Jurisdictional Issues

Jurisdictional issues are very important. In order for a court to entertain a lawsuit, such as the Red Hat v SCO lawsuit, it must have the legal authority (jurisdiction) to do so. (Jurisdiction: "juris, genitive of jus law + dictio act of saying" Merriam-Webster's Dictionary of Law via FindLaw) Jurisdiction is "the power, right, or authority [of a court] to interpret, apply, and declare the law (as by rendering a decision)". (Ibid.)

There must be an issue that involves some federal law, a federal treaty, or the United States Constitution in order for a federal court to have jurisdiction over a civil matter such as the Red Hat v SCO lawsuit (original jurisdiction). In certain circumstances, a federal court may also take jurisdiction over claims made under state law rather than federal law (pendent jurisdiction).

In Red Hat's requests for declaratory judgment against SCO, Red Hat claims the United States District Court for the District of Delaware, in which the Red Hat v SCO Complaint was filed, has jurisdiction under the United States Declaratory Judgment Act, 28 U.S.C. § 2201. However, the Declaratory Judgment Act requires that there must be an actual controversy between the parties in order for a federal court to have declaratory-judgment, subject-matter jurisdiction over a matter such as the Red Hat v SCO lawsuit.

28 U.S.C. Sec. 2201 - Creation of remedy

(a) In a case of actual controversy within its jurisdiction, . . . any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such. (Emphasis added. 28 U.S.C. 2201)

In reviewing SCO's Motion to Dismiss, the District Court will have to determine if the allegations of Red Hat's Complaint are sufficient to show an actual controversy between Red Hat and SCO.

Forum and Judicial Economy Issues

SCO also raises some issues regarding the already pending SCO v IBM lawsuit, which it filed in March 2003.

[E]ven if Red Hat were able to successfully establish the jurisdictional requirements for declaratory relief, this Court should decline to exercise jurisdiction because there is no practical reason to do so. The infringement and misappropriation issues Red Hat seeks to adjudicate in this case are currently before U.S. District Judge Dale A. Kimball in the SCO v. IBM Case pending in Utah Federal District Court. (SCO Group, Inc.'s Opening Brief in Support of its Motion to Dismiss, Red Hat v SCO, #03-372, U.S. District Court, District of Delaware, 15 September 2003. Download link on page 3.)

Simply put, this notion of judicial economy is that it does not make sense to have two different District Courts in different regions hear cases that involve the same issues -- unnecessary redundancy. Here, the two different courts are the Utah U.S. District Court and the Delaware U.S. District Court. The common issues are SCO's claims IBM has caused SCO-owned code to be placed in the GNU/Linux operating system and there is SCO-owned and copyrighted code in the GNU/Linux OS and in Red Hat Linux.

Tort and Damages Issues

Counts I and II of Red Hat's Complaint deal with Declaratory Judgment Act matters. The remaining counts, Counts III through VII involve the false advertising, deceptive trade practices, unfair competition, interference with business, and trade libel issues.

SCO's Opening Brief In Support Of Its Motion To Dismiss asks the U.S. District Court for Delaware to find that Counts III through VII are barred by First Amendment rights to free speech and because SCO's conduct does not violate the Lanham Act.

Red Hat's claims under Counts III through VII seeking tort damages and injunctive relief based upon SCO's so-called "campaign" of filing suit against IBM and publicly discussing that case and other potential legal liabilities are barred by the First Amendment to the U.S. Constitution and by the common law doctrine of litigation immunity. The nature of SCO's statements complained of by Red Hat do not give rise to liability under the Lanham Act or the associated state law claims. Further, any governmental interest served under the Lanham Act is heavily outweighed by fundamental governmental interests in protecting copyright interests, ensuring full and free access to courts, providing litigation immunity, promoting judicial economy and fairness in litigation, and safeguarding freedom of speech and the press. Therefore, Counts III through VII must be dismissed with prejudice. (SCO Group, Inc.'s Opening Brief in Support of its Motion to Dismiss, Red Hat v SCO, #03-372, U.S. District Court, District of Delaware, 15 September 2003. Download link on page 3.)

Analysis and Discussion

We discussed the Motion to Dismiss issues with Thomas C. Carey via e-mail. He is a programmer turned lawyer and now is a partner at Bromberg and Sunstein. He chairs the firm's Business Practice Group. His law practice includes licensing and transferring software, technology and other knowledge-based content, and lots more.

MozillaQuest Magazine: Do you have any thoughts about whether SCO's Motion to Dismiss for First Amendment issues about freedom of speech have any merit or will fly? I do not see how SCO's freedom of the press issues would apply to SCO-made statements. SCO is not the press.

Tom Carey: Freedom of speech is not absolute. Oliver Wendell Holmes's famous line on this subject is that the First Amendment does not protect the right to yell "Fire" in a crowded theater. The First Amendment was also raised, unsuccessfully, by the folks who were sued for disseminating the DeCSS code. (Emphasis added.)

MozillaQuest Magazine: How about SCO's issues about Red Hat failing to state a claim under the Lanham Act? How about SCO's issues regarding the balancing of government interests under the Lanham Act verses government interests in protecting copyright interests, court access, litigation immunity, judicial economy, and so forth?

Tom Carey: In a case like this, the First Amendment analysis can be pretty complex. Rather than get bogged down in a lengthy analysis of how the First Amendment might apply to the Lanham Act and state law claims asserted by Red Hat, let's keep our eye on the ball: Count 1, in which Red Hat seeks a declaratory judgment of non-infringement. Count 1 is not affected by the First Amendment issue. Even if SCO is entirely successful on its First Amendment argument, Count 1 stands. If on the other hand SCO wins on the copyright claim, the rest of Red Hat's claims melt away.

Tom Carey: The real question, then, is whether Red Hat has a reasonable apprehension of being sued by SCO for copyright infringement. SCO has been somewhat coy about this, avoiding any specific threat to sue Red Hat soon. Nonetheless, it has claimed that Linux infringes its copyright, it has mentioned Red Hat publicly in connection with that alleged infringement, it has sent warning letters to many, many Red Hat customers, and it is now in litigation over that very infringement. Is that enough to convince a court to assert jurisdiction for purposes of a declaratory judgment? Probably, but there is no guarantee. Right now, the most a court will do for SCO is dismiss the declaratory judgment action but give Red Hat permission to amend its complaint to beef up the jurisdiction argument. Sooner or later, Red Hat should be able to persuade the court to hear its theory of copyright non-infringement. (Emphasis added.)

MozillaQuest Magazine: As to judicial economy, that would seem to me a suggestion that the SCO v IBM and Red Hat v IBM suits be consolidated. However, while some issues might be common to both lawsuits, all the issues are not common to both lawsuits. How does that affect the judicial economy issues that SCO raises?

Tom Carey: The concept of judicial economy argues very strongly in favor of consolidating the two cases. The basic question facing Red Hat is whether or not SCO proprietary code, allegedly stolen by IBM, is in Linux. Both cases should come out the same way, depending upon the underlying facts. I am not aware of SCO actually moving to consolidate the two cases, however, so its arguments about judicial economy seem a little disingenuous right now. There are tactical reasons why Red Hat would not want to get mixed up in the IBM suit. It will likely take years to resolve. Red Hat is probably looking for a quick resolution of just the copyright issue. Thus, while Red Hat's complaint will survive a motion to dismiss, SCO will likely follow up with a motion to consolidate out in Utah.

SCO-Caldera & the GNU/Linux Community: The SCOsource IP Matter

SCO-Caldera & the GNU/Linux Community: Part 2, Under the Iceberg's Tip