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State of New York v. Microsoft Corp.

January 28, 2002

STATE OF NEW YORK, ET AL., PLAINTIFFS
v.
MICROSOFT CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge

MEMORANDUM OPINION

This case comes before the Court upon the filing of Microsoft's Motion to Vacate Orders Requiring Public Access to Depositions. Specifically, Microsoft's motion addresses two related Orders issued by Judge Thomas Penfield Jackson on August 11, 1998, and April 1, 1999, respectively. Microsoft's motion is not opposed by the non-Settling States, however various press-organizations *fn1 (the "Media Intervenors"), filing as intervenors, oppose Microsoft's motion. Having reviewed Microsoft's motion, the Media Intervenors' opposition, Microsoft's reply, the record in this case, and the relevant case law, this Court concludes that the previous Orders, premised on 15 U.S.C. § 30, concerning public access to depositions, should be vacated as to Civil Action No. 98-1233, but not as to Civil Action No. 98-1232.

I. BACKGROUND

On May 18, 1998, the United States and a group of State Plaintiffs filed separate civil complaints asserting antitrust violations by Microsoft and seeking preliminary and permanent injunctions barring the company's allegedly unlawful conduct. See United States v. Microsoft Corp., 253 F.3d 34, 47 (D.C. Cir. 2001). The suit filed by the United States was designated as Civil Action No. 98-1232, while the suit filed by the group of States was designated as Civil Action No. 98-1233. In an order dated May 22, 1998, pursuant to Microsoft's motion and in accordance with Federal Rule of Civil Procedure 42(a), Judge Jackson ordered the consolidation of Civil Action Nos. 98-1232 and 98-1233 "for all purposes, pending further order of the Court." United States v. Microsoft Corp., Nos. 98-1232 and 98-1233 (D.D.C. May 22, 1998).

Thereafter, various press organizations, acting as "prospective intervenors" in the consolidated action, filed motions "to enforce a right of access, pursuant to 15 U.S.C. § 30, to all depositions taken in this [consolidated] action." United States v. Microsoft Corp., Nos. 98-1232 and 98-1233 (D.D.C. August 11,1998) (order granting in part prospective intervenors' motion for leave to intervene to enforce a generic "right of access"). The "little known and even less used" Publicity in Taking Evidence Act of 1913, 15 U.S.C. § 30, relied upon by the previous group of intervenors provides:

In the taking of depositions of witnesses for use in any suit in equity brought by the United States under sections 1 to 7 of [Title 15, United States Code], and in the hearings before any examiner or special master appointed to take testimony therein, the proceedings shall be open to the public as freely as are trials in open court; and no order excluding the public from attendance on any such proceedings shall be valid or enforceable. United States v. Microsoft Corp., 165 F.3d 952, 954 (D.C. Cir. 1999) (quoting 15 U.S.C. § 30).

In an Order dated August 11, 1998, Judge Jackson recognized the previous intervenors' right to access pursuant to Section 30 and ordered, with some limitations, admission of the "intervenors and all other members of the public" in "all depositions to be taken henceforth in this [consolidated] action." Microsoft, Nos. 98-1232 and 98-1233 (D.D.C. August 11, 1998). A subsequent Order dated April 1, 1999, provided procedures enabling and governing public access to "all further depositions in this [consolidated] action." United States v. Microsoft Corp., Nos. 98-1232 and 98-1233 (D.D.C. April 1, 1999). *fn2

Judge Jackson certified his ruling for interlocutory appeal to the U.S. Court of Appeals for the District of Columbia Circuit, and the Court of Appeals ultimately affirmed the ruling. See Microsoft, 165 F.3d at 960. In its affirmance, the Court of Appeals addressed two issues raised by Microsoft. First, Microsoft argued that the term "deposition" in 15 U.S.C. § 30 carried a different meaning in 1913, when Section 30 was written, and therefore, the term "deposition," as used in Section 30, "cannot have been intended to apply to pretrial discovery depositions." Id. at 954. Second, Microsoft argued that Section 30 had been superseded by Federal Rule of Civil Procedure 26(c). Id. at 958-60. The Court of Appeals rejected both arguments. Id. at 958, 960. Notably, the appellate panel did not address the consolidated nature of the cases, nor the fact that 15 U.S.C. § 30, by its terms, applies only in actions "brought by the United States." See generally id.; 15 U.S.C. § 30.

Much has happened in the consolidated cases since the Court of Appeals issued its decision concerning Section 30. Since that time, Judge Jackson issued his findings of fact, conclusions of law, and order of remedy. See United States v. Microsoft Corp., 84 F. Supp. 2d 9 (D.D.C. 1999) (setting forth findings of fact); United States v. Microsoft Corp., 87 F. Supp. 2d 30 (D.D.C. 2000) (setting forth conclusions of law); United States v. Microsoft Corp., 97 F. Supp. 2d 59 (D.D.C. 2000) (entering final judgment and ordering the remedial division of Microsoft Corporation into two distinct companies). Judge Jackson concluded that Microsoft violated Sections 1 and 2 of the Sherman Act. See generally Microsoft, 87 F. Supp. 2d 30 (D.D.C. 2000). Significantly, the trial court, in the words of the Court of Appeals, "found the State antitrust laws coterminous with §§ 1 and 2 of the Sherman Act." 253 F.3d at 48; see also 87 F. Supp. 2d at 54-56. Correspondingly, Judge Jackson held Microsoft liable for violations of the state antitrust laws analogous to Sections 1 and 2 of the Sherman Act in each of the nineteen Plaintiff States and the District of Columbia.

On appeal, the D.C. Circuit deferred to Judge Jackson's factual findings, altered the finding of liability; affirming in part and reversing in part, and vacated the remedy decree. See generally Microsoft, 253 F.3d 34. The Court of Appeals found no fault in the trial court's analogous treatment of the Sherman Act and the corresponding state law claims and, in fact, engaged in similarly analogous treatment of the Federal and State antitrust claims. Id. at 46 ("Our judgment extends to the District Court's findings with respect to the state law counterparts of the plaintiffs' Sherman Act claims."). Thus, inasmuch as the Court of Appeals affirmed the trial court's finding of liability pursuant to Section 2 of the Sherman Act, it affirmed the finding of liability as to each Plaintiff State's counterpart antitrust statute.

The Court of Appeals remanded the cases to the district court with instructions to hold a "remedies-specific evidentiary hearing" and to order a new remedy in light of the revised liability findings. Microsoft, 253 F.3d at 97-108. On remand, the consolidated cases were reassigned to Judge Colleen Kollar-Kotelly, and this Court issued a Scheduling Order setting forth a schedule for the two cases to proceed through joint discovery toward a joint remedies-specific evidentiary hearing. See United States v. Microsoft Corp., Nos. 98-1232 and 98-1233 (D.D.C. September 28, 2001) (setting discovery schedule). Notwithstanding the expedited discovery schedule set forth in this Court's Scheduling Order, this Court, in a separate Order, required that the parties in the two consolidated cases enter into intensive settlement negotiations for a limited period of time prior to commencing with discovery. See United States v. Microsoft Corp., Nos. 98-1232 and 98-1233 (D.D.C. September 28, 2001) (order requiring that the parties enter into settlement negotiations).

The settlement negotiations did not resolve both cases in their entirety. However, the United States and Microsoft were able to reach a resolution in Civil Action No. 98-1232 in the form of a proposed consent decree. As a result, the Court vacated the discovery schedule with regard to Civil Action No. 98-1232, and proceedings toward a remedies hearing in Civil Action No. 98-1232 have ceased. See United States v. Microsoft Corp., Nos. 98-1232 and 98-1233 (D.D.C. November 2, 2001) (vacating the September 28, 2001, Scheduling Order with regard to Civil Action No. 98-1232). Instead, the United States and Microsoft have commenced the process for obtaining judicial approval of the proposed consent decree pursuant to the Tunney Act, 15 U.S.C. § 16(b)-(h).

The settlement negotiations were partially successful with regard to the States' case, Civil Action No. 98-1233; a portion of the Plaintiff States joined in the settlement between the United States and Microsoft. Consequently, these so-called "Settling States" have elected not to proceed to a remedies-specific hearing in Civil Action No. 98-1233. See United States v. Microsoft Corp., Nos. 98-1232 and 98-1233 (D.D.C. November 8, 2001).

Those states which opted not to join the settlement between the United States and Microsoft, often called the "non-Settling States," have proposed a remedy distinct from that presented in the proposed consent decree. Because of the continuing dispute between the non- Settling States and Microsoft regarding the appropriate remedy for Microsoft's anticompetitive behavior, the September 28, 2001, Scheduling Order remains in place in the ...


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