Microsoft Seeks Remedy Hearing Delay

Microsoft asked the courts for a delay in a hearing on the antitrust case of nine states and the District of Columbia because it says those plaintiffs changed their settlement offer in

Microsoft Corp. on Tuesday moved to delay for two weeks the remedy hearing between it and the nine states and the District of Columbia, which have refused to sign off on the proposed final settlement agreement between the software maker and the Department of Justice.

In an emergency motion filed with the U.S. District Court in Washington, Microsoft asked for a delay in the remedies hearing until March 25 to "enable Microsoft to take limited discovery on the non-settling States substantially revised proposed remedy , filed with the Court yesterday afternoon—only one week before the remedies hearing is scheduled to begin and without any notice to Microsoft or the Court."

The remedy hearing is scheduled to begin next Monday. Microsoft and the litigating states will each get about 100 hours to present their witnesses, a process that could take weeks.

Yesterday, the litigating states filed an amended version of their remedy proposals in which they said Microsoft should be forced to offer a modular version of its Windows operating system in addition to the fully integrated version of the product.

The states described the changes as "largely minor", with Iowa Attorney General Tom Miller saying the revisions clarified "the reasonable and responsible remedies we are seeking in our continuing effort to stop Microsofts illegal behavior.

"The proposal is entirely consistent with the objectives of our original remedy proposal, and the proposed changes are only minor modifications to make our remedy more clear and precise," he said.

While the parties had discussed the emergency motion filed Tuesday, the non-settling States opposed the motion, Microsoft said in the filing, adding that "on the eve of trial, the non-settling States have filed an extensively-revised proposed remedy, in a last minute effort to paper over some of the more glaring defects in their original relief proposal that have been revealed during discovery."

Unless Microsoft, of Redmond, Wash., was allowed to conduct limited additional discovery, the company would go to trial without having an opportunity to depose the non-settling States witnesses about their understanding of the meaning of the substantially-revised proposed remedy and its likely impact on consumers, the PC industry and Microsoft, the filing said.

"Microsoft thus will be severely prejudiced by the non-settling States eleventh-hour revisions to their proposed remedy," the filing said. "The non-settling States timed the submission of their revised remedy proposal to inflict maximum prejudice on Microsoft.

"They waited until after the deadline had passed for serving document requests and interrogatories. They waited until after Microsoft had deposed all of their expert witnesses and all but one of their fact witnesses. They waited until after they had deposed nearly all of Microsofts witnesses. They waited until after their third-party witnesses had completed their document productions and Microsoft had identified all of its witnesses and trial exhibits.

"And they waited until after Microsoft had filed all of its motions in limine and the parties had submitted their joint pretrial statement. In fact, but for the Courts decision last Friday to postpone the final pretrial conference, the non-settling States would have waited until the very day of the final pretrial conference to reveal their revised proposed remedy," Microsoft said.

Microsoft spokesman Jim Desler on Tuesday justified the call for a delay, saying the non-settling States had made substantial revisions – revising 11 of 16 sections of their proposed judgment – just one week before hearings were scheduled to begin.

Having spent the past month in an extensive period of discovery focused on the States original proposals, Microsoft was seeking "limited time to depose select witnesses about the meaning of the extensively revised proposed remedy, and its potential impacts on industry and consumers," Desler said. "The States extensive, last-minute changes require a limited and reasonable postponement. This time will be used for the limited purposes of quickly conducting additional discovery so we have an opportunity to present a case that addresses the adverse affects of these new proposals on the industry and on consumers," he added.