PALO ALTO, Calif. (Legal Newsline)--A San Mateo County judge has apologized and agreed to pay $100,000 to Silicon Valley billionaire Thomas Siebel for pursuing a claim she now admits had no legal merit.

"I acknowledge that my actions may have caused substantial expense and inconvenience, and damage to your reputation and good name, for which I apologize," Judge Carol Mittlesteadt wrote in a letter to Siebel.

The apology is part of a settlement ending a 12-year legal battle between the software entrepreneur and Mittlesteadt,who became a judge in 1998 and has been reelected twice. Her current term ends in 2012.

Mittlesteadt and co-counsel E. Rick Buell II originally filed suit against Siebel, founder of Siebel Systems Inc., in 1996 on behalf of Debra Christoffers, the company's former sales director.

Christoffers claimed wrongful termination and sexual discrimination, and alleged that Siebel had fired her in part to avoid paying commissions and vested stock options.

The jury ruled against Christoffers' discrimination claim, but did find Siebel Systems owed her unpaid sales commissions, awarding her $233,662.

Acting as an individual, Siebel in July 2000 sued Mittlesteadt and Buell for malicious prosecution.

Siebel alleged that both attorneys knew Christoffers' discrimination claims couldn't be proven and had only pursued the case hoping to force a settlement from Siebel, whose company was nearing an initial public offering.

The initial complaint says Buell told Siebel's lawyers several times he thought the claim was "bogus."

Middlesteadt challenged Siebel's right to sue, but the California Supreme Court sided with Siebel in a ruling last year.

Siebel calls the case a "private effort" at tort reform.

"My hope is that other plaintiff's lawyers will look at this outcome and think twice before seeking to extort settlements by filing lawsuits they know have no basis in fact," Siebel said.

Lisa Rickard, president of the Institute for Legal Reform at the US Chamber of Commerce, praised Siebel for going after Mittlesteadt.

"It is courageous people like Mr. Siebel who, by taking a stand, make it easier for individuals, small businesses and corporations to fight back against malicious lawsuits rather than be extorted into a settlement," Rickard said in a statement.

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Buell offered his own apology, after reaching a separate settlement last year.

"I sincerely regret participating in this clearly intemperate and ill-advised action, and accept the California Supreme Court's and California Appellate Court's opinion that the litigation contained claims for which there was no legal foundation. Accordingly I ask that you accept my apology," Buell wrote to Siebel.

"I thank you for your wise and gracious effort to put this unpleasant and unnecessary event in the past and for allowing the parties to move on with their lives."claims for which there was no legal foundation."

Siebel Systems Inc. was sold to Oracle in 2006. Siebel is now chairman of holding company First Virtual Group.