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Court Grants SCO's Oral Motion for Judgment on Novell's Slander of Title Claim
Friday, March 26 2010 @ 01:44 PM EDT

Yesterday, SCO made an oral motion after Novell rested, asking for judgment as a matter of law on Novell's slander of title counterclaim, and Stewart has ruled that Novell did not carry the burden of proof with respect to special damages, except for copyright registration costs, which he doesn't think can be viewed as specials, so Novell's slander of title claim fails as a matter of law:
As a result, Defendant has failed to present any evidence concerning any special damages that it has suffered as a result of Plaintiff’s alleged slanderous statements. Without such evidence, Defendant may not prevail on its slander of title action against Plaintiff. Therefore, the Court will grant Plaintiff’s Motion for Judgment as a Matter of Law on Defendant’s slander of title claim.
I agree, from the reports we've seen anyway, that they didn't present evidence, and that would be deliberate on their part, a choice not to bother, I would assume. Given that SCO hasn't paid Novell the millions they already owe, fighting for the costs of copyright registrations or whatever probably didn't seem worth going after. Special damages have to be proven as actual money or real deals provably lost, not just coulda woulda shoulda imaginings, and Novell would have had to take time from other things to go after that.

SCO also filed a Rule 50(a) motion regarding copyright ownership, but for some reason, that motion has been mooted. I don't understand why yet, actually, since the order doesn't explain, so we'll have to wait for more information. I have zero doubt that there will be more on this in due time. I think it means SCO's copyright issue has to go to trial. And the judge denied Novell's similar motion for judgment as a matter of law on SCO's slander of title claim, saying that he won't consider it since it would require him to weigh credibility, and that's not his job. It's up to the jury. Interestingly, he did say that Novell had demonstrated evidence of SCO's malice, constitutional malice, but proving special damages is a required element to sustain a slander of title claim. It's like a home run. It doesn't count unless you touch all the bases and home plate. Three out of four necessary elements of a claim also isn't enough.

Here are the filings:

03/26/2010 - 835 - MOTION for Judgment as a Matter of Law SCO'S RULE 50(a) MOTION AT THE CLOSE OF ALL EVIDENCE filed by Plaintiff SCO Group. (Hatch, Brent) (Entered: 03/26/2010)

03/26/2010 - 836 - MEMORANDUM in Support re 835 MOTION for Judgment as a Matter of Law SCO'S RULE 50(a) MOTION AT THE CLOSE OF ALL EVIDENCE filed by Plaintiff SCO Group. (Hatch, Brent) (Entered: 03/26/2010)

03/26/2010 - 838 - MEMORANDUM DECISION denying 833 Motion for Judgment as a Matter of Law. Signed by Judge Ted Stewart on 03/26/2010. (asp) (Entered: 03/26/2010)

03/26/2010 - 839 - MEMORANDUM DECISION granting Plaintiff's oral Motion for Judgment as a Matter of Law ; finding as moot 835 Motion for Judgment as a Matter of Law. Signed by Judge Ted Stewart on 03/26/2010. (asp) (Entered: 03/26/2010)

Specifically, SCO's motion that got mooted said this:
Plaintiff, The SCO Group, Inc. (“SCO”), respectfully hereby moves the Court at the close of all the evidence under Rule 50(a) for judgment as a matter of law in favor of SCO because defendant, Novell, Inc. (“Novell”) has failed to introduce legally sufficient evidence upon which a reasonable jury could find that SCO did not acquire ownership of the UNIX and UnixWare copyrights under the amended Asset Purchase Agreement (“APA”). Specifically, SCO has shown that (1) SCO acquired all “copyrights and trademarks owned by Novell as of the date of the Agreement required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies”; and (2) SCO requires the UNIX and UnixWare copyrights to exercise its rights with respect to the UNIX business. Novell has not introduced legally sufficient evidence upon which a reasonable jury could that SCO does not require the UNIX and UnixWare copyrights to exercise its rights with respect to the UNIX business.
Stewart makes one brief reference to this in his ruling cited above, specifically footnote 1:
Plaintiff has also filed a Rule 50(a) Motion at the Close of all Evidence. As a result of this Order, the Court need not address the arguments made in that Motion and that Motion is now moot.
Now, on the special damages, I don't think Novell will be losing sleep, if their only evidence of special damages was the costs of registering the copyrights. So, as best I can make out, that is the only result, with everything else going to the jury. But I confess it makes no sense to me this way, so if it does to you, apply for law school right away.

It's so strange watching this case unfold over the years. You may recall that back in the earlier iteration of the slander of title issue, at the summary judgment phase, SCO fervently argued that legal fees and costs are special damages. Here's their Opposition [PDF] and Novell's Memorandum of Law in support of its motion, which SCO was responding to. Novell's assertion was, in 2007, that SCO had failed to present evidence of special damages:

D. SCO Has Not Produced Evidence to Support Special Damages for Researching Copyright Registrations or for Correcting Public Statements

SCO's complaint further alleges that SCO has suffered damages including "attorneys' fees incurred in researching and reviewing Novell's improper copyright registrations, [and] attempting to mitigate damages by correcting and responding to Novell's false representations made to third parties." (SAC at ¶ 94.) Novell does not dispute that these amounts, if proven, could constitute special damages to support SCO's slander of title claim.

However, document discovery is now closed and SCO has not adduced a shred of evidence to support a realized or liquidated amount of such damages. SCO bore the burden of providing evidence to support this damage claim as well, and it has failed to meet that burden. First Sec. Bank, 780 P.2d at 1258 (holding that slander of title claim where plaintiff failed to bring forth enough evidence to "sufficiently establish[]" special damages resulting from defendant's alleged acts)....

Novell is entitled to summary judgment for SCO's slander of title claim on the grounds that SCO cannot establish the special damages that are a requirement of the claim. At a minimum, if this claim is permitted to proceed to trial, SCO should be limited to the only special damages that can be realized or liquidated based on the facts of this dispute: the costs incurred in researching copyright registration and attempting to respond to Novell's representation....

SCO cannot show that it has suffered special damages and Novell is entitled to summary judgment on SCO's claim for slander of title.

That was Novell's argument then, and it's in essence the same thing happening to Novell, roughly speaking, but with the positions reversed, and what's good for the goose is good for the gander. Special damages are supposed to be actual, provable losses, based on a before and after evaluation, Michael Jacobs argued at the hearing on May 31, 2007 on Novell's motion for summary judgment. The eventual decision was that the issue was mooted by Judge Kimball's ruling in August of 2007 that Novell did not transfer the copyrights, which is why it's back on the table now, after the copyright ruling was appealed by SCO and remanded back for a jury trial.

Here's Novell's answer to SCO's opposition, and here's the transcript of the hearing on the issue before Judge Dale Kimball, if you want the complete picture.

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