Groklaw - Wallace Files Opposition to FSF Motion to Dismiss

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Wallace Files Opposition to FSF Motion to Dismiss

Friday, June 24 2005 @ 03:41 PM EDT

Daniel Wallace has filed an opposition to FSF's Motion to Dismiss, a mere day after they filed their motion, so we may safely assume he anticipated such a motion. He should have taken more time to think.

I said yesterday that I wouldn't give an opinion about the outcome, because I have no practical experience in antitrust law. After reading this responsive filing, though, I feel that, even leaving antitrust law out of the mix, he has made such a serious mistake in the law that a dismissal is very likely, unless the judge stands on his head and then leaps tall buildings in a single bound on Mr. Wallace's behalf.

Now, I've seen that happen with pro se parties, if a judge is trying to make up for their lack of legal knowledge, but in this case, it would be, I think, improper, simply because the mistake Mr. Wallace makes isn't just procedural; it's fact-based and so fundamental, it's impossible to fix without... well, without Mr. Wallace fabricating new facts. His chance to fix it has come and now gone, even if he were willing to fabricate, unless I am missing something, which is always possible.

Let me explain what I think I see, so you can consider it. First, here is his Answer to Motion to Stay Briefing on Plaintiff's Motion for Summary Judgment [PDF], which isn't what you should call it or even a necessary filing, but the judge probably won't care about that. And here is his Answer to Defendant's Motion to Dismiss the Complaint [PDF], also oddly named and unnecessary, but not fatal. And here is the Plaintiff's Answer Brief to Defendant's Motion to Dismiss [PDF], which is also mistitled but at least pertinent.

What I think Wallace has failed to respond to adequately is the FSF's argument that he lacks standing to bring the complaint. Standing basically means that you have the right to complain about the defendant's actions, that it affects you personally. Here's the explanation from the book, "Law Dictionary, Second Edition," by Steven H. Gifis:

STANDING, the legal right of a person or group to challenge in a judicial forum the conduct of another, especially with respect to governmental conduct. In the federal system, litigants must satisfy constitutional standing requirements in order to create a legitimate case or controversy within the meaning of Article III of the federal Constitution. A taxpayer will have standing to challenge governmental conduct if the taxpayer can establish (1) "a logical link between that status and the type of legislative enactment attacked," and (2) "a nexus between that status and the precise nature of the constitutional infringement alleged." 392 U.S. 83, 102. "The gist of the question of standing, is whether the party seeking relief has 'alleged such a personal stake in the outcome of the controversy as to insure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions.'" 418 U.S. 208, 237 citing 369 U.S. 186, 204.

To clarify further, here's a snip from a judgment in a case [PDF], where the judge discusses and defines standing:

Standing has three constitutional elements. A plaintiff seeking to invoke a federal court's jurisdiction must show:
(1) it has suffered an "injury in fact" that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.

If you go to Google and search for "lacks standing", you will find many more cases where this was the issue. This highlights a fundamental difference between message boards and the courts. Theoretical discussions belong on message boards. The courts deal with real life. They want to know how you have been hurt or will be immediately, not theoretically, if the defendant is allowed to do whatever it is you are complaining about. The fact that others might really be harmed by the conduct, even an entire industry, has no relevance to your case, unless you are directly impacted. That doesn't mean someone else couldn't sue the defendant for the same thing you are complaining about, but if you are not personally affected, you lack standing to talk to the court about it.

There are, in short, no Don Quixote plaintiffs in courts of law. You can only fight for the right, so to speak, if you are the victim yourself. Maybe the court would let you enter an amicus brief, if you see something important and want to make sure the court sees it too, but you can't be a party unless you have a complaint personally against the defendant.

Here's what FSF wrote in its Motion:

The allegations of the Complaint also show that Plaintiff lacks standing to sue because he has suffered no "antitrust injury." This lack of standing and lack of antitrust injury is a separate, and independently sufficient, basis on which to dismiss the Complaint. The Supreme Court first articulated in the case of Brunswick Corp. vs. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477 (1977), the requirement that a plaintiff suing under the Clayton Act establish "antitrust injury." In Brunswick, the plaintiffs were independent bowling alley operators who alleged that they had been injured by the defendant's unlawful acquisition of failing bowling centers in their neighborhoods. Plaintiffs alleged that if the centers had been allowed to fail, or had been acquired by a less well-financed competitor, the plaintiffs would have been subject to less competition, and would therefore have made greater profits. The Supreme Court, in reversing a judgment in favor of the plaintiffs and ordering judgment NOV on their antitrust claims, explained that a plaintiff who alleges injury by reason of a violation of the Sherman Act must allege more than mere "but for" causation. Such a plaintiff must allege injury that flows directly from the anticompetitive aspect of the challenged activity. The Court reiterated that because the antitrust laws were created for the protection of competition, not individual competitors, a plaintiff does not state a claim under the Sherman Act when he merely complains that increased marketplace competition has diminished his profits.
The Supreme Court has reaffirmed and extended the holding ofBrunswick in subsequent cases that are dispositive here.
First, in Atlantic Richfield Co. vs. USA Petroleum Co., 495 U.S. 328 (1990), the Court held that a competitor who alleged that he had lost sales and profits due to his competitor's vertical maximum price fixing scheme lacked standing to sue under the antitrust laws. That is precisely the situation presented by this Complaint. Atlantic Richfield establishes that Plaintiff has no standing to bring this Complaint, even if the alleged vertical maximum price fixing agreement were per se unlawful, which after State Oil vs. Khan it plainly is not.

Wallace, in my view, misunderstood that and failed to address it, arguing instead that it's a per se violation and that he doesn't need a quantifiable injury. That is not the question he needs to talk about. The question is, does he have standing? He cites a case that he thinks establishes that he doesn't need to quantify the injury, but actually it doesn't help him, because while the party in the case didn't need to quantify its injury, it had already established that there was injury, that it would be injured personally and that it had standing. Here's what Wallace argued:

Even if the Defendant's naked price-fixing scheme were not facially condemned, the Plaintiff has claimed a plausible future antitrust injury:

"The rapid adoption of the GNU GENERAL PUBLIC LICENSE in schemes to deflate or eliminate the free market valuation of computer programs threatens to diminish or destroy the ability of the Plaintiff to earn future revenues in the career field of computer programming."; Plaintiff's Complaint
The Defendant misstates the law of the Seventh Circuit. The Plaintiff needs show no quantifiable injury to obtain standing for injunctive relief:
"Blue Cross is clearly right with regard to the injunction. We held when this case was last before us that the jury's finding on liability for dividing up the market with its competitors must be upheld and that Blue Cross was entitled to an injunction against that practice. This holding established the law of the case, binding the district judge on remand and us on this subsequent appeal unless we have good reasons to depart from the previous decision. . . . We don't. Even though, as we shall see, the district judge was correct that Blue Cross has failed to come up with evidence that would authorize an award for damages for the division of markets, this does not justify withholding an injunction -- rather the contrary. Inadequacy of a plaintiff's remedy at law, that is, his damages remedy, is normally . . . a prerequisite to the entry of an injunction. . . . And a common reason why the damages remedy is inadequate is that the plaintiff is unable to quantify the harm that the defendant's practice has inflicted or will inflict on him."

Constitutional requirements are not variable by district, for starters. And Blue Cross had already established that it had standing to sue. It had already established liability, just not in money terms that could be established by the evidence and so required an injunction to prevent the damage already established. Wallace is trying to prove oranges using apples. First you have to prove that you have sustained, or imminently will directly sustain, an antitrust injury. Then you talk about a remedy.

And Wallace is retired now. He retired from a job that was not a computer programming job, as I understand it. He tells us all he is a physicist because he got a BS in physics, but he doesn't tell us his employment history. He did write, he says, some computer programs on the side in the past. But he doesn't argue that these programs are being harmed by the GPL. All he has argued is that he may in the future be unable to make money from computer programs he may write someday. I don't believe that is sufficient to reach the constitutional bar for standing.

And because standing is such a basic concept in the law, I now wonder if he has any competent legal help behind the scenes helping him write his briefs. That doesn't mean he doesn't have a lawyer whispering in his ear or sending him templates or some such, because you can obviously see the difference between these documents and the earlier filings. Maybe he has a lawyer pal who doesn't normally do antitrust cases. Or maybe he isn't paying close enough attention. Who knows?

If you recall, I said that I believed the complaint was deliberately amateurish to hide what I guessed was a hidden lawyer in the wings, and I predicted as we went along, if I was correct, the work would show improvement, and so we do see that improvement. Misnaming the documents seems deliberate, when you consider you can look in any legal form book or just look at Groklaw's Legal Docs page or the Timeline pages to find out what you should call a response to a motion to dismiss. So that seems like a deliberate ploy to get the courts to view him as a bumbling lay person who should be given all the breaks.

But whether there is a lawyer behind the scenes or not, it appears a mistake has been made that I think ought to prove fatal to this case. At any rate, if I was researching this for my boss, that's what I'd tell him or her in my memo. I think I see a hole in the case big enough to drive a truck through. Lawsuits are tricky things, though, and that is why you should never go to court if you can help it, because what should happen and what does happen don't always match up. For that reason, plus my lack of experience in antitrust matters, I still won't predict the outcome here, only what I now think it ought to be.

Wallace Files Opposition to FSF Motion to Dismiss | 442 comments | Create New Account

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OT Here, Please

Authored by: overshoot on Friday, June 24 2005 @ 03:53 PM EDT

As usual, it's nice to post links as clickable HTML and preview before posting.