States' Huge Microsoft Tab

When David Boies took on the Microsoft case for the Justice Department, he became a $50-an-hour government employee -- a bargain for the government. The bill just submitted by the 19 state attorneys general who were co-plaintiffs with the Justice Department shows just how big a bargain that was. The tab? More than $13 million in attorneys' fees and $1.54 million in costs and expenses.

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When David Boies took on the Microsoft case for the Justice Department, he became a $50-an-hour government employee. The government got a bargain, everyone said. The bill just submitted by the 19 state attorneys general who were co-plaintiffs with the Justice Department shows just how big a bargain that was. Their tab was $13.2 million in attorney fees and $1.54 million in costs and expenses. The figures are contained in a July 21 motion by the states, which are entitled under state and federal law to seek fees and costs from the defendant as prevailing parties in the case. In his June 7 final judgment, U.S. District Judge Thomas Penfield Jackson ordered the states to file their motion in 45 days. “The States’ request for reimbursement of attorneys’ fees for a total of 48,866.15 hours is eminently reasonable,” the motion states. Attached as an exhibit are the hours spent by each of the 113 lawyers and paralegals who worked on the case. Richard Blumenthal, Connecticut’s attorney general, reported that he spent 791 hours on the case. At $400 an hour, his bill is $316,400. Tom Miller, Iowa’s attorney general, says he spent 813 hours. Assuming a 40-hour work week, that would amount to a solid 20 weeks of work on Microsoft. Also charged at $400 an hour, Miller’s bill is $325,200. TRIAL WORK At the Justice Department, the Microsoft investigation was headed by Phillip R. Malone and lawyers from the San Francisco bureau of DOJ’s Antitrust Division. During the 78-day trial, Boies took the lead in the courtroom, cross- examining all but one of the 12 defense witnesses. Seated at the head of the government table, Boies often consulted with Malone and a handful of Justice Department lawyers, among them Karma Giulianelli and Steven Holtzman. At the outset, Jackson denied a request by the states’ lead lawyer, Stephen Houck of New York, to cross-examine witnesses. That left Houck with little to do in the courtroom. He handled one witness for the government on direct examination. That role was circumscribed by a procedure Jackson implemented to speed the trial: direct testimony was submitted in writing. Houck logged 2,950 hours on the case. At $400 an hour, his bill is $1.18 million. He left the New York Attorney General’s Office in September. According to the brief, Kevin O’Connor of Wisconsin took over as lead counsel for the states from October to June. O’Connor, known for his work drafting a memorandum on potential remedies for the states, logged 3,149 hours. His bill: $1.13 million. Richard Schwartz of New York, who worked with the states’ economic expert and continued working on the case after Houck’s departure, logged the most hours: 4,004. At his $290 hourly rate, his bill is $1.16 million. Just behind Schwartz is a lawyer who never came to the trial: Richard Light of California. Light logged 3,561 hours. That works out to 89 solid weeks of Microsoft work. At a $335 hourly rate, Light’s bill is $1.19 million. Riddhi Janni of Minnesota logged 2,123 hours on the case at a $195 hourly rate. The bill: $413,985. The states “will submit detailed evidentiary support” for these fees at the appropriate time, the motion says. The states also reported $948,795.68 in expert fees. Their economic expert, Frederick Warren Boulton, was one of the 12 government witnesses. They spent $232,039 on attorney travel and lodging and almost as much on photocopying: $188,135. Bill Gates, Microsoft’s chairman and one of the world’s richest men, presumably could afford $15 million. But Jim Cullinan, a Microsoft spokesman, said, “Obviously, we think we’re going to win on appeal. This issue will be moot.” On July 25, Microsoft filed a brief urging the U.S. Supreme Court not to take direct review of the case, but to allow the District of Columbia appeals court to hear it. The brief says that Jackson’s findings of fact don’t “contain a single citation to the record severely complicating review of the district court’s determinations.” It says that, when the government expanded its case beyond the original allegations, the judge “assured Microsoft” that he would not make findings based on conduct unrelated to the complaint, but that he “later repudiate[d]” that promise with his sweeping ruling. And it contends that Jackson’s press interviews raise the question of whether the case should be assigned to another judge if it is remanded. The states’ fee petition will move forward while the case is on appeal.

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