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Judge Stewart Denies Novell Motion in Limine No. 7 - Updated 4Xs - More Orders Put SCO in a Real Pickle
Monday, February 22 2010 @ 02:43 PM EST

Judge Stewart has denied Novell's Motion in Limine No. 7, saying that the motion is "essentially one for partial summary judgment and, as such, is untimely." He also says they can bring their issues up in jury instructions. That was SCO's argument, which has been adopted wholesale.

But I think it's a bit of sleight of hand to say it's a matter for summary judgment. In theory, it is true that Novell could have brought it up again on a motion for partial summary judgment, but in real-life terms, I think it would have been a waste of time to do so, since the judge's order goes on to say that the issues Novell raises are issues of fact that must be decided by a jury. That telegraphs to my brain that any such summary judgment motion would be denied on the grounds that it's the jury that has to decide the matters. Unless in some alternate universe, SCO suddenly had agreed with Novell on all the facts. Hardy har. But I'm just a paralegal by training, so I could be missing something here. Anyway, it's too late now.

So, what I'm saying is, that as far as I can determine, Novell just got told no, period, final answer. It's up to the jury now. I am only guessing, but after the appeals court ruled that Judge Dale Kimball shouldn't have ruled on copyright ownership but should have left it to the jury, the new judge assigned is very likely to leave to the jury as much as he can. It takes longer, meaning it costs more to get there, but it's not a bad place to be, before a jury.

There have been so many motions in limine, you probably would like more of a clue as to which one it was, so here is the Novell Motion in Limine No. 7 and SCO's Opposition, both PDFs:

I've put text versions below. First though, here are all the latest filings:

02/22/2010 - 703 - NOTICE OF CONVENTIONAL FILING of Exhibit 1 filed by Plaintiff SCO Group re 693 Memorandum in Opposition to Motion, (Hatch, Brent) (Entered: 02/22/2010)

02/22/2010 - 704 - MEMORANDUM DECISION denying 633 Motion in Limine. Signed by Judge Ted Stewart on 02/22/2010. (asp) (Entered: 02/22/2010)

02/22/2010 - 705 - NOTICE OF CONVENTIONAL FILING of Exhibit 2 filed by Plaintiff SCO Group re 699 Memorandum in Opposition to Motion, (Hatch, Brent) (Entered: 02/22/2010)

02/22/2010 - 706 - NOTICE OF CONVENTIONAL FILING of Expert Report, Rebuttal Report and Declaration of Dr. Christine Botosan, filed by Plaintiff SCO Group re 701 Memorandum in Opposition to Motion, (Hatch, Brent) (Entered: 02/22/2010)

02/22/2010 - 707 - NOTICE OF CONVENTIONAL FILING of Expert Report and Rebuttal Report of Dr. Gary Pisano filed by Plaintiff SCO Group re 702 Memorandum in Opposition to Motion, (Hatch, Brent) (Entered: 02/22/2010)

[ Update: Here's the latest, and after we have a chance to upload them and analyze it all, I'll swing back by:
708 - Filed & Entered: 02/22/2010
Order on Motion in Limine
Docket Text: MEMORANDUM DECISION denying [643] Motion in Limine. Signed by Judge Ted Stewart on 02/22/2010. (asp)

709 - Filed & Entered: 02/22/2010
Order on Motion in Limine
Docket Text: MEMORANDUM DECISION granting [645] Motion in Limine. Signed by Judge Ted Stewart on 02/22/2010. (asp)

710 - Filed & Entered: 02/22/2010
Order on Motion in Limine
Docket Text: MEMORANDUM DECISION denying [632] Motion in Limine; denying [651] Motion in Limine. Signed by Judge Ted Stewart on 02/22/2010. (asp)

711 - Filed & Entered: 02/22/2010
Order on Motion in Limine
Docket Text: MEMORANDUM DECISION granting [650] Motion in Limine. Signed by Judge Ted Stewart on 02/22/2010. (asp)

712 - Filed & Entered: 02/22/2010
Order on Motion in Limine
Docket Text: MEMORANDUM DECISION granting in part and denying in part [649] Motion in Limine. Signed by Judge Ted Stewart on 02/22/2010. (asp)

713 - Filed & Entered: 02/22/2010
Order on Motion in Limine
Docket Text: MEMORANDUM DECISION taking under advisement [647] Motion in Limine. Signed by Judge Ted Stewart on 02/22/2010. (asp)

716 - Filed & Entered: 02/22/2010
Order on Motion in Limine
Docket Text: MEMORANDUM DECISION granting [635] Motion in Limine. Signed by Judge Ted Stewart on 02/22/2010. (asp)

717 - Filed & Entered: 02/22/2010
Order on Motion in Limine
Docket Text: MEMORANDUM DECISION granting in part and denying in part [637] Motion in Limine; granting in part and denying in part [638] Motion in Limine; granting in part and denying in part [639] Motion in Limine; granting in part and denying in part [640] Motion in Limine; granting in part and denying in part [641] Motion in Limine; granting in part and denying in part [642] Motion in Limine; granting in part and denying in part [644] Motion in Limine; granting in part and denying in part [648] Motion in Limine. Signed by Judge Ted Stewart on 02/22/2010. (asp)

Since docket numbers 714 and 715 are missing, I assume there will be more to come. You'll find the motions in limine by both parties all listed here, so you can match them up. But the orders tell you what each one is about. - End Update.]

[Update 2: 717, for example, is about SCO's witnesses and whose testimony the jury will hear. William Broderick is out, I gather. Jean Acheson can testify to what she heard at meetings, but not at the water cooler. Lawrence Bouffard can testify if he can find anything to testify about, other than his personal opinions after reading the APA. Frankenberg can testify about the parties' intent and course of performance. But he has no knowledge about Amendment 2, the judge rules, so he can't testify about that. Same with Duff Thompson and Ty Mattingly and Doug Michels. Ed Chatlos also can't testify about Amendment 2, and neither can Burt Levine. Kim Madsen, poor thing, who testified that she didn't recall any conversations about Amendment 2, will nevertheless be allowed to testify to her general impression of the intent of the overall deal.

So, SCO's testimony on Amendment 2, as far as this goes, is Kim Madsen, who will get on the stand and have to say she never heard a word about Amendment 2 but she thought it was a confirmation of SCO's intent to get the copyrights. Except there's a problem. I think the judge didn't weigh in that she also testified at her deposition that she doesn't recall any specific mention of copyrights at all. It was just "assumed", she testified. And if you read that deposition, I think you'll agree she really didn't seem to understand the APA very well anyhow, so if she tries to do better, Novell will surely let the jury know what she said that unfortunate, for SCO, day.

What does it mean? Here's how I understand things. That SCO is in a real pickle on copyright ownership. I think this order alone pretty much ensures that Novell will prevail on the copyrights issue. SCO has no specifics to present on Amendment 2. None. And since that is the only ambiguous aspect to the agreements, according to the appeals court, and so subject to witness testimony, they have no meaningful witness testimony about that, which has been obvious for a long time, and was pointed out by The Honorable Judge Dale Kimball, who seems to have gotten it exactly right, and the end result is, in any fair universe, the very same as what he ruled in 2007 on summary judgment, that the copyrights didn't transfer.

After all, if the only ambiguous part is Amendment 2, and the appeals court already ruled that the APA itself is clear that copyrights were excluded, if SCO can't prove anything about Amendment 2, all it can do is present testimony that various folks thought the original deal was supposed to include copyrights, but somehow it didn't. They can't explain the allegedly ambiguous wording in Amendment 2. Ergo if it didn't include copyrights in the APA, it didn't in Amendment 2, according to SCO's ability to tell the jury about that. End of story. Especially because Novell does have witnesses, the two lawyers who drafted the APA and Amendment 2, who *can* explain the wording of both.

The other orders are more favorable to SCO on the slander of title issue, but if the jury finds that the copyrights didn't transfer, that's the end of that in any meaningful sense.

And what about Groklaw? Here's the deal:

The Court agrees with Plaintiff’s general premise that sources of commentary on this and related SCO litigation has little, if any, relevance to this case. However, there may be some relevance as it relates to Defendant’s argument that Plaintiff’s SCOsource initiative failed for reasons other than Defendant’s statements concerning copyright ownership.

As to Plaintiff’s concern regarding any prejudice from possible jury investigation, the Court will instruct the jury that it is not to do any investigation whatsoever on anything that could relate to this trial. Because of these considerations, the Court is unable to grant Plaintiff’s broad request for exclusion.

Rather, the Court will rule on Plaintiff’s objections to specific exhibits as they arise during trial.

It is therefore ORDERED that Plaintiff’s Motion in Limine No. 4 (Docket No. 647) is TAKEN UNDER ADVISEMENT.

No. I can't explain why it says it's taken under advisement, since he seems to have ruled. But that is what it says. So, they can mention Groklaw, but SCO can object each time, and the judge will rule as they happen. - End Update 2.]

[ Update 3: Here are the rest:

02/19/2010 - 714 - **SEALED DOCUMENT** Exhibits A-C re 679 Memorandum in Opposition to Motion, filed by Defendant Novell, Inc.. (asp) (Entered: 02/22/2010)

02/19/2010 - 715 - **SEALED DOCUMENT** Exhibits A, C, D re 678 Memorandum in Opposition to Motion, filed by Defendant Novell, Inc.. (asp) (Entered: 02/22/2010)

02/23/2010 - 718 - **SEALED DOCUMENT** Exhibit 1 re 693 Memorandum in Opposition to Motion, filed by Plaintiff SCO Group. (asp) (Entered: 02/23/2010)

02/23/2010 - 719 - **SEALED DOCUMENT** Exhibit 2 re 699 Memorandum in Opposition to Motion, filed by Plaintiff SCO Group. (asp) (Entered: 02/23/2010)

02/23/2010 - 720 - **SEALED DOCUMENT** Exhibit 3 re 701 Memorandum in Opposition to Motion, filed by Plaintiff SCO Group. (asp) (Entered: 02/23/2010)

02/23/2010 - 721 - **SEALED DOCUMENT** Exhibit 4 re 701 Memorandum in Opposition to Motion, filed by Plaintiff SCO Group. (asp) (Entered: 02/23/2010)

02/23/2010 - 722 - **SEALED DOCUMENT** Exhibit 3 re 702 Memorandum in Opposition to Motion, filed by Plaintiff SCO Group. (asp) (Entered: 02/23/2010)

02/23/2010 - 723 - **SEALED DOCUMENT** Exhibit 2 re 702 Memorandum in Opposition to Motion, filed by Plaintiff SCO Group. (asp) (Entered: 02/23/2010)

02/23/2010 - 724 - MEMORANDUM DECISION granting 631 Motion in Limine. Signed by Judge Ted Stewart on 02/23/2010. (asp) (Entered: 02/23/2010)

02/23/2010 - 725 - MEMORANDUM DECISION denying 634 Motion in Limine. Signed by Judge Ted Stewart on 02/23/2010. (asp) (Entered: 02/23/2010)

#724 is interesting:
II. DISCUSSION

The mandate rule is an "important corollary" to the law of the case doctrine. "The mandate rule is an 'discretion-guiding rule' that 'generally requires trial court conformity with the articulated appellate remand,' subject to certain recognized exceptions." The mandate rule "provides that a district court must comply strictly with the mandate rendered by the reviewing court." While "a district court is bound to follow the mandate, and the mandate 'controls all matters within its scope, ... a district court on remand is free to pass upon any issue which was not expressly or impliedly disposed of on appeal.'" Further, the Court may decide issues that were necessarily implied by the mandate. However, the mandate rule prevents a court from considering an argument that could have been, but was not, made on appeal.

Plaintiff argues that the Court’s alternative ruling was premised on the Court’s other rulings—that (1) the APA can and should be read independent of Amendment No. 2; (2) extrinsic evidence cannot be considered; and (3) the APA merely gives SCO an implied license—which have now been reversed. Therefore, the Court may revisit them because they are necessarily implied by the mandate. The Court disagrees.

The Court’s alternative rulings were not predicated on those now-reversed rulings. Unlike the Court’s decision concerning Plaintiff’s slander of title claim, which was solely based on the Court’s finding that Defendant owned the copyrights, there were alternative, independent bases for the Court’s ruling on the copyright ownership portion of Plaintiff’s implied covenant of good faith and fair dealing claim. As those alternative rulings were not appealed and, thus, not reversed, the Court is without authority to revisit them on remand. Therefore, the Court will preclude litigation of the copyright ownership portions of Plaintiff’s claim for breach of the implied duty of good faith and fair dealing.

III. Conclusion.

It is therefore

ORDERED that Defendant's MOtion in Limine No. 4 to Preclude SCO from Contesting that Novell had an Objectively Reasonable, Good Faith Basis for its Statements Regarding Copyright Ownership (Docket No. 631) is GRANTED.

You can find SCO's arguments that just got shot down here in docket number 684, if you'd like to review. And Novell's motion which was just granted is here, number 631. - End Update 3.]

[ Update 4: Another Novell motion in limine denied, another SCO motion in limine granted, and we have updated the chart to reflect that:

02/24/2010 - 728 - MEMORANDUM DECISION denying 636 Motion in Limine; granting 646 Motion in Limine. Signed by Judge Ted Stewart on 02/23/2010. (asp) (Entered: 02/24/2010)

The Novell motion was to exclude evidence of substantial performance; the SCO motion was to exclude reference to Novell's prior money judgment against SCO. I can't explain the judge's reasoning on the former. He says he disagrees with Novell's argument that SCO failed to perform by not paying Novell the royalties from Sun, and that the district court so found. The judge says that what the court ruled was that SCO was liable for breach of its fiduciary duty, conversion and unjust enrichment, but since all of that springs from the agreement and not doing what the agreement said SCO should do, I can't follow his logic. Probably Novell can't either. The judge doesn't explain granting the SCO motion. - End Update 4.]

Here's the judge's order as text, and so it will be more meaningful, I've put Novell's motion in limine that it is talking about after it, and then SCO's Memorandum in Opposition. If you hold the SCO memo up next to the judge's order, I think you'll find they match very closely:

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

CENTRAL DIVISION

THE SCO GROUP, INC., a Delaware
corporation,

Plaintiff/Counterclaim Defendant,

vs.

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

____________________

Case No. 2:04-CV-139 TS

MEMORANDUM DECISION AND
ORDER DENYING DEFENDANT'S
MOTION IN LIMINE NO. 7 TO
DETERMINE THAT COMMON
LAW PRIVILEGES APPLY TO
ALLEGEDLY DEFAMATORY
PUBLICATIONS

This matter is before the Court on Defendant's Motion in Limine No. 7. In that Motion, Defendant seeks a ruling that: (1) its private correspondence to Plaintiff is not actionable because it is protected by the common law litigation privilege; and (2) its broader publications are not actionable unless Plaintiff can prove that Defendant acted solely out of malice or bad faith because they are the subject to the recipient's and rival claimant's privileges. Defendant's Motion is essentially one for partial summary judgment and, as such, is untimely. Considering the merits of the Motion, it will be denied.

1

I. DISCUSSION

A. ABSOLUTE PRIVILEGE

Defendant argues that its publication of its ownership claim in private pre-litigation correspondence to SCO, responding to SCO's demand letter, is protected by the litigation privilege.

"The general rule is that judges, jurors, witnesses, litigants, and counsel involved in a judicial proceeding have an absolute privilege against suits alleging defamation."1 The Utah Supreme Court, following the Restatement (Second) of Torts, has set out the litigation privilege as follows:

A party to a private litigation or a private prosecutor or defendant in a criminal prosecution is absolutely privileged to publish defamatory matter concerning another in communications preliminary to a proposed judicial proceeding, or in the institution of or during the course and as a part of, a judicial proceeding in which he participates, if the matter has some relation to the proceeding.2 The privilege "exists for the purpose of preserving both the integrity of the judicial proceeding and the associated quest for the ascertainment of truth that lies at its heart."3

In order for this privilege to apply, the following elements must be satisfied: (1) the statement must have been made during or in the course of a judicial proceeding; (2) the statement must have some reference to the subject matter of the proceeding; and (3) the statement must have been made by someone acting in the capacity of judge, juror, witness, litigant, or counsel.4

2

"The first element requires examination of whether the statement was made during or in the course of a judicial proceeding."5 "The second element requires that the statement have some reference to the subject matter of the proceeding."6 "The third and final element of the judicial proceeding privilege requires that the party claiming the privilege was acting in the capacity of judge, juror, witness, litigant, or counsel."7

The Utah Supreme Court has "indicated that the judicial proceeding privilege may be lost due to excessive publication."8 "The excessive publication rule, in the context of judicial proceeding privilege cases, is to prevent abuse of the privilege by publication of defamatory statements to persons who have no connection to the judicial proceeding."9 The issue of whether there has been excessive publication is a question of fact.10

The Court finds that the determination as to whether this privilege applies to Defendant's statements and whether it has been lost due to excessive publication are issues for the jury.

B. CONDITIONAL PRIVILEGES

Defendant argues that its broader communications are protected by two additional conditional privileges: (1) the recipient's privilege; and (2) the rival claimant's privilege.

3

Defendant seeks an order that its communications are covered by both privileges. Defendant seeks a ruling that its public disclosures are covered by both privileges.

"Whether a publication is conditionally privileged is a question of law to be determined by the trial court, unless a genuine factual issue exists regarding whether the scope of the qualified privilege has been transcended or the defendant acted with malice."11 Because there are factual issues concerning whether these privileges apply, whether the scope of these conditional privileges have been transcended, and whether Defendant acted with malice, the Court cannot rule that Defendant's statements are conditionally privileged.

C. EXCESSIVE PUBLICATION

Defendant also requests the Court rule that Plaintiff cannot show excessive publication, leaving malice as the only question for the jury. The Court declines to do so. As indicated, excessive publication is an issue for the jury.

II. CONCLUSION

It is therefore

ORDERED that Defendant's Motion in Limine No. 7 to Determine that Common Law Privileges Apply to Allegedly Defamatory Publications (Docket No. 633) is DENIED. Both parties may submit proposed jury instructions on these issues.

DATED February 22, 2010.

BY THE COURT:

[signature]
TED STEWART
United States District Judge

4

1 Krouse v. Bower, 20 P.3d 895, 898 (Utah 2001).

2 Price v. Armour, 949 P.2d 1251, 1256 (Utah 1997)(quoting Restatement (Second) of Torts § 587).

3 O'Connor v. Burningham, 165 P.3d 1214, 1222 (Utah 2007).

4 Price, 949 P.2d at 1256.

5 Id.

6 Id. at 1257.

7 Id. at 1258.

8 Krouse, 20 P.3d at 900.

9 Id.

10 Brehany v. Nordstrom, Inc., 812 P.2d 49, 58 (Utah 1991).

11 Id.

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

NOVELL’S MOTION IN LIMINE NO. 7 TO DETERMINE THAT COMMON LAW PRIVILEGES APPLY TO ALLEGEDLY DEFAMATORY PUBLICATIONS

SCO alleges that Novell slandered SCO’s title to certain copyrights by asserting that Novell, and not SCO, owns those copyrights. (Dkt. 96 at ¶ 91.) According to SCO, Novell published that allegedly defamatory matter in: (1) a public letter dated May 28, 2003; (2) private correspondence sent to SCO in June and August 2003; (3) copyright applications submitted to the United States Copyright Office in September and October 2003; and (4) various other public announcements, including a December 22, 2003 press release that republished hitherto private correspondence with SCO. (Id. at ¶ 37.) By this motion, Novell seeks rulings in limine that (a) its private correspondence to SCO is not actionable because it is protected by the common law litigation privilege; and (b) its broader publications are not actionable unless SCO can prove that Novell acted solely out of malice or bad faith because they are subject to the recipient’s and rival claimant’s privileges.1

I. ARGUMENT

All of Novell’s allegedly defamatory publications were made after SCO sent demand letters to Novell and to 1,500 other companies, in which SCO published its own claim that it owned the copyrights at issue in this case and demanded that the recipients pay for licenses.2 (Dkt. 121 at ¶ 52.) Under these circumstances, a rule imposing liability on Novell for disputing SCO’s ownership would be unfair both to Novell and to the third parties from whom SCO wants to extract licensing fees, and it is not the law. Slander of title requires a false statement made “without privilege,” Dowse v. Doris Trust Co., 116 Utah 106, 110-11, 208 P.2d 956 (1949), and Novell’s publications were privileged.

Novell’s publication of its ownership claim in private pre-litigation correspondence to SCO, responding to SCO’s demand letter, is protected by the litigation privilege, which is

1

absolute. See Price v. Armour, 949 P.2d 1251, 1256 (Utah 1997) (quoting Restatement (Second) of Torts [“Rest.”] § 587) (“A party to a private litigation … is absolutely privileged to publish defamatory matter … in communications preliminary to a proposed judicial proceeding … if the matter has some relation to the proceeding”).3

Novell’s broader publications, in turn, are protected by two other, conditional privileges. First, “[t]he law has long recognized that a publication is conditionally privileged if made to protect a legitimate interest of the … recipient.” Brehany v. Nordstrom, 812 P.2d 49, 59 (Utah 1991) (citing, inter alia, Rest. § 595); see also Rest. § 646A (privilege applies to slander of title).4 Second, a further privilege applies specifically to a rival’s publication of its claim to property (including intangible property). Rest. § 647; see also id. cmt. b (privilege is “applicable to … injurious falsehood”); Jack B. Companies v. Nield, 751 P.2d 1131, 1134 (Utah 1988) (“slander of title … is … injurious falsehood”). Novell seeks in limine rulings that its public disclosures are covered by both privileges. See O’Connor v. Burningham, 165 P.3d 1214, 1224 (Utah 2007) (“Whether a statement is entitled to the protection of a conditional privilege presents a question of law; whether the holder of the privilege lost it due to abuse presents a question of fact”). Taking them in order, the other recipients of Novell’s publications—to whom SCO also sent demand letters—have a legitimate interest in ascertaining the true ownership of the copyrights SCO is threatening to sue them on, so the recipient’s privilege also applies. See Rest.

2

§ 595. And the rival claimant’s privilege applies, by definition, to any assertion by Novell that it owns the copyrights claimed by SCO.

SCO bears the burden of overcoming the conditional privileges “by proof of malice or excessive publication.” Brehany, 812 P.2d at 59. Novell also requests that the Court rule in limine that SCO cannot show excessive publication because it is suing Novell for publishing to precisely those third parties that have interest in the true ownership of the copyrights, and any publication to disinterested parties is irrelevant to SCO’s supposed damages. See Rest. § 599 cmt. b (“If the harm done by the abuse is severable, and can be distinguished from the harm done by a part of the publisher’s conduct that would properly be privileged, he is subject to liability only for the excess of harm resulting from his abuse”); see generally O’Connor, 165 P.3d at 1224 (the Restatement’s teachings on privilege “enjoy close ties to common sense and thus appear worthy of our confidence”). The only remaining issue that would leave for the jury to decide is whether Novell made those publications in bad faith, solely out of ill-will, and with no intent to protect the legitimate interests of the recipients. See Rest. § 603 cmt. a. (“if the publication is made for the purpose of protecting the interest in question, the fact that the publication is inspired in part by resentment or indignation at the supposed misconduct of the person defamed does not constitute an abuse of the privilege”); id. at § 647 cmt. b (rival claimant’s privilege “permits the publisher to assert a claim … provided that the assertion is honest and in good faith, even though his belief is neither correct nor reasonable”).

II. CONCLUSION

This Court should rule, in limine, that (1) Novell’s publication of its ownership claim to SCO is subject to the absolute litigation privilege; and (2) any broader publication of that claim is conditionally protected by the recipient’s interest and rival claimant’s privileges.

___________________

1 A companion motion in limine (no. 8) addresses the Noerr-Pennington privilege applicable to Novell’s copyright applications.

2 SCO was also the first to go public, as more fully explained in Novell’s motion in limine no. 3.

3 For convenient reference, Restatement sections cited herein are reproduced in Exhibits 7A-7F hereto. As SCO itself has elsewhere observed: “Thus, for example, the sending of a demand letter, settlement letter, or a cease and desist letter is absolutely privileged.” SCO’s Mem. Supp. Mot. Summ. J. at 5, SCO Group, Inc. v. IBM, No. 2:03CV294 (D. Utah Sep. 25, 2006). Arguably, this privilege also protects Novell’s publications to the broader Linux community. See Krouse v. Bower, 20 P.3d 895, 900 (Utah. 2001) (“The excessive publication rule, in the context of judicial proceeding privilege cases, is to prevent abuse of the privilege by publication of defamatory statements to persons who have no connection to the judicial proceeding”).

4 Property interests are a “legitimate interest” within the ambit of the recipient’s interest privilege. See Rest. § 595 cmt. d.

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

SCO'S OPPOSITION TO "NOVELL'S MOTION IN LIMINE NO. 7 TO DETERMINE THAT COMMON LAW PRIVILEGES APPLY TO ALLEGEDLY DEFAMATORY PUBLICATIONS"

Novell asks the Court to rule that certain common-law privileges apply to Novell's claims of copyright ownership that are the subject of SCO's claim for slander of title.

1. Novell's motion should be denied without prejudice to request appropriate jury instructions. The subject of this motion would more appropriately be addressed in the context of jury instructions.1 Novell does not discuss in its motion Judge Kimball's prior rulings with respect to the applicability of privileges. Novell sought to have the slander of title claim dismissed on the basis of privilege. The Court denied the motion in June 2005. (Docket No. 75.) With the
exception of the "absolute privilege," Novell argued then for application of the same privileges it asks the Court to apply now. In denying the motion, the Court noted that SCO may establish that the asserted privileges do not apply or prove that Novell acted with an intent or through conduct that removes the privilege:

  • Where "'the disparaging matter was published maliciously,'" the defendant has published the matter "'without privilege to do so.'" Id. at 11 (quoting Dowse v. Doris Trust Co., 208 P.2d 956, 958 (Utah 1949)).
  • The qualified or conditional privileges that Novell invokes do not apply if "'the scope of the qualified privilege has been transcended or the defendant acted with malice.'" Id. (quoting Brehany v. Nordstrom, Inc., 812 P.2d 49, 57 (Utah 1991)).
  • The plaintiff may prove 'that the wrong was done with an intent to injure, vex or annoy,' or 'because of hatred, spite or ill will.' Or, 'malice may be implied where a party knowingly and wrongfully records or publishes something untrue or spurious or which gives a false or misleading impression adverse to one's title under circumstances that it should reasonably foresee might result in damage to the owner of the property.'" Id. at 12 (quoting First Sec. Bank of Utah v. Banberry Crossing, 780 P.2d 1253, 1257 (Utah 1989)).

  • "'Statements that are otherwise privileged lose their privilege if they are excessively published, that is, published to more persons that the scope of the privilege requires to effectuate its purpose.'" Id. at 15 (quoting Krouse v. Bower, 20 P.3d 895, 900 (Utah 2001)). "The issue of whether there has been an excessive publication is a question of fact." Id. (citing Brehany, 812 P.2d at 58).

SCO does not dispute that jury instructions may be appropriate with respect to certain applicable privileges, and their limitations. On the "legitimate interest" qualified privilege, for example, the defendant must be under "a legal duty" to the recipient to publish the statement. O'Connor v. Burningham, 165 P.3d 1214, 1224 (Utah 2007). Novell owed no "legal duty" to the public to make its statements.2

2. The issue of "excessive publication" is for the jury to determine. The Court's prior
rulings defeat Novell's instant request for a legal ruling that SCO cannot show "excessive publication." That is an issue for the jury. Indeed, where the very notion of a qualified privilege precludes "widespread or unrestricted communication," Spencer v. Spencer, 479 N.W.2d 293, 297 (Iowa 1991), a "defense of qualified privilege does not extend to a publication to the general public." Knudsen v. Kan. Gas and Elec. Co., 807 P.2d 71, 79 (Kan. 1991).

3. Novell is not entitled to any "in limine" relief. The question of excessive publication therefore is for the jury, and if Novell acted with malice, no qualified privilege applies. Even if SCO were to be required "actual malice," as Novell seeks to require in Motions in Limine Nos. 2 and 3, evidence of common law malice will be admissible at trial. D. Elder, Defamation: A Lawyer's Guide § 7:3 (2009).

4. Novell's claim of "absolute privilege" fails under the relevant law. The absolute privilege for litigation generally applies to a "party to a private litigation." Hansen v. Kohler, 550

2

P.2d 186, 189-90 (Utah 1976); see also O'Connor v. Burningham, 165 P.3d 1214, 122-23 (Utah 2007). The purpose of the privilege is to "promote candid and honest communication between the parties and their counsel in order to resolve disputes." Krouse v. Bower, 20 P.3d 895 900 (Utah 2001). In certain limited situations, pre-litigation correspondence such as cease-and-desist letters may qualify for the privilege. It is an open factual question, however, whether Novell's letters are consistent with any such purpose. In addition, those letters were later published to the world - which is clearly not consistent with the privilege. Contrary to Novell's suggestion, moreover, excessive publication (such as publication to the public) is a defense to this privilege as well. Id. That question, again, is for the jury to resolve.

Conclusion

SCO respectfully submits, for the reasons set forth above, that the Court should deny Novell's "Motion in Limine No. 7," without prejudice to Novell's right to request appropriate jury instructions on privileges.

DATED this 19th day of February, 2010.

By: ___/s/ Brent O. Hatch______
HATCH, JAMES & DODGE, P.C.
Brent O. Hatch
Mark F. James

BOIES, SCHILLER & FLEXNER LLP
David Boies
Robert Silver
Stuart H. Singer
Edward Normand
Sashi Bach Boruchow

Counsel for The SCO Group, Inc.

_______________

1 Insofar as part of Novell's motion seeks a ruling that certain of the slanderous statements are not
actionable because of an absolute litigation privilege, that is a motion for partial summary judgment that
was required to have been brought - like Novell's other summary judgment motions - by April 20, 2007,
the deadline for dispositive motions.

2 Likewise, financially motivated public claims of copyright ownership do not fall within the alternate "decent conduct" standard.


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