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September 22, 2008 AutoZone Status Hearing transcript
Thursday, March 12 2009 @ 11:03 AM EDT

We now have the hearing transcript [PDF] of the status conference in the AutoZone case, held before Judge Robert C. Jones on September 22, 2008. As you may recall, Judge Jones lifted the stay on the AutoZone case at that hearing and required the case to resume as of January 1, 2009.

- The Groklaw Team



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

UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA
LAS VEGAS, NEVADA

THE SCO GROUP, INC.,
Plaintiffs,
vs.
AUTOZONE, INC.,
Defendants.
___________________________________
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Docket No. 2:04-CV-0237-RCJ-GWF


Las Vegas, Nevada
September 22, 2008
9:19 p.m.

STATUS CONFERENCE

THE HONORABLE ROBERT C. JONES PRESIDING
JUDGE OF THE UNITED STATES DISTRICT COURT





COURT RECORDER:

ARACELI BARENG
U.S. District Court

Proceedings recorded by electronic sound recording, transcript produced by transcription service.

(1)

APPEARANCES:

FOR THE PLAINTIFFS: For The SCO Group, Inc.:
RICHARD J. POCKER, Esq.
Boies, Schiller, Flexner
[address]
[email address]
FOR THE DEFENDANTS: For AutoZone, Inc.:
LAURA E. BIELINSKI, Esq.
Brownstein Hyatt Farber & Schreck
[address]
[email address]

(2)

LAS VEGAS, NEVADA MONDAY, SEPTEMBER 22, 2008

PROCEEDINGS BEGAN AT 9:19:30 A.M.

THE COURT: SCO versus AutoZone. S-C-O. Right.

Good morning.

MR. POCKER: Good morning, Your Honor.

THE COURT: Appearances, please.

MR. POCKER: Richard Pocker of Boies, Schiller and Flexner on behalf of the plaintiffs in this matter, and with me is Ryan Tibbits, the general counsel for the client, plaintiff SCO.

MS. BIELINSKI: Good morning, Your Honor. Laura Bielinski, with Brownstein Hyatt Farber Schreck. We're local counsel for AutoZone.

THE COURT: Thank you.

We have had some movement in the case, so what can I do then, or what should I do to close out our proceeding?

MR. POCKER: Well, Your Honor, if the Court is apprized of the status report we submitted last Thursday, as it is now, we yet do not have a final judgment in the Novell litigation --

THE COURT: Mm-hmm.

MR. POCKER: -- up in the District of Utah.

THE COURT: Now in summary, of course, we have one back in New Jersey that's stayed -- still stayed, or no?

MR. POCKER: In Delaware, there's one stayed -- the

(3)

IBM --

THE COURT: Delaware.

MR. POCKER: -- litigation is stayed. And both of those are now stayed, in addition --

THE COURT: But the main one that was going forward in Utah, which was Novell?

MR. POCKER: Yes, sir.

THE COURT: In that one, give me the summary on the record here.

MR. POCKER: Okay. Where that stands right now, Your Honor, is that the Court had ruled -- made several rulings on summary judgment back in 2007, then held a trial in April of this year with respect to some of the remaining claims and the damages amounts, so --

THE COURT: And basically it was Novell did not transfer, still held --

MR. POCKER: They -- it --

THE COURT: -- the Linux -- the --

MR. POCKER: -- well, the -- with respect to the copyright issues, that was decided adversely to SCO.

THE COURT: Mm-hmm.

MR. POCKER: And that will -- that was resolved in a summary judgment and we'll be appealing that once we get a final judgment. And then as to the issues regarding the Sun and Microsoft licenses, there was a claim for $30 million

(4)

dollars in licence fees that --

THE COURT: By SCO?

MR. POCKER: By -- by Novell --

THE COURT: Mm-hmm.

MR. POCKER: -- to retrieve -- to get that back from SCO. Ultimately the Judge ruled that it was $2 million some hundred thousand dollars instead --

THE COURT: Mm-hmm.

MR. POCKER: -- and that -- in the course of making those rulings, the Court also issued additional findings which will be part of this final judgment once it's entered.

Novell, in that litigation, has raised what they consider to be bars to the issuance of a final judgment. One of them is based on the issue of whether there will be a constructive trust imposed upon SCO's assets to protect the judgment, and we believe that's been resolved through some tracing and a stipulation, and in all likelihood the bankruptcy judge will just adopt that, if he hasn't done so already.

The other issue had to do with some of the claims that SCO made in the Novell case were stayed, pending arbitration or based upon an arbitration clause --

THE COURT: Mm-hmm.

MR. POCKER: -- those were main stayed and Novell is taking the position that because of those stayed claims, final

(5)

judgment can't yet be entered up in Utah. We've taken a contrary position, have offered to dismiss those. In any event, in a nutshell, we're close to judgment up there, final judgment, and at that point in time our client will appeal that judgment.

We think it's important in the sense that the issues resolved with respect to the copyright ownership for the pre-1996 period are an issue that impacts this litigation here, and a good number of the claims. And as a result, rather than to duplicate effort and to run into massive judicial inefficiencies, it's our position that perhaps the Court should -- or, the Court definitely should continue the stay in effect while we labor through that final judgment and then the appeal.

THE COURT: Why shouldn't I lift it now and let you proceed? I appreciate that there's still appeals, or there may be appeals pending, but why shouldn't I lift it now and require you to proceed here, based upon those rulings?

MR. POCKER: Well, Your Honor, I believe that -- it's an efficiency argument, essentially. We believe that there are very strong arguments with respect to the summary judgment rulings especially, that the Court erred in granting summary judgment on those copyright issues. If the Tenth Circuit agrees, then this case down here will be a lot

(6)

larger and more complex than a truncated version of this case, if the Court were to move forward at this time, with just the main claims that are not impacted by what happened to Novell.

THE COURT: Mm-hmm.

MR. POCKER: And there are questions of --

THE COURT: Let me ask opposing counsel, do you see any reason why I shouldn't lift the stay?

MS. BIELINSKI: Your Honor, we would submit that to the Court's discretion.

THE COURT: Mm-hmm.

MS. BIELINSKI: I don't see any reason why --

THE COURT: Because you're talking about, Mr. Pocker, several years hence, right?

MR. POCKER: It could be. I --

THE COURT: In the meantime this is an '04 case.

MR. POCKER: It could be 18 months.

THE COURT: Mm-hmm.

MR. POCKER: Maybe two years.

THE COURT: I'm going to lift the stay. I'm going to lift it effective the end of this year, and require you to proceed in this litigation here.

So I'll let you -- you know, that's enough time -- maybe not enough time, but enough time to get yourself on pretty solid footing, short of the appeals in that other

(7)

proceeding, and then I'm going to require you to go here.

If you'll -- if you claim -- of course, you -- you may assert additionally that the Court there was in error, but seek a judgment nevertheless, alternatively, and probably we're going to be able to resolve most of that, I assume, by way of summary judgment. And then of course if it turns out that the Court there was wrong, we'll have to redo, no doubt about it. But I think I've got to get this case off the dime and move it towards conclusion.

MR. POCKER: Well, Your Honor, there are limited issues as a compromise that we could proceed with --

THE COURT: Mm-hmm.

MR. POCKER: -- with respect to the open server issues that don't impact those issues.

THE COURT: Mm-hmm.

MR. POCKER: We could have a -- if the Court were willing to have, say, a 180 day period in which we could engage in motion practice with respect to those claims, I believe that would move this case forward while still allowing for a period of time in which the results of Novell could be clarified and we'd avoid a lot of duplication in the litigation down here.

THE COURT: I'm going to lift the stay, end of this year, entirely on the case, and require then that there be discovery deadlines and motion deadlines, dispositive motion

(8)

deadlines and ultimately a trial setting as well. I think that will move the case.

MR. POCKER: So, Your Honor, it's effective January 1st, then --

THE COURT: Right.

MR. POCKER: -- the stay is lifted? And at that point in time, you wish us to submit the discovery plan, scheduling order, and --

THE COURT: I do

MR. POCKER: Alright.

THE COURT: And we'll have deadlines for that, and dispositive motion and of course we'll set a trial date as well. It will be out there. It doesn't mean you can't continue it, but it will be out there as a deadline for you.

MR. POCKER: Alright. Thank you, Your Honor.

THE COURT: Okay. Thank you so much

MS. BIELINSKI: Thank you, Your Honor.

PROCEEDINGS CONCLUDED AT 9:26:35 A.M.

* * * * * * *

(9)

CERTIFICATION

I (WE) CERTIFY THAT THE FOREGOING IS A CORRECT TRANSCRIPT FROM THE ELECTRONIC SOUND RECORDING OF THE PROCEEDINGS IN THE ABOVE-ENTITLED MATTER.

NW TRANSCRIPTS, LLC
NEVADA DIVISION
[address]
[phone]
[email]

/s/ Gayle Lutz
FEDERALLY CERTIFIED MANAGER/OWNER

Zachary Lutz
TRANSCRIBER

10/29/08
DATE

(10)


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