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State of New York v. Microsoft Corp.

May 29, 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 AND ORDER

Presently pending before the Court is Plaintiff Litigating States' "Motion to Reconsider the Admission of Plaintiffs' Exhibit 276." Plaintiffs bring this motion following the close of evidence in the remedies hearing recently held in the above-captioned case. Plaintiffs' Exhibit 276 (PX 276) is an internal Microsoft e-mail memorandum authored, in the first instance, by Microsoft executive Joachim Kempin. Plaintiffs proffer that PX 276 reflects Mr. Kempin's view, as shared with other Microsoft executives, regarding Microsoft's treatment of original equipment manufacturers (OEMs). Pl. Mem. at 2. Plaintiffs offered PX 276 during their April 23, 2002, cross examination of Microsoft Chairman and Chief Software Architect William H. Gates III. Upon this offering, Microsoft, having not previously lodged a specific objection to the admission of the document but having generally objected to all evidence of "new anticompetitive conduct," objected on the grounds that the document was both irrelevant and unfairly prejudicial. Following a discussion with counsel out of the hearing of the witness, the Court determined to exclude the document on the grounds that its probative value was outweighed by the risk of unfair prejudice to Defendant. Nearly three weeks later, Plaintiffs filed the instant motion to reconsider, asserting both new and previously asserted grounds to support the admission of PX 276. Upon review of Plaintiffs' motion, Defendant's opposition, and the record in this case, the Court concludes that Plaintiffs' motion must be denied.

At the outset, the Court is compelled to address Plaintiffs' assertion that the pertinent portion of the record, meaning the trial transcript ("Tr."), is not complete. Pl. Mem. at 3. Plaintiffs' memorandum posits that the sequence of relevant events can be summarized as follows:

On April 24, 2002, during the cross examination of Bill Gates, the Litigating States sought to admit PX 276 into evidence. Microsoft - which had not previously lodged any objection to the document even though it was required to do so under the Court's March 2, 2002 Order - then belatedly objected on relevance grounds. After a brief colloquy at the Bench, which is not fully transcribed, the Court sustained the objection. (Tr. at 4856-67). Pl. Mot. at 3.

Plaintiffs' rendition of the events surrounding PX 276 is inaccurate on a number of grounds. First and foremost, Plaintiffs offered PX 276 on the morning of April 23, 2002, not April 24. Accordingly, the principal discussion surrounding PX 276 and the Court's ruling on the issue appear in the April 23 transcript at pages 4707 through 4724 of the record. Without delving into the substance of the Court's ruling at this point, it is helpful to examine the beginning and the end of the colloquy to make clear that on April 23, 2002, as is fully reflected in the record, Plaintiffs offered PX 276, Defendant lodged an objection, and the Court issued a ruling:

MR. KUNEY: Your Honor, I'd like to identify and offer into evidence at this point in time Plaintiffs' Exhibit 276. It's two e-mails, the top of the page e-mail is from Mr. Gates to Steve Ballmer and others dated August 14, 2000.

MR. WEBB: Your Honor, I do object to this exhibit, Your Honor. This exhibit I believe is clearly being offered into evidence to get into new anticompetitive conduct.

THE COURT: So my approach at this point is not to use it and put it in the context of, you know, some new sort of anticompetitive conduct that you're setting out here. Ask it in a more hypothetical manner. If that doesn't work I'll revisit using this.

MR. WEBB: Very well. (End of bench conference.)

THE COURT: You can return, sir. Let's proceed. Tr. at 4707-08, 4723-24.

Following the Court's ruling with regard to PX 276, a related issue arose concerning Plaintiffs' application of the Court's ruling relative to PX 276 to two additional documents, Plaintiffs' Exhibits 223 and 495 (PXs 223 and 495). The Court engaged in a discussion with counsel which touches upon PX 276, but primarily concerns the potential admissibility of PXs 223 and 495. See Tr. at 4856-4867. That discussion was not fully transcribed. As a result, the Court endeavored to capture the substance of the post-ruling discussion by placing on the record of April 24, 2002, the nature of the discussion:

The only other issue that I think I would like to put on the record, and maybe this is the time to do it when Mr. Gates is not here, is the discussion about the exhibits that were not admitted, but identified as 276, 223 and 495.

We got into a short discussion, but it wasn't on the record, and at some point I think it should be put on the record before he completes his testimony so if there's an issue that needs to be revisited, he's still here.

And the only thing I was going to say, without getting into a discussion, is on the -- the inquiry that I made related to your decision that 223 and 495, that with the ...


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