Here, like lightning, is IBM's Reply Memorandum in Further Support of IBM's Proposed Scheduling Order, as text, thanks to Groklaw's vengie. Thank you. This is the scorcher that I already mentioned shows IBM's new style. I'll be fine-tuning the formatting, but I didn't want you to have to wait to read it while I doodle around with footnotes. IBM's beef is simply this: they want to know what exactly is the code that is allegedly misused by them: SCO offers no good reason why IBM should be kept in the dark about
SCO's claims. SCO contends that IBM's proposal is unnecessary because IBM can
learn all it
needs to know about SCO's claims in the ordinary course without any special
provisions being
included in the scheduling order. (See SCO's Third and Fourth Points.) That
is not true. IBM
has twice moved to compel, obtained two orders compelling discovery and
submitted three
motions for summary judgment. Still, as of today, SCO has failed to identify the
material that is
at issue in the case. Now, SCO is, they say, trying to sandbag them, and presenting a schedule that would inform IBM of that code, if ever, only after the close of all fact discovery, so IBM would be unable to do any discovery on it at all regarding their defenses. UPDATE: I have finished formatting, so if you find any errors after 1:35 PM EDT, please let me know. Thank you.
**************************
SNELL & WILMER L.L.P.
Alan L. Sullivan (3152)
Todd M. Shaughnessy (6651)
Amy F. Sorenson (8947)
[address, phone, fax]
CRAVATH, SWAINE & MOORE LLP
Evan R. Chesler (admitted pro hac vice)
David R. Marriott (7572)
[address, phone, fax]
Attorneys for Defendant/Counterclaim-Plaintiff
International Business Machines Corporation
____________________________
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
____________________________
THE SCO GROUP, INC.,
Plaintiff/Counterclaim-Defendant,
-against-
INTERNATIONAL BUSINESS
MACHINES CORPORATION,
Defendant/Counterclaim-Plaintiff.
_____________________
REPLY MEMORANDUM IN
FURTHER SUPPORT OF IBM'S
PROPOSED SCHEDULING ORDER
(ORAL ARGUMENT REQUESTED)
Civil No. 2:03CV-0294 DAK
Honorable Dale A. Kimball
Magistrate Judge Brooke C. Wells
IBM respectfully submits this reply memorandum in further support of its
proposed scheduling order.
Preliminary Statement
In opposition to IBM's proposed scheduling order, SCO offers five reasons why
it
should be allowed to keep IBM in the dark about SCO's claims and deny IBM the
right to
prepare its defense to those claims. Putting aside the fact that SCO made no
mention of these
reasons during the parties' meet-and-confer, none of them bears scrutiny. There
is no good
reason why this Court should not impose deadlines for the parties to identify
the materials they
contend one another misused and then allow discovery related specifically to
those materials.
(See Section I below.)
At the same time, SCO seeks the entry of an order that includes three
provisions
that are unnecessary or inappropriate. As is explained in IBM's opening brief,
SCO's proposal
would (1) foreclose IBM's motion for reconsideration; (2) re-open the pleadings
more than one
year after they closed; and (3) require the parties and the Court to participate
in a process that
would invite unnecessary disputes. SCO's opposition papers do nothing to
recommend SCO's
proposed provisions. (See Section II below.)
Finally, SCO's opposition papers point out two differences between the parties'
proposals that were not addressed in IBM's opening memorandum. These differences
arise
mostly out of SCO's last minute departure from the parties' tentative agreement
with respect to
the proposed schedule. SCO's effort to include these provisions in the
scheduling order is
nothing but a tactical ploy and should not be sanctioned. (See Section III
below.)
2
Argument
I. THE COURT SHOULD ENTER A SCHEDULING ORDER IMPOSING A DEADLINE
FOR THE PARTIES TO IDENTIFY THE ALLEGEDLY MISUSED MATERIAL.
As is explained in IBM's opening memorandum, we believe the Court should
impose firm deadlines, in advance of the close of all fact discovery, for both
parties to disclose
the Allegedly Misused Material. That is, we respectfully submit, the only way
to give both
parties an opportunity to undertake meaningful discovery in support of their
respective cases and
to bring this litigation to an expeditious resolution without unnecessary,
additional disputes.
SCO offers a laundry list of arguments, not raised during the parties' meet-and
confer,
why the Court should not enter a scheduling order that would require SCO to
disclose the
Allegedly Misused material.1 As is discussed below, SCO's opposition (1)
distorts IBM's
proposal, (2) seeks refuge in the irrelevant and (3) offers no good reason for
the Court not to
impose reciprocal disclosure deadlines of the kind IBM proposes. In fact, the
arguments on
which SCO relies are designed to keep IBM in the dark about SCO's case.
First, SCO's opposition distorts IBM's proposal. SCO contends that IBM's
proposal is one-sided.2 (See SCO's First and Third Points.) SCO is wrong. As
we have made
clear to SCO, IBM proposes that the Court impose on both parties deadlines for
the identification
3
of the Allegedly Misused Material such that both parties are able to take discovery
relating to the
Allegedly Misused Material before the close of all fact discovery. We do not
seek a scheduling
order that requires only SCO to disclose the Allegedly Misused Material or that
only permits
discovery with respect to the Allegedly Misused Material disclosed by SCO. IBM
seeks the
entry of an order that would subject IBM and SCO to the same obligations.3
SCO also complains that under IBM's proposal "SCO's expert(s) would have to
reach final conclusions regarding IBM's [alleged] misappropriation of SCO's
material" (Opp'n
at 12; SCO's Fifth Point). Here again, SCO misstates IBM's proposal. IBM
proposes only that
the Court impose deadlines for the parties to identify the Allegedly Misused
Material. IBM's
proposal requires neither that the parties rely on experts nor that any experts
that might be used
by parties finalize their expert reports before the close of all fact discovery.
Under IBM's
proposal, the parties' experts would need to reach final conclusions before the
close of fact
discovery only with respect to the identification of the source code and other
material that is at
issue in this case. That is no different from requiring final conclusions from
an expert used by a
party to respond to an interrogatory.4 SCO cannot credibly contend that it should
be allowed to
identify the material at issue in this case for the first time via its expert
reports and after the close
4
of fact discovery. The Allegedly Misused Material must be disclosed well in
advance of the
close of all fact discovery so that the parties can take fact discovery as to
their defenses and focus
on the issues to be addressed during the expert phase of the case. Not requiring
the parties to
disclose the Allegedly Misused Material before the close of all fact discovery
would merely
allow sandbagging.
Second, SCO's opposition seeks refuge in the irrelevant. SCO argues that IBM's
proposal should be rejected on the grounds that IBM opposed SCO's request for
certain AIX and
Dynix discovery and on the grounds that IBM's proposal would not afford SCO
enough time to
review that discovery.5 (See SCO's First, Second, Third and Fifth Points.)
While IBM believes
the AIX and Dynix discovery SCO sought is irrelevant, the Court has ordered IBM
to produce it,
and we have produced, or will produce, it (subject to IBM's reconsideration
motion). SCO made
no mention during the parties meet-and-confer of needing more time to review
IBM's
production, and it is difficult to believe SCO really requires more time than
IBM's proposal
allows. In any case, that is unrelated to whether the Court should impose
deadlines for the
disclosure of the Allegedly Misused Material. If SCO believes it requires more
time to review
discovery than is provided under IBM's proposal, then the solution would be to
extend the
5
deadlines in IBM's proposal, not to leave SCO free to sandbag IBM by untimely
identifying the
material it contends IBM misused.
Third, SCO offers no good reason why IBM should be kept in the dark about
SCO's claims. SCO contends that IBM's proposal is unnecessary because IBM can
learn all it
needs to know about SCO's claims in the ordinary course without any special
provisions being
included in the scheduling order.6 (See SCO's Third and Fourth Points.) That
is not true. IBM
has twice moved to compel, obtained two orders compelling discovery and
submitted three
motions for summary judgment. Still, as of today, SCO has failed to identify the
material that is
at issue in the case. If that were not reason enough to impose deadlines for
disclosure of the
Allegedly Misused Material, then SCO's opposition brief is. SCO's brief holds
open the
possibility of SCO's updating its interrogatory responses, and using its expert
reports and other
pretrial disclosures, to identify the Allegedly Misused Material for the first
time at or after the
close of fact discovery. Based on SCO's conduct to date, we can only conclude
that it does not
intend to disclose the Allegedly Misused Material until it is too late for IBM
to take fact
discovery concerning its defenses.
SCO suggests, without any meaningful explanation, that IBM's proposal is
inconsistent with the Court's discovery and summary judgment rulings and with
the Federal
Rules of Civil Procedure. (See SCO's First, Second, Third and Fourth Points.)
Contrary to
SCO's suggestion, however, nothing in any of the Court's prior orders disfavors
the entry of an
6
order imposing deadlines for the disclosure of the Allegedly Misused Material.
In fact, the
Court's orders make clear that it believes there should be deadlines for the
parties to disclose the
Allegedly Misused Material. (See 12/12/03 Order ¶4 (requiring SCO to disclose
the material
allegedly misused by IBM); 3/3/04 Order ¶2 (again requiring SCO to disclose the
material
allegedly misused by IBM)). Nor is there anything in the Federal Rules of Civil
Procedure to
undermine IBM's proposal. On the contrary, the Federal Rules of Civil Procedure
make clear
that the Court can and should enter orders of the kind IBM seeks here. See Fed.
R. Civ. P. 16
(providing that the Court may enter a scheduling order including "modifications
of the times for
disclosures under Rules 26(a) and 26(e)(l) and of the extent of discovery to be
permitted" and
"any other matters appropriate in the circumstances of the case").
As the Court is aware, there are millions of lines of code in Linux and Unix
System V. SCO has long had access to this code. SCO has demanded the production
of
hundreds of millions of lines of AIX and Dynix code, and IBM has produced it.
Yet, under
SCO's proposal, it would not be required to identify the lines of code allegedly
misappropriated
by IBM until after the close of fact discovery. Thus, if SCO were to have its
way, the only way
IBM would be able to prepare a defense with respect to SCO's claims would be to
assume that
those claims address all of the code in Linux, Unix, AIX and Dynix and to prepare
a defense as
to hypothetical claims relating to every line of code under any and all theories
of liability. Not
only would be it unfair to require IBM to prepare its defense under such
circumstances, but it
would also be practically impossible.
In sum, unless the Court imposes a deadline by which the parties must identify
the
Allegedly Misused Material, then they may not learn the identity of the material
they are alleged
7
to have misused until after the close of fact discovery -- and potentially even
expert discovery --
when it would be too late to prepare a defense to claims relating to the
material. Imposing a final
deadline, before the close of all fact discovery, for the parties to disclose
all of the Allegedly
Misused Material, ensures that the parties learn what each other's case is about
at a time when
they can take discovery necessary to prepare a defense.
II. THE PROVISIONS SCO SEEKS TO INSERT INTO THE SCHEDULE ARE
UNNECESSARY OR INAPPROPRIATE.
As is explained in IBM's opening brief, SCO's proposal includes three
provisions
not included in IBM's proposal. Nothing in SCO's opposition papers justifies
these provisions.
First, SCO seeks to require IBM to complete by May 3, 2005 the production
ordered by the Court on January 18, 2005. In its opposition papers, SCO concedes
that there is
already an order in place requiring IBM to complete its production by May
3, 2005. (Opp'n at
3.) That is reason enough to reject SCO's proposal: it is redundant. On top of
that, however,
SCO effectively concedes that its proposal would require IBM to produce by May
3, 2005, the
discovery the Court recently ruled -- over SCO's objection -- that IBM need not
provide before
the Court decides IBM's motion for reconsideration, which may not be decided
before May 3.7
Although SCO states (without explanation) that it does not "aim[] to 'foreclose
IBM's motion for
reconsideration'", it betrays the opposite objective in acknowledging that SCO
"constructed its
8
proposed schedule based on a May 3 compliance date". (Opp'n at 4.) Thus, there
is no question
that SCO's proposal would foreclose IBM's motion for reconsideration.
Second, SCO seeks to reopen the pleadings more than one year after the deadline
for amending the pleadings. SCO contends that it need not establish "extremely
compelling
circumstances" to reopen the pleadings because the Court "already struck the
prior Amended
Scheduling Order". (Opp'n at 5.) SCO further contends that the deadline should
be ignored
because SCO wishes not only to amend its complaint pursuant to its pending
motion but also "to
propose further amendments to its complaint". (Id.) Contrary to SCO's contention,
a showing of
"extremely compelling circumstances" is required to reverse the deadline for
amending
pleadings. While the Court's January 18 Order struck the then-current scheduling
order, it was
plainly directed to future deadlines, not missed deadlines. In fact, the
deadline for amending the
pleadings was set out in an order dated September 29, 2003, not the scheduling
order struck by
the January 18 Order.
Even if (contrary to fact) the January 18 Order could be understood to make it
easier for the parties to avoid the consequences of missed deadlines, there is
no basis for
allowing further amendments to the pleadings. SCO was given ample opportunity to
amend its
pleadings before the existing deadline passed, and it has done so, filing three
separate
complaints. The fact that discovery is incomplete is an insufficient basis for
amending the
pleadings, especially in the way SCO proposes (i.e., to assert a brand new copyright
claim
challenging conduct that SCO has known about for years and to make "additional
amendments"
that SCO has yet to disclose). It is one thing to allow SCO additional discovery
with respect to
closed pleadings (as the Court has). It would be another thing -- indeed, it
would be
9
inappropriate, we believe -- to allow SCO to reopen pleadings that have been
closed for more
than a year, especially where it has repeatedly failed to substantiate its
existing claims.
Third, SCO seeks to require the Court and the parties to participate in monthly
status conferences. SCO argues that discovery disputes have taken too long to
resolve and
proposes a special procedure, including truncated briefing and expedited
hearings, to speed
things up. (Opp'n at 6-7.) Putting aside the irony in SCO's proposal,8 SCO
fails to establish a
need for monthly status conferences. As stated in IBM's opening brief, the
procedure SCO
proposes would likely just invite unnecessary disputes.
III. THE TWO NEW ISSUES THAT SCO RAISES IN ITS OPPOSITION PAPERS ALSO
SHOULD NOT BE INCLUDED IN THE PROPOSED SCHEDULE.
As a result of SCO's last-minute gamesmanship, there are two differences
between the parties' proposed schedules that were not highlighted in IBM's
opening submission
but that are featured in SCO's proposal.
First, SCO points out that its "proposed scheduling order differs from IBM's
proposal in its deadlines for the close of fact and expert discovery periods,
submission of expert
reports, and submission of dispositive motions and related briefing". (Opp'n at
8.) What SCO
fails to say is that the parties had a tentative agreement as to these dates
until the afternoon of the
10
day the proposed schedule was due to be filed.9 SCO rejected the parties'
tentative agreement,
without explanation, and submitted a proposed schedule referring to the
tentatively-agreed-to
dates as "IBM's dates" and returning to its original dates. While the
differences between the
parties' proposed dates are minor, SCO's gamesmanship should not be rewarded.
The dates to
which the parties tentatively agreed -- which are set out in IBM's proposal but
are the product of
compromise and are not IBM's preferred dates -- should be included in the
proposed schedule.
Second, SCO complains that IBM's proposal "attempts to restructure" expert
discovery by using new labels to describe the exchange of expert reports. The
prior scheduling
order described the deadlines for expert reports in general terms, i.e.,
"initial reports", "opposing
reports" and "counter-reports". Because there is some ambiguity as to what those
terms require
of the parties,10 IBM proposes the use of more descriptive language based on
who bears the
burden of proof (a matter as to which there should be no dispute).11 Contrary
to SCO's
contention, there is nothing complex about IBM's proposal. It seeks merely to
ensure that the
parties and the Court are on the same page (as we told SCO during the parties'
meet-and-confer).
11
Whatever labels it employs, the scheduling order should be clear as to the
parties' obligations
regarding expert disclosures. IBM's proposal is, we submit, more clear than
SCO's and
therefore less likely to result in future disputes.
Conclusion
For the foregoing reasons, IBM respectfully requests that the Court enter IBM's
proposed schedule as the final scheduling order in the case.
DATED this 11th day of April, 2005
SNELL & WILMER L.L.P.
___[signature]____
Alan L. Sullivan
Todd M. Shaughnessy
Amy F. Sorenson
CRAVATH, SWAINE & MOORE LLP
Evan R. Chesler
David R. Marriott
Attorneys for Defendant/Counterclaim-Plaintiff
International Business Machines Corporation
Of counsel:
INTERNATIONAL BUSINESS MACHINES CORPORATION
Donald J. Rosenberg
Alec S. Berman
[address, phone]
Attorneys for Defendant/Counterclaim-Plaintiff
International Business Machines Corporation
1 In a footnote, SCO claims that IBM is wrong in asserting that SCO did not
offer a reason
for its objection to IBM's proposal. (Opp'n at 9 n.7.) While the parties
disagree about that, not
even SCO purports to have shared its laundry list of objections with IBM during
the parties'
meet-and-confer. It did not. They were plainly constructed after the fact to
justify a strategy of
hiding the ball.
2 According to SCO, IBM's proposal gives IBM "the advantage of a special
discovery
period after [SCO's] discovery must be finished", allows IBM "an additional
three months to
conduct unilateral discovery on SCO's claims", and constructs a "special"
discovery period for
IBM "to conduct exclusive discovery on its defenses". (Opp'n at 10-11.)
3 In a footnote, SCO states that "IBM's claim that its schedule imposes a
'reciprocal'
discovery obligation on itself. . . is misleading" because "IBM has identified
evidence
purportedly in support of its counterclaims". (Opp'n at 10 n.8.) It is true that
IBM, unlike SCO,
has already properly disclosed the Allegedly Misused Material. But that does not
make IBM's
proposal one-sided. It signifies only that IBM's claims can be (and have been)
substantiated,
whereas SCO's have not been and cannot be.
4SCO states that "SCO's compliance with IBM's interrogatory responses will
necessarily
involve expert analysis". (Opp'n at 12.) If that is true, then SCO's experts
will have to reach
final conclusions long before the close of all fact discovery. SCO cannot base
sworn
interrogatory responses on non-final expert analysis.
5 SCO states, for example, that IBM has refused "to produce voluminous,
relevant discovery
for over a year"; "IBM has long failed to produce" discovery "relevant to SCO's
claims"; and
"[IBM's] discovery intransigence leaves it in an even less credible position to
complain about the
discovery schedule". (Opp'n at 10-11.) SCO further states that "IBM seeks a
revised discovery
schedule in which SCO has only half the time it requests to review [the
discovery it seeks]";
objects that IBM's proposal "would completely undermine SCO's time and capacity
finally to
review that now Court-ordered discovery"; and suggests that under IBM's proposal
SCO's
experts would not have enough time to complete their work. (Opp'n at 10-12.)
6Specifically, SCO states that it "will supplement its discovery responses as
information
becomes available" and that "IBM will have a full opportunity to conduct
discovery on its
defenses during the mutual discovery period, and to further analyze its defenses
during the
expert-discovery and other pretrial period". (Opp'n at 11-12.)
7 If the Court were to deny IBM's motion for reconsideration -- which is
premised in part on
the fact that it would take many months for IBM to produce the discovery at
issue in the
reconsideration motion -- it would obviously not be possible for IBM to produce
the material at
issue on or before May 3, 2005. Many months of additional work would be required
before IBM
could make that production.
8SCO complains about the time it has taken to resolve discovery issues but
overlooks the
fact that it has repeatedly filed overlength briefs and redundant motions and
that its own
shortcomings in discovery necessitated two motions to compel, resulted in two
orders requiring it
to comply with IBM's discovery requests and triggered a stay of discovery.
Similarly, SCO
proposes that the Court set up a special procedure for dealing with discovery
disputes but ignores
the fact that the best way to avoid unnecessary discovery disputes is for the
parties to identify the
Allegedly Misused Material (which SCO seeks so vigorously to avoid doing) and
limit discovery
to that material.
9 The Court afforded the parties 60 days during which to meet and confer and
reach
agreement with respect to a proposed schedule.
10 The ambiguity arises in part from the fact that the case includes both
claims and
counterclaims. For example: Do "initial reports" include reports on
counterclaims, including
counterclaim issues for which a party does not bear the burden of proof? Are
"opposing reports"
limited to responding to issues raised in "initial reports" or may they also
address issues not
raised in an initial report such as issues as to which a party does not bear the
burden of proof?
What are "counter-reports" allowed to counter; can they go beyond the scope of
"opposing
reports"?
11 IBM proposes a three-pronged schedule: (1) the party with the burden of
proof (whether
claimant or counterclaimant) submits experts reports on issues as to which the
party bears the
burden of proof; (2) the other party submits responsive reports or reports on
issues as to which it
does not have the burden of proof; and (3) the parties submit expert reports
responding to reports
on issues as to which the sponsor does not bear the burden of proof.
12
CERTIFICATE OF SERVICE
I hereby certify that on the 11th day of April, 2005, a true and correct copy of
the
foregoing was served on the following by U.S. Mail, postage prepaid:
Brent O. Hatch
Mark F. James
HATCH, JAMES & DODGE, P.C.
[address]
Stephen N. Zack
Mark J. Heise
BOIES, SCHILLER & FLEXNER LLP
[address]
Robert Silver
Edward Normand
Sean Eskovitz
BOIES, SCHILLER & FLEXNER LLP
[address]
13
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