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SCO Memorandum in Support of Motion to Amend Scheduling Order - as text
Thursday, April 08 2004 @ 12:36 AM EDT

Here it is. You won't believe your eyes. After dragging their feet and being pulled kicking and screaming through discovery (remember the "We couldn't make the deadline we agreed to because we had to shut the office down to celebrate Christmas" excuse?), with IBM having to bring two Motions to Compel (and SCO still hasn't coughed up everything, but is supposed to on April 19), and IBM winning both motions, which tells you plenty, SCO now has the gall to stand before the court and boldly say:

"Although SCO has diligently pursued discovery since the inception of this case, it is now apparent that discovery cannot be completed in the time remaining under the existing schedule."

Obviously, this is hilarious. If they were in a hurry to pursue discovery, why wait until April 19? Let's see the "infringing" code right this minute and get this show on the road. Of course that won't happen, and frankly I anticipate they may have another excuse on the 19th why they can't meet that deadline either. The real problem they have is, they told the judge they couldn't tell her where infringing code was in AIX unless IBM turned it over first. Instead, the judge told them to deliver their list of infringing code the same day as IBM turns over AIX, on the 19th. It's a real problem for them. Methinks there may be a connection.

SCO is now in the awkward position of having just asked to separate the patent claims, which they said should be done to "reduce both prejudice and delay", and now asking for a delay anyway for the non-patent claims. SCO just doesn't like deadlines. Whatever could the problem be?

"Where, oh, where have my million lines gone? Oh, where, oh, where can they be?"

Here are the excuses this time:

"(1) after the Scheduling Order was entered, IBM filed 10 counterclaims, including 4 claims for patent infringement; (2) discovery in this case was effectively stayed for four months; and (3) IBM's untimely reponses to discovery have hindered orderly prosecution of the case."

Here's what I would tell this judge, using Eben Moglen's style of talking to judges: "Your Honor, they delayed discovery, had to be forced to comply, and now they are using their own delay as justification for yet more delay, likely because they know that as soon as discovery is finished, you will rule on our request for a declaratory judgment, and then they will lose. Please make them stop." I'd probably also list all the delays they have asked for so far, too. It's quite a list.

Groklaw reader Steve Martin points out something else. In the Memorandum, SCO says that they filed their amended complaint prior to the Scheduling Order and that IBM filed their response after the Scheduling Order:

"On August 6, 2003, approximately six weeks after the Court established a schedule for the case, IBM responded to SCO's amended complaint (which had been filed prior to the entry of the Scheduling Order in June 2003) by answering but now also asserting 10 counterclaims..."

As Steve correctly points out, if you go to look at the IBM Timeline on this site, or the Pacer list, you will find that in actuality SCO filed their amended complaint after the Scheduling Order, not before. Here's the order it really happened. On June 16, SCO (then Caldera) filed a Motion to Amend, which was granted by Judge Kimball on July 10, the same day as the Scheduling Order. SCO filed its Amended Complaint thereafter, on July 22, and IBM timely responded on August 6.

What kept running through my mind as I transcribed this was a article about the Boies ethics complaint in Florida over his representation of Amy Habie, specificallly this sentence:

"Throughout the litigation, Habie and her attorneys have been sanctioned nine times by six different judges for violating at least 13 court orders related to the settlement and discovery orders."

I'd probably also want to point out to the judge that SCO dropped all its trade secrets claims, making this a much simpler case, and they are asking to bifurcate the patent claims anyway, and they have a separate attorney handling that, so what is their problem with what is left? That the patent claims have them scared silly? That they can't prove what they have trumpeted to the world for a year about infringing code? That isn't a problem the judge can solve for them, and they really should not be given more time to harrass and annoy the world, creating the false impression in the marketplace that the IBM case has legs. It may be profitable for them to delay, but it is costing others a great deal.

SCO is obviously not looking forward to the IBM case going to trial. However, they are asking for only a few months' delay, so they may be granted their wish. Don't become apoplectic if that happens. I'm assuming you don't want SCO to have any excuse for an appeal. IBM has said they will answer this, and I surely look forward to reading their response. Likely they will oppose. However, now that we know Microsoft is in this picture, there may be other discovery matters IBM itself may wish to pursue and no doubt it will use any extra time wisely.

They filed this on April 5, by the way, the day before the Red Hat decision on their Motion to Dismiss. For sure, we know what the first letter from Red Hat to Judge Robinson will be about.


Brent O. Hatch (5715)
[address, phone, fax]

Stephen N. Zack (admitted pro hac vice)
Mark J. Heise (admitted pro hac vice)
David K. Markarian (admitted pro hac vice)
[address, phone, fax]

Attorneys for Plaintiff










Case No. 2:03CV0294DAK

Judge Dale A. Kimball
Magistrate Judge Brooke C. Wells


Pursuant to DUCiv 7-1(b), Plaintiff The SCO Group, Inc. ("SCO"), hereby submits this Memorandum in Support of its Motion to Amend the Scheduling Order.


SCO has moved to amend the Scheduling Order to extend certain deadlines in this case. Good cause exists to grant SCO's motion because: (1) after the Scheduling Order was entered, IBM filed 10 counterclaims, including 4 claims for patent infringement [1]; (2) discovery in this case was effectively stayed for four months; and (3) IBM's untimely reponses to discovery have hindered orderly prosecution of the case.

In addition to its Motion to Amend the Scheduling Order, SCO has previously filed a Motion for Separate Trials to bifurcate the discovery and trial of IBM's unrelated patent counterclaims from the other pending claims and counterclaims. For the reasons detailed herein, the Scheduling Order should be amended to provide sufficient time for discovery on the non-patent claims. This proposed amendment to deadlines on the non-patent claims, however, does not obviate the necessity to separate pre-trial and trial of the unrelated patent counterclaims.

Procedural Background

This action commenced when SCO filed its complaint against IBM on March 3, 2003. After requesting an extensionn of the time to respond to the complaint, IBM filed its Answer on April 30, 2003. One month later, on May 27, 2003, IBM filed an Amended Answer to SCO's complaint.

Soon thereafter, the parties jointly submitted to the Court their Attorneys' Planning Report and Proposed Scheduling Order. On the basis of that Planning Report and Proposed Scheduling Order, on June 20, 2003, Magistrate Judge Nuffer entered the Scheduling Order currently governing this case.

On August 6, 2003, approximately six weeks after the Court established a schedule for the case, IBM responded to SCO's amended complaint (which had been filed prior to the entry of the Scheduling Order in June 2003) by answering but now also asserting 10 counterclaims, including four patent infringement counterclaims. IBM then amended its counterclaims (which then totaled 13) on September 25, 2003, and SCO answered on October 24, 2003. Recently, on March 26, 2004, IBM received permission to again amend its counterclaims, which now total 14. As of the date of filing this Motion to Amend the Scheduling Order, SCO has not responded to IBM's Second Amended Counterclaims, so the case is currently not at issue. These new counterclaims include IBM's request for a declaratory judgment ruling that "IBM does not infringe, induce the infringement of or contribute to the infringement of any SCO copyright through it Linux activities, including its use, reproducion and improvement of Linux, and that some of all of SCO's purported copyrights in Unix are invalid and unenforceable." These new claims further expand the scope of the case greatly beyond its posture when the original Scheduling Report and Scheduling Order were entered.

As explained below, "good cause" exists to amend the Scheduling Order in this case. Counsel for SCO has conferred with IBM regarding the need for amendment of the Scheduling Order, but IBM asserts that the approximately four months that remain before the deadline for fact discovery are sufficient to complete discovery on all claims in this case.


"Federal Rule of Civil Procedure 16(b) gives district courts wide latitude in entering scheduling orders"Burks v. Oklahoma Publishing Co., 81 F.3d 975, 978 (10th Cir. 1996). Once entered, district courts may modify scheduling orders upon a showing of "good cause," Fed. R. Civ.P. 16(b), and their decisions are reviewed for abuse of discretion. Id. There is clearly "good cause" to modify the existing Scheduling Order in this case.

First, after the parties negotiated, and the Court entered the existing scheduling order, IBM filed ten counterclaims, including several claims of patent infringement. The impending assertion of counterclaims by IBM was not known to either SCO or the Court at the time the current schedule was adopted. As a result, the schedule put in place did not account for their injection into the case. This problem is compounded by the fact that several of IBM's counterclaims are for alleged patent infringement - allegations that relate to facts (and law) entirely distinct from the other issues implicated by SCO's complaint and the balance of IBM's non-patent counterclaims. The current schedule simply does afford adequate opportunity for SCO to prosecute its own claims and defend against the counterclaims asserted by IBM.

Second, discovery in this case was effectively stayed for over four months. In response to motions to compel filed by SCO and IBM, Magistrate Judge Wells entered an order on December 12, 2003, which stayed all discovery other than certain discovery actions of SCO covered by the order. See December 12, 2003 at 3. The Court "lift[ed] th[at] discovery stay it previously imposed" on March 3, 2004, and provided that both parties had another 45 days to comply with discovery that otherwise would have been due earlier. See March 3, 2004 Order at 3. The cessation of discovery during that period, combined with the 45 days allowed for the parties to provide required discovery, has had the effect of shortening the discovery period in the case, thereby making it impossible for SCO to prosecute its own claims and defend against IBM's counterclaims within the limited time remaining under the existing schedule.

Even assuming that IBM provides all documents responsive to SCO's supplemental requests for production and fully answers SCO's supplemental interrogatories by that date, only three and one-half months would remain to complete non-expert discovery -- including review and analysis of IBM's documents and discovery responses, and conducting dozens of depositions per side. Such a schedule would result in prejudicially and unnecessarily hurried discovery even if all information is disclosed timely and without objection by IBM - an expectation that is not warranted in light of IBM's prior conduct in this case. [2]

Third, IBM's conduct during discovery has frustrated SCO's ability to complete discovery in the time allotted under the Scheduling Order. For example, one of the most critical discovery items in this case has been the production of IBM's AIX and Dynix/ptx source code. After first claiming artificial limitations on such production (such as IBM claiming it would only produce the "base operating system") IBM asserted that it would provide the requested code, but it needed to get approval from third parties that also had their source code in IBM's products. IBM then waited months before sending out notices to the third parties. Eventually, in October 2003, IBM finally sent out notices to third parties and represented to SCO's counsel that the requested code would be provided by Thanksgiving 2003. No code was produced. Then, on the eve of the hearing on the competing motions to compel, IBM produced two CDs containing Dynix/ptx code. IBM still did not produce a single line of AIX code at that time. As noted above, at that hearing, the Court stayed discovery until March 3, 2004. The day after the stay was lifted, IBM sent AIX source code to SCO for the first time. In other words, one year after the suit was filed, SCO finally obtained this critical information from IBM. The requested source code of AIX and Dynix provides information that goes to the core of this case. The wholesale failure of IBM to produce a single line of AIX code until one year after the suit was filed has hampered SCO's ability to conduct necessary code comparisons and delayed the orderly prosecution of this action.

IBM's incomplete answers to interrogatories have also hindered SCO's ability to prosecute this action and defend against IBM's counterclaims. For example, in Interrogatory Number 2, SCO asked IBM for the identity of all persons with knowledge concerning any of the issues in this litigation. IBM, however, identified only employees and former employees. When SCO moved to compel a more responsive answer on this interrogatory, IBM responded that it would provide a complete answer and would not limit its response to current and former IBM employees. To date, IBM has yet to provide this complete answer - even though SCO provided a complete response to IBM with this information on October 10, 2003.

These examples are illustrative of persistent problems with IBM's discovery responses in this case. Given those responses, and given the significantly changed nature of the case after the Scheduling Report and Scheduling Order were entered, as well as the stay of discovery from December 2003 until March 3, 2004, it is evident there is "good cause" to amend the Scheduling Order.

As the Advisory Committee notes to Rule 16(b) made clear, Rule 16(b) adopts the relatively liberal "good cause" standard in recognition that scheduling orders are required to be enterd early in litigation, and that a stricter standard would encourage counsel to request the longest time possible for discovery out of fear an extension would not be granted. See Wright, Miller & Kane, Federal Practice and Procedure: Civil 2d Section 1522.1 at 230-231; see also Adv. Comm. Notes to Rule 16(b). The need for scheduling order modifications is particularly warranted in large, complex cases (like this one) where "[d]evelopments in the litigation may call for subsequent modification of a scheduling order entered early in the litigation." Manual for Complex Litigation, Fourth Section 11.212. Although SCO has diligently pursued discovery since the inception of this case, it is now apparent that discovery cannot be completed in the time remaining under the existing schedule.


For the foregoing reasons, SCO respectfully moves for amendment of the existing Scheduling Order. Specifically, SCO requests that the Scheduling Order be amended as follows:

  • 1. The fact discovery deadline should be changed to May 18, 2005.
  • 2. The expert discovery deadline should be changed to July 15, 2005. Moreover, as noted above, at the time that the original Scheduling Order was entered, the only claims that existed in this case were those of SCO. The expert disclosure and expert deposition schedule needs to be revised to reflect that the party with the burden of proof on a claim or defense that is relying upon an expert must be the first to disclose their expert and make that expert available for deposition. The initial report should be due on May 25, 2005. The opposing experts' reports therefore would be due on June 8, 2005, with counter-reports due on June 22, 2005.
  • 3. The deadline for filing dispositive motions should be changed to July 27, 2005.
  • 4. The deadline for disclosure of 26(a)(3) materials should be changed to August 3, 2005.
  • 5. The deadline for the special attorney conference and for the settlement conference should be changed to August 15, 2005.
  • 6. The final pre-trial conference should be changed to approximately August 30, 2005.
  • 7. The trial period should be changed to approximately September 15, 2005.

    DATED this 5th day of April, 2004.

    Respectfully submitted,

    BY: ____signature__________
    Brent O. Hatch
    Mark F. James

    Stephen N. Zack
    Mark J. Heise
    David K. Markarian

    [1] IBM recently dropped one of its four patent claims.
    [2] IBM has already indicated its rolling discovery production will continue past the court imposed deadline.


    Plaintiff, The SCO Group, Inc. hereby certifies that a true and correct copy of PLAINTIFF'S MEMORANDUM In SUPPORT OF ITS MOTION TO AMEND THE SCHEDULING ORDER was served on Defendant International Business Machines Corporation on this 5th day of April, 2004, by U.S. Mail, first class, postage prepaid, on their counsel of record as indicated below:

    Alan L. Sullivan, Esq.
    Todd M. Shaughnessy, Esq.
    Snell & Wilmer L.L.P.

    Evan R. Chesler, Esq.
    David R. Marriott, Esq.
    Cravath, Swaine & Moore LLP

    Donald J. Rosenberg, Esq.


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