Psystar responds to accusation that it can’t be trusted with Apple’s financial information

Fri, Sep 4, 2009

Legal, News

Yesterday, we wrote that Apple doesn’t trust Psystar to keep its sensitive financial information under wraps, in part due to an email string Psystar lead counsel K.D. Camara forwarded on to Harvard Professor Charles Nesson, a correspondence which ultimately found its way onto Nesson’s blog.

Apple explained why this was troubling,

Apple discovered that Psystar and its counsel have communicated the details of this case to individuals not bound by the protective order and thereby to the public at large.

… Given the actions of Psystar and its counsel, and their waiver of the confidentiality of Psystar’s own privileged communications in an effort to drum up publicity, Apple’s fear of disclosing its highly confidential information is genuine and well-founded.

And oh yes, did we mention that Psystar CEO Rudy Pedrazza has already been caught lying under oath?  All in all, Apple’s fears that confidential financial information might “accidentally” leak out is well-grounded, in our opinion.

In response, Psystar lead counsel K.D. Camara calls Apple’s fear about his email to Nesson an attack on his character, and that he’s freely allowed to talk to Nesson about legal issues if he wants to, and that the protective order doesn’t extend to or include the information conveyed to Nesson in the email.

In that respect, Camara is correct – but Apple’s fear was rooted in the fact that the communication ended up on Nesson’s public website.  Essentially, Camara forwarded on work-product and strategic legal information onto Nesson without prior knowledge from Psystar.  Okay, not a big deal as Psystar didn’t seem to mind.  Then, without informing Camara or Psystar, Nesson posted the email string onto his website.  Again, no big deal since Camara and Psystar apparently didn’t mind when alerted to the posting after the fact.  But the fear here is that the pattern of “act first, ask questions later” has potentially dire consequences for Apple’s financial data in the slippery hands of Psystar. 

Psystar’s response to Apple’s allegations that it’s not trustworthy is pasted below, courtesy of Groklaw.  Draw your own conclusions and let us know what you think in the comments.

“The second supplemental brief that Apple seeks leave to file contributes only one thing worth responding to: an entirely unprofessional personal attack on lead counsel for Psystar, K.A.D. Camara of Camara & Sibley LLP — that is, a personal attack on me. Apple accuses me of disclosing information in violation of the protective order to Professor Charles R. Nesson of Harvard. I have done no such thing. Neither has anyone at my firm or at Psystar. If anyone at our firm or at Psystar ever violated the protective order, we would, of course, be subject to contempt proceedings in this Court. The accusation that I have somehow violated the protective order is nothing more than an attempt to distract this Court from what is at issue in this round of supplemental briefing — namely, Apple’s complete failure to provide testimony from a corporate representative on damages.

Professor Nesson is the William F. Weld Professor of Law at Harvard Law School. He was
my torts professor at Harvard, where he also teaches classes on evidence and the American jury, and
is now co-counsel with me in several ongoing cases against the recording industry and Google. We
are friends and colleagues. Professor Nesson has particular expertise in the public aspects of
litigating high-profile cases, having been counsel, for example, in the defense of Daniel Ellsberg in
connection with the release of the Pentagon Papers and in the toxic-tort litigation later described in
the book and movie A Civil Action. I told Professor Nesson about our engagement in Apple v.
Psystar, just as I have told him about many other cases on which our firm is working. I described for
him the allegations leveled by Apple against Psystar and some of the legal issues involved in this
case, including important legal questions about the first-sale doctrine, § 117 of the Copyright Act,
and the enforceability of the Apple EULA. I did not disclose to him or to anyone else any
information covered by the protective order in this case, such as the substance of deposition
testimony designated confidential or the contents of any document designated confidential.

Apple’s only evidence that I violated the protective order is a post on Professor Nesson’s
blog. A true and correct copy of this blog post is attached as Exhibit A. The blog post consists of an
email exchange between me and Rudy Pedraza. In the first message, Mr. Pedraza suggests having a
public event showcasing Psystar’s products at the same time as Apple’s then-upcoming inspection of Psystar’s premises. I replied to Mr. Pedraza’s email and copied Professor Nesson on my reply. In
my reply, I describe certain aspects of our public-relations strategy in this case: how we should “start
explaining the dispositive motions arguments to the world — first sale and 117 non-infringement,
nominative use of trademarks, preemption, and copyright misuse”; and how I think that the idea of
the public exhibition is good, but that “[w]e need to make sure that our circus day doesn’t vary in any material way from how we do business ordinarily.” I also describe how we are negotiating with
Apple over deposition dates and suggest that “[a] nice follow-up post [to the Psystar blog] might be
the roster of Apple people being deposed — we can invite the world to send us questions.” Finally, I
say that I am copying Professor Nesson “who I told about the case, who likes our side and story, and
who is expert in public litigation.”

Nothing in this email exchange is protected by the protective order in this case. Even the
identity of the deponents, which was later published on Psystar’s blog, is not protected by the
protective order in this case. With respect to depositions, only the substance of the witnesses’
testimony (and summaries of it) is protected by the protective order. I disclosed nothing like this to
Professor Nesson or to anyone else. And, of course, I am permitted to describe to Professor Nesson
or to anyone else the legal issues involved in this case and the nature of the allegations leveled by
Apple against Psystar — information that is available from the publicly filed pleadings and motions.

Apple has attempted to draw a veil of secrecy over this litigation and over the conduct at issue
in this litigation that, in my view, goes well beyond what is warranted. That is why so many
documents of interest to the computer industry have had to be filed under seal and made available only in heavily redacted form, despite the widespread interest in the case among members of the public and the media that a simple Google search reveals. There is no secret about the fact that since our firm’s engagement, a part of Psystar’s strategy has been to engage with the press and attempt to
clear up some of the very negative and, in our view, mistaken coverage that has appeared about Psystar’s business and this litigation. Engaging with the press in this way is Psystar’s right, both under the protective order and as a constitutional matter. Neither Psystar nor I plan to violate the protective order; neither Psystar nor I have violated the protective order; and Apple’s suggestion to the contrary is unprofessional in the extreme.


By: _/s__ K. A. D. Camara__________________________


Attorney for Defendant





2 Comments For This Post

  1. CapnVan Says:

    There are a couple of points that you could have added.

    First, let’s remember who Charles Nesson is – in his most recent case, he posted on his blog a recorded telephone call between himself, the opposing lawyers, and the judge, despite being specifically told by the judge not to do so. He’s an advocate of near-absolute transparency in legal proceedings.

    Second, Camara took the step of proactively involving Prof. Nesson in this case. Given the above point, that in and of itself raises eyebrows.

    Third, with Camara’s advice, Psystar solicited questions from the public to ask Apple execs. Now, here’s where the real kicker is — why would you ask the public for questions, promise a circus, and then *not* publicly release answers?

    When you put the three together, an already-annoyed Judge Alsup could well see a reasonable basis for Apple’s concerns.

  2. Joe Says:

    I’m not sure there’s enough to find Camara in contempt, but with all his shenanigans, he’d better not be asking the court for any favors. Maybe his plan is to pi$$ off the judge and then when the judge rules against him, he’ll file for an appeal on the basis of judicial bias?

    The real issue is how in the heck this attorney plans to stay in business. His first big case manages to turn a $5,000 fine into a $2 M fine. At Psystar, he’s making a mockery of the entire process, running up countless hours of legal time, drawing fines from the judge for discovery errors, and looks like the case is a guaranteed loss.

    Who in their right mind would ever hire him in the future?

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