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To read comments to this article, go here
Novell's Motion to Drop 3rd Claim - all filings as text
Thursday, September 06 2007 @ 02:09 PM EDT

Here are all the filings regarding the Novell Motion to Dismiss Voluntarily Its Third Claim for Relief [PDF] as text, including the Memorandum in Support [PDF], SCO Opposition [PDF], and Novell's Reply [PDF]. Again, I've placed them in order of filing, along with links to help you navigate, and I've marked the important bits for you. This is *not* one of the motions that will be heard on Sept. 11. That hearing is for the motions in limine. This is a regular motion, so unless the judge decides to rule on the papers only, there will be a hearing announced eventually.

Novell's argument is simple:
The Court should not compel Novell to try a claim that seeks equitable relief to which Novell is already entitled through other claims and that Novell thus does not need or desire to prosecute.

SCO just wants a jury trial, and that is the basis for its opposition, because without Novell's 3rd claim, a bench trial will be sufficient, and Novell says it is sufficient and will streamline the case. SCO has no "right" to a jury, Novell argues:

Whether a particular claim triggers the Seventh Amendment right to a jury trial turns primarily on the remedy the plaintiff seeks.

Novell is seeking equitable relief, and that's for a judge to rule on. This is one of those moments when I wish you all had accounts at Westlaw. To really understand what Novell is arguing here, you need to read the cases. Then you would see the arguments more clearly. But even without that, and restricting myself only to what you can publicly access, you will see that Novell mocks SCO's cases. That's not a good thing.

The Novell Reply is notable in that it responds, for the first time that I recall, to the possibility of SCO using the judge's ruling to go after Novell or anyone else for post-APA copyright infringement:

SCO has never articulated any theory of liability under post-APA UNIX-related copyrights. SCO has had the opportunity to do so in its complaints, in opposition to Novell's and IBM's motions for summary judgment, in its expert reports, in its extensive public commentary on this case, in the post-Order statements in this case and in SCO v. IBM, and, of course, in its opposition to this motion in limine.

That's if SCO even has any copyrights to use, which hasn't yet been determined, but Novell is making a different point -- that SCO has never once tried to offer a theory of liability regarding those post-APA copyrights, even if it had them. I believe personally that SCO isn't playing that card because it hasn't got one. It followed a strategy that it owned all the UNIX and UnixWare copyrights, and when the judge ruled otherwise, leaving it only crumbs from the table, it left SCO in a kind of shock. It may be frantically searching now for something, but if it had it in hand, it certainly would have played it by now. Because if not now, when? SCO speaks of the "upcoming trial on bifurcated issues." You'll remember that in the parties Joint Status Report, they couldn't agree on whether SCO has a right to pursue such issues:

The parties agree that the Court did not dismiss any alleged portion of the claim concerning technology other than the UNIX and UnixWare copyrights the Court has held were retained by Novell. The parties disagree as to whether SCO has pled or can pursue such a claim, but agree that any such portion is stayed by the Court's August 21, 2006 Order pending resolution of the SuSE arbitration. No aspect of this claim will be tried during the September 2007 trial.

So SCO, being SCO, naturally wishes to sound like they will be menacing folks eventually. Novell calls it a hypothetical.

[Novell Motion ] [Novelll Memo in Support ] [ SCO's Opposition ] [ Novell Reply ]


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

MORRISON & FOERSTER LLP
Michael A. Jacobs, pro hac vice
Eric M. Acker, pro hac vice
Kenneth W. Brakebill, pro hac vice
Marc J. Pernick, pro hac vice
David E. Melaugh, pro hac vice
[address, phone, fax]

ANDERSON & KARRENBERG
Thomas R. Karrenberg, #3726
John P. Mullen, #4097
Heather M. Sneddon, #9520
[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.

NOVELL'S MOTION TO
VOLUNTARILY DISMISS ITS THIRD
CLAIM FOR RELIEF


Case No. 2:04CV00139

Judge Dale A. Kimball


[ back to top ]

MOTION

Defendant and Counterclaim-Plaintiff Novell, Inc. ("Novell") hereby moves this Court to voluntarily dismiss Novell's Third Claim for Relief pursuant to Federal Rules of Civil Procedure 41.

For the reasons set forth in Novell's opening brief, filed herewith, Novell requests that the Court grant this motion.

DATED: August 24, 2007

ANDERSON & KARRENBERG

By: /s/ Heather M. Sneddon

Thomas R. Karrenberg
John P. Mullen
Heather M. Sneddon

-and-

MORRISON & FOERSTER LLP
Michael A. Jacobs, pro hac vice
Eric M. Acker, pro hac vice
Kenneth W. Brakebill, pro hac vice
Marc J. Pernick, pro hac vice
David E. Melaugh, pro hac vice

Attorneys for Defendant and
Counterclaim-Plaintiff Novell, Inc.


[ back to top ]

2

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this 24th day of August, 2007, I caused a true and correct copy of NOVELL'S MOTION TO VOLUNTARILY DISMISS ITS THIRD CLAIM FOR RELIEF to be served to the following:

Via CM/ECF:

Brent O. Hatch
Mark F. James
HATCH JAMES & DODGE, P.C.
[address]

Stuart H. Singer
William T. Dzurilla
Sashi Bach Boruchow
BOIES, SCHILLER & FLEXNER LLP
[address]

David Boies
Edward J. Normand
BOIES, SCHILLER & FLEXNER LLP
[address]

Devan V. Padmanabhan
John J. Brogan
DORSEY & WHITNEY, LLP
[address]

Via U.S. Mail, postage prepaid:

Stephen Neal Zack
BOIES, SCHILLER & FLEXNER LLP
[address]

/s/ Heather M. Sneddon

3

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

MORRISON & FOERSTER LLP
Michael A. Jacobs, pro hac vice
Eric M. Acker, pro hac vice
Kenneth W. Brakebill, pro hac vice
Marc J. Pernick, pro hac vice
David E. Melaugh, pro hac vice
[address, phone, fax]

ANDERSON & KARRENBERG
Thomas R. Karrenberg, #3726
John P. Mullen, #4097
Heather M. Sneddon, #9520
[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.

MEMORANDUM IN SUPPORT OF
NOVELL'S MOTION TO
VOLUNTARILY DISMISS ITS THIRD
CLAIM FOR RELIEF


Case No. 2:04CV00139

Judge Dale A. Kimball


[ back to top ]

BACKGROUND

In the wake of the Court's August 10 Memorandum Decision and Order, the parties have met and conferred and have considerably narrowed the issues for trial. The parties have agreed that Novell shall dismiss its First, Second, and Fifth Claims, as well as any claim for punitive damages, subject only to a right to renew such claims should there be any subsequent adjudication or trial in this action or any enlargement of the issues for trial beyond that contemplated by the August 17, 2007 Joint Statement. Novell has sought SCO's consent to also dismiss Novell's Third Claim, for breach of contract, under the same terms.

SCO will not consent, necessitating this motion seeking leave to dismiss the claim pursuant to Federal Rule of Civil Procedure 41(a)(2). Voluntary dismissal is appropriate here. The Court's August 10 Order has given Novell the bulk of the relief Novell sought under this Claim, interpreting the APA in most respects in the fashion advocated by Novell. What remains of the Third Claim is essentially duplicative of the remaining claims, and seeks the same equitable relief as those claims. Dismissing the Third Claim will further streamline this matter.

ARGUMENT

I. VOLUNTARY DISMISSAL UNDER RULE 41 IS APPROPRIATE.

Federal Rule of Civil Procedure 41(a)(2) grants the Court authority to dismiss claims, at the request of the claimant, "upon such terms and conditions as the court deems proper." Dismissal of Novell's Third Claim is appropriate here.

The Court's August 10 Order, though it concerns motions on other claims, resolves many of the issues arising under Novell's Third Claim. In light of the Court's Order and in light of the considerably narrowed scope of trial, Novell's Third Claim is simply duplicative. As explained in Novell's Motion to Strike SCO's Jury Demand, filed herewith, the issues and remedies remaining for trial are fundamentally equitable, and arise under Novell's Fourth, Sixth, Seventh, Eighth Claims for Relief. Novell can obtain the only remedies it now seeks by way of these other remaining claims. Leaving the breach claim will only serve to complicate matters.

1

"Absent 'legal prejudice' to the defendant, the district court normally should grant [a Rule 41 voluntary] dismissal." Ohlander v. Larson, 114 F.3d 1531, 1537 (10th Cir. 1997).
The parameters of what constitutes "legal prejudice" are not entirely clear, but relevant factors the district court should consider include: the opposing party's effort and expense in preparing for trial; excessive delay and lack of diligence on the part of the movant; insufficient explanation of the need for a dismissal; and the present stage of litigation. Each factor need not be resolved in favor of the moving party for dismissal to be appropriate, nor need each factor be resolved in favor of the opposing party for denial of the motion to be proper.

Id Here, although the stage of litigation is considerably advanced, SCO has not engaged in any "effort or expense" that will go to waste with dismissal of this claim. Dismissal will serve the goal of simplifying this matter, making it more appropriate for a streamlined bench trial. And even if the Court does not grant Novell's Motion to Strike SCO's Jury Demand, dismissal of this claim will reduce the number and complexity of claims that go to the jury, eliminating the need for separate jury instructions.

II. NOVELL DOES NOT SEEK A GENERAL DISMISSAL WITHOUT PREJUDICE,
ONLY A NARROW RIGHT TO RENEW THE CLAIM.

Though the Court is authorized to dismiss claims without prejudice under Rule 41 (and that is in fact the default), Novell seeks only considerably more narrow rights here. Pursuant to the terms of the dismissal described in the proposed order filed herewith, Novell shall only have the right to renew its Third Claim should there be any subsequent adjudication or trial in this action or any enlargement of the issues for trial beyond that contemplated by the parties' August 17, 2007 Joint Statement. Absent such a subsequent adjudication or enlargement, Novell would have no right to renew this Claim.

2

CONCLUSION

For the reasons stated above, Novell requests that the Court permit Novell to dismiss its Third Claim for Relief under the terms detailed in the accompanying proposed order.

DATED: August 24, 2007

ANDERSON & KARRENBERG

By: /s/ Heather M. Sneddon

Thomas R. Karrenberg
John P. Mullen
Heather M. Sneddon

-and-

MORRISON & FOERSTER LLP
Michael A. Jacobs, pro hac vice
Eric M. Acker, pro hac vice
Kenneth W. Brakebill, pro hac vice
Marc J. Pernick, pro hac vice
David E. Melaugh, pro hac vice

Attorneys for Defendant and
Counterclaim-Plaintiff Novell, Inc.


[ back to top ]

2

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this 24th day of August, 2007, I caused a true and correct copy of MEMORANDUM IN SUPPORT OF NOVELL'S MOTION TO VOLUNTARILY DISMISS ITS THIRD CLAIM FOR RELIEF to be served to the following:

Via CM/ECF:

Brent O. Hatch
Mark F. James
HATCH JAMES & DODGE, P.C.
[address]

Stuart H. Singer
William T. Dzurilla
Sashi Bach Boruchow
BOIES, SCHILLER & FLEXNER LLP
[address]

David Boies
Edward J. Normand
BOIES, SCHILLER & FLEXNER LLP
[address]

Devan V. Padmanabhan
John J. Brogan
DORSEY & WHITNEY, LLP
[address]

Via U.S. Mail, postage prepaid:

Stephen Neal Zack
BOIES, SCHILLER & FLEXNER LLP
[address]

/s/ Heather M. Sneddon

4

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

Brent O. Hatch (5715)
Mark F. James (5295)
HATCH, JAMES & DODGE, PC
[address]
[phone]
[fax]
Stephen N. Zack (admitted Pro Hac Vice)
BOIES SCHILLER & FLEXNER LLP
[address]
[phone]
[fax]
David Boies (admitted pro hac vice)
Robert Silver (admitted pro hac vice)
Edward Normand (admitted pro hac vice)
BOIES SCHILLER & FLEXNER, LLP
[address] [phone] [fax]
Stuart Singer (admitted pro hac vice)
BOIES SCHILLER & FLEXNER, LLP
[address]
[phone]
[fax]
Devan V. Padmanabhan (admitted pro hac vice)
DORSEY & WHITNEY LLP
[address]
[phone]
[fax]

Attorneys for Plaintiff, The SCO Group, Inc.


IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH

THE SCO GROUP, INC., a Delaware
corporation,

Plaintiff/Counterclaim-Defendant,

vs.

NOVELL, INC., a Delaware corporation,
Defendant/Counterclaim-Plaintiff.

SCO'S MEMORANDUM IN
OPPOSITION TO NOVELL'S MOTION
TO VOLUNTARILY DISMISS ITS
THIRD CLAIM FOR RELIEF


Civil No. 2:04 CV-00139

Judge Dale A. Kimball
Magistrate Brooke C. Wells


[ back to top ]

(1)

Plaintiff/Counterclaim-Defendant, The SCO Group, Inc. ("SCO"), hereby submits its Memorandum in Opposition to Novell's Motion to Voluntarily Dismiss Its Third Claim for Relief, or grant the motion with the additional conditions set forth herein.

BACKGROUND

Novell's sole purpose for requesting a voluntary dismissal of its third claim is to facilitate its motion to strike SCO's demand for a jury trial. Novell states (at 2): "Dismissal will serve the goal of simplifying this matter, making it more appropriate for a streamlined bench trial." SCO has a Constitutional right to a jury trial on Novell's claims. Therefore, if voluntary dismissal of this claim enables Novell to circumvent SCO's Constitutional right to a trial by jury, it inflicts plain legal prejudice on SCO, and should not be permitted.1 Courts have routinely rejected voluntary dismissals where they are motivated by tactical maneuvers that would deny the other party its legal rights, and where they try to obtain through indirection what the party cannot obtain directly. Furthermore, the timing of Novell's motion just three weeks before the jury trial on its claims is scheduled to begin exacerbates this prejudice, because SCO has proceeded in this litigation for over two years under the expectation that it was entitled to a jury trial on Novell's claims.

Moreover, Novell has proposed conditions on the dismissal that would potentially permit Novell to revive its third claim for relief in any subsequent trial in this matter including the subsequent trial on the bifurcated issue of Novell's breach of the TLA. Novell's proposed order

(2)

states that the dismissal is conditional on "Novell having the right to renew such claim only in the event there is any subsequent adjudication or trial in this action or any enlargement of the issues for trial beyond that contemplated by the August 17, 2007 Joint Statement." (Emphasis added.) The upcoming trial on bifurcated issues would constitute a "subsequent adjudication or trial in this action," and thus, Novell would potentially be permitted to revive its claim in that subsequent trial. This would defeat the purpose of the bifurcation, would be highly prejudicial to SCO, and would waste judicial resources. Consequently, Novell's motion should be denied on the grounds that it would inflict plain legal prejudice on SCO and waste judicial resources.

Alternatively, if Novell's voluntary dismissal is permitted, conditions should be imposed that would cure SCO's prejudice namely, the conditions should recognize and retain SCO's ongoing Constitutional right to a trial by jury on Novell's claims, and foreclose Novell from reviving its third claim in a subsequent trial on bifurcated issues. SCO would have no objection to dismissal under these conditions.

ARGUMENT

I. BY INTERFERING WITH SCO'S CONSTITUTIONAL RIGHT TO A JURY TRIAL, NOVELL'S VOLUNTARY DISMISSAL WOULD INFLICT PLAIN LEGAL PREJUDICE ON SCO.

Federal Rule of Civil Procedure 41(a)(2) provides that, absent stipulation of the parties as set forth in Rule 41(a)(1), "an action shall not be dismissed at the plaintiff's instance save upon order of the court and upon such terms and conditions as the court deems proper." It is well established that a voluntary dismissal should not be granted where it would inflict legal prejudice on the defendant, or in this case, the counterclaim defendant. See, e.g., Brown v. Baeke, 413 F.3d 1121 (10th Cir. 2005); Ledbetter v. City of Topeka, Kansas, 61 Fed.Appx. 574 (10th Cir.

2 (3)

2003). In Brown v. Baeke, the Tenth Circuit reiterated that Federal Rule of Civil Procedure 41(a)(2) is "designed primarily to prevent voluntary dismissals which unfairly affect the other side, and to permit the imposition of curative conditions." Brown, 413 F.3d at 1123.

SCO would suffer such prejudice if Novell's voluntary dismissal were permitted. Novell has argued that it should be permitted to dismiss its third claim in order to make the action "more appropriate" for a streamlined bench trial. Thus, the dismissal, if granted without curative conditions that retain SCO's right to a jury trial, would unfairly prejudice SCO by denying its right to a jury trial on the eve of the commencement of the scheduled jury trial after SCO has litigated the case for over two years with the expectation that Novell's claims would be tried before a jury. This constitutes prejudice that precludes Novell's proposed dismissal.

The Tenth Circuit has explained that "prejudice" is a function of "practical factors" including: "the opposing party's effort and expense in preparing for trial; excessive delay and lack of diligence on the part of the movant; insufficient explanation of the need for a dismissal; and the present stage of litigation." Id.; see also, Ledbetter v. City of Topeka, Kansas, 61 Fed.Appx. 574 (10th Cir. 2003) (affirming denial of motion for voluntary dismissal without prejudice, which was "filed more than a year and a half into the litigation and after discovery, motions, and a pretrial order," because of "prejudice to the opposing party, including the expense and effort in preparing for trial, excessive delay and insufficient explanation therefor, the stage of the litigation, and other factors"). Novell's excessive delay in seeking this dismissal over two years after the commencement of its counterclaims, and just three weeks before the commencement of the jury trial on its claims inflicts prejudice on SCO. SCO conducted this litigation, including substantial discovery and multiple depositions, with the expectation that the

3 (4)

claims would be tried before a jury because of the legal relief sought by Novell. Novell's attempt to circumvent that right to a jury trial through a tactical dismissal shortly before the jury trial should not be sanctioned.

Furthermore, even apart from the timing of the request, the dismissal would prejudice SCO in so far as it improperly circumvents SCO's Constitutional right to a jury trial. The above factors articulated by the Tenth Circuit for determining prejudice are neither exhaustive nor conclusive. Indeed, the Tenth Circuit has instructed that "the court should be sensitive to other considerations unique to the circumstances of each case." Brown, 413 F.3d. at 1123. If Novell's voluntary dismissal would deprive SCO of its constitutional right to a trial by jury as Novell suggests (at 2) in its motion that is a unique factor that should be considered, and a prejudice that should be avoided.

Through its motion, Novell is manipulating Rule 41(a) in order to obtain a right to a bench trial (and to circumvent SCO's legitimate right to a trial by jury) that it would not otherwise have had. This tactical use of Rule 41 should not be sanctioned. Indeed, several courts have rejected plaintiffs' efforts to use Rule 41(a) to frustrate the rules surrounding jury trials. This issue most commonly arises where a plaintiff inadvertently fails to request a jury trial, and having waived its right, seeks a voluntary dismissal in order to assert that right in a subsequently filed action. See, e.g., Russ v. Standard Ins. Co., 120 F.3d 988 (9th Cir. 1997) (holding that district court could not grant claimant's motion to dismiss without prejudice so as to permit her to refile claims and make timely jury demand); Evans v. Bankers Life Co., 27 F.R.D. 489 (E.D.N.Y. 1961) (same). In Russ v. Standard Insurance Company, the Ninth Circuit persuasively explained that the general discretion granted the courts under Rule 41 does not

4 (5)

extend to frustration of the specific purpose of rules governing jury trial demands. Russ, 120 F.3d at 988. Similarly, in Evans v. Bankers Life Company, the court observed: "Plaintiff's alternative request for a voluntary dismissal of the complaint is admittedly an effort to obtain by indirection that which the Court has hereby denied directly. As such, it cannot be granted." Evans, 27 F.R.D. at 490.

The issue facing this Court is the inverse: Novell's attempt to use the discretion granted under Rule 41 to frustrate SCO's legitimate and timely demand for a trial by jury, and to obtain by indirection what Novell cannot obtain directly. Because the right to a trial by jury is guaranteed by the Constitution and SCO has not waived that right, the considerations expressed in the cases discussed above are even more compelling here than the inverse scenario in which a plaintiff tries to use a voluntary dismissal to avoid its prior clear waiver of the right.2

The Tenth Circuit has repeatedly recognized that plain legal prejudice would result in an array of contexts in which the plaintiff has endeavored to use the dismissal for tactical gain at the expense of the other party as Novell has here. See, e.g., County of Santa Fe, N.M. v. Public Service Co. of New Mexico, 311 F.3d 1031, 1048-49 (10th Cir. 2002) (noting that list of factors to be considered is by no means exclusive, and holding that district court abused its discretion by granting a motion for voluntary dismissal with prejudice where it would be impossible for the intervenors to obtain the relief that they sought under their writ of mandamus cause of action); Phillips USA, Inc. v. Allflex USA, Inc., 77 F.3d 354 (10th Cir. 1996) (affirming district court's

5 (6)

denial of motion to dismiss claims without prejudice where motion was filed, without explanation, "a few days before its response to the summary judgment motion was due"); Cook v. Rocky Mountain Bank Note Co., 974 F.2d 147, 148 (10th Cir. 1992) ("A plaintiff cannot be allowed to undermine the requirements of Rule 54(b) by seeking voluntarily dismissal of her remaining claims and then appealing the claim that was dismissed with prejudice."); U.S. v. Wyoming Nat. Bank of Casper, 505 F.2d 1064 (10th Cir. 1974) (affirming denial of voluntary dismissal of claim against impleaded party, where party was "needed to protect the rights of all of the parties and to accomplish expeditious determination of the litigation"); see also Elbaor v. Tripath Imaging, Inc., 279 F.3d 314, 318-19 (5th Cir. 2002) (finding that defendant would suffer "plain legal prejudice" from an unconditional dismissal because such a dismissal "would potentially strip [defendant] of a viable statute of limitations defense").

Accordingly, Novell should not be permitted to use Rule 41(a) to obtain a bench trial on its claims and avoid SCO's timely demand for a jury trial, when it cannot obtain that result directly.

II. BY PERMITTING NOVELL TO REVIVE ITS CLAIM IN A SUBSEQUENT TRIAL IN THIS MATTER, THE CONDITIONS PROPOSED BY NOVELL WOULD INFLICT PLAIN LEGAL PREJUDICE ON SCO.

Novell's proposed order states that the dismissal is conditional on "Novell having the right to renew such claim only in the event there is any subsequent adjudication or trial in this action or any enlargement of the issues for trial beyond that contemplated by the August 17, 2007 Joint Statement." (Emphasis added.) This condition would arguably permit Novell to revive its third claim for relief in the subsequent trial on the bifurcated issues namely, Novell's breach of the TLA. However, Novell's third claim for relief has no relation with the bifurcated issues and

6 (7)

would defeat the purpose of the bifurcation. Moreover, most of the issues related to the third claim would have already been determined in this trial. Thus, voluntary dismissal under these conditions is nonsensical. Novell's motion should be denied on the grounds that it would inflict plain legal prejudice on SCO and waste judicial resources.

III. IF NOVELL'S MOTION IS GRANTED, CONDITIONS SHOULD BE IMPOSED ON THE DISMISSAL THAT WOULD PROTECT SCO'S LEGAL RIGHTS.

SCO would have no objection to a voluntary dismissal of Novell's third claim that protects SCO's legal rights, and avoids the prejudice set forth above. First, the voluntary dismissal should be conditional on SCO continuing to have a right to a trial by jury. Second, the voluntary dismissal should preclude Novell from trying to raise its third claim in a subsequent trial on the bifurcated issues. This latter condition would prevent Novell's attempt to get "two bites at the apple" to re-litigate any issues already decided in this action. For instance, if the dismissal is granted, the conditions should state: "SCO shall continue to have a right to a trial by jury irrespective of this dismissal. Novell shall not have the right to renew such claim unless, in a subsequent trial, its Fourth, Sixth, Seventh, and Eighth Claims are retried, or there is any enlargement of the issues for trial beyond that contemplated by the August 17, 2007 Joint Statement."

7 (8)

CONCLUSION

Wherefore, SCO requests that the Court deny Novell's Motion to Voluntarily Dismiss Its Third Claim for Relief, or grant the motion with the additional conditions set forth herein.

DATED this 31st day of August, 2007.

HATCH, JAMES & DODGE, P.C.
Brent O. Hatch
Mark F. James

BOIES, SCHILLER & FLEXNER LLP
David Boies
Robert Silver
Stuart H. Singer
Stephen N. Zack
Edward Normand

DORSEY & WHITNEY LLP
Devan V. Padmanabhan

By: /s/ Edward Normand


[ back to top ]

8 (9)

CERTIFICATE OF SERVICE

Plaintiff/Counterclaim-Defendant, The SCO Group, Inc., hereby certifies that on this 31st day of August, 2007 a true and correct copy of the foregoing SCO'S OPPOSITION TO NOVELL'S MOTION TO VOLUNTARILY DISMISS ITS THIRD CLAIM FOR RELIEF was electronically filed with the Clerk of Court and delivered by CM/ECF to the following:

Thomas R. Karrenberg
John P. Mullen
Heather M. Sneddon
ANDERSON & KARRENBERG
[address]

Michael A. Jacobs
Matthew I. Kreeger
MORRISON & FOERSTER
[address]
By: /s/ Edward Normand

9 (10)

1As set forth in SCO's Opposition to Novell's Motion to Strike SCO's Demand for a Jury Trial, SCO maintains that, even if the third claim is dismissed, SCO is still entitled to a jury trial. However, it is clear that if the third claim is not dismissed, SCO is entitled to a trial by jury, and Novell has conceded that voluntary dismissal makes a bench trial "more appropriate." Thus, SCO opposes this motion to the extent the Court concludes that, without the third claim for relief, SCO has no constitutional right to a jury trial.
2Notably, at least one court has permitted a plaintiff to withdraw a claim (where no waiver issue existed) where it was the only way in which the plaintiff could obtain a jury trial. See In re Empire Coal Sales Corp, 45 F. Supp. 974, 976 (D.C.N.Y. 1942) (holding that Referee did not abuse his discretion in permitting claimant to withdraw its claim upon concluding: "If claimant is not permitted to withdraw its claim it will be deprived of a trial by jury, which is a more substantial right than the trustee's right to have a summary determination of the single issue of preference.").

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

MORRISON & FOERSTER LLP
Michael A. Jacobs, pro hac vice
Eric M. Acker, pro hac vice
Kenneth W. Brakebill, pro hac vice
Marc J. Pernick, pro hac vice
David E. Melaugh, pro hac vice
[address]
[phone]
[fax]

ANDERSON & KARRENBERG
Thomas R. Karrenberg, #3726
John P. Mullen, #4097
Heather M. Sneddon, #9520
[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.

NOVELL'S REPLY IN SUPPORT OF
ITS MOTION TO VOLUNTARILY
DISMISS ITS THIRD CLAIM FOR
RELIEF


Case No. 2:04CV00139

Judge Dale A. Kimball


[ back to top ]

(1)

INTRODUCTION

Ever since the Court's August 10, 2007 Memorandum Decision and Order ("Order"), Novell has endeavored by all means practical to simplify this case and reduce the number of issues that need to be tried. As part of that effort, Novell secured SCO's agreement to dismiss Novell's First, Second, and Fifth Claims, as well as its claim for punitive damages, subject to conditions on which the parties agreed. SCO balked, however, at Novell's attempt to dismiss its Third Claim, for breach of contract, subject to the same terms.

SCO now opposes Novell's Motion to Voluntarily Dismiss Its Third Claim for Relief on the grounds that dismissing this claim would jeopardize SCO's supposed right to a jury trial, frustrate SCO's apparent "expectation" that this case would ultimately be heard by a jury, and permit Novell to revive the claim in a hypothetical future proceeding. None of these arguments justifies overlooking the efficiencies that a dismissal would provide, and SCO has not cited any case that denied a motion to dismiss in similar circumstances. The Court should not compel Novell to try a claim that seeks equitable relief to which Novell is already entitled through other claims and that Novell thus does not need or desire to prosecute.

ARGUMENT

I. SCO CANNOT SHOW THAT DISMISSAL WILL CAUSE IT PREJUDICE.

The parties agree that "[a]bsent 'legal prejudice' to the defendant, the district court normally should grant [a Rule 41 voluntary] dismissal." Ohlander v. Larson, 114 F.3d 1531, 1537 (10th Cir. 1997). Notwithstanding SCO's complaint that it is being denied a jury trial, SCO has made no proper showing of prejudice.

A. SCO Has No Constitutional Right to a Jury in the First Place.

The premise of SCO's opposition is that Novell's motion is a "tactical maneuver that would deny" SCO its "Constitutional right to a trial by jury." (Opp. at 1.) This premise is wrong. As discussed in greater detail in Novell's reply in support of its Motion to Strike SCO's

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Jury Demand, SCO has no right to a jury trial on Novell's remaining claims, including on the breach of contract claim that is at issue on this motion.

Whether a particular claim triggers the Seventh Amendment right to a jury trial turns primarily on the remedy the plaintiff seeks. Tull v. United States, 481 U.S. 412, 421 (1987). Under its breach of contract claim, the remedy Novell would seek is the same as the remedy Novell seeks under its unjust enrichment, breach of fiduciary duty and conversion claims restitution of revenue wrongfully withheld by SCO, a fiduciary. Whatever the label of the claim for which restitution is sought, this remedy is an equitable one. See Crews v. Central States, Se. & Sw. Areas Pension Fund, 788 F.2d 332, 338 (6th Cir. 1986) ("[A]n action for restitution seeks an equitable remedy for which there is no Seventh Amendment right to a jury trial."). Accordingly, SCO has no Seventh Amendment right to a jury trial on Novell's breach of contract claim. See, e.g., In re Friedberg, 131 B.R. 6, 12 (S.D.N.Y. 1991) (no right to jury on breach of contract claim where relief sought is equitable); C & K Eng'g Contractors v. Amber Steel Co., 23 Cal. 3d 1, 9 (1978) (same). The presence or absence of Novell's breach of contract claim will not affect the decision whether this case gets tried to the Court of to a jury.

SCO makes much of Novell's assertion in its moving papers that "[d]ismissal will serve the goal of simplifying this matter, making it more appropriate for a streamlined bench trial" (Opp. at 1, 3, 4), and claims that Novell's request to voluntarily dismiss its breach of contract claim is designed "to facilitate its motion to strike SCO's demand for a jury trial." (Id. at 1.) But SCO's attempt at "gotcha" is a diversion. As explained above, SCO has no right to a jury trial on this claim to begin with. Moreover, allowing Novell to dismiss its breach of contract cause of action will streamline the upcoming trial whether or not the Court grants Novell's Motion to Strike. Even if this matter is heard by a jury, dismissing Novell's claim will result in fewer jury instructions, less complex special verdict forms, and fewer facts to present. Despite SCO's selective quotations, this is precisely what Novell argued in its opening brief. (Mot. at 2.)

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B. SCO Cannot Establish Any Other Prejudice.

SCO maintains that the prejudice it would suffer is especially acute because it has "proceeded in this litigation for over two years under the expectation that it was entitled to a jury trial," and because, "just three weeks before the" trial is to begin, Novell seeks to dismiss its contract cause of action. (Opp. at 1.) These claims fare no better.

First, it strains credulity to believe that SCO "proceeded in this litigation under" any "expectation" as to whether Novell's Third Claim would be tried before the bench or the jury. What SCO likely expected (or at least hoped for) was that its slander of title claim and copyright ownership allegations would be tried to a jury. The Court's recent summary judgment rulings not Novell's Motion for Voluntary Dismissal are what have changed the scope, character, and length of the upcoming trial.

Second, SCO offers no explanation whatsoever for how it will be prejudiced if its vague "expectation" of proceeding before a jury is not fulfilled. SCO has not, for instance, cited to any deposition or other discovery that it would not have conducted if it knew this case was going to be tried to the bench. If Novell had never brought its Third Claim, the parties would have prepared in the same way, taken the same depositions, and filed a series of motions for summary judgment. Aside from its phantom right to a jury trial, SCO cannot identify any other form of prejudice that dismissing Novell's claim would cause.

Finally, the timing of Novell's request is of no import. That Novell filed this Motion "just three weeks" before trial (Opp. at 1) is simply a function of the summary judgment briefing schedule and the nature and effect of the Court's Order. Novell did not plead its Third Claim for Relief and then move to dismiss it for the purpose of duping SCO a few weeks before trial.

II. THE COURT SHOULD GRANT THIS MOTION EVEN IF DISMISSAL WOULD ALTER THE BENCH/JURY ANALYSIS.

Granting this motion would be appropriate even if, contrary to precedent, SCO were correct that the dismissal of Novell's breach of contract claim would affect the merits of Novell's

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Motion to Strike SCO's Jury Demand. SCO has cited no case denying a motion to dismiss because dismissal would make the case less appropriate for trial to a jury. Nor has Novell located such a case. Instead, SCO relies on cases standing for a different principle: that parties cannot remedy their own failure to seek a jury trial by dismissing their case and then re-filing it with a new jury demand. (Opp. at 4, citing Russ v. Standard Ins. Co., 120 F.3d 988 (9th Cir. 1997), Evans v. Bankers Life Co., 27 F.R.D. 489 (E.D.N.Y. 1961).).

But that is not what Novell is attempting, and the rationales underlying SCO's cases do not apply here. The decisions to deny motions for voluntary dismissal in Russ and Evans were based on the fact that the plaintiff's ability to proceed before a jury was already foreclosed by another Federal Rule. See Russ, 120 F.3d at 989-90 (under Ninth Circuit interpretation of Rule 38, the plaintiff could no longer seek a jury); Evans, 27 F.R.D. at 490 (version of Rule 81(c) then in effect required jury demand in removed cases within ten days of removal). Thus, to allow plaintiff to dismiss and re-file with a jury demand would have directly contravened a Federal Rule. That is not the case here, where granting dismissal would not give Novell something that another Rule forbids.

The other cases SCO string-cites address unique scenarios of even less relevance. (Opp. at 5-6.) In Elbaor v. Tripath Imaging, Inc., 279 F.3d 314, 318-19 (5th Cir. 2002), the court denied voluntary dismissal because of the prospect that the plaintiff would re-file its claim in a jurisdiction with a longer statute of limitations. In Phillips USA, Inc. v. Allflex USA, Inc., 77 F.3d 354 (10th Cir. 1996), the court would not allow a party to dismiss its claim to avoid an adverse decision on a pending summary judgment motion. Cook v. Rocky Mountain Bank Note Co., 974 F.2d 147, 148 (10th Cir. 1992), turned on appellate jurisdiction, not on Rule 41. The Cook court rejected a plaintiff's attempt to subvert Rule 54(b) and 28 U.S.C. 1291 by voluntarily dismissing with prejudice. United States v. Wyo. Nat'l Bank of Casper, 505 F.2d 1064, 1067

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(10th Cir. 1974), was a multi-defendant case in which the defendant seeking dismissal was "needed to protect the rights of all of the parties and to accomplish expeditious determination of the litigation." And in County of Santa Fe, N.M. v. Pub. Serv. Co. of New Mexico, 311 F.3d 1031, 1048-49 (10th Cir. 2002), the intervenors sought to have plaintiff prosecute a claim against the defendants. Allowing plaintiff to dismiss that very claim with prejudice would have barred plaintiff's claim against the defendants in the future, and eviscerated the intervenors' ability ever to obtain the relief they sought.

At bottom, SCO contends that Novell must proceed on a claim Novell does not wish to pursue and that seeks a remedy that is duplicative of Novell's other remaining claims, all so that SCO can present its defense to a jury. But there is no authority for the proposition that a plaintiff must maintain a claim it would prefer to drop just so its adversary might theoretically have a better chance of procuring the jury trial it seeks.

III. SCO'S CONCERNS ABOUT ITS SUPPOSED TLA CLAIM ARE A RED HERRING.

SCO also maintains that this motion should be denied because it would permit Novell a second "bite at the apple" during the trial of SCO's purported TLA claims. (Opp. at 7.) But SCO's supposedly surviving TLA claims are hypothetical at best. SCO has never articulated any theory of liability under post-APA UNIX-related copyrights. SCO has had the opportunity to do so in its complaints, in opposition to Novell's and IBM's motions for summary judgment, in its expert reports, in its extensive public commentary on this case, in the post-Order statements in this case and in SCO v. IBM, and, of course, in its opposition to this motion in limine. The prejudice SCO will supposedly suffer when prosecuting this entirely hypothetical claim should therefore be entitled to no weight.

In any event, SCO has already consented to the dismissal of Novell's First, Second, and Fifth Claims for Relief under precisely the same conditions as Novell seeks in this motion. SCO does not explain, because it cannot, why it would be prejudiced by the potential renewal of one

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of Novell's claims (the Third) but not by Novell's other three claims (the First, Second and Fifth).

The bottom line is that Novell has no intention of renewing this claim in the fashion SCO apparently fears. Novell would therefore (with one modification highlighted by italics below) consent to one of the revised conditions proposed by SCO. Novell will agree that it "shall not have the right to renew such claim unless, in a subsequent trial, its Fourth, Sixth, Seventh, or Eighth Claims are retried, or there is any enlargement of the issues for trial beyond that contemplated by the August 17, 2007 Joint Statement." (Opp. at 7 (proposing condition).) The reason for Novell's modification is that Novell might deem it appropriate to renew its breach of contract claim if, for example, the grant of summary judgment on one or more of Novell's Fourth, Sixth, Seventh, or Eighth Claims is reversed on appeal. SCO recognizes that this is a reasonable position, but proposes that Novell be allowed to renew its breach of contract claim only if all of those claims are retried. That does not make sense. Novell's modification makes clear that Novell may renew this claim if any one of the Fourth, Sixth, Seventh, or Eighth Claims gets retried.

Of course, Novell does not consent to SCO's first proposed condition that Novell agree to a jury trial. (Opp. at 7.)

CONCLUSION

For the reasons stated above, Novell requests that the Court permit Novell to dismiss its Third Claim for Relief.

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DATED: September 4, 2007

ANDERSON & KARRENBERG

By: /s/ Heather M. Sneddon
Thomas R. Karrenberg
John P. Mullen
heather M. Sneddon

-and-

MORRISON & FOERSTER LLP
Michael A. Jacobs, pro hac vice
Eric M. Acker, pro hac vice
Kenneth W. Brakebill, pro hac vice
Marc J. Pernick, pro hac vice
David E. Melaugh, pro hac vice

Attorneys for Defendant and
Counterclaim-Plaintiff Novell, Inc.


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CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this 4th day of September, 2007, I caused a true and correct copy of the NOVELL'S REPLY IN SUPPORT OF ITS MOTION TO VOLUNTARILY DISMISS ITS THIRD CLAIM FOR RELIEF to be served to the following:

Via CM/ECF:

Brent O. Hatch
Mark F. James
HATCH JAMES & DODGE P.C.
[address]

Stuart H. Singer
William T. Dzurilla
Sashi Bach Boruchow
BOIES, SCHILLER & FLEXNER LLP
[address]

Devan V. Padmanabhan
John J. Brogan
DORSEY & WHITNEY, LLP
[address]

Via U.S. Mail, postage prepaid:

Stephen Neal Zack
BOIES, SCHILLER & FLEXNER LLP
[address]

/s/ Heather M. Sneddon

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