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Novell Responds to SCO's Attempt to Avoid Paying Costs Now
Monday, July 26 2010 @ 11:00 PM EDT

In the latest news from SCO's slow boat to absolutely nowhere, Novell has filed its opposition to SCO's motion to stay taxation of costs. SCO filed this exact motion [PDF] in 2008, after it lost the first trial, Novell points out, and Novell opposed that motion too, and the motion was denied [PDF] by this very same court, and here they are with the same type of motion and even using the same stupid case that didn't work for them the last time.

Is SCO trying to lose this motion? Or just half-hearted? If it knows the court will not grant the motion, why file it? No. Really. Why? To keep things going as long as possible? They think Judge Ted Stewart will be more favorable to them than Judge Dale Kimball? Nothing else has changed.

When you are the paralegal, all you do is take the old document, change the dates to upgrade it, and hand it to your boss for him to add his touches, if any. I puzzle over why SCO is even bothering. But I'm thinking about that more and more. Why is SCO continuing when the outcome is so obvious?

Here's the filing:

07/26/2010 - 888 - MEMORANDUM in Opposition re 883 MOTION to Stay Taxation of Costs filed by Defendant Novell, Inc.. (Brennan, Sterling) (Entered: 07/26/2010)

And here's the heart of what Novell says:
Federal Rule of Civil Procedure 54 entitles Novell to its costs. SCO moves to stay taxation of costs. SCO has filed this motion once before - essentially verbatim - in a request to stay costs pending its earlier appeal in 2008. (See SCO's Motion to Stay Taxation of Costs, Dkt. No. 575.) This Court denied SCO's motion, then stating, "[T]he court does not believe that a party's speculation as to the possibility of the underlying judgment being reversed on appeal is a valid reason for delaying a determination of costs." (Mar. 13, 2009 Order Denying SCO's Motion to Stay Taxation of Costs, Dkt. No. 591 ["Mar. 13 2009 Order Denying Stay"].) The only reason SCO provides in favor of such a stay is the same reason it provided the first time it filed this motion: the possibility that things will turn out differently for SCO on appeal. As before, this Court should deny SCO's motion.
Novell also points out that the only case law SCO cites, How v. City of Baxter Springs, Kas., [PDF] is inapposite because it concerned an *uncontested* request to stay taxation of costs, which Novell points out does not apply here. Novell lists the same 3 reasons it listed last time as to why SCO's motion should not be granted: 1) the court should review and assess costs while the facts are fresh; 2) it's efficient, in that SCO can then appeal everything at once; and 3) Novell needs a sum fixed by the court to take to bankruptcy court to supplement its claim there.

Assuming the result will be the same this time as last time, SCO next will file objections:

In the event that such stay is not granted, SCO will file its objections to Novellís Bill of Costs within ten days of the Courtís decision.
Then again, when hasn't SCO tried to delay?

Here it is as text, and all I had to do was copy and paste and then update, and what I noticed doing that was that Novell actually checked the case law, which SCO seems not to have done, and Novell adds another case, Sensormatic Elecs. Corp. v. Tag Co. US, to its list of supporting decisions, and it again and again cites the earlier decision denying SCO's almost verbatim motion. If I were Boies Schiller, I'd be embarrassed.

**********************************************

WORKMAN | NYDEGGER
Sterling A. Brennan (Utah State Bar No. 10060 [email]
David R. Wright (Utah State Bar No. 5164, [email])
Kirk R. Harris (Utah State Bar No. 10221, [email])
Cara J. Baldwin (Utah State Bar No. 11863, [email])
[address, phone, fax]

MORRISON & FOERSTER LLP
Michael A. Jacobs (Admitted Pro Hac Vice [email])
Eric M. Acker (Admitted Pro Hac Vice [email])
Grant L. Kim (Admitted Pro Hac Vice [email])
Deaniel P. Muino (Admitted Pro Hac Vice [email])
[address, phone, fax]

Attorneys for Defendant and Counterclaim-Plaintiff NOVELL, Inc.

IN THE UNITED STATES DISTRICT COURT
DISTRICT OF UTAH, CENTRAL DIVISION

THE SCO GROUP, INC., a Delaware corporation,
Plaintiff and Counterclaim-Defendant,

v.

NOVELL, INC., a Delaware corporation,
Defendant and Counterclaim-Plaintiff.
______________

| AND RELATED COUNTERCLAIMS

________________

NOVELL'S OPPOSITION TO SCO'S
MOTION TO STAY TAXATION OF
COSTS


Case No. 2:04CV00139

Judge Ted Stewart

(1)

Federal Rule of Civil Procedure 54 entitles Novell to its costs. SCO moves to stay taxation of costs. SCO has filed this motion once before -- essentially verbatim -- in a request to stay costs pending its earlier appeal in 2008. ( See SCO's Motion to Stay Taxation of Costs, Dkt. No. 575.) This Court denied SCO's motion, then stating, "[T]he court does not believe that a party's speculation as to the possibility of the underlying judgment being reversed on appeal is a valid reason for delaying a determination of costs." (Mar. 13, 2009 order Denying SCO's Motion to Stay Taxation of Costs, Dkt. No. 591 ["Mar. 13, 2009 Order Denying Stay"].) The only reason SCO provides in favor of such a stay is the same reason it provided the first time it filed this motion: the possibility that things will turn out differently for SCO on appeal. As before, this Court should deny SCO's motion.

SCO's only cited support for its motion is How v. City of Baxter Springs, Nos. 04-2256 & 04-2256 JWL, 2006 U.S. Dist. LEXIS 23951 (D. Kan. Apr. 26, 2006), the same inapposite case it cited in 2008, in which the court, on an uncontested motion, stayed costs pending appeal. A subsequent case considering How concluded that How should be limited to unopposed stay requests. See Maytag Corp. v. Electrolux Home Prods., Inc., No. C 04-4067-MWB, 2006 U.S. Dist. LEXIS 89383 (N.D. Iowa Dec. 11, 2006). Examining the caselaw on staying costs, the Maytag court concluded that "the consensus seems to be that the court must have some valid reason for not awarding costs at the customary stage of the proceedings." Id. at *5; see also Fed. R. Civ. P. 54(d) (creating presumption in favor of costs award). In How, the "valid reason" was the consensus of the parties, a consensus not present here. In Maytag, the offered "valid reason" was the same as SCO offers ó the possibility of reversal on appeal. Id. at *6. The Maytag court explicitly rejected such an argument:

The possibility that the underlying judgment might be reversed, with the result that the award of costs must also be reversed, is simply too speculative to outweigh the benefit of the trial court conducting a review of the bill of costs while the case is still fresh. The marginal difficulties of vacating an award of costs, upon which Maytag also relies, simply do not justify a stay based on the losing party's speculation that it might do better on appeal. Finally, the court notes that far more judicial resources have been expended to resolve the parties' dispute over whether or not to stay the taxation of costs than could possibly have been saved by delaying

1

the taxation of costs to a later date, so that Maytag's judicial economy argument also is not persuasive. Therefore, the court will deny Maytag's motion to stay the taxation of costs.
Id. at *7-8 (internal citations omitted). Other courts have consistently agreed with the Maytag court and declined to stay costs pending resolution of an appeal -- including, as noted above, this Court in this case. (See Mar. 13 2009 Order Denying Stay; Sensormatic Elecs. Corp. v. Tag Co. US, No. 06-81105-CIV-HURLEY/HOPKINS, 2009 U.S. Dist. LEXIS 92208, at *2-3 (S.D. Fla. Oct. 2, 2009) [noting that courts often award costs during pendency of appeal, denying motion to stay adoption of report and recommendation as to bill of costs].)

As before, there are at least three compelling reasons to deny this motion. First, as the Maytag court noted and this Court agreed, it makes sense for this Court to review and determine costs while the facts of the case are fresh. (Mar. 13 2009 Order Denying Stay at 2; Maytag, 2006 U.S. Dist. LEXIS 89383 at *7; see also Le Moine v. Combined Comms. Corp., No. 95 C 5881, 1996 U.S. Dist. LEXIS 10838 (N.D. Ill. July 30, 1996) (expressing preference for review of costs while case fresh).

Second, it avoids the possibility of piecemeal appeals, as "[w]ith prompt taxation, any appeal from the award of costs [can] feasibly be consolidated with the pending appeal on the merits, thereby enhancing judicial efficiency." Singleton v. Dep't of Corr. Educ., No. 1:03CV00004, 2003 U.S. Dist. LEXIS 17834, *4-5 (W.D. Vir. Oct. 3, 2003); see also Mar. 13 Order Denying Stay at 2; Holley v. Giles County, No. 1:03-0071, 2005 U.S. Dist. LEXIS 44372, *6 (M.D. Tenn. Sept. 12, 2005) (denying motion to delay assessment of costs pending appeal); Epcon Gas Sys. v. Bauer Compressors, Inc., No. 98-CV-75392, 2001 U.S. Dist. LEXIS 12665 (E.D. Mich. Mar. 26, 2001)(recommendation that motion for stay of bill of costs pending appeal be denied.)

Third, establishing costs is necessary for Novell to supplement its claim in the Bankruptcy Court.

2

For the reasons outlined above, Novell requests that the Court deny SCO's Motion to Stay Taxation of Costs.

DATED: July 26, 2010

Respectfully submitted,

By: /s/ Sterling A. Brennan

WORKMAN | NYDEGGER


MORRISON & FOERSTER LLP

Attorneys for Defendant and
Counterclaim-Plaintiff Novell, Inc.

3


  


Novell Responds to SCO's Attempt to Avoid Paying Costs Now | 262 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections thread
Authored by: ais523 on Monday, July 26 2010 @ 11:09 PM EDT
Just in case PJ's made a mistake.

[ Reply to This | # ]

The Off Topic thread
Authored by: ais523 on Monday, July 26 2010 @ 11:11 PM EDT
Things that fit Groklaw, but not this article in particular.

[ Reply to This | # ]

Novell Responds to SCO's Attempt to Avoid Paying Costs Now
Authored by: dio gratia on Monday, July 26 2010 @ 11:30 PM EDT
Ah, SCO with more of those off the mark citations.

[ Reply to This | # ]

Why is SCO continuing when the outcome is so obvious?
Authored by: SpaceLifeForm on Tuesday, July 27 2010 @ 12:13 AM EDT
Delay.

Standard M.O. since they finally realized they had no case.


---

You are being MICROattacked, from various angles, in a SOFT manner.

[ Reply to This | # ]

The News Picks thread
Authored by: ais523 on Tuesday, July 27 2010 @ 01:07 AM EDT
Discussing the links in the right main page sidebar.

[ Reply to This | # ]

Everthing COMES here
Authored by: red floyd on Tuesday, July 27 2010 @ 01:39 AM EDT
[this post intentionally left blank, except for this text and the sig]

---
I am not merely a "consumer" or a "taxpayer". I am a *CITIZEN* of the United
States of America.

[ Reply to This | # ]

Must be money paid based on length of litigation
Authored by: CraigV on Tuesday, July 27 2010 @ 03:12 AM EDT
The only thing that really makes sense to me is that some entity has a secret
agreement that provides money or sweetheart business deals based on how long
they are able to prolong this litigation.

[ Reply to This | # ]

If I were Boies Schiller, I'd be embarrassed.
Authored by: Ian Al on Tuesday, July 27 2010 @ 04:16 AM EDT
If PJ were Boies Schiller, think of all the silly and outlandish stories she
would have told us over the last seven years.

Actually, we would have stopped listening, years ago.

Suddenly, I feel intense compassion for the judges, juries and lawyers that have
to keep dealing with the sort of nonsense we have got from Boies Schiller and
other SCOG 'professionals'.

We know we can just up sticks and leave.

---
Regards
Ian Al
SCOG, what ever happened to them? Whatever, it was less than they deserve.

[ Reply to This | # ]

Post-petition liability?
Authored by: rfrazier on Tuesday, July 27 2010 @ 04:50 AM EDT
Would it matter in the BanKruptcy Court whether SCO owes Novell a packet of
money post-petition?

Best wishes,
Bob

[ Reply to This | # ]

What This Means
Authored by: DaveJakeman on Tuesday, July 27 2010 @ 07:47 AM EDT
What this means is that SCO are following the textbook on frivolous, vexatious
litigation that they wrote earlier.

To the letter.

(Copy and paste.)

[ Reply to This | # ]

Chance for some Judicial humor
Authored by: YurtGuppy on Tuesday, July 27 2010 @ 10:44 AM EDT
Since this decision is a slam dunk, seems to me it is Judge Stewart's
opportunity to inject a little bit of his own kind of judicial humor into the
proceedings.

I've been trying to decide what that will look like. Will he use the prior
decision verbatim changing only the date and signature? Will he just file a
decision that makes reference to the prior decision with a terse
"ditto"?

I'd really like to see something more imaginative.
I think he should take his time and come up with something interesting.

---

just swimming round and round

[ Reply to This | # ]

When the buzzer sounds the game is over
Authored by: cbc on Tuesday, July 27 2010 @ 11:10 AM EDT
SCO will continue to file as long as it has money to pay the lawyers who are not
pre-paid. The gavel on the bankruptcy finalization is the buzzer. Maybe I
should have titled this post "When the buzzer sounds the gaming is
over".

[ Reply to This | # ]

Personal Guarantee Side Agreements
Authored by: Guil Rarey on Tuesday, July 27 2010 @ 11:39 AM EDT
Some years ago I was working for a company that had begun life as an
entrepreneurial start up. By the time I got there, they were a couple stages of
growth past the "guy in a garage" phase, but that's how they started.
When I there, I was doing some internal due diligence on financing they were
lining up. This include the history of past financing agreements, for some
reasons. The earliest rounds of financing for the company included side
agreements or codicils that were personal guarantees by the guy in the garage /
CEO for the money.

I mention this because it leads me to this speculation: I'm wondering what side
agreements exist that aren't part of the SEC filings (by some narrow reading of
SEC rules) between various entities involved in this -- contingency guarantees
and so forth -- that might be driving this behavior.

---
If the only way you can value something is with money, you have no idea what
it's worth. If you try to make money by making money, you won't. You might con
so

[ Reply to This | # ]

Novell Responds to SCO's Attempt to Avoid Paying Costs Now
Authored by: Anonymous on Tuesday, July 27 2010 @ 12:59 PM EDT
"Why is SCO continuing when the outcome is so obvious?"

So the lawyers cannot be accused of leaving a stone unturned. I think each and
every rat is trying to make sure someone else looks like the reason the scam
failed.

They need to create and maintain the fiction that they were true believers in
the merits and not just common grifters.

Someone might looking for revenge against obvious scam artists, but maybe not
after people stupid enough to truly believe.

[ Reply to This | # ]

Competition - Alternative Argument Practice
Authored by: sproggit on Tuesday, July 27 2010 @ 02:52 PM EDT
So, as PJ has pointed out, the arguments mustered by SCO are pretty much a
duplicate of a previous attempt that was denied by Judge Kimball.

Upon reflection, it occurs to me that this community, with all of our combined
experience of the case, might come up with something that is either 1) more
truthful or 2) funnier, or 3) both.

So here we go. An impromptu competition. The prize is kudos from the community.
The objective is to come up with (tongue in cheek) arguments that SCO might have
used...

I'll get us started with:-


1. Perhaps, in a little-noticed and un-reported clause of the agreement with
BSF, SCO agreed to pay the law firm additional expenses based on the word count
of all filed motions. We should expect BSF to file requests for permission to
submit over-length sur-sur-replies to Novell's anticipated objections.

2. Because (and this is sad but true) those in control at SCO would rather pay
the lawyers to make mischief than give Novell what is rightfully theirs.

3. At the wild and whacky end of the spectrum, maybe SCO have got some kind of
"Brewsters Millions" deal going on with their legal fees. Maybe they
think that if they can spend $100 Million in legal fees they might win back $10
Billion in damages? ;-)

Can you do better? Cool - give it your best shot!

[ Reply to This | # ]

Novell Responds to SCO's Attempt to Avoid Paying Costs Now
Authored by: Anonymous on Tuesday, July 27 2010 @ 06:02 PM EDT
Thoughts?

A couple of them. First, from the beginning, or very near to it, the bulk of
the intention is extortion-via-lawsuit-expense. That is, 'we don't need to
have a case, we just need to threaten hard with lawyers, and people will settle
with us.' Maybe not beelions, but meelions.

Second, everyone salaried at SCO, including Cahn and Blank Rome have a vested
interest in stall, stall, stall. While any realistic hope of winning ANY of
the lawsuits *must* be gone from everyone at SCO now, there is still the matter
of milking the cow until it is dead. As long as SCO has enough money to pay
salaries, the management will keep stalling in order to keep collecting salary.

It's got to be easy money now. What business do they have to run? I picture
someone collecting many $/hour for a job that probably consists of showing up
once a week for a couple of hours to sign a few documents and collect a
paycheck. Are they developing software? Making sales calls? Serving clients
with issues? Or is this a business consisting entirely of managers with
nothing left to manage except themselves?

Really, what ARE they doing at SCO, other than watching their law firm file
motions?

[ Reply to This | # ]

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