Judge William Alsup of the United States District Court for the Northern District of California presides over Oracle's lawsuit against Google and is building maximum pressure on the two companies to settle. Earlier this week I reported on the uncertainty he just created about the trial date, which is currently scheduled for Halloween but could be postponed "considerably". Now he just entered an order that suggests Oracle CEO Larry Ellison and Google CEO Larry Page -- or other high-ranking executives -- may have to spend one or two full days in court on settlement negotiations before a United States Magistrate Judge. This is the text of the order -- I'll interject my comments:
Early on in this case the Court allowed both sides to skip the Court’s mediation plan and use a private mediator instead. The private mediation thus far has not succeeded.
We are close to trial.
The judge continues to schedule everything based on the assumption of a Halloween trial even though this depends on the timing of an unrelated criminal trial as I mentioned in the blog post I linked to above. Today Judge Alsup also ordered a shortened briefing schedule for an upcoming Google motion, another sign of him not yet having given up on the Halloween date.
Subject to considering the views of counsel, the Court is inclined to order both sides to mediate the case before a United States Magistrate Judge and to order the top executive officers of both sides to be in attendance for one or two complete days as necessary in the judgment of the Magistrate Judge.
The first part shows some deference to the parties' lawyers. More on that further below.
Unless that court has some mediation specialist among its magistrate judges, I guess Magistrate Judge Donna Ryu, who handles discovery issues in this case, would be an obvious choice because she's quite familiar with the issues and she showed a pretty strong performance so far in terms of assertiveness and decisions that seemed pretty well-reasoned to me, to the extent I'm able to form an opinion on that.
Counsel may comment on this proposal, including identifying who the appropriate top executives of both sides would be, by NOON on SEPTEMBER 7, 2011.
So the top executives won't necessarily be the CEOs, though the expression "the top executives" further above suggest "the number one executives". Oracle would probably have a better argument if Larry Ellison didn't want to handle this personally. They have two presidents, Mark Hurd and Safra Catz. There's no doubt that either one of them could handle this. In Google's case, the only alternative to the current CEO would probably be his predecessor and now-Executive Chairman Eric Schmidt. I'm pretty sure the judge wants businesspeople for this, not inhouse counsel like David Drummond or Kent Walker. Google co-founder Sergey Brin is very smart but more of a technologist. Maybe Google could try to send its Senior VP and Chief Business Officer Nikesh Arora.
There's still a possibility that the parties' lawyers can convince Judge Alsup that one or two full days to be spent in court by top-level executives of both companies would be overly burdensome and unlikely to yield the desired result. They'll probably be quite creative now in arguing against such a compulsory high-level settlement negotiation, but neither party will want to appear too uncooperative. I would also expect them to argue that there's uncertainty about the trial date, but I guess Judge Alsup wouldn't be impressed by that argument since he wants the parties to make all preparations for a Halloween trial regardless of a possible postponement.
I don't think this kind of pressure is going to be productive. The problem is, as I said several times, that the parties' positions are irreconcilable and there are strategic reasons for that. If they have to, they'll spend one or two days in court and still go home without a result. The only way to force them to settle would be if their CEOs were locked up and denied food and beverages until they can announce a settlement. Since that's not possible in the free world, a pre-trial settlement may not happen, at least not before there's a firm trial date. With a definitive trial date, there's at least some chance that they announce a settlement a day or two before. But in the current situation, I doubt it very strongly.
Meanwhile, I look forward to Oracle's and Google's lawyers' responses to Judge Alsup's order. Those will be interesting to read, I'm sure. Possibly Judge Alsup believes that those replies will help him understand how likely a settlement is, and based on that he may take one scheduling decision or another.
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