Oracle Corporation et al v. SAP AG et al

Filing 1070

MOTION Approval of Security Pursuant to FRCP 62 Defendants' Motion For Approval of Security Pursuant to Rule 62 of the Federal Rules of Civil Procedure filed by SAP AG, SAP America Inc, Tomorrownow Inc. Motion Hearing set for 6/29/2011 09:00 AM in Courtroom 3, 3rd Floor, Oakland before Hon. Phyllis J. Hamilton. (Attachments: # 1 Proposed Order)(Froyd, Jane) (Filed on 5/20/2011)

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Robert A. Mittelstaedt (SBN 060359)
Jason McDonell (SBN 115084)
Elaine Wallace (SBN 197882)
JONES DAY
555 California Street, 26th Floor
San Francisco, CA 94104
Telephone:
[phone]
Facsimile:
[phone]
[e-mail]
[e-mail]
[e-mail]
Tharan Gregory Lanier (SBN 138784)
Jane L. Froyd (SBN 220776)
JONES DAY
1755 Embarcadero Road
Palo Alto, CA 94303
Telephone:
[phone]
Facsimile:
[phone]
[e-mail]
[e-mail]
Scott W. Cowan (Admitted Pro Hac Vice)
Joshua L. Fuchs (Admitted Pro Hac Vice)
JONES DAY
717 Texas, Suite 3300
Houston, TX 77002
Telephone:
[phone]
Facsimile:
[phone]
[e-mail]
[e-mail]
Attorneys for Defendants
SAP AG, SAP AMERICA, INC., and
TOMORROWNOW, INC.

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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OAKLAND DIVISION

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ORACLE USA, INC., et al.,

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Plaintiffs,

DEFENDANTS’ MOTION FOR
APPROVAL OF SECURITY
PURSUANT TO RULE 62 OF THE
FEDERAL RULES OF CIVIL
PROCEDURE

Defendants.

Date:
June 29, 2011
Time:
9:00 a.m.
Courtroom: 3, 3rd Floor
Judge:
Hon. Phyllis J. Hamilton

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v.

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SAP AG, et al.,

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SVI-93012v1

Case No. 07-CV-1658 PJH (EDL)

DEFENDANTS’ MOTION FOR APPROVAL OF PROPOSED
SECURITY PURSUANT TO FRCP 62
Case No. 07-CV-1658 PJH (EDL)

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NOTICE OF MOTION

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PLEASE TAKE NOTICE THAT on June 29, 2011, at 9:00 a.m., or as soon thereafter as

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this matter may be heard by the above-titled Court, located at 1301 Clay Street, Oakland,

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California, in Courtroom 3 before the Honorable Phyllis J. Hamilton, Defendants SAP AG, SAP

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America, Inc. (together, “SAP”) and TomorrowNow, Inc. (with SAP, “Defendants”) will bring

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this motion for approval of security pursuant to Rule 62 of the Federal Rules of Civil Procedure,

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against Plaintiff Oracle International Corporation (“Oracle”). This motion is based on the

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Memorandum of Points and Authorities herein, the Declaration of Jane L. Froyd in Support of

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Defendants’ Motion for Approval of Security Pursuant to Rule 62 of the Federal Rules of Civil

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Procedure (“Froyd Declaration” or “Froyd Decl.”), and exhibits attached thereto.

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RELIEF REQUESTED

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Defendants submit this motion pursuant to Rule 62(d) of the Federal Rules of Civil

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Procedure (“Rule 62(d)”) for entry of an order approving the supersedeas bond in the amount of

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$1,325,033,547.00, attached as Exhibit 1 to the Froyd Declaration, as appropriate security to stay

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execution of the final judgment entered on February 3, 2011 (ECF No. 1036), pending

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disposition of post-judgment motions and, if necessary, appeal.

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MEMORANDUM OF POINTS AND AUTHORITIES
I.

INTRODUCTION AND SUMMARY OF ARGUMENT

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On April 29, 2011, the Court entered an order granting Defendants’ Motion for Stay of

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Execution of Judgment Through Appeal and Approval of Proposed Security Pursuant to FRCP

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62, ruling that “[e]xecution of final judgment is stayed pending disposition of post-judgment

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motions and, if necessary, appeal” and ordering Defendants “to obtain and move the Court for

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approval of a supersedeas bond in the amount of $1,325,033,547.00 within 21 days after this

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order is entered.” ECF No. 1069 (“Order”). In compliance with the Court’s Order, Rule 62(d),

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and Local Rule 65.1, Defendants secured the requisite bond (a copy of which is attached as

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Exhibit 1 to the Froyd Declaration) and now move the Court for entry of an order approving this

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bond. Because the bond obtained by Defendants complies with Rule 62(d), Local Rule 65.1, and

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this Court’s Order, the Court should grant Defendants’ motion.
SVI-93012v1

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DEFENDANTS’ MOTION FOR APPROVAL OF PROPOSED
SECURITY PURSUANT TO FRCP 62
Case No. 07-CV-1658 PJH (EDL)

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Defendants provided the bond form to Oracle in advance of this filing and asked whether

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Oracle would stipulate to it, such that Defendants could present the Court with a stipulated

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motion. Oracle declined to stipulate to the bond form and instead asked Defendants to make

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several non-substantive changes. When Defendants declined to make these changes, Oracle

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informed Defendants that Oracle would offer a competing bond form to the Court. Oracle did

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not, however, provide any reason why Defendants’ bond form does not provide adequate

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security to enforce the judgment or how Oracle’s proposed changes make Oracle any more

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secure in its judgment.

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Accordingly, because (1) the bond Defendants submit to the Court provides ample

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security to enforce the judgment, (2) none of the changes Oracle requests are necessary or make

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Oracle more secure in its judgment, (3) Oracle is not a party to the bond (a financial instrument

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between Defendants and the surety companies underwriting the bond) and is not in a position to

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demand changes that do not otherwise affect whether the bond provides adequate security, and

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(4) changing the bond form is a complicated process, requiring the approval of all 10 surety

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companies, the Court should decline to entertain Oracle’s suggested revisions and grant

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Defendants’ motion approving the bond submitted by Defendants.

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II.

ARGUMENT

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A.

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The bond obtained by Defendants adequately secures the judgment under all applicable

Defendants’ Proposed Supersedeas Bond Adequately Secures the Judgment.

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rules and warrants granting of this motion. First, in compliance with Rule 62(d) and the Court’s

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Order, Defendants post a supersedeas bond in an amount approved by this Court—

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$1,325,033,547.00. See Fed. R. Civ. P. 62(d); Froyd Decl. ¶ 1, Ex. 1. Second, in compliance

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with Local Rule 65.1, the bond is signed by 10 sureties, each a “corporation authorized by the

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Secretary of the Treasury of the United States to act as surety on official bonds under 31 U.S.C.

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§§ 9301-9306.” Civ. L.R. 65.1(b)(1); see also Department of the Treasury’s Listing of Certified

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Companies, Financial Management Services – A Bureau of the United States Department of the

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Treasury, http://www.fms.treas.gov/c570/c570_a-z.html (last viewed May 20, 2011); Froyd Decl.

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¶ 1, Ex. 1. Oracle does not dispute that the amount of the bond is appropriate under Rule 62(d) or
SVI-93012v1

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DEFENDANTS’ MOTION FOR APPROVAL OF PROPOSED
SECURITY PURSUANT TO FRCP 62
Case No. 07-CV-1658 PJH

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that the bond is appropriately insured as required by Local Rule 65.1. Thus, the Court should

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approve the bond attached as Exhibit 1 of the Froyd Declaration as adequate security to stay final

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judgment pending disposition of post-judgment motions and, if necessary, appeal.

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B.

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Although Oracle declined to stipulate to Defendants’ motion, Oracle has no substantive

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objections to the bond form and can provide no legal basis preventing approval of this motion.

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Oracle Can Provide No Legal Basis to Prevent Approval of this Motion.

As a courtesy and in an effort to obtain Oracle’s stipulation to the bond, on Monday, May

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16, 2011, Defendants provided Oracle with the bond form that Defendants intended to file. See

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Froyd Decl. ¶ 2, Ex. 2. At 11:33 p.m. on Wednesday, May 18, 2011, Oracle responded with

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unsolicited proposed changes to the bond form. See Froyd Decl. ¶ 3, Ex. 3 at 2-3. First, Oracle

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requested that Defendants remove plaintiffs Oracle USA, Inc. and Siebel Systems, Inc. as

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beneficiaries of the bond. See id. at 3. But, as Defendants explained to Oracle, that the bond

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form lists all three plaintiffs, rather than simply Oracle International Corporation, has no bearing

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on whether the bond adequately secures Oracle. See id. at 1-2. Second, Oracle proposed an

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additional paragraph that would state that (a) each surety underwriting the bond meets the

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qualifications of Local Rule 65.1 and (b) the Court has the ability to order judgment and

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execution on the surety’s obligation, in the event that the surety defaults or refuses to obey a

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Court order regarding payment. See id. at 3. As Defendants explained to Oracle, this proposed

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language is superfluous and unrelated to ensuring security of the judgment because—as noted

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above and as Oracle does not dispute—each surety underwriting the bond meets the qualifications

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of Local Rule 65.1 and because the Court already has the ability to order judgment and execution

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on the sureties’ obligations. See id. at 1-2. Finally, Oracle proposed several cosmetic edits,

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which Defendants pointed out as such. See id. at 3.

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None of Oracle’s comments are substantive in nature or aimed at making Oracle more

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secure in the judgment. These proposed changes neither correct alleged deficiencies with the

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bond form under the Court’s Order or applicable rules, nor are they aimed at making Oracle more

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secure in its judgment. Oracle is simply not in a position to demand non-substantive changes to a

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bond form that is between Defendants and the surety companies underwriting the bond.
SVI-93012v1

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DEFENDANTS’ MOTION FOR APPROVAL OF PROPOSED
SECURITY PURSUANT TO FRCP 62
Case No. 07-CV-1658 PJH

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Finally, Defendants also note that obtaining security for the amount at issue has been, and

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is necessarily, a complicated and time-consuming task. Defendants have worked diligently to

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secure this bond, which involved extensive negotiations and coordination with multiple insurance

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carriers. See ECF No. 1063 (Plonka Decl.) ¶¶ 2-10. Any changes to the language or terms of the

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bond form requires additional negotiation and coordination with each of the 10 surety companies

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underwriting the bond, all of whom would have to approve any changes to the bond form.

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III.

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CONCLUSION
Because the bond form complies with all applicable requirements for security under the

federal and local rules and this Court’s Order—a fact that Oracle cannot not dispute—none of

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Oracle’s unnecessary proposed revisions justify denial of Defendants’ motion. The Court can and

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should approve the bond in its current form. Accordingly, Defendants’ respectfully request that

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the Court enter an order approving the supersedeas bond in the amount of $1,325,033,547.00,

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attached as Exhibit 1 to the Froyd Declaration, as appropriate security to stay execution of final

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judgment, entered on February 3, 2011 (ECF No. 1036), pending disposition of post-judgment

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motions and, if necessary, appeal.

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Dated: May 20, 2011

JONES DAY

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By: /s/ Tharan Gregory Lanier
Tharan Gregory Lanier

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Counsel for Defendants
SAP AG, SAP AMERICA, INC., and
TOMORROWNOW, INC.

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SVI-93012v1

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DEFENDANTS’ MOTION FOR APPROVAL OF PROPOSED
SECURITY PURSUANT TO FRCP 62
Case No. 07-CV-1658 PJH