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Novell and Microsoft Hit the Ground Running
Saturday, January 08 2005 @ 09:30 PM EST

There is no love lost between Novell and Microsoft, judging by their latest filings in the antitrust lawsuit. The run-of-the-mill titles of the documents in no way tell the story. Microsoft filed a request to file an oversized memorandum in support of its motion to dismiss Novell's Complaint. Novell responded. And the court said they could. But if this was a cartoon, you'd see balloons saying "SPLAT!", "BAM!", "CRASH!", "ZAP!", "Take that, you villain," etc.

They are already at each other's throat. There is none of the gentlemanly "after you, Alphonse" that you normally see in the early stages of litigation. It makes me think this one is going to be fun to watch. What is the battle about this soon? Microsoft would like to move the pre-trial process to Maryland, and it implied that Novell also wanted to go there and then later changed its mind. In Maryland, you can file 50 pages, not just 10, so they suggested that since there was a "distinct possibility" the change to Maryland will happen, they'd like to have 19 pages' worth, more or less applying Maryland rules to Utah in a fudgy kind of way.

Novell, although not opposing the overlength request, makes clear to the judge that they have no desire to go East, they never did, and that while it is a possibility, thanks to Microsoft's effort (Novell implies Microsoft thinks they have a friendly judge there), its "distinctness" is by no means assured, and they would like to be sure the judge labors under no misapprehension that Novell ever, ever asked for any transfer to Maryland. In the meantime, they'd like Utah law followed, thank you. It's a riot.

Both these companies are very experienced in litigation. If you enter either name in Pacer, you'll be clicking on Next for days. And their swordplay so far seems very evenly matched, and thus it's a pleasure to watch.

There is also a stipulation by IBM and SCO to another new schedule and SCO is doing some visible discovery, I think, judging from the Pacer notes. There may well be a connection.

Here's the Pacer entry:

1/3/05 - 371 - Certificate of service by SCO Grp re: discovery (blk) [Entry date 01/05/05] [Edit date 01/06/05]

1/7/05 - 372 - Stipulation by Intl Bus Mach Inc amend/to extend time for briefing as follows: IBM's mem opp to SCO' renewed motion to compel disc due 2/4/05; IBM's reply mem sup re: motion for partial sum jgm on breach of contract claims due 2/25/05; and, IBM's reply memo in support of motion for partial sum jgm on counterclaim for copyright infringement 8th counterclaim due on 2/25/05 (blk) [Entry date 01/07/05]

The Microsoft-Novell documents mention Utah District Court Local Rule 7.1(e) and the Judicial Panel on Multidistrict Litigation, and here is some info on the J.P.M.L. Rules, and here is U.S. Code, Title 28, Section 1407, so you know what they are talking about. 1407 begins like this:

Sec. 1407. Multidistrict litigation

(a) When civil actions involving one or more common questions of fact are pending in different districts, such actions may be transferred to any district for coordinated or consolidated pretrial proceedings. Such transfers shall be made by the judicial panel on multidistrict litigation authorized by this section upon its determination that transfers for such proceedings will be for the convenience of parties and witnesses and will promote the just and efficient conduct of such actions. Each action so transferred shall be remanded by the panel at or before the conclusion of such pretrial proceedings to the district from which it was transferred unless it shall have been previously terminated: Provided, however, That the panel may separate any claim, cross-claim, counter-claim, or third-party claim and remand any of such claims before the remainder of the action is remanded.

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

David B. Tulchin
Steven L. Holley
Joseph J. Reilly
Jennifer L. Murray
SULLIVAN & CROMWELL LLP
[address, phone]

James S. Jardine (A1647)
Mark M. Bettilyon (A4798)
John W. Mackay (A6923)
Mark W. Pugsley (A8253)
RAY QUINNEY & NEBEKER
[address, phone]

Thomas W. Burt
Steven J. Aeschbacher
MICROSOFT CORPORATION
[address, phone]

Robert A. Rosenfeld
Kit A. Pierson
HELLER EHRMAN WHITE &
McAULIFFE LLP
[address, phone]

Attorneys for Microsoft Corporation

January 5, 2005

__________________

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH

CENTRAL DIVISION

_________________

NOVELL, INC.,

Plaintiff,

-v-

MICROSOFT CORPORATION,

Defendant.

____________________

MICROSOFT'S MOTION
PURSUANT TO LOCAL RULE 7-1(e)
FOR LEAVE TO FILE AN
OVERSIZED MEMORANDUM
IN SUPPORT OF MICROSOFT'S
MOTION TO DISMISS
NOVELL'S COMPLAINT

Civil N. 2:04 CV 1045 TS
Judge Ted Stewart

_____________________

Local Rule 7-1(b)(3) of this Court provides that the Argument section of a memorandum supporting or opposing a motion to dismiss must not exceed ten (10) pages. Local Rule 7-1(e), however, permits parties to seek leave of court to file a longer Argument section.

Microsoft Corporation hereby seeks leave of this Court, pursuant to Local Rule 7-1(e), to file a memorandum in support of its Motion to Dismiss Novell's Complaint with an Argument section not to exceed nineteen (19) pages.1 Microsoft states the following in support of its request for leave:

1. Novell's Complaint contains approximately 180 paragraphs and is 68 pages long. Microsoft is moving to dismiss all six counts of the Complaint. To address adequately the legal issues, Microsoft requires more than Local Rule 7-1(b)(3) would otherwise permit.

2. Novell's Complaint alleges that Novell Suffered over $1.2 billion in actual damages as a result of alleged antitrust violations committed by Microsoft. (Novell's Complaint 150.) Novell further alleges that if it proves its claims, Microsoft will be liable for three times the amount of Novell's actual damages, plus interest, costs, and attorney fees. (Id., Prayer for Relief 2, 3.) With so much at stake, Microsoft believes that is should be permitted the requested number of pages to advance its arguments in support of the Motion to Dismiss.

3. This action may soon be transferred to the United States District Court for the District of Maryland by the Judicial Panel on Mulidistrict Litigation (the "Panel"), which issued a conditional transfer order on December 14, 2004. The Local Rules of the District of Maryland allow memoranda in support of motions to dismiss to be fifty (50) pages, exclusive of (a) affidavits and exhibits, (b) tables of contents and citations, and (c) addenda containing statutes, rules, regulations and similar material. D. Md. R. 105.3. 2

The conditional transfer order was issued after Novell filed a "Notice of Potential 'Tag-Along' Action" with the Panel, notifying the Panel that its lawsuit "shares common questions of fact with other private antitrust actions" against Microsoft, and that the "Panel has transferred such actions to the United States District Court for the District of Maryland for coordinated and/or consolidated pre-trial proceedings pursuant to 28 U.S.C. 1407." On November 30, 2004, Microsoft filed its own "Notice of Potential 'Tag-Along' Action" with the Panel, agreeing that transfer to the District of Maryland was appropriate.

On December 29, 2004, in a change of position, Novell notified the Panel that it opposed transfer (without indicating the reasons for its position) and would be moving to vacate the conditional transfer order.

Transfer in the near future remains a distinct possibility. Pursuant to 28 U.S.C> 1407, the Panel may transfer "civil actions involving one or more common questions of fact [that] are pending in different districts."3 Id. Both parties agree that this action shares "common questions of fact" with actions previously transferred to the District of Maryland. Novell's motion to vacate the conditional transfer order should be fully briefed with the Panel by February 8, 2005. Microsoft's Motion to Dismiss, on the other hand, will not be fully briefed until March 10, 2005.

CONCLUSION

For the foregoing reasons, Microsoft requests that this Court grant its Motion Pursuant to Local Rule 7-1(e) for Leave to File an Oversized Memorandum in Support of Microsoft's Motion to Dismiss Novell's Complaint.

Dated: January 5, 2005

Respectfully submitted,

By: ___[signature]___

David B. Tulchin
Steven L. Holley
Joseph J. Reilly
Jennifer L. Murray
SULLIVAN & CROMWELL LLP
[address, phone]

Thomas W. Burt
Steven J. Aeschbacher (A4527)
MICROSOFT CORPORATION
[address, phone]

James S. Jardine (A1647)
Mark M. Bettilyon(A4798)
John W. Mackay (A6923)
Mark W. Pugsley (A8253)
RAY QUINNEY & NEBEKER
[address, phone]

Kit A. Pierson
HELLER EHRMAN WHITE &
McAULIFFE LLLP
[address, phone]


1The length of the entire memorandum will not exceed thirty-three (33) pages.
2 A copy of the relevant section of the Local Rules for the District of Maryland is submitted herewith as Exhibit A.
3 In conformance with Local Rule 3-3 of this Court, which requires attorneys in cases "that may be subject to pretrial proceedings before the Judicial Panel on Multidistrict Litigation" to submit the "titles and case numbers of all other related cases filed in this or any other jurisdiction," Microsoft is submitting herewith as Exhibit B a table of such cases.


CERTIFICATE OF SERVICE

I hereby certify that on January 5, 2005, I caused a true and correct copy of the foregoing to be served upon the following by facsimile and overnight mail:

Max D. Wheeler
Stanley J. Preston
Maralyn M. Reger
Snow, Christensen & Martineau
[address]

R. Bruce Holcomb
Jeffrey M. Johnson
Milton A. Marquis
David L. Engelhardt
Dickstein Shapiro Morin & Oshinsky LLP
[address]

___[signature]___


Exhibits/Attachments
to this document
have not been
scanned.


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

Max D. Wheeler (Utah Bar # 3439)
Stanley J. Preston (Utah Bar # 4119)
Maralyn M. Reger (Utah Bar # 8468)
SNOW, CHRISTENSEN & MARTINEAU
[address, phone, fax]

R. Bruce Holcomb (admitted pro hac vice)
Jeffrey M. Johnson (admitted pro hac vice)
Milton A. Marquis (admitted pro hac vice)
David L. Engelhardt (admitted pro hac vice)
DICKSTEIN SHAPIRO MORIN & OSHINSKY LLP
[address, phone, fax]

Attorneys for Plaintiff

______________________________

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

_____________________________

NOVELL, INC.,

Plaintiff,

v.

MICROSOFT CORPORATION,

Defendant.

___________________________

NOVELL'S RESPONSE TO
MICROSOFT'S MOTION FOR
LEAVE TO FILE AN OVERSIZED
MEMORANDUM IN SUPPORT OF
ITS MOTION TO DISMISS

Judge Ted Stewart

Civil No. 2:04-CV-01045-TS

____________________________

Plaintiff Novell, Inc. ("Novell") hereby responds briefly to Microsoft's Motion For Leave To File An Oversized Memorandum In Support Of Its Motion To Dismiss. Novell does not oppose the page limitations requested by the Defendant, and Novell is aware that the Court has granted Defendant's motion. 1 Nevertheless, certain arguments made by the Defendant merit this brief response. First, Plaintiff does not agree that the Local Rules of the District of Maryland should supplant this District's Local Rules. Microsoft argues that because transfer to the District of Maryland is a "distinct possibility," this Court should defer to the District of Maryland Local Rules, which permit fifty-page memoranda. Microsoft ignores Rule 1.5 of the Rules of Procedure of the Judicial Panel on Multidistrict Litigation ("J.P.M.L. Rules") which provides that the pendency of proceedings before the Panel do not affect pretrial proceedings in the district court. While Defendant plainly prefers transfer to familiar surroundings before Judge Motz, Novell believes, and will so inform the Judicial Panel on Multidistrict Litigation ("the Panel"), that this Court is perfectly capable of handling this two-party litigation through pre-trial procedures and trial. Indeed, as this Court will ultimately be responsible for the trial, irrespective of any transfer for pre-trial procedures, it should have the benefit of understanding that comes from the disposition of pre-trial matters.

Second, Defendant erroneously suggests that Novell, with the act of simply filing a Notice of Potential Tag-Along, has advocated for transfer and then changed its position by filing a Notice of Opposition to the Conditional Transfer Order ("CTO"). As Defendant's counsel is no doubt aware, filing a Notice of Potential Tag-Along is not a request for action or a statement of any position on transfer. The Notice is simply an alert to the Panel that there is a "civil case pending in a district court [] involving common questions of tact with actions previously transferred under Section 1407." J.P.M.L. Rule 1.1. In addition to the fact that Novell has never stated or implied that transfer is appropriate or desired, the Notice itself prominently emphasized that it reserved "all rights with respect to any motion or Order concerning transfer." A copy of the Notice is attached as Exhibit A.

Third, while a transfer to Judge Motz is certainly a "possibility," it's "distinctness" has yet to be decided. 28 U.S.C. 1407(a) permits the Panel to transfer cases sharing common questions of fact only upon a finding among this case, the government suit, and the cases before Judge Motz are obvious, the Panel frequently denies the transfer of newly filed cases to a transferee court where proceedings in that court are far advanced. The consolidated cases (most of which are class actions) before Judge Motz have been steadily proceeding for over four and a half years, and this is a two-party case which has just been filed. Thus, it is also a distinct possibility that the Panel will grant the Plaintiff 's Motion to Vacate the CTO, and pretrial proceedings will proceed in this Court.

Finally, by stating that briefing before the Panel will be complete before completion of briefing in this Court on Defendant's motion to dismiss, the Defendant seeks to imply that the resolution of the Panel proceedings will precede this Court's consideration of its motion to dismiss. Again, the Defendant omits well understood facts concerning Panel actions. The Panel will not rule on transfer in advance of a Hearing Session. The next Panel Hearing Session is scheduled for January 27, 2005, and this case is not assigned to that hearing. The next Session has not been scheduled. Under J.P.M.L. Rule 16.1, the Panel has discretion to schedule such hearings "whenever and wherever desirable or necessary in the judgment of the Chairman." As such, while there is no way to predict precisely when a hearing will be scheduled for this matter, history shows that several months could elapse before the Panel considers the issue and makes it determination. In the meantime, there is no reason why this Court cannot advance this matter by considering and ruling on Defendant's effort to dismiss Novell's Complaint.

CONCLUSION

In sum, Novell does not oppose Defendant's request. Indeed, Novell anticipates that it will make a similar request in a more timely manner in connection with its opposition to Defendant's motion. The Plaintiff does not agree, however, that the mere "possibility" of transfer should compel this Court to defer to the Rules of the District of Maryland or that the Court should labor under the misapprehension that Novell ever supported transfer of this action from its chosen forum.

Dated: January 6, 2005

Respectfully submitted, SNOW, CHRISTENSEN & MARTINEAU

By: ___[signature]___
Max D. Wheeler
Stanley J. Preston
Maralyn M. Reger

DICKSTEIN SHAPIRO MORIN &
OSHINSKY LLP

R. Bruce Holcomb
Jeffrey M. Johnson
Milton A. Marquis
David L. Engelhardt

Attorneys for Plaintiff


1 It should be noted that Microsoft waited until the 11th hour to file its motion, its response to Novell's complaint being due tomorrow. Obviously, the Defendant has been aware for some time that its motion to dismiss would exceed the page limitations of this Court.


CERTIFICATE OF SERVICE

I hereby certify that, on this 6th day of January 2005, I caused a true and correct copy of the foregoing Novell's Response To Microsoft's Motion For Leave To File An Oversized Memorandum In Support Of Its Motion To Dismiss to be served by first class mail, postage prepaid on the following:

James S. Jardine
RAY QUINNEY & NEBEKER
[address]

David B. Tulchin
SULLIVAN & CROMWELL, LLP
[address]

___[signature]_____


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