Toshiba America Electronic Components, Inc. v. Superior Court

Lexar Media, Inc. (Lexar) (plaintiff) sued Toshiba America Electronic Components, Inc. (Toshiba) (defendant) for misappropriation of trade secrets and unfair competition. Lexar served a request for the production of documents that sought email and other forms of electronically stored information, sometimes referred to as ESI. In response, Toshiba produced more than 20,000 pages of documents. Toshiba also disclosed that it had more than 800 backup tapes containing electronically stored information for the requested time period. Backup tapes usually hold a large amount of data that is loosely organized. Mining this data to discover relevant information is expensive and time-consuming because it usually requires restoring the tape, viewing the directories, and searching within the directories for specific files. An electronic-discovery specialist estimated that completely processing all the tapes would cost between $1.5 and $1.9 million. The specialist also estimated that processing a portion of the tapes surrounding key dates would cost approximately $200,000. Toshiba asked Lexar to share the cost of processing the tapes. Lexar refused and filed a motion to compel Toshiba to produce the information entirely at Toshiba’s expense. Lexar argued that, based on federal court decisions analyzing the Federal Rules of Civil Procedure, Lexar should not be required to share the cost of processing the tapes. Toshiba argued that the federal analysis favored cost-shifting in this situation. The trial court granted Lexar’s motion to compel without explanation and did not require Lexar to pay any of the tape-processing costs. Toshiba appealed.