsoft's own applications developers have
unfair access to information about Microsoft's operating systems,
giving them an undue advantage over competitors in developing
applications software that is compatible with Microsoft's
operating systems. The government did not include "vaporware" or
unfair access charges in its complaint against Microsoft.
At a subsequent status hearing on November 2, 1994, the
district judge again referred to Hard Drive and its
"vaporware" allegations, noting that the book "does allege some
very serious practices," and telling the government that he
wanted to be satisfied that the allegations in the book were not
true. The Department was instructed to inform interested persons
that they had until December 5, 1994 to seek leave to participate
in the court's hearing on the consent decree. Only I.D.E.
Corporation, which had participated in the comment process,
sought leave to participate in the hearing. But on January 10,
1995, (over a month late and over the objection of both the
government and Microsoft), the law firm of Wilson, Sonsini,
Goodrich & Rosati, on behalf of three computer industry companies
("Doe Companies"), filed a 96-page memorandum (plus a 215-page
appendix) arguing that the proposed consent decree was inadequate
because it would not result in increased competition in the
operating systems market, nor prevent Microsoft from monopolizing
the rest of the software industry. The Doe Companies claimed
that because of the unusual "increasing returns" nature of
Microsoft's market position, it would be extremely difficult to
dislodge Microsoft from its dominant status and return the market
to a state of equilibrium, or competition. Moreover, they
claimed that Microsoft had the capacity to leverage its installed
base in the operating systems market so as to dominate the
related markets for applications and other software products.
The Doe Companies also attached two documents purporting to show
that Microsoft had engaged in "vaporware."[FNR3] Wilson,
Sonsini's brief was accompanied by a motion requesting that the
district court permit the late filing, and also permit the
purported computer industry companies to remain anonymous,
asserting "fear" that they would be subject to unexplained
retaliation from Microsoft. The district court, without a
hearing on the need for or propriety of the Doe Companies'
proceeding anonymously, granted the motion over the government's
and Microsoft's objections.
On January 18, 1995, the United States filed a motion
for entry of the decree (later joined orally by Microsoft at the
district court's January 20, 1995 hearing) and attached an
affidavit from Professor Arrow. As noted, Professor Arrow agreed
with amici that in an increasing returns market there is
a possibility of monopolization, which may be inefficient; but,
he claimed, this process is entirely natural. He specifically
rejected the notion that the government should intervene where,
as he believed was the case here, the market success of the
dominant firm was not the result of anticompetitive practices.
Professor Arrow concluded that only artificial barriers, such as
the licensing practices addressed in the decree, should be
regulated or prohibited.
The next day the district court issued an order
identifying issues to be addressed at the hearing scheduled for
the following day. The parties were requested to explain why,
among other things, the consent decree did not contain provisions
that would (1) bar Microsoft from engaging in "vaporware," (2)
establish a wall between the development of operating systems
software and the development of applications software at
Microsoft, and (3) require disclosure of all instruction codes
built into operating systems software designed to give Microsoft
an advantage over competitors in the applications software
market. See Opinion, 159 F.R.D. at 326-27 n.15. The
Computer & Communications Industry Association ("CCIA") filed a
motion for leave to intervene, or alternatively, to participate
as amicus curiae.
The district court allowed I.D.E. Corporation, CCIA and
the Doe Companies to participate in the January 20, 1995
hearing.[FNR4] All three urged disapproval of the decree. The
district judge devoted substantial time to questioning counsel
about "vaporware" and pressing the government for information
regarding its investigation of "vaporware"
allegations--information which the government declined to
provide on the ground that the such allegations were unrelated to
the violations charged in the complaint.[FNR5]
On February 14, 1995, the district court issued an order
denying the government's motion to approve the consent decree.
The judge stated that he could not find the proposed decree to be
in the public interest for four reasons:
First, the Government has declined to provide the
Court with the information it needs to make a proper public
interest determination. Second, the scope of the decree is too
narrow. Third, the parties have been unable and unwilling
adequately to address certain anticompetitive practices, which
Microsoft states it will continue to employ in the future and
with respect to which the decree is silent. Thus, the decree
does not constitute an effective antitrust remedy. Fourth, the
Court is not satisfied that the enforcement and compliance
mechanisms in the decree are satisfactory.
Opinion, 159 F.R.D. at 332.
The judge's understanding of the extent of additional
information he "need[ed]" to make the public interest
determination under the Tunney Act was quite considerable and was
of a character that the government contended was not only outside
the scope of the Tunney Act, but was also improper for a judge to
seek. The court required at a "minimum":
(1) The broad contours of the investigation
i.e., the particular practices and conduct of the
defendant that were under investigation along with the nature,
scope and intensity of the inquiry;
(2) With respect to such particular practices and
conduct, what were the conclusions reached by the Government;
(3) In the settlement discussions between the
Government and defendant: (a) what were the areas that were
discussed, and (b) what, if any, areas were bargained away and
the reasons for their non-inclusion in the decree;
(4) With respect to the areas not discussed at the
bargaining table or not bargained away, what are the plans for
the Government to deal with them i.e., is the
investigation to continue, and, if so, at what intensity, or if
the investigation is to be closed, then the Government must
explain why it is in the public interest to do so.
Opinion, 159 F.R.D. at 332.
The judge's second objection, going to the
scope of the decree, was predicated on his concern that
it does not apply to all of Microsoft's operating systems. The
decree, it will be recalled, explicitly excludes from its
coverage "Windows NT." In an apparent reference to Microsoft's
contention that its product preannouncements do not fit the
definition of "vaporware" and do not constitute antitrust
violations, the court further noted that "taking into account
Microsoft's penchant for narrowly defining the antitrust laws,
the Court fears there may be endless debate as to whether a new
operating system is covered by the decree." Id. at
333.
As to the third point--the essence of the
amici's objection--the judge concluded that the
decree does not provide an effective antitrust remedy because it
does not "pry open" the market to competition, i.e.,
remedy the monopolist position Microsoft has achieved through
supposed illegal means. The judge was especially concerned that
the decree does not address "a number of other anticompetitive
practices that from time to time Microsoft has been accused of
engaging in by others in the industry." Id. at 334.
Among such practices were "vaporware," Microsoft's "use[ ][of]
its dominant position in operating systems to give it an undue
advantage in developing applications software," and its
manipulation of its operating systems to render competing
applications software inoperable or more difficult for consumers
to use. Id. at 334-35.
Finally, the court determined that the consent decree
did not oblige Microsoft to adopt sufficient internal compliance
mechanisms. Based on its perception that Microsoft had misled
the court about whether it engaged in "vaporware," the district
court concluded that Microsoft's current staff of "50 or so
in-house lawyers, along with its outside retained counsel," were
insufficient to monitor the decree adequately. Id. at
336.
The United States and Microsoft appeal from the order
refusing to enter the decree, asking this court to remand with
instructions to enter the decree. Microsoft appeals as well from
the order allowing the anonymous participation of the Doe
Companies (and CCIA's participation), and asks that the case be
remanded to another district court judge because it contends that
Judge Sporkin has demonstrated personal bias against the
company.
Since both parties to the decree have appealed the
district court's order, these consolidated cases present the rare
situation in which there is no appellee. Accordingly, we have
allowed the Doe Companies, CCIA and I.D.E. Corporation to
continue in their roles as amici.
Both the government and Microsoft contend that the
district judge vastly exceeded his authority under the Tunney
Act, and that as a matter of law they are entitled to the court's
entry of the consent decree. Before considering their arguments,
however, we are obliged to determine that we have jurisdiction to
entertain this appeal. Amici contend that we do not.
The government (and Microsoft) rely on 28 U.S.C. § 1292(a)(1)
(1988), which authorizes interlocutory appeals from orders of the
district court "granting, continuing, modifying, refusing or
dissolving injunctions...." By refusing to enter the consent
decree, the district court, it is argued, has refused to grant an
injunction within the meaning of that statute. The leading case
on point is Carson v. American Brands, Inc., 450 U.S. 79
(1981), where the Supreme Court held that a district court's
refusal to enter a consent decree that had the practical effect
of denying an injunction was immediately appealable if the order
had a "serious, perhaps irreparable, consequence," and could only
be "effectually challenged" by immediate appeal. Id. at
84, citing Baltimore Contractors, Inc. v. Bodinger, 348
U.S. 176, 181 (1955).
The decree at issue here does, as in Carson,
call for an injunction: Microsoft would be permanently enjoined
from using what the government contends are anticompetitive
licensing contracts for its PC operating systems. "Indeed,
prospective relief [is] at the very core of the disapproved
settlement." Id. To be sure, in Carson the
district court indicated its disapproval of the relief sought by
a civil rights plaintiff because it was arguably too extensive;
whereas here, the district judge is objecting because the relief
does not appear to him to go far enough. Amici thus
describe the district judge's order as a refusal to
limit the potential relief available rather than a
refusal to grant injunctive relief. That seems to us to be only
a deft semantic characterization. It matters not whether a
district judge objects to the injunctive relief as too strong or
not strong enough: in either case, the judge is refusing to
grant the injunction except under conditions that the parties
will not accept. Nor is there any doubt in this case that the
district judge had reached a firm determination. His order and
opinion make that quite clear.
Amici nevertheless contend that the government has
not shown any "serious consequences" that justify the
interlocutory appeal. The government, it is argued, is only
concerned about its settlement statistics. We disagree. The
district court's refusal to enter the decree puts the government
to a difficult, perhaps Hobson's, choice. It must either drop
its case against Microsoft entirely and allow Microsoft to
continue to engage in practices which the government believes are
anticompetitive; or, it is compelled to litigate and presumably
proceed under a vastly expanded complaint that in effect asserts
that Microsoft engaged in activities which the government does
not believe are illegal (i.e., achieving its dominant
position in the first place), or seeks remedies which the
government does not believe are justified by the evidence.
Moreover, as the government points out, the consent decree is
part of a negotiated settlement. A district judge's refusal to
accept the decree--particularly upon the grounds
advanced--cannot but have enormous practical consequences
for the government's ability to negotiate future settlements.
Cf. Carson, 450 U.S. at 88 n.14 (order refusing to enter
consent decree would undermine Title VII's strong preference for
encouraging voluntary settlement of employment discrimination
claims). The Tunney Act was not intended to create a
disincentive to the use of the consent decree. See,
e.g., S. Rep. No. 298, 93d Cong., 1st Sess. 7
(1973) ("The [Senate Judiciary] Committee wishes to retain the
consent judgment as a substantial antitrust enforcement tool.");
H. Rep. No. 1463, 93 Cong., 2d Sess. 6 (1974)
(expressing intent to preserve the policy of the antitrust laws
to encourage settlement by consent decree), reprinted in
1974 U.S. Code Cong. & Admin. News
6535, 6536-37. We conclude, therefore, that the government
easily meets the Carson standard. We have jurisdiction
over the appeal.
Microsoft has also appealed the judge's refusal to enter
the consent decree. Actually, in this situation, it is doubtful
if we would have jurisdiction unless both parties to the decree
appealed. Certainly if the government accepted the district
judge's view of the case and wished to proceed to trial, the
propriety of the judge's order would be moot; and, if Microsoft
was no longer willing to agree to the government's conditions,
the issue would similarly be moot.[FNR6] Therefore, both parties
must be entitled to appeal the district judge's refusal to enter
the decree. Microsoft in addition appeals one order that the
government does not: the order allowing participation by the Doe
Companies and CCIA. Microsoft asserts that the district court
erred in permitting the Doe Companies to participate
anonymously.
Microsoft argues that the order fits within the
"collateral order" doctrine of Cohen v. Beneficial Industrial
Loan Corp., 337 U.S. 541 (1949), which permits interlocutory
review of collateral orders "that are conclusive, that resolve
important questions completely separate from the merits, and that
would render such important questions effectively unreviewable on
appeal from final judgment in the underlying action."
Digital Equip. Corp. v. Desktop Direct, Inc., 114 S. Ct.
1992, 1995-96 (1994). Normally, of course, an order permitting
or denying amici participation could not qualify under
the doctrine. Here, however, the Doe Companies, the prime
opponents of the decree and the most vigorous accusers of
Microsoft, appeared anonymously. That is quite a departure from
normal procedure, and raises profound questions of fundamental
fairness and perhaps even due process. It might well be that a
party forced to confront an anonymous plaintiff (or the
functional equivalent of a plaintiff acting as an amici
) could suffer injury that might not be redressable in an
ultimate appeal. Anonymity may well confer a kind of immunity
which permits a plaintiff to hurl rhetorical weapons that could
cause a unique kind of harm not faced in ordinary litigation.
Cf. McIntyre v. Ohio Election Comm'n, 63 U.S.L.W. 4279,
4286 (U.S. Apr. 19, 1995) (holding that Ohio election law
forbidding all anonymous political leafletting violated the First
Amendment but noting that "[t]he right to remain anonymous may be
abused when it shields fraudulent conduct"). However, in our
view, it is unnecessary to decide whether Microsoft would have
been entitled to appeal this order independently. Since we have
concluded that we have jurisdiction over the basic appeal, the
district judge's order permitting the amici to
participate is not really interlocutory. It comes before us as
part and parcel of the record in this case.
Appellants contend that the district judge
misinterpreted the Tunney Act--indeed interpreted that
statute so as to raise serious questions regarding its
constitutionality--by basing his rejection of the decree on
considerations which implicate the executive branch's
prosecutorial discretion. The thrust of the judge's concerns
were directed to his dissatisfaction with the framework of the
complaint fashioned by the Department. He thought it much too
modest to deal with the imperfections in the relevant market and
their cause--at least as he perceived them. Appellants
contend that the judge did not simply make the proper inquiry
into whether the decree was appropriate to the complaint, but
instead asked whether the complaint itself was adequate. By
doing so, it is argued, the judge improperly intruded on the
government's prosecutorial role. The judge's demand that he be
informed of the contours of the investigation, the settlement
discussions, and the government's future investigative plans,
indicates that the judge impermissibly arrogated to himself the
President's role "to take care that the laws be faithfully
executed."
Amici, defending the judge's order, argue that it
merely focused on whether the remedy provided in the decree was
adequate to the allegations in the complaint. Appellants
respond, however, that even to the extent that the judge's order
is directed to the adequacy of the remedy to the allegations
actually charged--which they insist is only a minor theme in
the judge's opinion--the judge nevertheless exceeded his
authority. Under our own precedent dealing with uncontested
modifications of a consent decree, we have repeatedly said that a
district judge must approve such modifications so long as the
proposed falls "within the reaches of the public
interest." United States v. Western Elec. Co., 900 F.2d
283, 309 (D.C. Cir. 1990) ("Triennial Review Opinion ")
(emphasis in original) (quoting United States v. Bechtel
Corp., 648 F.2d 660, 666 (9th Cir.), cert. denied,
454 U.S. 1083 (1981), in turn quoting United States v.
Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975)).
At the heart of this case, then, is the proper scope of
the district court's inquiry into the "public interest." Is the
district judge entitled to seize hold of the matter--the
investigation into the putative defendant's business
practices--and decide for himself the appropriate combined
response of the executive and judicial branches to those
practices? With respect to the specific allegations in the
government's complaint, may the court interpose its own views of
the appropriate remedy over those the government seeks as a part
of its overall settlement? To be sure, Congress, in passing the
Tunney Act, intended to prevent "judicial rubber stamping" of the
Justice Department's proposed consent decree. H.R. Rep.
No. 1463, supra, at 8, reprinted in 1974
U.S. Code Cong. & Admin. News at 6538.
The Court was to "make an independent determination as to whether
or not entry of a proposed consent decree [was] in the public
interest." S. Rep. No. 298, supra, at 5.
Yet, Congress did not purport to alter antitrust precedent
applying the public interest in reviewing consent decrees.
H.R. Rep. No. 1463, supra, at 11,
reprinted in 1974 U.S. Code Cong. &
Admin. News at 6539. The difficulty with that
stated purpose is that there was virtually no useful
precedent--certainly none in which an appellate court had
approved a trial court's rejection of a consent decree as outside
the public interest. Cf. Antitrust Procedures and Penalties
Act: Hearings on S.782 and S.1088 Before the Subcomm. on
Antitrust and Monopolies of the Senate Comm. on the
Judiciary, 93d Cong., 1st Sess. 92 (1973) ("Senate
Hearings") (Statement of Thomas E. Kauper, Assistant Attorney
General, Antitrust Division, Dept. of Justice) ("[E]xcept in
cases where a previous judicial mandate is involved and the
consent decree fails to comply with that mandate, or where there
is a showing of bad faith or malfeasance, the courts have allowed
a wide range of prosecutorial discretion.").
Although the statute does not give specific guidance, it
does speak in rather broad terms. In determining whether the
decree is in the public interest, the district court is
authorized to "consider":
(1) the competitive impact of such judgment,
including termination of alleged violations, provisions for
enforcement and modification, duration or relief sought,
anticipated effects of alternative remedies actually considered,
and any other considerations bearing upon the adequacy of such
judgment;
(2) the impact of entry of such judgment upon the
public generally and individuals alleging specific injury from
the violations set forth in the complaint including consideration
of the public benefit, if any, to be derived from a determination
of the issues at trial.
15 U.S.C. § 16(e) (1988).
The Ninth Circuit observed (in a case in which the
defendant wished to withdraw from the decree) that that
language "suggests that a court may, and perhaps should, look
beyond the strict relationship between complaint and remedy in
evaluating the public interest." Bechtel Corp., 648
F.2d at 666. But it went on to determine that "we cannot agree
that a district court should engage in an unrestricted evaluation
of what relief would best serve the public."
Id.[FNR7]
The most prominent post-Tunney Act consent decree, the
AT&T consent decree, was modified by the district judge in
several respects in accordance with his views of the public
interest and, although both the government and AT&T acquiesced,
non-parties to the decree were allowed to intervene for purposes
of appealing the district judge's public interest determination.
It does not appear that any of the appellants challenged the
constitutionality of the Tunney Act, but Justice Rehnquist,
speaking for Chief Justice Burger and Justice White, nevertheless
published a dissent from the order affirming the district court's
entry of the decree. See Maryland v. United States, 460
U.S. 1001 (1983). The dissent expressed grave doubt as to the
Act's constitutionality because without a judicial finding of
illegality (a consent decree is, of course, a settlement), the
statute does not supply a judicially manageable standard for
review of the decree, id. at 1004, and the
considerations that led the Department of Justice to settle are
not amenable to judicial review, id. at 1005-06.
See also Heckler v. Chaney, 470 U.S. 821, 831 (1985).
For instance, a settlement, particularly of a major case, will
allow the Department of Justice to reallocate necessarily limited
resources.
The government, cautioning us as to the constitutional
difficulties that inhere in this statute, urges us to flatly
reject the district judge's efforts to reach beyond the complaint
to evaluate claims that the government did not make and
to inquire as to why they were not made. We agree. Although the
language of section 16(e) is not precise, we think the government
is correct in contending that section 16(e)(1)'s reference to the
alleged violations suggests that Congress did not mean for a
district judge to construct his own hypothetical case and then
evaluate the decree against that case. Moreover, in section
16(e)(2), the court is authorized to consider "the public benefit
... of the determination of the issues at trial." Putting aside
the perplexing question of how the district judge could insure a
trial if the government did not wish one, "the issues" referred
to must be those formulated in the complaint. Congress surely
did not contemplate that the district judge would, by
reformulating the issues, effectively redraft the complaint
himself. We therefore dismiss the claim that the last line in
section 16(e)(1), the catchall clause allowing the district court
to entertain "any other considerations bearing upon the adequacy
of such judgment," authorizes the wide-ranging inquiry the
district court wished to conduct in this case. That language
recognizes, inter alia, that a consent decree might well
do unexpected harm to persons other than those "alleging specific
injury from the violations set forth in the complaint." 15
U.S.C. § 16(e)(2) (1988). And the district court might
ponder those sort of concerns in determining whether to enter the
judgment.
To be sure, the Act also authorizes the district judge
to "take testimony of Government officials ... as the court may
deem appropriate." 15 U.S.C. § 16(f)(1) (1988). We do not
read this language, however, to authorize the district judge to
seek the kind of information concerning the government's
investigation and settlement negotiations that he wished to
obtain here. Even when a court is explicitly authorized to
review government action under the Administrative Procedure Act,
"there must be a strong showing of bad faith or improper
behavior" before the court may "inquir[e] into the mental
processes of administrative decisionmakers." Citizens to
Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 420
(1971). Here, the district court is not empowered to review the
actions or behavior of the Department of Justice; the court is
only authorized to review the decree itself. It is unnecessary
to consider whether the district court might have broader
authority to inquire into the Department's deliberations, even
though not authorized to "review" the Department's action, if
there were a credible showing of bad faith. See Senate
Hearings, supra, at 92. There is no such claim here.
The district court was troubled that if its review were
limited to the market and practices within that market against
which the complaint was directed, the government could, by narrow
drafting, artificially limit the court's review under the Tunney
Act. See Opinion, 159 F.R.D. at 332. We think, with
all due respect, that the district court put the cart before the
horse. The court's authority to review the decree depends
entirely on the government's exercising its prosecutorial
discretion by bringing a case in the first place.
That brings us to amici's contention that the
district court was justified in rejecting the decree as providing
inadequate remedies, even if the court was barred from reaching
beyond the complaint to examine practices the government did not
challenge. The district judge (and amici ) believed
that the decree would not "effectively pry open to competition a
market that has been closed by defendant['s] illegal restraints."
Opinion, 159 F.R.D. at 333 (quoting United States v.
American Telephone & Telegraph Co., 552 F. Supp. 131, 150
(D.D.C. 1982) (in turn quoting International Salt Co. v.
United States, 332 U.S. 392, 401 (1947)), aff'd sub nom.
Maryland v. United States, 460 U.S. 1001 (1983)). The judge
was especially concerned that Professor Arrow had not explained
"how the decree remedies the monopolist position Microsoft has
achieved through alleged illegal means in an increasing
returns market." Id. at 334 (emphasis in
original). And he urged that the decree should address "a number
of other anticompetitive practices that from time to time
Microsoft has been accused of engaging in by others in the
industry," such as "vaporware." Id.
This argument, it seems to us, merely recasts the
district court's order to make it appear less unorthodox. The
complaint did not allege--because the government did not
believe it was true--that Microsoft's dominant market
position resulted from illegal means. The district court and
amici would have it be otherwise, but neither have the
power to force the government to make that claim. And since the
claim is not made, a remedy directed to that claim is hardly
appropriate. Of course, such reasoning applies a
fortiori to discrete practices such as "vaporware," that the
government does not assert are antitrust violations and which
bear no relationship to the practices against which the complaint
is directed. Even where the government has proved antitrust
violations at trial, the remedies must be of the "same type or
class" as the violations, and the court is not at liberty to
enjoin "all future violations of the antitrust laws, however
unrelated to violations found by the court." Zenith Radio
Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 132-33
(1969) (citations omitted).
If the essential dispute between amici and
appellants were more narrowly cast as objections to the remedies
sought, the district judge would still not be empowered to reject
them merely because he believed other remedies were preferable.
As we have said in the context of reviewing agreed upon
modifications of a consent decree:
The court should also bear in mind the
flexibility of the public interest inquiry: the court's
function is not to determine whether the resulting array of
rights and liabilities "is the one that will best serve
society," but only to confirm that the resulting settlement is "
"within the reaches of the public interest.' "
Triennial Review Opinion, 900 F.2d at 309 (emphasis in
original) (citing and quoting Bechtel, 648 F.2d at 666,
in turn quoting Gillette, 406 F. Supp. at 716). Thus, a
court should not reject an agreed-upon modification unless "it
has exceptional confidence that adverse antitrust consequences
will result--perhaps akin to the confidence that would
justify a court in overturning the predictive judgments of an
administrative agency." United States v. Western Elec.
Co., 993 F.2d 1572, 1577 (D.C. Cir.) ("Triennial Review
Remand Opinion "), cert. denied, 114 S. Ct. 487
(1993).
The Triennial Review cases, dealing with the
administration of the AT&T consent decree, involve a decree the
oversight of which had been the business of a district judge for
several years. In some respects, the parties' request for
approval of a modification to a decree is akin to a request for
entry of an initial proposed decree but, in other respects, it is
therefore different. In the latter situation, it seems to us
that the district judge must be even more deferential than in the
former. As Justice Rehnquist noted in Maryland v. United
States, when a consent decree is brought to a district
judge, because it is a settlement, there are no findings
that the defendant has actually engaged in illegal practices.
See 460 U.S. at 1004 (Rehnquist, J., dissenting). It is
inappropriate for the judge to measure the remedies in the decree
as if they were fashioned after trial. Remedies which appear
less than vigorous may well reflect an underlying weakness in the
government's case, and for the district judge to assume that the
allegations in the complaint have been formally made out is quite
unwarranted.[FNR8] We think the district judge's criticism of
Microsoft for declining to admit that the practices charged in
the complaint actually violated the antitrust laws was thus
unjustified. See Opinion, 159 F.R.D. at 337;
H.R. Rep. No. 1463, supra, at 6
("Ordinarily, defendants do not admit to having violated the
antitrust or other laws alleged as violated in complaints that
are settled."), reprinted in 1974 U.S. Code
Cong. & Admin. News 6535, 6536-37. The
important question is whether Microsoft will abide by the terms
of the consent decree regardless of whether it is willing to
admit wrongdoing.
After a district judge has administered a consent decree
for some period of time--as is true regarding the AT&T
decree--it might be thought that he would gain at least some
familiarity with the market involved, and therefore the lack of
an initial trial is, at least marginally, less of an inhibition.
But when the proposed decree comes to a district judge in the
first instance as a settlement between the parties that may well
reflect weaknesses in the government's case, the district judge
must be even more deferential to the government's predictions as
to the effect of the proposed remedies than he would be when a
modification request is presented, as in the AT&T cases, long
after entry.
Giving due respect to the Justice Department's
perception of the market structure and its view of the nature of
its case, we think the district judge was obliged to conclude
that the remedies were not so inconsonant with the allegations
charged as to fall outside of the "reaches of the public
interest." The district court understandably questioned the
government as to why the decree did not forbid Microsoft from
using the alleged anticompetitive licensing practices with
respect to all of Microsoft's operating systems (in particular,
Windows NT products). But the government explained that Windows
NT products do not have "a significant share of a relevant market
at this time."
It might well be that the decree would be strengthened
if Windows NT were explicitly covered (it could also be that this
was a concession the government made in bargaining), but that is
of no great moment. It is undisputed that Windows NT does not
have a dominant market position, and Professor Arrow assured the
court that the decree "appropriately addresses and remedies the
anticompetitive effects of the practices challenged in the
complaint." It is not for us (or the district court) to decide
whether Professor Arrow is correct. "The quality of [his]
presentation[ ] is enough ... to establish an ample factual
foundation for the judgment call made by the Department of
Justice and to make its conclusion reasonable." Triennial
Review Remand Decision, 993 F.2d at 1582.[FNR9]
A district judge pondering a proposed consent decree
understandably would and should pay special attention to the
decree's clarity. The government may be entitled to rather broad
discretion to settle with the defendant within the reaches of the
public interest, but the district judge who must preside over the
implementation of the decree is certainly entitled to insist on
that degree of precision concerning the resolution of known
issues as to make his task, in resolving subsequent disputes,
reasonably manageable. We therefore think the district judge was
on solid ground in, at least, inquiring as to the product lines
covered in the decree. Amici suggest that in this
respect the decree is ambiguous and that the district judge's
refusal to accept it can be justified on this alternative ground.
The decree provides that "successor versions of or replacement
products marketed as replacements for the [covered products]" are
covered by the decree. But, as noted, Windows NT is specifically
excluded. What would happen, amici ask, if Windows NT
were somehow to be made to serve as a replacement or successor to
MS-DOS or Windows products covered by the decree? The government
contends (and Microsoft does not dispute) that in such an
unlikely event Windows NT would be covered as a successor to the
covered products. We think that is the logical interpretation of
the decree, and therefore perceive no continuing ambiguity.[FNR10]
In any event, the district judge's concern was not primarily
ambiguous language, but was rather his perception that Microsoft
had a "penchant for narrowly defining the antitrust laws," and
that therefore "endless debate" might ensue "as to whether a new
operating system is covered by the decree." Opinion,
159 F.R.D. at 333. This observation apparently stems from the
"vaporware dispute" between Microsoft's counsel and the district
judge, as well as from Microsoft's unwillingness to concede that
the practices covered by the decree violated the antitrust laws.
As we have already noted, the judge's conclusions about
Microsoft's behavior past or future are, on this record,
unwarranted.
Similarly, we would expect a district court to pay close
attention to the compliance mechanisms in a consent decree. In
this case, the lack of an adequate compliance mechanism was the
final ground the district judge advanced for rejecting the
decree. The district judge appeared to be concerned, however,
with a great deal more than the decree. Although the court
recognized that Microsoft employed "50 or so in-house lawyers,
along with its outside retained counsel," all available to
monitor compliance, he indicated that the company ought to be
obliged to employ an internal compliance officer, such as a
private inspector general. The judge, in accordance with his
previously described views of Microsoft's business practices and
positions taken in court, believed the decree should seek to
fundamentally alter Microsoft's culture, perhaps even reduce its
competitive zeal. Suffice it to say, those objectives exceed any
legitimate concerns about actual compliance with the decree.
* * * *
When the government and a putative defendant present a
proposed consent decree to a district court for review under the
Tunney Act, the court can and should inquire, in the manner we
have described, into the purpose, meaning, and efficacy of the
decree. If the decree is ambiguous, or the district judge can
foresee difficulties in implementation, we would expect the court
to insist that these matters be attended to. And, certainly, if
third parties contend that they would be positively injured by
the decree, a district judge might well hesitate before assuming
that the decree is appropriate. But, when the government is
challenged for not bringing as extensive an action as it might, a
district judge must be careful not to exceed his or her
constitutional role. A decree, even entered as a pretrial
settlement, is a judicial act, and therefore the district judge
is not obliged to accept one that, on its face and even after
government explanation, appears to make a mockery of judicial
power. Short of that eventuality, the Tunney Act cannot be
interpreted as an authorization for a district judge to assume
the role of Attorney General.
Accordingly, the case is remanded with instructions to
enter the proposed decree.
We are deeply troubled by several aspects of the
proceedings in district court. As we have made clear, it was
error for the judge to inquire into allegations outside the
complaint. That a judge commits error, of course, is by itself
hardly a basis for imputing bias or even the appearance of
partiality. But a review of the transcripts in this case makes
it patently obvious that the reason for the judge's broad-ranging
inquiries was his acceptance of the accusations in the book
Hard Drive. The district judge's reliance on that book
contaminated the entire Tunney Act review. Perhaps the most
serious example was the district judge's insistence on dwelling
on the book's charges regarding "vaporware." After reviewing the
transcripts and the district judge's opinion, an objective
observer is left with the overall impression that the district
judge had formed an opinion about Microsoft's practices based on
Hard Drive, and therefore was unwilling to accept a
consent decree that did not address "vaporware" (as well as
various other allegations made in the book). The following
colloquy is just one of many that leaves this impression:
THE COURT: You see, what you have to explain to me
is why not if these other practices--say while we're
cleaning up this mess, why don't we also take care of--you
must agree that vaporware is a problem. You must agree that to
give Microsoft an advantage because their applications people
have access to their operation people--
MS. BINGAMAN (for the government): Let me go to
that.
THE COURT: In other words, it would seem to me to
say, hey, look, we don't want to come back and sue you next week.
We don't want to come back and sue you every Monday and Tuesday.
You ought to clean up this mess. They've got 50 lawyers there.
They can make sure that they're doing it.
MS. BINGAMAN: Here's the answer, Your Honor. If I
had a case that I could file today on those practices, I would
file it. I've said that repeatedly.
THE COURT: Well, I know, but you don't have to
have a case.
The book's allegations are, of course, not evidence on which a
judge is entitled to rely, nor are those unsworn allegations even
grounds upon which to interrogate the government about its
position with respect to those allegations.
We are similarly distressed by the district judge's
decision to allow the Doe Companies to proceed anonymously. We
are not aware of any case in which a plaintiff was allowed to sue
a defendant and still remain anonymous to that defendant. Such
proceedings would, as Microsoft argues, seriously implicate due
process. Indeed, parties to a lawsuit must typically openly
identify themselves in their pleadings to "protect[ ] the
public's legitimate interest in knowing all of the facts
involved, including the identities of the parties." Doe v.
Frank, 951 F.2d 320, 322 (11th Cir. 1992). "Basic fairness
dictates that those among the defendants' accusers who wish to
participate ... as individual party plaintiffs must do so under
their real names." Southern Methodist Univ. Ass'n of Women
Law Students v. Wynne & Jaffe, 599 F.2d 707, 713 (5th Cir.
1979).
Although it is within the discretion of the district
court to grant the "rare dispensation" of anonymity against the
world (but not the plaintiff), even in that situation the court
has "a judicial duty to inquire into the circumstances of
particular cases to determine whether the dispensation is
warranted." James v. Jacobson, 6 F.3d 233, 238 (4th
Cir. 1993). As part of this inquiry, the court should take into
account the risk of unfairness to the opposing party, Wynne &
Jaffe, 599 F.2d at 713, as well the "customary and
constitutionally-embedded presumption of openness in judicial
proceedings." Doe v. Stegall, 653 F.2d 180, 186 (5th
Cir. 1981). Nor are we aware of any case in which an
amici--a friend of the court--has been
permitted to remain anonymous. One might think that such a
situation would be a contradiction in terms. But these
amici are in any event apparent adversaries of
Microsoft, so they should be no more entitled to proceed
anonymously than if they were plaintiffs.
Here, the district judge accepted the Doe Companies'
claims of fear of retaliation from Microsoft, without inquiry and
apparently with no consideration of what an extraordinary break
with precedent such an action implied. See Opinion, 159
F.R.D. at 329. The judge did not fulfill his duty to consider
the impact of anonymity on the public interest in knowing the
identities of the participants in this proceeding, nor did he
consider possible unfairness to Microsoft.
The language of the Tunney Act relied upon by the
district judge--which permits a district court to authorize
"participation in any other manner and extent which serves the
public interest," 15 U.S.C. § 16(f) (1988)--does not
authorize his cursory dismissal of Microsoft's (and the
government's) protests. The district judge may not rely on that
language to abandon all precedent governing accepted process in
federal courts. The public interest, after all, includes an
interest in fairness to all parties. While "judicial rulings
alone almost never constitute valid basis for a bias or
partiality motion," Liteky, 114 S. Ct. at 1157, the
district judge's failure to accord any weight to Microsoft's
interests in making its determination adds to the appearance of
bias in this case.
We are also concerned by the district judge's acceptance
of ex parte submissions. See, infra, n.5.
"Ex parte communications generally are disfavored
because they conflict with a fundamental precept of our system of
justice: a fair hearing requires "a reasonable opportunity to
know the claims of the opposing party and to meet them.' "
In re Paradyne Corp., 803 F.2d 604, 612 (11th Cir. 1986)
(quoting Morgan v. United States, 304 U.S. 1, 18
(1938)). See also Code of Judicial Conduct for United States
Judges, Canon 3(A)(4) (a judge "should ... neither initiate
nor consider ex parte or other communications concerning
a pending or impending proceeding"). Although the district judge
stated that he did not consider the ex parte submissions
of the Doe Companies or Apple Computer, Inc., see
Opinion, 159 F.R.D. at 327-28, he allowed the latter to be
filed, and with respect to the former, he suggested that the
government should consider the redacted material "and if it
believes such information is pertinent to this case, on notice to
defendant, it may request the Court to reopen these proceedings
so the information appropriately may be considered."
Id. at 327-28 n.16. We think the appropriate course
would have been simply to refuse to accept any ex parte
communications.
Finally, we note that the district judge made several
comments during the proceedings which evidenced his distrust of
Microsoft's lawyers and his generally poor view of Microsoft's
practices. See, e.g., Opinion, 159 F.R.D. at 336 ("This
is the same group [of lawyers] that has advised its client that
"product preannouncements' to impede competition is proper
behavior."); id. at 338 ("Microsoft, a rather new
corporation, may not have matured to the position where it
understands how it should act with respect to the public interest
and the ethics of the market place."). These comments arose out
of the district court's misguided focus on "vaporware" and
Microsoft's other alleged misdeeds, none of which were charged in
the complaint.
The combined effect of the foregoing is to cause a
reasonable observer to question whether Judge Sporkin "would have
difficulty putting his previous views and findings aside" on
remand. United States v. Torkington, 874 F.2d 1441,
1447 (11th Cir. 1989). Accordingly, we will remand the case to
the chief judge of the district court, with instructions that it
be assigned to another district court judge.
_______________________________
[FNT1]
James Wallace & Jim Erickson, Hard Drive: Bill Gates and the
Making of the Microsoft Empire (1992).
[FNT2]
Based on his reading of Hard Drive, the district judge
initially described "vaporware" as "putting out announcements
that are misleading or not true to freeze the competition." When
the judge asked Microsoft whether it engaged in "vaporware" so
defined, Microsoft stated that such charges are "entirely false."
Microsoft did not deny that it preannounced products, but
explained in its subsequent filings that such preannouncements do
not violate the antitrust laws unless they are knowingly false or
misleading when made. The judge rejected Microsoft's position,
stating that Microsoft's lawyer "[n]ever told me that you have
this funny little interpretation of vaporware."
[FNT3]
In it submissions to the district court, Microsoft rebutted the
claim that the documents evidenced "vaporware" activities.
Microsoft also explained that it preannounces products because
ISVs need such early notification to begin developing compatible
applications software. The district court, however, did not
refer to Microsoft's rebuttal in its opinion.
[FNT4]
The district court subsequently issued an order denying motions
to intervene by I.D.E. Corporation and CCIA but authorizing them
to participate under § 16(f)(3) of the Tunney Act, which allows
the district court to "authorize full or limited participation in
proceedings before the court by interested persons ... in any
other manner and extent which serves the public interest as the
court may deem appropriate." 15 U.S.C. § 16(f)(3) (1988).
[FNT5]
After the hearing on the consent decree, several ex
parte submissions were sent to the district judge. First,
the Doe Companies submitted a supplement to their brief which
contained a redacted exhibit. At the same time the district
judge ruled on the motion to approve the consent decree, he
granted Microsoft's motion to strike the supplement, but only to
the extent that it referred to the redacted exhibit. Then, Apple
Computer, Inc. sent to the district judge an ex parte
letter (with five attached affidavits) accusing Microsoft of
anticompetitive practices not related to those charged in the
complaint. The judge ordered that Apple's letter and affidavits
be filed, but stated that he did not consider them. See
Opinion, 159 F.R.D. at 328-29. Finally, Andrew Schulman, a
software industry commentator, sent the district judge an ex
parte letter opposing the consent decree. In his letter,
Schulman stated that he had asked his publisher to send to the
judge a copy of Unauthorized Windows 95, Schulman's
latest book. Microsoft states that the judge did not disclose
his receipt of the Schulman letter or book and Microsoft did not
become aware of the letter's existence until the Doe Companies
attached it to their supplemental submission. Upon learning that
the materials Schulman sent to chambers had "become an issue in
this case," the judge ordered that a facsimile from Schulman be
filed. (The order did not refer to Schulman's previous letter
opposing the consent decree.) That facsimile indicates that the
district judge had returned Schulman's unsolicited book (along
with a copy of the district judge's opinion).
[FNT6]
In a case in which only the defendant appealed (the government's
position is not apparent) the Ninth Circuit concluded that it
lacked jurisdiction. Equal Employment Opportunity Comm'n v.
Pan American World Airways, 796 F.2d 314 (9th Cir. 1986),
cert. denied, 479 U.S. 1030 (1987).
[FNT7]
The Ninth Circuit subsequently split as to whether that language
did or did not authorize a district court to look behind and
beyond the complaint to judge the public interest. United
States v. BNS, Inc., 858 F.2d 456 (9th Cir. 1988). The
majority thought a district judge could look to non-antitrust
factors, but not to antitrust concerns in markets other than
those alleged in the complaint. Id. at 462-63.
[FNT8]
On this point, we disagree with Gillette, 406 F. Supp.
at 715-16, in which the district court stated that "the decree is
to be tested on the basis of the relief provided, on the
assumption that the government would have won."
[FNT9]
Amicus I.D.E. Corporation (which refers to itself as
"IDEA") contends that the decree is inadequate because it does
not require Microsoft to disgorge unused minimum commitment
payments that IDEA made pursuant to its licensing agreement with
Microsoft. In other words, IDEA asserts generally that the
remedy should provide retroactive relief and that it should be
tailored to meet IDEA's particular situation. While the district
court may inquire into whether a decree will result in any
positive injury to third parties, see 15 U.S.C. §
16(e)(2) (1988), in the absence of such injury, it should not
reject an otherwise adequate remedy simply because a third party
claims it could be better treated. The decree does not preclude
IDEA from bringing its own private antitrust suit against
Microsoft to gain the specific relief it seeks.
[FNT10]
Amici also contend without explanation that the decree
contains a "loophole" by which a next-generation operating system
can be taken outside the scope of the decree if Microsoft sells
it "bundled" with an applications program. We perceive no
interpretation of the decree's definition of covered products
which would allow such a result.
[FNT11]
Section 455(a) provides that "[a]ny justice, judge, or magistrate
of the United States shall disqualify himself in any proceeding
in which his impartiality might reasonably be
questioned." (emphasis added).
[FNT12]
Although Liljeberg was decided in the context of the
recusal statute, 28 U.S.C. § 455(a), it guides our analysis under
28 U.S.C. § 2106.