Judge Denies Microsoft More Time & Gives DOJ Access to MS Financial Databases

(October 12, 1998)  Judge Thomas Jackson conducted a final pretrial conference on Friday, October 9, in the Department of Justice's antitrust action against Microsoft.   He ruled that the start of the trial will be delayed four days, from October 15 to October 19.   He also ruled that Microsoft must promptly give the government access its computer systems to search through its financial databases.

Trial Date

Microsoft again asked for more time to prepare its defense.  Attorney John Warden stated that what Microsoft really needs is for the trial to be put off until next year.   However, absent that, he said that "there should be a two week delay until November 2 ..."

See, Case Summary: DOJ v. Microsoft, Case Nos. 98-1232, 1233.

Microsoft has maintained that since this case was filed in May of this year that it would be unfair to force Microsoft into a trial of such a complex case this year.   The Department of Justice (DOJ) prevailed in its request for an expedited trial schedule based on its limited claims for relief, and claim of exigent circumstances for resolving those claims to trial quickly.

However, Microsoft has argued in this pretrial conference, and in several recent hearings, that the DOJ has expanded its case far beyond the claims stated in its original Complaint.  "Your Honor's procedure was directed to a confined Complaint," stated Warden.  "The exigency which was supposedly the purpose ... does not exist ..."

"You can't have this bait and switch," said Warden.

Warden concluded that "if the case were to be transformed into a broader case, as the Plaintiffs have made clearer, and clearer, and clearer, with every court filing ... we need, and are entitled to, an amended complaint, and a much longer schedule."

Judge Jackson's Order, issued on October 9, states "that the trial of these actions shall commence at 10:00 a.m., October 19, 1998, and shall continue from day to day, and week to week, Mondays through Thursdays (the Court’s calendar permitting), holidays excepted, until the taking of evidence has been completed ..." (parentheses in original).

Financial Databases

Judge Jackson also ruled that Microsoft must give the DOJ access to all of Microsoft's financial records databases.

Excerpt from October 9 Order
"... Microsoft shall produce to plaintiffs, on or before 5:00 p.m. (PT), October 12, 1998, an exact duplicate of each of its own databases in the form in which Microsoft itself maintains them, in CD-ROM machine-readable form, relating to the subjects set forth in Request No. 1 of plaintiffs’ Third Joint Request for Production of Documents, together with the software Microsoft relies on to analyze and manipulate the data contained therein, and detailed and complete instructions on the use of that software to access the data. Alternatively, should Microsoft deem that the provision of the software and/or the underlying data by the date set forth above is impossible or impractical, Microsoft may comply with this Order by permitting plaintiffs access to the computer systems on which the relevant databases and associated software are maintained by Microsoft, and by providing the assistance of Microsoft personnel trained and knowledgeable in their use for as along as plaintiffs shall require, at a time mutually agreeable to the parties, but to commence not later than 10:00 a.m. (PT), October 14, 1998."

The DOJ sought to have the Court compel Microsoft to allow access to Microsoft's financial databases.  Judge Jackson gave Microsoft a choice: either provide the DOJ with a duplicate copy of its entire collection of financial records, on CD-ROM, or alternatively, allow the DOJ to use Microsoft's computer systems to search through its financial databases.

Microsoft's attorney stated at the hearing that the former alternative would be impossible, and the later would be possible, but would interfere with Microsoft's business operations. He offered to let the government tell Microsoft what it wanted from the records, and Microsoft would produce it.  He argued that this software runs Microsoft on a day to day basis, and "... it will be very difficult for Microsoft to remain in business -- which may be their purpose ..."

The DOJ's Philip Malone argued that it was necessary to have access to the databases themselves.

Judge ruled for the DOJ at the hearing, and affirmed this ruling in his Order.

Witnesses

On October 6 both the DOJ and Microsoft filed revised lists of trial witnesses.   The DOJ substituted in two near witnesses: Avadis Tevanion, SVP of Software Engineering at Apple, and James Gosling, VP and Fellow at Sun Microsystems.  Microsoft argued at the hearing they these two would testify regarding matters not relevant to the claims stated in the original Complaint, and for which Microsoft had no rebuttal witnesses.

Microsoft stated that it will substitute in Eric Engstrom, Microsoft General Manager of Multimedia, and Bob Muglia, Microsoft SVP for Tools, to provide rebuttal testimony regarding QuickTime and Java.  Also, Microsoft will delete Thomas Reardon and Jeffrey Raikes from its witness list.

Microsoft also raised at the hearing the subject of how many lawyers would be able to question witnesses.  John Warden argued that only one lawyer from each side should be allowed to question each witness.  He also argued that the DOJ, the nineteen states, and the District of Columbia should be treated as one party for the purpose of questioning witnesses.

Judge Jackson agreed, and so ruled.

Media Intervention

Judge Jackson also ruled at the hearing, and reaffirmed in a separate Order, that the motion to intervene in the case filed by various news media is denied.

In August, several news media seeking to intervene in the case filed a motion seeking access to the deposition of Bill Gates.  Jackson had previously ruled that depositions were closed, but granted the media's motion.  Microsoft immediately filed an interlocutory appeal, and a motion to stay, with the Court of Appeals.  The Appeals Court almost immediately stayed Judge Jackson's order.

Microsoft Breakup

The DOJ's lead trial attorney in this case, David Boies, held a press conference on the front steps of the courthouse after the hearing.  He was asked: "There has been quite a bit of speculation about breaking Microsoft up.  Can you comment on that?"  Boies smiled broadly, but did not say anything.

The relief requested by the DOJ in its Complaint filed on May 18 does not include any request for dissolution or breakup of Microsoft.   However, the DOJ's Pretrial Statement filed on October 6 stated that:

"Depending on the nature and scope of the violations determined by the Court at trial, plaintiffs will seek such additional permanent relief as is necessary to restore competitive conditions and to prevent Microsoft from committing similar violations in the future. To that end, plaintiffs may request that the Court conduct additional proceedings for the purpose of hearing evidence concerning such additional relief."

Relevant Pleadings and Orders
Microsoft's Pretrial Statement, 10/6/98.
DOJ's Pretrial Statement, 10/6/98.
Microsoft's Witness List, 10/8/98.
DOJ's Witness List, 10/8/98.
Microsoft's Objections to DOJ's new claims for relief, 10/8/98.
DOJ's Reply Brief (re: access to MSFT's financial databases), 10/8/98.
Final Pretrial Order (re: trial procedure), 10/9/98.
Order (granting DOJ access to MSFT's financial databases), 10/9/98.
Order (denying media's motion to intervene), 10/9/98.

 

Statement of William Neukom, Microsoft General Counsel
on the front steps of the courthouse after the hearing.
"It was largely a procedural hearing, as you all know.  We are certainly pleased that the Judge has agreed with us that there should be just one lawyer per witness when it comes to the trial in this matter.  More importantly, the government's last minute decision to add witnesses which raised new issues, in new fronts in this litigation, is further evidence of their apparently not liking the case that they brought in May, and seeking to extend it into new areas.  In response to that attempt to expand the case, we will need to substitute two witnesses.  I understand that the government will not be objecting to that, so we intend to proceed in that fashion.   With the expansion of the case to what the government seems to want to try now, we will also need time to prepare ourselves, like this eleventh hour change.  So we will file the motion that the judge invited seeking to have him reset the trial date a bit in the future so that we can have time to respond to the new areas of controversy raised by the government's designation of these new witnesses.  Thankyou."

Note: The U.S. District Court for the District of Columbia does not permit the use of tape recorders in its courtrooms.  All of the courtroom quotes of Judge Jackson and the attorneys in this article are based on handwritten notes taken at the hearing, and have not been checked against an audio recording.