Plus One, LLC v. Capital Relocation Services L.L.C.

Background

The case is a trade-secret dispute between Plus One, LLC and Capital Relocation Services, LLC. The appeal concerned a December 18, 2024 order by Magistrate Judge John F. Docherty arising from discovery disputes about the trade secrets Plus One alleged against Capital Relocation Services.

During an earlier discovery dispute, Plus One stated that 16 trade secrets were at issue. Plus One later produced a 104-page chart describing its asserted trade secrets and told the court that it intended to narrow the scope of those trade secrets. Capital Relocation Services later argued that Plus One had instead served a November 12, 2024 disclosure that expanded the number of alleged trade secrets from 16 to 38.

Judge Docherty’s December order barred Plus One from asserting newly identified trade secrets that neither narrowed nor streamlined the previously identified trade secrets and that were inconsistent with Plus One’s earlier commitment to the court. The order also stated that Plus One could not amend its trade-secret definitions again without the court’s permission, which would be granted only upon a showing of extraordinary good cause.

Appeal and standard of review

Plus One appealed the December order to the district court. Plus One suggested that the order was dispositive because it could prevent Plus One from asserting some substantive trade secrets. Capital Relocation Services argued that the order was nondispositive and should be reviewed for clear error.

Under Federal Rule of Civil Procedure 72, a district court reviews a magistrate judge’s dispositive decisions anew, while reviewing nondispositive decisions for clear error. Clear-error review is highly deferential.

Ruling

Judge Menendez denied Plus One’s appeal after finding no clear error in Judge Docherty’s decision. The court held that the December order was nondispositive because it arose from a discovery dispute, did not result from a motion that disposes of a claim or defense, and did not itself dispose of any claim or defense. The order also left open the possibility of further amendments for extraordinary good cause.

The court explained that, even if the order eventually weakened Plus One’s position by limiting further disclosure of new trade secrets, that effect did not make the order dispositive. The court stated that it would not repeat the reasons given during the April 1, 2025 hearing for finding no clear error; those reasons were incorporated by reference.