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Microsoft's Motion to Consolidate.
(and Proposed Order).
May 21, 1998.
Source: Microsoft.  This document has been edited for HTML, but not for content.


IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

___________________________________

UNITED STATES OF AMERICA,

Plaintiff,

vs.

MICROSOFT CORPORATION,

One Microsoft Way,
Redmond, Washington 98052,
Defendant.

___________________________________


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)   Civil Action No. 98-1232 (TPJ)
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MOTION OF DEFENDANT MICROSOFT
CORPORATION TO CONSOLIDATE

1. Pursuant to Rule 42(a) of the Federal Rules of Civil Procedure, defendant Microsoft Corporation ("Microsoft") hereby moves to consolidate this action for all purposes with New York ex rel. Vacco, et al. v. Microsoft Corporation, Civil Action No. 98-1233, a virtually identical action brought in this Court by various States and the District of Columbia (the "States") against Microsoft. Counsel for Microsoft conferred with counsel for the Antitrust Division of the U.S. Department of Justice ("DOJ") about this motion pursuant to Local Rule 108(m). Counsel for the DOJ stated that the DOJ does not oppose consolidation of its action with the States’ action for purposes of discovery and motion practice but that, in the DOJ’s view, it is premature to decide whether the two actions should be consolidated for trial.

BACKGROUND

2. On May 18, 1998, the DOJ and twenty States (including the District of Columbia) filed lengthy complaints with this Court (i) alleging numerous violations of Sections 1 and 2 of the Sherman Act and (in the States’ action) the States’ respective antitrust statutes, and (ii) seeking wide-ranging injunctive relief that would regulate the design of Microsoft’s operating system software. In filing their complaints, both the DOJ and the States submitted a notification of related cases pursuant to Local Rule 405(b)(2) in which they stated that their actions were related to United States v. Microsoft Corporation, Civil Action No. 94-1564, in that they "involve[] common issues of fact" and "grow[] out of the same event or transaction." (Copies of these notifications are annexed hereto as Exhibit A.)

3. Even though they filed separate complaints with this Court, the DOJ’s and States’ actions are based on the same factual allegations and legal theories. That is not surprising because the actions emanate from coordinated investigations in which the DOJ and the States worked arm-in-arm to conduct broad discovery and formulate their claims. Indeed, the two actions are for all intents and circumstances identical and thus should be consolidated for purposes of discovery, motion practice and trial.

ARGUMENT

4. Rule 42(a) of the Federal Rules of Civil Procedure permits a court to consolidate actions pending before it if those actions involve "a common question of law or fact." That standard "is an expansive one, allowing consolidation of the broad range of cases brought in federal court." 8 Moore’s Federal Practice 42.10[1][a], at 42-9 (3d ed. 1998). District courts have broad discretion to consolidate actions that satisfy this expansive standard if, under the circumstances, such consolidation will serve the interests of justice. See, e.g., In re Air Crash Disaster at Stapleton Int’l Airport, 720 F. Supp. 1505, 1513 (D. Colo. 1989). Consolidation has been found to be appropriate in virtually every kind of action that can be brought in federal court, including antitrust actions. See, e.g., State of Ohio ex rel. Montgomery v. Louis Trauth Dairy, Inc., 163 F.R.D. 500, 503 (S.D. Ohio 1995). Consolidation is unquestionably appropriate in this instance.

5. The instant actions involve "a common question of law or fact" and, as such, satisfy the only requirement for consolidation under Rule 42(a). Although it is sufficient for purposes of Rule 42(a) if the actions involve only one common question of law or fact, the DOJ’s and States’ actions involve a multitude of common questions of both law and fact. Those common questions are not peripheral issues; they go to the very heart of the two actions.

6. The common questions of law and fact include, but certainly are not limited to, the following: (i) the design of Windows 98, (ii) the role of Internet Explorer technologies in Windows 98, (iii) the extent to which those technologies can be removed from Windows 98 without seriously degrading the functionality of the operating system, (iv) Microsoft’s license agreements with computer manufacturers for operating systems, (v) Microsoft’s agreements with Internet Service Providers, Internet Content Providers, and Online Services, (vi) the definition of the relevant product market and geographic market for Sherman Act purposes, (vii) whether Microsoft possesses monopoly power, i.e., the power unilaterally to control prices or exclude competition, (viii) whether Windows 98 and its tightly-integrated Internet Explorer elements are "separate products" for tying law purposes, (ix) whether there is any demand among computer manufacturers for operating system software without Internet technologies, (x) whether the relief requested by the DOJ and the States constitutes a confiscation of Microsoft’s intellectual property rights, and (xi) numerous other complex factual and legal issues under Sections 1 and 2 of the Sherman Act (such as the application of "technological tying" law to Microsoft’s design of Windows 98).

7. Indeed, the DOJ’s and States’ actions are so nearly identical that the common legal and factual issues overwhelm any minor issues that are not common to both cases. See Allen v. McEntee, Nos. 92-0776, 92-2151, 1993 WL 121,513, at *3 (D.D.C. Apr. 5, 1993) ("The near identity of the complaints in these two actions provides ample basis for consolidation.") (a copy of this opinion is annexed hereto as Exhibit B).

8. This Court should exercise its discretion to consolidate these actions because such consolidation will serve the interests of justice. Among other things, consolidation will produce significant savings of time and resources for the Court and the parties. In contrast, having virtually identical cases proceed in a parallel fashion would generate needless duplication of effort.

9. Consolidation will achieve substantial efficiencies and savings without sacrificing fairness. Because both actions were filed on the same day, they are at the exact same point in the pretrial process. As a result, consolidation will not cause the trial of one action to be delayed while discovery is completed in the other action, as is sometimes the case. Moreover, given that the DOJ and the States were able to coordinate closely their investigations of Microsoft leading up to their filing of these actions—as Attorney General Janet Reno reported during her press conference to announce the filing of the DOJ’s complaint with Attorney General Tom Miller of Iowa standing at her side—consolidation will not prejudice the plaintiffs. (A copy of the transcript Attorney General Janet Reno’s May 18, 1998 press conference is annexed hereto as Exhibit C.)

CONCLUSION

10. For the foregoing reasons, Microsoft respectfully requests that this Court consolidate this action for all purposes with New York ex rel. Vacco, et al. v. Microsoft Corporation, Civil Action No. 1233.

Dated: New York, New York

May 21, 1998

Respectfully submitted,

 

______________________________
Daryl A. Libow
SULLIVAN & CROMWELL
1701 Pennsylvania Avenue, N.W.
Washington, D.C. 20006-5805
(202) 956-7500

John L. Warden
Richard J. Urowsky
Steven L. Holley
Richard C. Pepperman, II
SULLIVAN & CROMWELL
125 Broad Street
New York, New York 10004
(212) 558-4000

James R. Weiss
PRESTON GATES ELLIS &
ROUVELAS MEEDS
1735 New York Avenue, N.W.
Washington, D.C. 20006
(202) 628-1700

William H. Neukom
Thomas W. Burt
David A. Heiner, Jr.
MICROSOFT CORPORATION
One Microsoft Way
Redmond, Washington 98052
(425) 936-8080

Counsel for Defendant
Microsoft Corporation

 

CERTIFICATE OF SERVICE

I hereby certify that on this 21st day of May, 1998, I caused true and correct copies of the foregoing Motion of Defendant Microsoft Corporation to Consolidate to be served by facsimile and overnight courier upon:

A. Douglas Melamed, Esq.
Principal Deputy Assistant Attorney General
Antitrust Division
U.S. Department of Justice
10th Street & Constitution Avenue, N.W.
Washington, D.C. 20530

Phillip R. Malone, Esq.
Antitrust Division
U.S. Department of Justice
450 Golden Gate Avenue, Room 10-0101
San Francisco, California 94102

 

______________________
Christopher J. Meyers


IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

___________________________________

UNITED STATES OF AMERICA,

Plaintiff,

vs.

MICROSOFT CORPORATION,

One Microsoft Way,
Redmond, Washington 98052,
Defendant.

___________________________________


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)   Civil Action No. 98-1232 (TPJ)
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[PROPOSED] ORDER

UPON CONSIDERATION OF the Motion of Defendant Microsoft Corporation to Consolidate, and it appearing to the Court that such an Order is necessary and appropriate in the interest of judicial economy,

IT IS HEREBY ORDERED that defendant’s motion to consolidate is GRANTED and that this action is consolidated for all purposes with New York ex rel. Vacco, et al. v. Microsoft Corporation, Civil Action No. 98-1233, pursuant to Rule 42(a) of the Federal Rules of Civil Procedure.

Dated: Washington, D.C.

May __, 1998

SO ORDERED:

 

______________________________
Thomas Penfield Jackson
United States District Judge

Please serve copies of Order on:

A. Douglas Melamed
Antitrust Division
U.S. Department of Justice
10th Street & Constitution Avenue, N.W.
Washington, D.C. 20530

Phillip R. Malone
Antitrust Division
U.S. Department of Justice
450 Golden Gate Avenue, Room 10-0101
San Francisco, California 94102

William H. Neukom
Microsoft Corporation
One Microsoft Way
Redmond, WA 98052-6399

James R. Weiss
Preston Gates Ellis & Rouvelas Meeds
1735 New York Avenue, N.W.
Washington, D.C. 20006

Richard J. Urowsky
Steven L. Holley
Sullivan & Cromwell
125 Broad Street
New York, New York 10004

 


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