Dissenting States Slam Microsoft Delay Tactics

The nine states and the District of Columbia, which have refused to sign off on the proposed set-tlement in the antitrust case between Microsoft Corp. and the Department of Justice, on Monday asked Washington District Court Judge Colleen Kollar-Kotelly to

The nine states and the District of Columbia, which have refused to sign off on the proposed settlement in the antitrust case between Microsoft Corp. and the Department of Justice, on Monday asked Washington District Court Judge Colleen Kollar-Kotelly to issue an emergency order striking 18 of the 23 new fact witnesses named in Microsofts final witness list submitted late last week.

In the 12-page emergency motion filed Monday, the dissenting states—California, Connecticut, Florida, Iowa, Kansas, Massachusetts, Minnesota, Utah, West Virginia and the District of Columbia—lashed out at the Redmond, Wash., software maker, accusing it of yet again trying to delay and derail the remedy proceedings set to proceed in early March.

"Microsoft is obviously trying yet again to derail this remedy proceeding to the detriment of consumers and competitors who continue to be harmed by Microsofts monopolistic conduct. This motion is made on an emergency basis because of the extremely short amount of time remaining for discovery in this case," they said.

Microsoft waited until 9 p.m. on the day that final witness lists were to be exchanged, Friday, Feb. 8, to add 23 new witnesses to its list. These new additions included eight new Microsoft fact witnesses, including president and chief software architect Bill Gates and Jim Allchin, the group vice president of Microsofts platforms division, who is in charge of all Windows operations.

Microsoft also named 15 new third-party fact witnesses from organizations like Unisys Corp., Qwest Communications International, Inc., Best Buy Co., Inc., and Advanced Micro Devices, Inc., bringing its total list of witnesses for the upcoming hearing to 34 (28 fact and six expert witnesses), the dissenting states said in their filing.

Microsofts tactics reflected a "blatant disregard for this Courts schedule and for the reasonable and appropriate conduct of litigation," the motion said.

"By waiting to disclose additional witnesses, only five of whom have already been or are already scheduled to be deposed by the Litigating States, until just two weeks before the fact discovery deadline, Microsoft obviously hopes that its hide the ball tactics will present the Litigating States with a hobbesian choice: either ask for a continuance, thereby finally giving Microsoft the delay that it has repeatedly and unsuccessfully sought, or proceed to trial without conducting even the most rudimentary document and deposition discovery that the Federal Rules contemplate," the emergency motion said.

Microsofts repeated efforts to delay the remedy proceedings had two obvious and powerful motivations: to put off the date when an effective remedy would restore competition and deprive Microsoft of the fruits of its illegal conduct; and to increase the likelihood that the Court would bless its settlement with the Department of Justice in the Tunney Act proceeding without the benefit of the discovery or the evidentiary record being developed in the matter, the filing said.

Microsoft spokesman Jim Desler rejected the suggestion that the company was trying to further delay the matter. In an interview with eWeek, he said the non-settling states were trying to remove nearly all the witnesses from Microsofts final list, including every witness representing the industry and consumers.

"We submitted our final witness list on Feb. 8, which is the exact date we were required to in terms of the Courts scheduling order. We find it more than ironic that the states who have come forth with a very broad remedy proposal now want to limit the input from industries, consumers and other interested parties into this process.

"There claim that we are trying to delay is simply dead-on wrong," he said, adding that Microsoft wanted the Court to hear industry input supporting its main point that the litigating states remedy proposals were extreme and would harm different segments in the PC industry.

Some of the new witnesses were also in response to those put forward by the dissenting states, such as Qwest in the telecommunications space. "We dont want to deal with these issues, the states do. But we have to be able to respond and get people from the industry to respond. The Court needs to hear all this. The knee-jerk response from the states that Microsoft is seeking to delay the process is simply wrong. We want the court to hear from all parties that could potentially be harmed by the states draconian proposals," Desler said.

In justifying their request for the denial of the new Microsoft witnesses, the dissenting states said that they had submitted their proposed remedy and preliminary witness list on December 7, 2001, which included 14 fact witnesses including Peter Ashkin, the President of Product Strategy at AOL Inc. and a former Senior Vice President and Chief Technology Officer at Gateway, Inc.; Jim Barksdale of The Barksdale Group and former CEO of Netscape Communications, Inc.; Richard Green, the Vice President and General Manager for Java Software at Sun Microsystems, Inc., and Carl Ledbetter, the Senior Vice President and Chief Technology Officer at Novell Inc.

In turn, Microsoft had submitted its proposed remedy along with its preliminary witness list on December 12, 2001, which included just six witnesses, all current Microsoft employees, including its chief executive officer Steve Ballmer.

The parties were then to exchange final witness lists on February 8, 2002. Well before the final lists were due, the dissenting states advised Microsoft of their intention to remove three of their original fact witnesses and to add one additional fact witness, the filing said.

As such, their final list, which included 13 fact witnesses and three experts, contained only one new name, Kathy Skidmore, of Gateway Inc., the states said, adding that their counsel had, on more than one occasion, asked Microsoft to reciprocate in naming its additional witnesses as they became known.

"Notwithstanding these requests, and its own prior protestations about how long third-party discovery would take, Microsoft waited until 9:00 p.m. on the day that final witness lists were to be exchanged to add 23 new witnesses to its final witness list," they said.

"Microsofts latest and in many ways most egregious effort to derail these proceedings should not be countenanced. Plaintiff States Emergency Motion to strike 18 of Microsofts 23 belatedly named witnesses should be granted," the dissenting states concluded in their filing.

Microsofts Desler said he expected the company would "soon" file its response to the dissenting states emergency motion.

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