Infotech and the Law

Microsoft Corp., smarting under the attention being paid to its marketing strategies by the Justice Department's antitrust division, lashed out last month in a surprising fit of pique against the department's request for information about Microsoft's plan to market its online service, Microsoft Network, with the Aug. 24 release of Windows 95.

Microsoft's attack was all the more surprising because it followed -- by only a few days -- a favorable ruling by the United States Court of Appeals for the District of Columbia Circuit. This court ruled Microsoft and the Justice Department overturned U.S. District Judge Stanley Sporkin's refusal to approve a settlement of the Justice Department antitrust probe of Microsoft's product announcement and marketing practices. Microsoft has already given up its plans to acquire Intuit and its Quicken financial software. The company announced Monday that it was preparing to strip the Network access software from Windows 95 if issues with the Justice Department could not be resolved before its Aug. 24 release date.

A last-minute injunction barring the sale of Network with Windows 95 would be a further embarrassment in the long-delayed release of Microsoft's newest operating system.

Still, appearances notwithstanding, the clash between Microsoft and the Justice Department is neither uncommon nor unusually heated in civil litigation with the government or other commercial parties. In cases governed by federal procedural rules, civil discovery begins with either a subpoena or a set of requests for documents and interrogatories from one party to another. In virtually all cases, the initial requests are couched in extraordinary sweeping terms. The theory in drafting such requests is, first, that something not requested will never be produced, and second, that the initial request is merely the commencement of negotiations over what eventually will be produced. The party drafting the initial requests frequently does not know what documents exist or where they are located. The requesting party also anticipates, with good cause, that a recipient of the request who is represented by competent legal counsel will parse the initial requests looking for any grammatical nuance, carelessly defined term or other loophole that will provide an opportunity to frustrate what would otherwise be a perfectly reasonable request. To avoid such obstacles, the requesting party frequently writes initial requests for documents and information in terms that are excessively broad, seek irrelevant information and are burdensome to answer.

The party receiving such requests has two choices: fight or negotiate. Throughout the 1980s, the reaction was frequently to fight first, by filing motions to suppress subpoenas or for protective orders striking discovery requests. The resulting legal battles were tedious, time-consuming and expensive. The focus gradually shifted to negotiation, rather that litigation, over the scope and schedule of documents and other information. Nearly all federal courts began to require that before filing a motion to resist or compel discovery that the parties confer in an effort to agree on the material to be produced. Today the Federal Rules of Civil Procedure require that such conferences occur in every case.

The initial round of document requests and interrogatories merely define the scope of the negotiations to follow. Justice Department lawyers ably exploit the convenience of word processing, boiler plate document requests and interrogatories. They are frequently overbroad and burdensome both in scope and number. Both the department and the recipient expect that the recipient will respond with a written objection, which is necessary to preserve the right to object later in court, and a telephone call. The negotiations that eventually lead to an agreement about what will actually be produced, and the timing of that production may last days, even weeks. During the course of negotiations, the department narrows and refines its requests while the recipient gradually is forced to concede the department's right to see certain, more specifically defined categories of documents. Frequently, the recipient agrees to produce a limited number of some category of documents, with the hope that once the department sees a sample of the material, it will lose interest in the remainder.

In Microsoft's case, however, it appears that the negotiations were not going well for the software maker. According to the Justice Department's brief in the New York Federal Court, Microsoft abruptly broke off negotiations over the scope of the documents to be produced and sought to bar the department from pursuing its discovery. In seeking the federal court's intervention to bar the discovery, Microsoft is taking on a difficult burden. Courts are unwilling to foreclose a party in civil litigation from obtaining relevant information, and are particularly hesitant to bar government antitrust lawyers from investigating potentially illegal practices. As part of a negotiating strategy, however, Microsoft's appeal to the federal court may make sense. If Microsoft can persuade the court that the Justice Department is carelessly imposing unreasonable burdens on the company, the court may require the government to trim some of its demands or extend the time for compliance.

Jonathan Cain is a partner in the litigation and high technology groups at Shaw Pittman Potts &amp Trowbridge, McLean, Va. He can be reached via E-mail at Jonathan_Cain@sppt.com