News

I know we are all riveted on Utah today, but take a moment, please, because this is important. Jonathan Schwartz, formerly CEO of Sun, has a personal blog, What I Couldn't Say ..., where he has begun to tell us what he couldn't tell us before about events during his tenure there. He has a interesting tale to tell about Bill Gates and Steve Ballmer asking Sun to pay patent royalties to Microsoft on ... OpenOffice.

Would it surprise you to find out that it turns out that apparently one of the jurors might be related to one of SCO's prior corporate officers? At any rate they have the same last name, and Salt Lake City is a big place, so perhaps not. Novell noticed the similarity in names, according to our reporter today, MSS2, only after jury selection was over.

MSS2 has just sent me his first report of day 2 of the jury trial in SCO v. Novell, with more to come. Today was opening arguments by both sides. And we have lots more goodies for you from two eyewitnesses, MSS2 and Tilendor. We begin with SCO's opening argument by Stuart Singer. All I can say after reading it is maybe you needed to be there. Or SCO must be a slow learner or Mr. Singer never reads Groklaw, or ... well, see what you think.

The parties are still going back and forth over pre-trial issues, specifically over the jury instructions and the verdict form. We may see even more on this, because jury instruction and the verdict form come at the very end, so there is still time to try to get it just right. Not that either side will be entirely happy with the result. SCO, of course, wants the last word.

But in truth, the wording of these documents does matter a lot, so it's typical to have quite a lot of discussion on exactly how to phrase things. After all, when the jury is deciding, they will be reading that wording, and going over it with a fine-tooth comb on any issues where they don't immediately agree, most likely. You've seen what a mess the unclear wording in the appeals court ruling created, so imagine if the jury were to be confused into thinking they *have* to rule a certain way if they actually don't, based on a misreading of an unclear phrase.

I thought it was funny yesterday that the parties couldn't come up with a proposed introduction to give the judge to read, so he wrote his own, and when they handed up one they'd finally been able to agree on, he decided to just use his own anyway. It was too late. I expect that incident was inspirational to both parties. And as you'll see in a minute, they are really trying on the jury instructions, with Novell putting the model instructions and both parties' competing phrasing all in one document, so the judge has it all in one place. And then Novell says SCO wants to file its own also.

My, if we think we're having trouble keeping up, how'd you like to be Judge Ted Stewart? Or Sterling Brennan, for that matter? So many filings already, and more today. Proposed exhibit and witness lists, a Memorandum of Authorities Regarding Excusing Potential Jurors Having Knowledge Pertaining to this Dispute -- the one I'm going to read first -- and another responding to SCO's Objection to Board Minutes and a letter from Brennan to the court. And then one more motion in limine denied. Judge Stewart has denied Novell's motion asking for a further, and broader, ruling on its already successful motion in limine #4. He views is as rearguing a point Novell lost already in the denied Request for Judicial Notice of Prior Factual Findings, and he's not going to change his mind. Of course, that's what appeals are for. And now Novell is fully positioned.

Happily, cpeterson was able to attend this morning's session.

Update: It looks like that will be all the news for today. They are keeping the public in the hall mainly, to fit all the prospective jurors in, so unless there is something unexpected, tune in tomorrow.

Also, I see questions about what's hearsay within hearsay and things like that, so here are all the Federal Rules of Civil Procedure -- meaning the rules you follow for civil trials in federal district courts, and you'll find every other kind of applicable rule linked on the Utah District Court's Rules page. There are local rules as well, and then judges have their preferences, if you recall the judge's marching orders the other day. If you dig and learn something interesting, please share it in your comments. Thanks.

Novell has asked the Court to rule further on their Motion in Limine No. 4 [PDF; text]. The Court had previously issued a ruling [PDF] granting that Motion, but Novell now asks for further ruling, stating that "[t]he Court addressed this issue solely in the context of SCO's covenant of good faith claim. However, Novell's motion covered all of SCO's claims, including slander of title. The Court's prior ruling did not expressly address other claims, so Novell requests the Court to rule on the issue that was left open by its prior order."

SCO's Chapter 11 Trustee Edward Cahn bragged at Friday's bankruptcy hearing that he had won all the Daubert motions and most of the motions in limine in Utah. However, Judge Stewart has just reversed himself with regard to Novell's Motion in Limine No. 2 and No. 3 and has now granted them.

If you look at the chart we've prepared you can see that and if you do the math, you'll see that Novell was denied on six of its motions in limine, but it won on five, and in won in part and was denied in part on 8.

It also wouldn't be true to say that SCO won all its motions in limine. SCO was denied without prejudice on one, denied outright on another, denied in part and granted in part on one, granted on two, and one was taken under advisement. SCO did prevail in the three Daubert motions. Just setting the record straight.

In reversing himself on Novell's two motions in limine in his recent order [PDF], I think he made a mistake in describing Novell's press releases, however. It's fundamental to what exactly are the disputed copyrights. So I thought I'd take the time to explain.

We need a volunteer to cover the first day of trial. Our volunteer has the flu, so it's a crisis. This will be the day they pick the jury and possibly also do the opening statements, about the most important day of the week.

Further, I don't think there will be a transcript of the jury picking, so if we don't have anyone, we'll never know what happened.

So if there is any way you can attend, this is your moment. Monday, bright and early and it ends by a little after lunch. 3/8/2010 08:30 AM in Room 142 before Judge Ted Stewart.

Please try. If you email me, I can give you more detailed instructions.

Here is Groklaw member RFD's report from the bankruptcy hearing from Friday March 5. His initial notes come first, followed by a more detailed report by another witness, pbk.

Update:PJ: I have had a chance now to listen to the CD, and I've taken notes to share with you. I've added them at the end. My overview: this is money they want to pay themselves, Blank Rome and the other professionals. I take it they are worried they might get stiffed. And it turns out there are 12 to 14 lenders, and we don't have all their names. It's farcical.

It's been a busy week heading up to the Novell trial in Utah, and I had an accident, which is why I've been offline. I am recovering now, and we'll have the more detailed reports from the hearing shortly. There were some additional filings on Friday and this morning, including some more decisions from Judge Stewart (we have 762 as text), and some more pre-trial filings from both sides. So while we're waiting for the trial to commence, let's get caught up.

Believe it or not, here's our first report from today's bankruptcy hearing:The bottom line is that Judge Gross found that the terms of the proposed loan are "fair, reasonable & adequate." He then signed the order. SCO plans to close on the deal on Monday

It's getting hard to keep up with all the filings, but here are the MORs through January, typically being filed just before a court hearing, so no one has time to read them and digest it all. I note that the MORs all have the same disclaimer, so this may be interim MORs.

There are more filings in the bankruptcy, related to the proposed Yarro deal, and because that hearing is coming up soon, on Friday, I'm posting them quickly, before even reading them myself. Specifically, there are proposed changes to the deal, so take a look. Exhibit A is the redlined draft. Exhibit F is "proof" that Seung Ni Capital, LLC actually exists, or at least that it has written up Articles of Organization. It's a Utah LLC. Or at least the page we get to see has a stamp "Received - Mar 01 2010 - Utah Tax Commission [address]." However, the Collateral Agent Agreement says it's a Delaware LLC, and it calls it Seung Ni Capital Partners, L.L.C. Is that the sound of wings I hear?

I'm starting to get the impression that they don't want us to have time to actually read and think about this super-fast proposed deal.

SCO's Chapter 11 Trustee Edward Cahn has filed the obligatory notice regarding his intention to sell the mobility assets to Darl McBride. If anyone has a counteroffer, it provides information on what to do. Also, if anyone has a mobility contract with SCO, it will be going to Darl, so if they don't want that to happen or have an objection to the listed cure amount, the notice tells them what to do to file their objection. Otherwise, if no objections are filed, the judge can just sign the deal and Darl is good to go.

There's a paragraph in the deal that might interest you regarding copyrights, a list of what he doesn't get. I put it in the original article about the proposed sale, as an update, but let's highlight it again.I've seen a lot of you noticed that McBride was buying the entire business without getting the copyrights, so I thought you'd want to see SCO's argument.

SCO and Novell have amended their voir dire questions and submitted a new joint set:The parties jointly submit this set of Joint Proposed Voir Dire Questions, to be considered in lieu of the questions previously submitted separately. Here are the originals, their separate lists, if you'd like to compare. And I think you might like to, because this is the first time the parties' lawyers have cooperated on anything that I can recall getting better as a result. Probably Judge Ted Stewart's no nonsense ways can take credit for this. Either that or it's sun spots. Something worked.

The Notice of Agenda for the bankruptcy hearing on Friday is posted. Also, two of our faithful reporters can't make it this time, so if anyone else can go, it would be greatly appreciated. It's March 5 at 11 AM. The notice has the address in Delaware Bankruptcy Court in Wilmington.

Here's what will be covered: 1. A status report from Edward Cahn, SCO's trustee.

2. The Yarro loan offer. How can you resist? It should be eventful indeed. So if you are free to go, email me and I'll help you out with instructions, if you have never attended before.

Both SCO and Novell have begun to file their additional pretrial briefs, stemming from the discussion at the most recent hearing. Novell has filed a Request for Judicial Notice of Prior Factual Findings and the parties jointly submit a Submission Addressing Allocation of Issues for Bench and Jury Trial. SCO has filed a Brief Regarding Issues to be Tried in Equity by the Court.

What do the parties want?

Judge Ted Stewart has denied all three Novell motions for Daubert hearings. In essence, he says, let the jury decide. Novell can cross-examine them to highlight any flaws.

Novell's trial brief and proposed jury instructions have been filed in SCO v. Novell. Of course, the parties were asked to try to file the latter jointly, and they have done so a little bit on two instructions, but on others, they couldn't agree so they tell the court they will file separately the rest of the proposed jury instructions. Novell has done so. When SCO does the same, I'll add it to this article. And Novell has filed Amended Objections to SCO's Second Amended Supplemental Rule 26(a)(3) Pretrial Disclosures. What, you are asking, is that?

Update: SCO's have now shown up on PACER, so I've added them to the article.

Novell objected vigorously to SCO's Motion for PostPetition Financing, the proposed Ralph Yarro "loan" to SCO which also involves granting "security interests and superpriority administrative expense status", and now there's a second objection, from Al Petrofsky. This will not surprise us. What would surprise us would be the court granting the motion. To give you a taste of the flavor of this filing, here's the first paragraph of the introduction: 2. The trustee, carrying on the tradition of the debtors-in-possession before him, has submitted another half-baked proposal to obtain funding from a non-existent counterparty. Should this party soon come into existence and execute the agreement, but never produce a dime of funds, the trustee wishes to provide it with a parting gift of up to $50,000. I can't defend the proposed loan terms, but I think Mr. Petrofsky has overstated them. I read the contract as saying that if the deal doesn't, for listed reasons, happen, then SCO has to pay Yarro's legal fees associated with trying to set up the loan, up to $50,000, with any unpaid expenses over that to come from litigation winnings, if any. That isn't really the same as saying SCO wants to provide Yarro with a parting gift. And when you overstate in a court of law, you greatly increase your odds of losing, because you may lead the judge to defend the very entity you hoped he would not rule for by making it seem your complaints are over the top. I also think the objection wasn't timely filed.