Tesla, Inc. v. Cao
- Vince Chhabria
- 3:19-cv-01463
- U.S. District Court · Northern District of California
- 2
In Tesla, Inc. v. Cao, Judge Chhabria partly granted XMotors’s discovery motion and denied Tesla’s other motions.
Tesla, Inc., Guangzhi Cao, XMotors, and Zhang were affected by the discovery and filing rulings. XMotors had to produce specified materials, Tesla had to publicly re-file specified filings, and Tesla’s motion to compel was denied; the order recognized Zhang’s ability to raise the Fifth Amendment privilege against self-incrimination.
What happened
Tesla, Inc. v. Cao involved disputes over information Tesla sought concerning its claim that Cao disclosed Tesla trade secrets to XMotors. XMotors asked the court to block or limit Tesla’s requests.
The court partly granted and partly denied XMotors’s motion to quash. XMotors had to produce requested source code, source-code logs, and forensic images, but not images from computers of people it did not employ. It did not have to produce grand jury materials related to Zhang. The court also denied Tesla’s request to file a sur-reply, denied motions to keep filings under seal, and required Tesla to file public, unredacted versions of specified materials within seven days.
Judge Chhabria denied Tesla’s motion to compel because information about Zhang’s conduct was too speculative and disproportionate, particularly given a possible interference with an ongoing criminal prosecution. The court also said the breadth of Tesla’s requests allowed Zhang to claim the constitutional protection against compelled self-incrimination.
The detailed version
- Tesla, Inc. v. Cao · No. 3:19-cv-01463
- Vince Chhabria
- May 27, 2020
Background
The order addressed several pending discovery and filing motions. Tesla said information sought from XMotors was relevant to its claim that Guangzhi Cao disclosed Tesla’s trade secrets to XMotors. The opinion also discussed requests concerning Zhang and noted a concern, raised by the U.S. Attorney, that discovery could interfere with an ongoing criminal prosecution.
Rulings on XMotors’s Motion to Quash
XMotors’s motion to quash was granted in part and denied in part.
The court required XMotors to produce:
- The requested source code; - Source-code logs; and - The requested forensic images.
The court allowed the source-code topics to be discussed in the deposition of XMotors’s designated organizational witness under Rule 30(b)(6). The information was subject to the protective order in the case. Tesla and XMotors were instructed to meet and confer about whether a neutral third party should examine the source code first.
XMotors did not have to provide forensic images of computers belonging to people it did not employ. The court found that Tesla had not shown XMotors had legal control over those computers.
XMotors also did not have to produce grand jury materials related to Zhang. The court found that the materials’ relevance to Tesla’s claims against Cao was speculative and tenuous, and that Tesla had not shown that obtaining them at that time was proportional to the needs of the case.
Other Motions
Tesla’s administrative motion to file a sur-reply was denied.
The administrative motions to file materials under seal were denied. Tesla was ordered to re-file public and unredacted versions of its opposition brief and the relevant deposition testimony on the docket within seven days of the order.
Tesla’s motion to compel was denied. The court again found that information about Zhang’s conduct had only speculative relevance to Tesla’s claims against Cao and that discovery was not proportional to the needs of the case at that time. The court also cited the potential interference with an ongoing criminal prosecution.
The court further held that the broad scope of Tesla’s subpoena requests entitled Zhang to raise the Fifth Amendment privilege against self-incrimination. The opinion gave as an example that Tesla’s requests were not limited to information already held by the government and could require Zhang to identify and produce new incriminating information.
Disposition
The order resolved the listed discovery and filing motions but did not decide the underlying trade-secret claim. Judge Vince Chhabria issued the order on May 27, 2020.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.