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To read comments to this article, go here
G2 et al Reply Memorandum -- PDF and text
Friday, February 04 2005 @ 08:38 AM EST

Here's G2, CNET, and Forbes' Reply Memorandum in Support of their Motion to Intervene and to Unseal Court's Records. Our thanks to Steve Martin for the transcript and HTML.

Their argument can basically be summed up that they'd like to have their lawyer look at all the sealed documents, so they can argue about them at a hearing, one by one, if they want something unsealed:

"The Court should permit Intervenors to intervene in this action for purposes of challenging designations made under the Protective Order. The Court should order that Intervenors' counsel be made party to the Protective Order and permitted to view those filed documents sealed pursuant thereto. The Court should require the parties to state the 'good faith' basis for their designation of each of such documents as 'Confidential.' Finally, the Court should schedule briefing as to those documents that Intervenors and the parties cannot agree are appropriately sealed or appropriately unsealed."

That isn't such a strong argument. Who is the bad guy in this picture, who is over-sealing things? They don't know. But it could happen, and they trust the parties and the judge not at all, so they want to look for themselves. Basically, they argue that civil cases should be just as open as criminal cases. This is a doomed argument. They aren't. Then they present an argument that probably lacks judicial appeal. They say they want access so they can see if he is doing his job right:

"Second, public access, especially in this case, will play a significant positive role in advancing the litigation. As argued above, the actual and perceived legitimacy of the Court's decisions in this case depend upon public access to the information used to reach those decisions. In most cases, this Court goes to considerable trouble to make filings readily available, maintaining a public clerks' office and even adopting means of electronic access. These efforts are for good reason; the public cannot judge or otherwise rely upon the fairness of a decision that is made in secret, with secret information. This is particularly true in this case, where proponents of open source software vehemently oppose SCO's theory that Linux contains some aspect of its proprietary Unix system. Every aspect of this case available to this public is criticized and examined in detail, and secret submissions jeopardize public confidence in the process."

So, they would like to monitor the judge's decisions. First they say that the Court has gone to great lengths to make documents available, and then I think they reveal what the real motive may be. Proponents of open source "oppose SCO's theory" that there is any Unix code in Linux. I believe that would be Groklaw they are referring to, particularly when they next mention that "every aspect of this case is criticized and examined in detail." I believe they want to try to find something to help win the PR battle for the other side, and they'd like the public's taxes to pay for their personal quest. What did you expect from G2 and Forbes? As for CNET, what's a nice girl doing in a place like this?

As for what they want, they want nothing that might impact negatively on SCO revealed. The Linux code SCO improperly designated confidential isn't even on their radar, for example. What they want can be found first in footnote 2. They want the hearing where the email was improperly read aloud by SCO unsealed. For some reason, SCO desperately wants that email made public. That's the conclusion I draw, anyway. And they want the exhibits attached to discovery motions, which appears to involve the same materials. Why? I gather they want SCO to look better, and maybe some journalists too. It's mighty hard for the other side to accept that they just might have been wrong about Linux and SCO's claims. Just think how embarrassing as a journalist, looking back at the early coverage of this case in particular and comparing it with the facts as currently known. How can it be? They couldn't just have been wrong, could they?

And what do you make of this sentence? "A decision on the case will have far ranging impacts beyond the millions of shareholders of the two parties..." They acknowledge that the share price of IBM and SCO can be affected by developments in the courtroom, and then they argue simultaneously for materials that are most likely to impact negatively on IBM, in their world view, and positively on SCO. Remember that article by Steven Hantler, assistant general counsel at DaimlerChrysler in the Wall Street Journal that mentioned that nowadays folks bring lawsuits with the very purpose of impacting negatively on a company's reputation precisely to send the victim company's stock down, so as to pressure them into settling? He mentioned a 5-Page Program plaintiffs in such situations use:

"Page Five is staging a press conference or working with their allies at the network news magazines to generate incendiary coverage about their lawsuits. In Old West parlance, some of these events could be called 'necktie parties' -- that is, public hangings. Trial lawyers have even been known to brief financial analysts who cover a company's stock in an effort to drive down share price. . . .

"The idea of this coordinated campaign is to create a perfect storm of highly adverse media coverage, regulatory agency subpoenas, share-value loss, and decline in company and product reputation that overwhelms any company that did not see it coming. The trial bar knows that if they can turn up the heat, someone in the besieged company will propose settling the lawsuit 'for a couple hundred million dollars' as the most expedient solution, even though the lawsuit is without merit."

They may be granted some access, if the judge is in an extraordinarily laid-back mood, and relishes prolonging the case still further with more delay on the public's tab, but not, in my opinion, because of anything argued here. Frankly, it's almost as if they have changed their minds, but it could just be that it's mighty hard to argue a point successfully to a judge, when you aren't telling him openly what you really want and why. One would have to be irony-challenged, for sure, if while arguing for openness, one masked one's actual motives and goals.

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

Michael Patrick O'Brien (USB #4894)
Andrew H. Stone (USB #4921)
JONES WALDO HOLBROOK & McDONOUGH PC
[address]
[phone]

Attorneys for G2 Computer Intelligence, Inc., CNET Networks, Inc., and Forbes, Inc.

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


THE SCO GROUP, INC., a Delaware
corporation,
Plaintiff,
vs.

INTERNATIONAL BUSINESS MACHINES
CORPORATION, a New York corporation,

Defendant.
REPLY MEMORANDUM IN SUPPORT
OF MOTION TO INTERVENE AND
MOTION TO UNSEAL COURT'S
FILES



Civil No. 03CV0294

Judge Dale A. Kimball
Magistrate Judge Brooke C. Wells

G2 Computer Intelligence, Inc. ("G2"), CNET Networks, Inc. ("CNET"), and Forbes, Inc. ("Forbes") (collectively "Intervenors")1 submit the following Reply Memorandum in Support of their Motion to Intervene and to Unseal Court's Records.

Neither SCO nor IBM deny that this case is of significant public interest. SCO's claims have tremendous ramifications for the computer industry; they challenge one of the most widely adopted open source operating systems available. The case involves two public companies, one of them among the

1

world's largest corporations. This Court's website lists this case among its ten high profile cases currently pending in the District. A decision on the case will have far ranging impacts beyond the millions of shareholders of the two parties and may affect technology adopted by millions of other people.

A fundamental component of our judicial system is the right of public access to judicial proceedings. Like all aspects of our democratic government, courts derive their legitimacy from powers granted by the people. Decisions made in secret, or based upon secret evidence and arguments, cannot be perceived as fair by the public. It is for this reason that courts are presumptively open to the public and that sealing of proceedings or records is disfavored.

The parties here have reacted to Intervenors' motion in different ways. SCO acknowledges the limits on access to certain documents, and points out that Intervenors have not yet demonstrated reasons for altering the Protective Order or unsealing any documents in this case. The answer to this argument is simple: until Intervenors' attorneys have access to the sealed documents, it is impossible to argue whether the documents are properly sealed or whether they are documents that are more properly released to the public.

IBM, on the other hand, has resisted the motion on several grounds. First, without citing any authority to the contrary, IBM questions whether a right of access exists. Second, IBM argues that the Protective Order in this case, because it requires that a party designate documents as confidential in "good faith," adequately protects any public interest. Third, IBM invites the Court to exclude, without any review, whole classes of documents as necessarily beyond the reach of the First Amendment, common law or any other theory of public access. IBM is wrong on all accounts.

2

The Court should permit Intervenors to intervene in this action for purposes of challenging designations made under the Protective Order. The Court should order that Intervenors' counsel be made party to the Protective Order and permitted to view those filed documents sealed pursuant thereto. The Court should require the parties to state the "good faith" basis for their designation of each of such documents as "Confidential." Finally, the Court should schedule briefing as to those documents that Intervenors and the parties cannot agree are appropriately sealed or appropriately unsealed.

I. The Court Should Permit Access to Court Documents Which Are Not Genuinely
Competitively Sensitive.

Intervenors do not question IBM's assertion that blanket protective orders are commonplace in civil litigation. That, indeed, is part of the problem. When parties are permitted to unilaterally designate their documents produced and later filed with the Court as "confidential," large portions of the "public" record are automatically sealed from public view. Private litigants generally do not have any particular interest in challenging designations made by an opposing party their interest is a private one in litigating the case, as opposed to the public's interest in its judicial processes. Blanket protective orders such as the one involved here generally do not contemplate that a court, on its own motion, would challenge any such designation. Thus, as in this case, large portions of the documents filed with courts in civil matters are presented for decision to the court outside of public view.

This threatens the legitimacy of our civil jurisprudence. See generally Brown & Williamson Tobacco Corp. v. FTC, 710 F.2d 1165 (6th Cir. 1983), cert. denied, 465 U.S. 1110, 104 S.Ct. 1595, 80 L.Ed.2d 127 (1984). Federal courts are not private arbitrators provided at public expense for the

3

convenience of parties. They are funded and empowered by the public and their decisions are public decisions.

Significantly, IBM cites no case that has held that the public has no right of access to civil proceedings. In fact, at least five circuits recognize a right of access to civil proceedings, and none reject the right. Publicker Indus., Inc. v. Cohen, 733 F.2d 1059 (3d Cir. 1984); Rushford v. New Yorker Magazine, Inc., 846 F.2d 249, 253 (4th Cir. 1988); Westmoreland v. Columbia Broad. Sys., Inc., 752 F.2d 16, 23 (2d Cir. 1984), cert denied sub nom, Cable News Network, Inc. v. United States District Court for the Southern District of New York, 472 U.S. 1017, 105 S.Ct., 3478, 87 L.Ed.2d 614 (1985); Brown & Williamson Tobacco Corp. v. FTC, 710 F.2d 1165 (6th Cir. 1983), cert denied, 465 U.S. 1100, 104 S.Ct. 1595, 80 L.Ed.2d 127 (1984); In re Continental Ill. Sec. Litigation, 732 F.2d 1302, 1308 (7th Cir. 1984). IBM likewise makes no argument that the reasoning by the United States Supreme Court that public access is a necessary element of courts' legitimacy when it comes to criminal proceedings do not apply just as strongly to civil decisions. See Richmod Newspapers Inc. v. Virginia, 448 U.S. 554, 564-569 (1980). It is particularly true in a case such as this, which will have widespread public implications. A protective order permitting IBM or SCO to simply unilaterally declare documents submitted to the Court to be sealed does nothing to protect the public's right to know about the process this Court is undertaking.

Intervenors do not suggest that their rights to access are without limits. Intervenors have no desire to require either party to release genuinely competitively damaging information of no public significance. Proprietary source code, for example, would plainly be appropriately sealed. But it is premature to conclude that any single class of documents, such as documents attached to discovery

4

motions or SCO's Motion for Leave to File a Third Amended Complaint are necessarily outside the purview of the public, without balancing whatever privacy interests, if any, may justify sealing against the public's interest in access.

II. The Court Should Apply The Experience and Logic Test Set Forth By the Tenth Circuit.

IBM acknowledges that the Tenth Circuit in United States v. McVeigh, 119 F.3d 806 (10th Cir.1997), cert denied sub non, Dallas Morning News v. United States, 522 U.S. 1142, 118 S.Ct. 1110, 140 L.Ed.2d 163 (1998) and United States v. Gonzales, 150 F.3d 1246 (10th Cir. 1997), cert denied sub nom, Albuquerque Journal v. Gonzales, 525 U.S. 1129, 119 S.Ct. 918, 142 L.Ed. 2d 915 (1999) applied the test for public access set forth by the Supreme Court in Press-Enterprise Company v. Superior Court, 478 U.S. 1 (1986) ("Press-Enterprise II"). The parties agree that this test requires that the Court consider (1) whether the document which has been historically open to inspection by the press and public; and (2) whether public access plays a significant positive role in the function of the particular process in question.

The first test is easily satisfied in this case. Intervenors seek only to unseal those documents that have been or are filed with the Court. Papers on file with the Court are historically and normally available to the public; the Court's files are generally open for public inspection. See Nixon v. Warner Communications, 435 U.S. 589, 597, 98 S.Ct 1306, 55 L.Ed. 2d 570 (1978). While IBM argues that sealed documents are not historically open to the public, that is tautology: obviously, the motion here challenges the very seal that IBM argues places the documents out of public reach. The result of this

5

argument would mean no sealed document could ever meet the test.2 Protective orders, while common, are still the exception to the ordinary rule of open files.

Second, public access, especially in this case, will play a significant positive role in advancing the litigation. As argued above, the actual and perceived legitimacy of the Court's decisions in this case depend upon public access to the information used to reach those decisions. In most cases, this Court goes to considerable trouble to make filings readily available, maintaining a public clerks' office and even adopting means of electronic access. These efforts are for good reason; the public cannot judge or otherwise rely upon the fairness of a decision that is made in secret, with secret information. This is particularly true in this case, where proponents of open source software vehemently oppose SCO's theory that Linux contains some aspect of its proprietary Unix system. Every aspect of this case available to this public is criticized and examined in detail, and secret submissions jeopardize public confidence in the process.

Moreover, IBM's argument that having to justify its designations of "confidential" is somehow burdensome ignores the fact that, under this Court's Protective Order, IBM must already have a good faith basis for each of its designations. Requiring it to articulate those bases for those documents on file is not burdensome, if the Protective Order has been properly invoked. While requiring the parties to establish those bases for sealing may somewhat tax their subjective individual interests, the judicial

6

process benefits from the credibility it gains through openness. The civil process is advanced by a presumption that civil litigation should be conducted in public, absent a genuine interest justifying closure. That is enough for the second prong of the Press-Enterprise II test.

Finally, IBM argues that documents attached to discovery motions or SCO's Motion For Leave to File a Third Amended Complaint should be excluded, without review, from any unsealing based upon their presumed secondary role in the process. IBM's position in this regard oversimplifies the reality of civil litigation. The Court's decisions on discovery motions can have far-ranging impacts on the merits of the case. Such pleadings can go to the very heart of the judicial function in civil litigation:

Discovery procedures have become a continuing focus of controversy and reform within the judicial and the legal community. This debate has arisen precisely because discovery is so important in trial practice. If we take as our standard 'that the public's right of access attaches to decisions of major importance of the administration of justice,' then discovery motions and hearings fall within the ambit of this right.

Mokhiber v. Davis, 537 A.2d 1100, 1112 (D.C. App. 1988). Even more significantly a motion for leave to amend is an important event of public interest, altering the very claims made in the case and, in effect, redefining the case. The Court cannot assume that such papers never contain anything of sufficient public interest to even consider whether a seal is appropriate at all.

The appropriate analysis is the one set forth in United States v. Amodeo, 71 F.3d 1044, 1049-1050 (2nd Circuit 1995).3 Under Amodeo, the weight of the presumption of access is variable, depending upon the importance of the particular document to the judicial process. When the document is directly

7

relevant to the core judicial function, the presumption of access is strong, the First Amendment is implicated, and the documents can remain sealed only if sealing is "essential to preserve higher values and is necessary to serve that interest." McVeigh, 119 F.3d at 813. When the document is less relevant to the judicial function, the presumption may be weaker, but the Court must still balance the common law right of access against the competing interests of the parties, and the proponent of sealing still bears the burden of establishing the need for the seal. Nixon v. Warner Communications, 435 U.S. 589, 598 (1978) (balancing required); Huntsman-Christensen Corp. v. Entrada Indus., Inc., 639 F.Supp. 733, 737 (D.Utah 1985) (balancing, burden on party resisting access to overcome presumption of access). By asking the Court to retain the seal, without review, on all documents attached to discovery motions, IBM effectively says that no right of access can ever attach to such motions, regardless of their content or impact on the case. This is not and should not be the law. Whether to retain the seal on such documents is a decision that is best made by the Court after weighing, in a fully informed manner, the interest of the public in access against the interest of the parties in secrecy.

Accordingly, the Court should order that the Protective Order be modified to permit counsel for Intervenors to review sealed documents under the "Attorneys Eyes Only" provisions of that Order. The Court should further order that the parties explain their good faith basis for sealing those documents filed with the Court under seal, a basis that, under the Protective Order, they are already required to have.

Finally, the Court should set a timetable for briefing on any documents the parties and Intervenors cannot agree should be appropriately sealed or unsealed.

8

Respectfully submitted this 31st day of January, 2005.

JONES WALDO HOLBROOK & McDONOUGH PC

By: (signature)
Michael P. O'Brien
Andrew H. Stone
Attorneys for G2 Computer Intelligence, Inc., CNET Networks, Inc., and Forbes Inc.

9

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on the 31st day of January, 2005, I caused a true and correct copy of the foregoing to be sent as indicated below to the following:

Brent O. Hatch
Mark F. James
Hatch, James & Dodge, P.C.
[address]

(via facsimile & hand delivery)
David Boies
Boies, Schiller & Flexner LLP
[address]

(via facsimile & 1st class mail)
Stephen N. Zack
Mark J. Heise
Boies, Schiller & Flexner LLP
[address]

(via facsimile & 1st class mail)
Todd Shaughnessy
Snell & Wilmer LLP
[address]

(via facsimile & hand delivery)
Advid Marriott
Cravath, Swaine & Moore LLP
[address]

(via facsimile & 1st class mail)
Donald J. Rosenberg
[address]
(via facsimile & 1st class mail)

(signature)


  1. G2, CNET, and Forbes, as proposed Intervenors, do not mean to presume the Court's decision on this aspect of their motion by styling themselves "Intervenors." Though SCO has affirmatively stated that it does not oppose the motion to intervene, and IBM has not argued against it, G2, CNET, and Forbes merely adopt this style for ease of reference.

    (Back to text)

  2. That is documents that were sealed from the beginning. In this case, the Transcript of the Court's October 19, 2004 hearing was not originally sealed and the hearing was held in open court. Docket, Entry No. 328. Thus, even under IBM's tautological test for whether such a record was historically available, Intervenors prevail with respect to this Transcript. As a matter of actual history, the hearing was open to the public.

    (Back to text)

  3. IBM implicitly suggests the same standard when it acknowledges a "spectrum establishing the strength of the presumption of access to documents filed with the court." See IBM Memo. at p. 9.

    (Back to text)


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