States Accuse Microsoft of Stalling

WASHINGTON, D.C.--Microsoft is trying to derail the remedy proceedings in its antitrust case by adding 23 witnesses to its witness list at the eleventh hour, nine U.S. states and the District of Columbia said Monday. They have filed a motion to bar 18 of these witnesses.

There is not enough time to depose the new witnesses before the end of the discovery period on February 22, say the nine states and the District of Columbia that are continuing their litigation with Microsoft. Any additional preparation as a result of Microsoft's new witnesses could unduly prolong the case, the states said in a motion filed to the U.S. District Court for the District of Columbia Monday.

Microsoft is employing "hide the ball" tactics in "blatant disregard for this court's schedule and the reasonable and appropriate conduct of litigation," the states said. If the court denies the motion to strike the witnesses, the states ask for an extension of their discovery period.

Microsoft rebutted that claim Tuesday in a court filing. The company contends it was forced to add a number of industry executives to its witness list at the last minute to address what it calls a "draconian remedy" proposed by the plaintiffs.

Next Hearing Nears

A hearing is scheduled for March 11, when the states will present remedy proposals to Judge Colleen Kollar-Kotelly. Nine other states and the U.S. Department of Justice have already agreed to a settlement with Microsoft.

Many of the witnesses that Microsoft said it could call to the stand during those remedy hearings were picked in response to a summary the suing states laid out for Microsoft in early January. That summary detailed the subjects that each of the states' witnesses would discuss during the trial.

The software maker argued Tuesday that "until it received the non-settling states' proposed judgment and preliminary witness list ... (it) could not even begin to identify its fact witnesses."

Further affecting its last-minute changes, Microsoft said it took nearly a month to pin down many of the witnesses it plans to call in the hearings.

"Knowing that they ... would be subject to subpoenas for documents and deposition testimony, not to mention the subject of intense press scrutiny, third parties ... declined to make a final decision until days before Microsoft was required to submit its final witness list," the company said in Tuesday's court document.

Preparing for Battle

When both parties exchanged preliminary witness lists for the hearing last December 7, Microsoft listed six witnesses, all company employees, according to the states' motion. Microsoft's final list, released late on Friday, has a total of 34 witnesses, including Bill Gates, the company's chairm and chief software architect, and Steve Ballmer, Microsoft's chief executive.

With 23 new names added to the list at the last minute, the states argue they won't have enough time to interview new witnesses or collect documents that could be relevant to their testimony. Even if subpoenas are served early next week, the states would have fewer than four business days to conduct 15 depositions throughout the country during a time that 11 depositions already are scheduled, the states said.

Microsoft said it needs the witnesses to defend itself against the sanctions proposed by the states. The company said "it is important that the court hear from consumer and industry witnesses on the harms they would suffer under the state proposals."

Microsoft's witness list includes executives from third parties including PC maker Compaq, chip maker Advanced Micro Devices, and retailer Best Buy.

The states argue that Microsoft has repeatedly tried to stifle proceedings to postpone a remedy that "will restore competition and deprive Microsoft of the fruits of its illegal conduct," and to increase the likelihood that the court will underwrite the settlement that has been reached with the DOJ and nine other states.