Apple Inc. v. Psystar Corporation

Filing 65

Transcript of Proceedings held on 05/05/2009, before Judge William Alsup. Court Reporter/Transcriber Lydia Zinn, Telephone number [phone]. Per General Order No. 59 and Judicial Conference policy, this transcript may be viewed only at the Clerks Office public terminal or may be purchased through the Court Reporter/Transcriber until the deadline for the Release of Transcript Restriction.After that date it may be obtained through PACER. Any Notice of Intent to Request Redaction, if required, is due no later than 5 business days from date of this filing. Release of Transcript Restriction set for 8/3/2009. (Zinn, Lydia) (Filed on 5/7/2009)

Apple Inc. v. Psystar Corporation

Doc. 65

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Pages 1 - 17 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA BEFORE THE HONORABLE WILLIAM H. ALSUP ) ) ) Plaintiff, ) ) vs. ) ) PSYSTAR CORPORATION, a Florida ) corporation, and DOES 1-10, ) inclusive, ) ) Defendants. ) ) ___________________________________) APPLE INC., a California corporation,

NO. C 08-03251-WHA

San Francisco, California Monday May 5, 2009 11:02 a.m.

TRANSCRIPT OF PROCEEDINGS APPEARANCES: For Plaintiff: Townsend and Townsend and Crew, LLP Two Embarcadero Center - 8th Floor San Francisco, California 94111-3834 [phone] [phone] (fax) MEGAN M. CHUNG Carr & Ferrell, LLP 2200 Geng Road Palo Alto, CA 94303 [phone] [phone] (fax) COLBY B. SPRINGER

BY: For Defendant:

BY:

Reported By:

Lydia Zinn, CSR #9223, RPR Official Reporter - U.S. District Court

Dockets.Justia.com

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THE COURT: THE CLERK: versus Pystar.

Have a seat, please. Calling Civil Action C. 08-3251, Apple

Counsel, can you please state your appearances? MS. CHUNG: Your Honor, my name is Megan Chung, for

Townsend, Townsend, and Crew, representing plaintiff, Apple, Inc. THE COURT: Welcome. Colby Springer, of Carr & Ferrell,

MR. SPRINGER:

L.L.P., for Psystar Corporation. THE COURT: For the record, we're here on a discovery Earlier the

And it's now 11:00 o'clock this morning.

two sides met in the jury room. Ms. Chung, this is your motion? MS. CHUNG: THE COURT: MS. CHUNG: Yes.

So whose motion is this?

This is Apple's motion.

Have any agreements been reached. I am happy to report that we have been

able to reach agreement on most of the issues. THE COURT: Why don't you come up here, so the court

reporter can hear you? All right. Well, then, let's go through the

agreements then one at a time, and make sure that Mr. Springer agrees that you have reached an agreement. MS. CHUNG: Okay? Go ahead.

So we have been able to reach an

agreement that Mr. Springer will check and get confirmation Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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that they have produced everything regarding sales and revenue information from April to September of 2008. And we have been able to also reach an agreement that they will request the bank's four statements from April to September of 2008. We have been able to reach an agreement that they will check to determine whether they have tabulations of vendor invoices from Ms. Perez, and whether they have produced that; and if not, they will produce that. THE COURT: All right. Let me stop you there.

So far do you agree, Mr. Springer? MR. SPRINGER: THE COURT: MS. CHUNG: That is correct. Continue.

All right.

We have also an agreement that by the end

of the day, Pystar will produce or reproduce Bates-numbered documents 1383 through 2000, which Apple had never received. THE COURT: Correct? That's correct.

MR. SPRINGER: THE COURT: MS. CHUNG:

All right. We have also agreed that Mr. Springer

will check on the status of the aggregated financial statement information that they are creating, and also check on the underlying documents to make sure that they have been produced in this case. And he'll let me know when the aggregated

information will come to us. Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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THE COURT:

True? That is correct.

MR. SPRINGER: THE COURT: MS. CHUNG:

All right. He will check on the underlying documents

for the balance statements and profit and loss statements that were attached as Exhibit B to the motion, and whether those underlying documents were produced; and if not, produce them. MR. SPRINGER: THE COURT: MS. CHUNG: And that is correct.

All right. He confirmed that they -- Pystar -- have

produced all the payroll information; that there is no information or documents on lease payments; that they have produced all of the vendor invoices that they have to date. MR. SPRINGER: MS. CHUNG: And that is correct.

And then the two other issues are -- we

have discovered during the meet-and-confer session -THE COURT: These are issues that you agreed on, or

things that you want me to decide? MS. CHUNG: outstanding. And we have agreed, in the sense that Mr. Springer will check on the attachments to the e-mails which have not been produced. And now I understand that some of the e-mails attachments were corrupted, as well as some of the attachments. Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone] No. These two issues are still

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In the conversion from Psystar to its counsel, the export did not function or did not work correctly. MR. SPRINGER: That's generally correct, your Honor.

The document attachments to e-mails that -- Psystar has produced a number of e-mails. A number of those e-mails

that have been produced reference the existence of an attachment. In a number of instances, those attachments have It is a result of -- not because Psystar is

not been produced.

withholding the attachments for any reason, but because the attachments have been corrupted. And it appears that that

corruption of the attachment has something to do with the e-mail system that they use as a whole. So we have identified the make and model of the e-mail system, as it were. do something. And we're going to try to work to

Either the file itself -- the original file is And we're going to try

still present with Psystar, we believe.

to find some way that we can get Apple to have access to those original attachments, those original documents somehow, because there's a problem moving the file from the electronic form into the form that is actually produced to them. occurs somewhere between there. THE COURT: But if you went to Psystar now and went The corruption

on their e-mail system and sat in one of the employees' desks and called up that e-mail and opened the attachment, would it be gobbledygook, or would it be a real -- you know, would it Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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read properly? MR. SPRINGER: I don't want to say for certain. My

understanding is that if they were able to open -- if someone was sitting in front of a terminal and clicked on a file, or whatever the case might be, some indication of -- that there's an attachment -- my understanding is that they would be able to open the attachment. The issue -THE COURT: Why don't you just open them up and print

them out in hard copy? MR. SPRINGER: in electronic copy. THE COURT: You can either do this. Produce them in Because we've been producing documents

hard copy or electronically. the other. MR. SPRINGER: THE COURT:

You've got to do it one way are

Absolutely.

When are you going to do this? It's not an issue of are we not going what's the best way to do it?

MR. SPRINGER: to do it.

It's an issue of: THE COURT:

And also when? If Apple would like us to go back and

MR. SPRINGER:

manually print out e-mails, to the extent that that's possible, if that's the solution they want us to do, that's the solution we'll take. If they'd rather have an electronic format -The discovery cutoff in this case is

THE COURT:

Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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June 26th. MS. CHUNG: THE COURT: Yes. If it turns out this is a delay, I'm

going to let them take depositions the rest of the year -MR. SPRINGER: THE COURT: Mr. Springer. MR. SPRINGER: THE COURT: It's absolutely not, your Honor. Understood.

-- because it sounds like a stall to me,

I'm going to take it as a good-faith I've never herd of This is a new one

sign, but you -- that's it's not a stall.

such a thing; of documents being corrupted. on me.

So you'd better fix it, and fix it promptly. And, Ms. Chung, if it turns out you need more time to

take depositions, your side's going to get an extension if it relates to these documents. MS. CHUNG: THE COURT: I understand. Now, if it's not relating to these

documents, you don't get an extension; but this doesn't sound right to me. All right. Well, regarding this issue we are also

MS. CHUNG:

still talking about how we could get the attachments so that they come with the e-mail, because right now, they produce -some are separate. THE COURT: If they have to write -- print it out,

they're going to put on top of it, "This went with e-mail dated Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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June 28th," or whatever. Look. all the time: In the old-fashioned way, we used to do this You could live with that

hard-copy documents.

system, if you need to. MS. CHUNG: THE COURT: MS. CHUNG: Right. What's your next problem? That would be great, your Honor. we

And then the last is -- well, the other issue is: need dates for reopening the deposition for topic two on the financial information. back to me. THE COURT: date right now. MS. CHUNG: Okay, but we would like a date All right. And I asked for dates.

And he will get

I'm going to just give you a

sufficiently far enough so that we could review all of these documents, and especially the attachments. THE COURT: produced? MR. SPRINGER: Produced to them on Monday. And then When are you the documents going to be

there's also a question of whether or not they need to review additional documents as well. THE COURT: Well, when are you going to finish up all

the production of these open items that you just mentioned to me in the last ten minutes? MR. SPRINGER: So --

Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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MS. CHUNG: to get confirmation. THE COURT:

Well, by the end of the day, I'm supposed

Yeah, but that was just -- a lot of those

MS. CHUNG: THE COURT:

Right. But you're not going to get -- you

weren't intending to say that Mr. Springer's going to produce all of these documents by the end of the day? MS. CHUNG: THE COURT: No, no. And --

So when is the day he's going to produce

MR. SPRINGER: 1383 through 2000.

By the end of the day, Bates range

I am going to confirm with Psystar Corporation today with respect to the existence of -- this kind of reiterates some of the things that Ms. Chung already mentioned. I'm going

to check and confirm by the end of the day with respect to -THE COURT: I heard all of those things, but a lot of

them, where you were going to be producing more materials if they existed -MR. SPRINGER: THE COURT: So the documents --

-- when is that going to occur? If there are additional documents that

MR. SPRINGER:

need to be produced, I believe those documents are -- the e-mail-system issue aside -- are bank statements which they are Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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going to get back on line and see if they can go further back for these bank statements. THE COURT: All right. When is that going to happen?

When are we going to get all of that material? MR. SPRINGER: I will tell them. I propose they go If not, have sent a

back in time if they're available on line.

letter to those banks for those accounts requesting those documents to be produced in hard copy by the end of this week. THE COURT: So you'll get the documents. Ms. Chung

will get the material by the end of -- the material by the end of the week if it exists, or they can get it from the bank? MR. SPRINGER: The issue with some of these

on-line -- statements may no longer exist on line because they're too far back in time. end of the day tomorrow. THE COURT: Today's May 5. MR. SPRINGER: THE COURT: Correct. Look. Here's what I'm going to do. I'm going to have them by the

I'm going to give you until Monday, May

18th, at noon to absolutely finish all of the completion that -- that you've agreed to undertake. In other words, if they've got to do several steps and they're contingent whether they exist or they don't exist, you've got to find all of that out and actually make the productions by the 18th of May. Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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MR. SPRINGER: THE COURT: MS. CHUNG: THE COURT:

understood.

Is that good enough time? Yes, your Honor. Well, Mr. Springer, is that enough time

MR. SPRINGER:

It is not an issue with respect to

Psystar making that inquiry, and then immediately sending notice to the bank. I would ask for some, presuming that we -- that Psystar takes care of business today and tomorrow with respect to, A, can they download, and if not, immediately informing the bank to send those documents, at that point, the issue is where the bank stands. So -Well, but the customer can go, you know, They've

THE COURT: and complain.

Maybe it's not enough to just ask once.

got to ask, you know, every other day, "Where is it? it," until they finally get it to you. MR. SPRINGER: THE COURT: If that is what the Court --

Where is

Every other day you've got to bug the

bank; otherwise, it goes at the bottom of the stack. MR. SPRINGER: THE COURT: with that. June 3rd, Wednesday, is the date of the deposition at 9:00 a.m., unless you two agree in writing to a different day Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone] We'll harass them every other day. I'm going to stick

May 18th at nine.

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of the week of June 1.

So you've got five daze to choose from,

but if you can't reach an agreement, June 3rd, Wednesday, 9:00 a.m., is the day. Where did you take this deposition last time? MR. SPRINGER: THE COURT: MS. CHUNG: THE COURT: Does that work? MR. SPRINGER: THE COURT: MS. CHUNG: THE COURT: Correct. You both agree to that? San Francisco, your Honor.

In whose office? At Townsend's office. It will be at the same place on June 3rd.

Is that okay?

It will be fine. All right. That will give you the

flexibility to change it, if you both agree in writing. Otherwise, if there's -- please don't do this to me. it's not convenient. We'll still working on a date." Say, "Oh, If

June 3rd comes and this person doesn't show up, there will be trouble. So that is the date, June 3rd, unless you agree in

advance, beforehand, in writing to some other date; but it has to be the week of June 1. All right. So that solves that problem.

See how easy it is to solve these problems? MS. CHUNG: Just for clarification, your Honor, for

May 18th -- is that the date by which Psystar's to produce all of the attachments in hard copy? Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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THE COURT:

Well, okay.

Yeah.

That's what I was

MS. CHUNG: THE COURT:

Okay. Let's address that specifically. Is that

going to be enough time for you, Mr. Springer, to get those attachments produced, either in hard copy or electronically? But one way or the other, you've got to have them produced. MR. SPRINGER: THE COURT: Today's date is the 5th?

Identified as to which e-mail they went

MR. SPRINGER: THE COURT:

That will be fine.

May 18th.

That will give you about a week and a And then

half, two weeks, to review all of those documents. you can finish up your deposition. What else do you want me to solve today? MS. CHUNG:

Apple is seeking its attorneys' fees and This defers time.

expenses for having to bring this motion.

We've discovered that there might be these issues with attachments. We've been asking for these attachments. We've

about been asking for all these files since December, if not February of this year, your Honor. you is our request for sanctions. THE COURT: Well, it's not really sanctions. No So the last issue before

It's -- under the rule, it's -- what does it say? longer -- you don't have to find bad faith anymore? Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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MS. CHUNG: THE COURT: MS. CHUNG: THE COURT:

No. What rule am I looking at here? I believe it's 37(c). 37(c). I'm not finding the

Mr. Springer, what do you say? part that I used to remember, but -MR. SPRINGER: THE COURT:

Are you asking me what my stance is?

What do you say about the attorneys'-fees

MR. SPRINGER:

I would disagree, in the sense that They have limited resources. This is the We've

Psystar is a small company.

They've made every effort to produce documents.

first and only real discovery dispute that we've had. been able to come to anamicable conclusion on it.

Unfortunately, it was unnecessary to do it at the Court's request. We did inform Apple during the deposition of Roberto Pedraza that additional documents and deposition dates would be forthcoming. Those were produced.

Obviously, there still are issues outstanding, but there's a good-faith effort between the parties. resolve it. There are are no efforts here to hide the ball of any sort with respect to the e-mail issue. Apple this morning. We're working with We may

As of this morning, we're working with

Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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Apple, you know, to come to a remedy that allows them to get those attachments. So there clearly is a good-faith effort on behalf of Psystar and their limited resources and the abilities they have to produce documents and, at the same time, carry on their business. MS. CHUNG: points. We have been -- Mr. Springer and I have been meeting and conferring about the financial documents, I can attest, since February. This is the first time today that I heard that If I may respond, your Honor, just two

documents were lost during a move, and that the e-mail attachments could not be produced due to the corruption. Now, if he had said that to me way back when when we were talking about these documents, we could have worked that out before; but he never raised that before. So to bring that up now as evidence of good faith or diligence, I believe, is not accurate. the record. And it mischaracterizes

And so it is due to Psystar's lack of diligence

that we're before you. THE COURT: All right. Here's the answer.

If you completely comply with this May 18th date and the deposition, there will be no attorneys' fees. MR. SPRINGER: THE COURT: Fair enough.

But if you don't do that, I think

Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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Ms. Chung is probably entitled to them; but to give you an incentive to bring this to closure and to solve these problems, I'm going to say no. If you get it done and you've done it all

right and meet all these deadlines and there won't be things like, "Oh, the bank won't respond. Oh, the corruption. The

corruption won't respond" -- no, no. In other words, no more excuses. Then, no attorneys' fees. MR. SPRINGER: THE COURT: MS. CHUNG: THE COURT: Thank you, your Honor. Are we done now? Just get it done.

All right? Yes. Okay.

Thank you, your Honor. Thank you for coming in and for

working hard to solve the problems you did solve this morning. See you soon, I guess. This is on the record. No. You two need to meet and confer and do a form of Then

order that will capture what the Court ruled today. submit that as an agreed-upon form of order. said that earlier. I'm sorry.

I should have

In other words, you write down

what it is the Court ruled. MR. SPRINGER: THE COURT: Okay. My law

And then we will go through it.

clerk will go through it to make sure that it tracks what we did today. So usually, the lawyers can at least agree on what Okay?

the court ruled.

Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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MS. CHUNG:

Okay. Okay. Please do that. Try to

MR. SPRINGER: THE COURT:

Thank you.

submit that by Friday at noon. (At 11:20 a.m. the proceedings were adjourned.)

Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]

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CERTIFICATE OF REPORTER I, LYDIA ZINN, Official Reporter for the United States Court, Northern District of California, hereby certify that the foregoing proceedings in C.08-3251-WHA, Apple v. Pystar, were reported by me, a certified shorthand reporter, and were thereafter transcribed under my direction into typewriting; that the foregoing is a full, complete and true record of said proceedings as bound by me at the time of filing. The validity of the reporter's certification of said transcript may be void upon disassembly and/or removal from the court file.

________________________________________ /s/ Lydia Zinn, CSR 9223, RPR Thursday, May 7, 2009

Lydia Zinn, CSR, RPR Official Reporter - U.S. District Court [phone]