Calltrol Corporation v. LoxySoft AB

Background

Calltrol alleged that Loxysoft improperly developed a prohibited competing product in violation of Section 6.3 of the parties’ Reseller Agreement. The dispute appeared to depend significantly on whether implementing Loxysoft’s accused product required software development.

Fact discovery had closed. Loxysoft had identified Bylander and Lund as people likely to have discoverable information in its initial disclosures on February 10, 2022. Calltrol did not depose them during fact discovery, instead deposing other witnesses, including Loxysoft’s principal, Tobias Sjolander.

Loxysoft’s expert, Bates, relied in part on conversations with Bylander and Lund in preparing his expert report. Calltrol argued that the expert’s opinions raised questions about how the accused product was implemented and justified allowing Calltrol to depose the two developers. Calltrol had made a similar request in June 2024, arguing that Sjolander and Bates could not explain technical aspects of the product. After hearing the parties’ arguments, the court denied that earlier request to reopen fact discovery. Calltrol renewed the request on June 28, 2024.

Legal Standard

The court explained that federal district courts have broad discretion to manage discovery. Courts in the Second Circuit generally consider six factors when deciding whether there is good cause to reopen fact discovery: whether trial is imminent, whether the request is opposed, whether reopening would prejudice the opposing party, whether the requesting party acted diligently, whether the need for more discovery was foreseeable, and whether the discovery would likely produce relevant evidence.

Court’s Analysis

The court found that two factors favored reopening discovery: no trial date had been set, and depositions of the product’s developers might produce relevant evidence. The court considered prejudice to Loxysoft neutral because Loxysoft had not argued prejudice, although reopening discovery could add cost and delay.

The remaining factors weighed against Calltrol. Loxysoft opposed the request. More importantly, the court found that Calltrol had not been diligent and that its need for information from Bylander and Lund was foreseeable. The court stated that these witnesses were known to Calltrol from the beginning of the case, were identified as Loxysoft developers, and were central to the dispute about product development. The court also noted that Loxysoft had identified the relevant algorithm and code as early as November 2023 and that the court had extended discovery deadlines multiple times.

The court rejected Calltrol’s argument that the expert’s reliance on conversations with Bylander and Lund created a new reason to depose them. In the court’s view, Calltrol had previously had the opportunity to seek this discovery and made a strategic choice not to do so.

Disposition

The court denied Calltrol’s request for additional discovery and to reopen fact discovery. The court declined to rule on Calltrol’s separate request for leave to file a motion in limine—a request to exclude evidence or testimony at trial—against Loxysoft’s expert, stating that request should be directed to the District Judge.