Psystar Hit with $5K Fine for Discovery Abuse

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Unauthorized Mac clone maker Psystar was slapped with a US$5,000 fine for discovery abuse, indicating the company's "guns blazin'" legal strategy may have misfired. The ruling came as part of Apple's case against the company for selling PCs with Mac OS X pre-installed.

"The $5,000.00 penalty means that judge Alsup has found that Psystar has violated the rules of discovery," an attorney familiar with this type of case told The Mac Observer. "That indicates that Psystar is in trouble with the court. However, it is impossible to determine, because the proceedings are under seal, exactly on what Judge Alsup is focusing."

The judge overseeing the case in U.S. District Court in Northern California, Judge William Alsup, also ordered supplemental briefs to be filed by Thursday, August 27 -- an indication that he likely isn't finished dealing with Psystar for its actions in the discovery process.

Apple filed its lawsuit against Psystar claiming the company was violating the Mac OS X end user licensing agreement, and that it was violating the Digital Millennium Copyright Act with the steps it used to install the Mac operating system on PCs. Psystar countered that it is within its rights to build and sell PCs with Mac OS X pre-installed and that Apple is overstepping its bounds by blocking companies from selling Mac clones.

Judge Alsup's ruling comes after Apple filed a brief with the court alleging Psystar intentionally destroyed evidence by deleting the code it uses to install Mac OS X on generic PCs. According to Apple's brief, Psystar CEO Rudy Pedraza admitted that his company deleted the code instead of turning it over to Apple's legal team, violating a requirement to preserve evidence.

Apple asked the court to order Psystar to produce the missing code as part of its brief. It also asked for court-imposed sanctions if Psystar isn't able to produce the requested software, and for a court order requiring the company to admit to destroying the evidence along with sanctions for discovery misconduct.

If Judge Alsup's fine is related to Psystar's alleged destruction of evidence, the company could find itself in a serious legal bind with the court. "Destroying evidence could be referred to the U.S. Attorney as possible obstruction of justice and/or perjury, both of which are federal felonies," TMO's legal contact said.

Should the court follow that path, Psystar's top brass -- namely Mr. Pedraza -- could be facing criminal charges, too, and considering his company's track record in court so far, that's probably a path he doesn't want to go down.


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If truly believes in his case, and isn’t just grand standing, then he wouldn’t have taken the idiotic step of destroying evidence, if in fact that’s what he did.  This could be the beginning of the end for Psystar.


Throughout this process, many had believed there are some deep pockets (Apple’s competitors) behind Psystar’s effort. Looking at how the case has been developing lately, it’s becoming less and less likely that anyone would be financing such foolish moves.

It seems that Messrs. Pedraza have no clue what they have got themselves into here. Their legal team isn’t helping much, although it’s possible that they are acting against the legal advice, in their misguided hope that there is some grass-roots sympathy for their David-vs-Goliath cause.

The judge seems to be getting impatient and hopefully will want to wrap this up quickly. It surely has been going long enough now.


This could be the beginning of the end for Psystar.

Surely we’re to the middle of the end by now, aren’t we? wink


Throughout this process, many had believed there are some deep pockets (Apple?s competitors) behind Psystar?s effort. Looking at how the case has been developing lately, it?s becoming less and less likely that anyone would be financing such foolish moves.

I’m guessing that Psystar had some deep pockets but they have been such boneheads throughout the process if their backers have not bailed they soon will


Die, Psystar, Die.

They destroyed evidence.

They used open source products to load Mac OS X commercially into generic PC hardware.  They also removed evidence of this from their website, where they previously claimed their use of such software.

They also created a “master” hard drive containing a modified Mac OS X, which they then MASS COPIED into all the other clones they manufactured.  This is NOT like a consumer installing Mac OS X from an installation disk.  This is MASS COPYING. If Psystar was the end user as in the end user license, they should have opened up each copy of Mac OS X and installed it individually into each clone.  But instead, they MASS COPIED the modified version of Mac OS X into the clones.  THIS IS OBVIOUSLY A COPYRIGHT VIOLATION.


So much for the new team.  I guess they’re good at spending their clients money and not much else.  They’re 0 for 2 now right?  I’m waiting for Pedraza to get hit with a contempt ruling.

I read the whole thing in Groklaw:

“Well, Psystar is continuing to hit its head against the wall. There is a minute entry, letting us know that there was a discovery hearing on the 20th, about Psystar’s motion to compel, and the judge has ordered the parties to file supplemental briefs, and “Defendant shall pay plaintiff $5,000 in attorneys fees for bringing the motion”. Defendant is Psystar:

  08/24/2009 - 96 - Minute Entry: Discovery Hearing held on 8/20/2009 before William Alsup (Date Filed: 8/24/2009). Supplemental briefs due by 8/27/09. Deft shall pay pltf $5,000 in attys fees. (Court Reporter Sahar McVickar.) (dt, COURT STAFF) (Date Filed: 8/24/2009) (Entered: 08/24/2009)

I feel safe in saying that the new strategy is working about as well as the prior strategy, namely not. This was the motion [PDF] where Psystar claimed Apple executive Phil Schiller arrived “totally unprepared” for the deposition, and Apple said that he sat for two depositions, and Psystar walked out of the second one midstream (“Mr. Schiller was fully prepared to discuss the non-quantifiable, irreparable injury to Apple but Psystar’s counsel chose to not ask those questions and terminated the deposition instead.”)

The judge asking for supplemental briefs is interesting. I’m thinking the judge was disturbed by something he heard at the hearing, but we’ll have to wait to find out the details once the briefs are filed on the 27th.”

Check it out:


The first of many to come.


They destroyed evidence they were ordered to preserve?  How boneheaded can they get?  Is there a more surefire way to antagonize the judge hearing your case?

Worse, they were prepared to destroy evidence but not to lie about it.

What a bunch of clowns.

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