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Marbux on DaimlerChrysler - Now What?
Sunday, December 19 2004 @ 12:47 PM EST

Here's Groklaw's marbux, who as you know is a retired attorney, imagining how he might strategize, if he were the attorney for DaimlerChrysler.

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

Now that the court has denied SCO's motion to stay the Daimler-Chrysler case until after SCO v. IBM is decided, the pressure is on SCO and its lawyers to decide what to do before the trial date. That's on January 7, 2005, only a few short weeks from now, coming up fast.

But just how much pressure is SCO under? Because of the narrowness of SCO's only remaining "timeliness of notice" claim and the court's "rocket docket" trial date, most if not all of the trial preparation work has happened behind the scenes. So we can only speculate about the pressure, but that doesn't mean we have no informed basis for speculation.

It's reasonable to assume that Daimler-Chrysler doesn't want to run up the legal bills, and doesn't share the F/OSS community's concern about how SCO loses, as opposed to whether SCO loses. DC just wants the case to go away as cheaply and quickly as possible. At the same time, let's assume that DC isn't interested in getting a reputation for giving in to shakedown artists, so in DC's mind, the only way the case settles is SCO's unconditional surrender. Any SCO damages are trivial at best, so it's very low risk for DC to fight the case all the way.

All SCO's claims but the timeliness of DC's response to SCO's certification demand were dismissed on partial summary judgment (PDF). So realistically, only two of the SCO complaint's items of requested relief are still in play at all. All SCO can ask the court for now is to:

  • Enter an order permanently enjoining DC from further violations of the DC Software Agreement; and . . .
  • Award damages in an amount to be determined at trial[.]
SCO Complaint.

Somewhat incredibly, SCO announced it still intends to force a trial on whether DC's response to the certification demand letter was timely. Time to map out a case strategy for what's left. Let's try to imagine that we are DC's lawyers, planning the next move. Got your popcorn? Time to take your seat and let the show begin. DC lawyer thoughts, as I imagine them, are in colored text.

* * * * *

The judge is right. There's a jury issue about the timeliness of DC's response letter. We can put together some evidence showing the circumstances and probably win. But that issue is about as exciting as mud pies. Can we risk putting the jury to sleep? And what if the jury decides that just focusing on the amount of time allowed in the license agreement gets them back home faster than bickering over all the excuses for being tardy. Being late means you get sent to the principal's office, right? What can I do to jazz up our defense? Let me take a look at our answer to the complaint and see if I raised any defense that might get the jury moving in our direction.

Let's see (flip, flip, flip) ... ah, here they are, our affirmative defenses:

1. Failure to State a Claim. The Complaint fails to state a claim against DCC upon which relief can be granted.

2. Waiver, Estoppel, Laches, Unclean Hands and Acquiescence. Plaintiff's claims are barred by the doctrines of waiver, estoppel, laches, unclean hands and/or acquiescence.

3. Lack of Capacity to Sue. Plaintiff is not a party to the License Agreement attached to the Complaint, and therefore Plaintiff may lack the capacity to sue.

4. Lack of Standing. Plaintiff is not a party to the License Agreement attached to the Complaint, and therefore Plaintiff may lack standing to sue. Plaintiff also lacks standing to sue because the terms of Plaintiff's contract with Novell, Inc. ("Novell") require Plaintiff to waive its right to enforce the License Agreement upon Novell's request, which, upon information and belief, Novell has expressly requested Plaintiff to do.

5. Lack of Case or Controversy. Plaintiff's action for declaratory judgment fails for lack of a case or controversy because DCC did not breach the License Agreement.

6. Lack of Breach/Cure of Alleged Breach. Plaintiff fails to identify a duty under the License Agreement that DCC breached, and DCC has cured any alleged failure to comply with an actual duty under the License Agreement. Nothing set forth herein shall be construed as an admission by DCC that it has failed to comply with any duty under the License Agreement.

7. Mitigation of Damages. The damages sought by Plaintiff are not recoverable because Plaintiff has failed to mitigate its damages.

8. Plaintiff's Claims are Moot. The claims asserted in the Complaint are moot because DCC has provided Plaintiff with a proper certification under the License Agreement.

9. Bar by Third-Party Contract. Plaintiff is barred from asserting the claims in the Complaint by its contract with Novell, Inc.

10. Reservation of Right. DCC reserves the right, upon completion of its discovery and investigation or otherwise, to assert such additional defenses as may be appropriate.

Hmm ... Let's see. Number 6 is the "put-'em-to-sleep" mud pie argument and number 7 goes with it. Defenses 1, 4, 5, and 8 are issues for the judge rather than the jury. Number 6 would be expensive to prove.

But 4 and 9 can be read together for a jury issue. And number 2? Well, Novell's instruction to SCO to drop the case asserted a right under its APA contract to "waive" SCO claims, so waiver is relevant. Ah, yes. Unclean hands, too.

O.K., think it through. So SCO was required to drop the lawsuit after Novell told them to, but they didn't, and they just kept on suing us. Sounds like dirty hands to me. My, I do love that jury instruction. All the jury has to do is read that part of the APA giving Novell the power to forbid lawsuits and the Novell letter to SCO telling them to drop our case, then just let the SCO lawyer try to argue that the APA doesn't mean what it says in plain English. Let him make things complicated, not us. I'll just wave Novell's letter to SCO telling them to drop the case. Let's see ... How should the argument go?

"Ladies and gentlemen of the jury: SCO didn't have the right to make you decide this in the first place, folks. The judge is going to instruct you on the law, and I ask you to listen very carefully to his instruction about the Doctrine of Unclean Hands. SCO has dirty hands because this contract and this letter from Novell absolutely required SCO to drop this lawsuit, but they didn't. Even though they no longer had any right to sue, they just kept suing us. And even if you disagreed with me about that, wasn't being a few days late justified to check out who SCO is, since their name isn't even on the license agreement with DC, and why they're demanding all that information the judge already ruled they weren't entitled to, and finding out they're suing companies all over the place, and needing to have our lawyers look it over before we responded, and ... Just why are we all here trying to figure out why being a little late ruffled their feathers so bad? And damages, how can they claim they suffered money damages and still keep a straight face? We're late answering their letter and they want you to give them money for it?"
That's a workable trial theme, all right. Keep it simple. This makes them the bad guys and gives us the white hat and the moral high ground.

Now let's look at the big picture. How will SCO's lawyers react? Hmm. Looks like winning on this defense would block every case SCO has filed because Novell told SCO to drop all of them. Collateral estoppel strikes again. That would leave just Red Hat's case and IBM's counterclaims. And the judge is holding their feet to the fire in our case with a fast trial date coming up quick. This really gives us a red hot poker for a trial strategy. If I let SCO know what's coming, they might just drop this thing before trial.

So let's say I do three depositions. One for Novell to have them authenticate the Novell-Old SCO agreement and the Novell letters to New SCO, demanding that SCO drop the cases. One for SCO to prove that they got all those letters but decided to keep going after DC and the other companies anyway. That's a one-day trip to Utah. One deposition for the SCO damages expert just to nail down what he's going to say so there are no surprises. Maybe I can do that on the same trip.

Let's see. They could brazen it out and try to beat us at trial. Naw, they don't want to risk all their cases being dismissed because of this case. They're fantasizing big bucks in the IBM case. They'll chicken out. They could drop the case, but that would make it look like they're giving up on their protection racket. Wouldn't investors wonder how they're going to find out who they can sue if they can't demand the kind of information they tried to get from Daimler-Chrysler?

What's left? Oh, that's it. They'll probably just drop the timeliness stuff just before trial and ask the judge to enter final judgment on the rest of the case so they can appeal.

It's damage control time for them, and dropping the remaining claim then appealing the rest will at least buy them some time to think about what they're going to do if they can just make it past the Michigan border alive. I like this. I should give DC a call and get approval on the strategy.

* * * * *

O.K., show's over. Please drop your popcorn containers in the trash bins in the lobby on your way out.

That was all speculation, of course. We don't really know what went on inside the brains of the DC lawyers (but we'd like to, wouldn't we?). Maybe they've found something even better. Maybe they didn't give the SCO lawyers any warning about what's coming. Maybe they got them to stipulate to the necessary facts and didn't even have to go to Utah for depositions. Who knows?

But one thing folks who read Groklaw can count on: It isn't concern for SCO's welfare that's guiding the DC lawyers' thinking and trial preparation. There is, after all, a reason people think about sharks when they think about lawyers. Experienced lawyers know how to bite.


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