SCO Grp v. Novell Inc

Filing 888

MEMORANDUM in Opposition re 883 MOTION to Stay Taxation of Costs filed by Defendant Novell, Inc.. (Brennan, Sterling)

SCO Grp v. Novell Inc

Doc. 888

WORKMAN

I NYDEGGER

A

PROFESSIONAL

CORPORATION

Sterling A. Brennan (Utah State Bar No. 10060; Email: [e-mail]) David R. Wright (Utah State Bar No. 5164; Email: [e-mail]) Kirk R. Harris (Utah State Bar No. 10221; Email: [e-mail]) Cara 1. Baldwin (Utah State Bar No. 11863; Email: [e-mail]) 1000 Eagle Gate Tower 60 E. South Temple Salt Lake City, Utah 84111 Telephone: [phone] Facsimile: [phone]
MORRISON & FOERSTER LLP Michael A. Jacobs (Admitted Pro Hac Vice; Email: [e-mail]) Eric M. Acker (Admitted Pro Hac Vice; Email: [e-mail]) Grant L. Kim (Admitted Pro Hac Vice; Email: [e-mail]) Daniel P. Muino (Admitted Pro Hac Vice; Email: [e-mail]) 425 Market Street San Francisco, California 94105-2482 Telephone: [phone] Facsimile: [phone]

Attorneys for Defendant and Counterclaim-Plaintiff

NOVELL, INC.

IN THE UNITED STATES DISTRICT COURT DISTRICT OF UTAH, CENTRAL DIVISION THE SCO GROUP, INC., a Delaware corporation, Plaintiff,
v.

Case No. 2:04CV00139 NOVELL'S OPPOSITION TO SCO'S MOTION TO STAY TAXATION OF COSTS Judge Ted Stewart

NOVELL, INC., a Delaware corporation, Defendant. AND RELATED COUNTERCLAIMS.

Dockets.Justia.com

Federal Rule of Civil Procedure 54 entitles Novell to its costs. SCO moves to stay taxation of costs. SCO has filed this motion once before-essentially verbatim-in a request to

stay costs pending its earlier appeal in 2008. (See SCO's Motion to Stay Taxation of Costs, Dkt. No. 575.) This Court denied SCO's motion, then stating, "[T]he court does not believe that a party's speculation as to the possibility of the underlying judgment being reversed on appeal is a valid reason for delaying a determination of costs." (Mar. 13, 2009 Order Denying SCO's Motion to Stay Taxation of Costs, Dkt. No. 591 ["Mar. 13 2009 Order Denying Stay"].) The only reason SCO provides in favor of such a stay is the same reason it provided the first time it filed this motion: the possibility that things will turn out differently for SCO on appeal. As before, this Court should deny SCO's motion. SCO's only cited support for its motion is How v. City of Baxter Springs, Nos. 04-2256 & 04-2256 JWL, 2006 U.S. Dist. LEXIS 23951 (D. Kan. Apr. 26, 2006), the same inapposite case it cited in 2008, in which the court, on an uncontested motion, stayed costs pending appeal. A subsequent case considering How concluded that How should be limited to unopposed stay requests. See May tag Corp. v. Electrolux Home Prods., Inc., No. C 04-4067-MWB, 2006 U.S. Dist. LEXIS 89383, at *5 (N.D. Iowa Dec. 11,2006). Examining the caselaw on staying costs,

the May tag court concluded that "the consensus seems to be that the court must have some valid reason for not awarding costs at the customary stage of the proceedings." Id at *5; see also Fed.

R. Civ. P. 54(d) (creating presumption in favor of costs award). In How, the "valid reason" was the consensus of the parties, a consensus not present here. In May tag, the offered "valid reason" was the same as SCO offers-the explicitly rejected that argument: The possibility that the underlying judgment might be reversed, with the result that the award of costs must also be reversed, is simply too speculative to outweigh the benefit of the trial court conducting a review of the bill of costs while the case is still fresh. The marginal difficulties of vacating an award of costs, upon which Maytag also relies, simply do not justify a stay based on the losing party's speculation that it might do better on appeal. Finally, the court notes that far more judicial resources have been expended to resolve the parties' dispute over whether or not to stay the taxation of costs than could possibly have been saved by
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possibility of reversal on appeal. Id at *6. The May tag court

delaying the taxation of costs to a later date, so that Maytag' s judicial economy argument also is not persuasive. Therefore, the court will deny Maytag' s motion to stay the taxation of costs. May tag, 2006 US. Dist. LEXIS 89383 at *7-8 (internal citation omitted). Other courts have consistently agreed with the May tag court and declined to stay costs pending resolution of an appeal-including, as noted above, this Court in this case. (See Mar. 13 2009 Order Denying 2009

Stay; Sensormatic Elecs. Corp. v. Tag Co. US, No. 06-81105-CIY-HURLEY/HOPKINS,

US. Dist. LEXIS 92208, at *2-3 (S.D. Fla. Oct. 2,2009) [noting that courts often award costs during pendency of appeal, denying motion to stay adoption of report and recommendation as to bill of costs].) As before, there are at least three compelling reasons to deny this motion. First, as the May tag court noted and this Court agreed, it makes sense for this Court to review and determine costs while the facts of the case are fresh. (Mar. 13 2009 Order Denying Stay at 2; May tag, 2006 US. Dist. LEXIS 89383 at *7; see also Le Moine v. Combined Comms. Corp., No. 95 C 5881, 1996 US. Dist. LEXIS 10838 (N.D. Ill. 1996) [expressing preference for review of costs while case is fresh].) Second, it avoids the possibility of piecemeal appeals, as "[ w ]ith prompt taxation, any appeal from the award of costs [can] feasibly be consolidated with the pending appeal on the merits, thereby enhancing judicial efficiency." Singleton v. Dep't of Carr. Educ., No. 1:03CY00004, 2003 US. Dist. LEXIS 17834, at *4-5 (W.D. Vir. Oct. 3,2003); see also Mar. 13 Order Denying Stay at 2; Holley v. Giles County, NO.1 :03-0071,2005 US. Dist. LEXIS 44372, at *6 (M.D. Ten. Sept. 12,2005) (denying motion to delay assessment of costs pending appeal); Epcon Gas Sys. v. Bauer Compressors, Inc., No. 98-CY-75392, 2001 US. Dist. LEXIS 12665, at *3-4 (E.D. Mich. Mar. 26,2001) (recommendation that motion for stay of bill of costs pending appeal be denied.) Third, establishing costs is necessary for Novell to supplement its claim in the Bankruptcy Court.

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For the reasons outlined above, Novell requests that the Court deny SCQ's Motion to Stay Taxation of Costs. DATED: July 26,2010 Respectfully submitted,

By:

Isl Sterling A. Brennan
WORKMAN
I NYDEGGER

MORRISON & FOERSTER LLP

Attorneys for Defendant and Counterclaim-Plaintiff Novell, Inc.

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