FXRobott LLC v. Noetiq Research Inc.

Background

FXRobott LLC, Argand Technologies Corp., and Robott Corporation moved for injunctive relief against Noetiq Research Inc., Henry Wilcox, Pixel Cloud Tech Solutions LLC, Patrick Black, Finnovation Technologies LLC, and Noah Applebaum. The motion concerned Plaintiffs’ claims for breach of contract and violation of the Defend Trade Secrets Act.

The disputed evidence was a nondisclosure agreement (NDA) purportedly executed by Argand Technologies Corp. and nonparty Tappollo Media, LLC, on February 20, 2025. Plaintiffs said the NDA covered Tappollo Media’s purported owners, Boon Chew and Frank Perez, who had been shown the alleged trade secrets. Defendants’ document requests sought documents concerning Plaintiffs’ disclosure of confidential information or trade secrets to third parties, including confidentiality and nondisclosure agreements.

Plaintiffs did not produce the NDA until 7:36 a.m. on June 18, 2025, less than an hour and a half before the evidentiary hearing on the preliminary-injunction motion began. Defendants moved to strike the exhibit, and Plaintiffs opposed the motion.

Legal standard

Federal Rule of Civil Procedure 37(c) generally bars a party from using information that it failed to provide as required by the discovery rules unless the failure was substantially justified or harmless. Rule 26(e) requires a party to timely supplement a document production or interrogatory response when the party learns that the earlier disclosure was materially incomplete or incorrect.

The court applied four factors used to decide whether to exclude evidence: the explanation for the discovery failure, the importance of the evidence, the prejudice to the opposing party, and whether a continuance could cure the problem. Exclusion of evidence is a serious sanction, so the court also considered less severe alternatives.

Court’s analysis

The court found Plaintiffs’ explanation weak. Robert Del Grande testified that he found the NDA in text messages after his May 29 deposition, but he did not send it to Plaintiffs’ counsel for nearly three weeks. The court also questioned why Plaintiffs had not found the NDA during their earlier search, particularly because Del Grande testified that he located it immediately after his deposition. Plaintiffs’ opposition offered no additional explanation for the delay.

The court found the NDA highly relevant to the trade-secret claim because it concerned whether Plaintiffs had disclosed alleged trade secrets without adequate confidentiality protection. The court also found that Defendants were prejudiced by the late production. They had not had a fair opportunity to investigate the NDA’s authenticity and scope, including whether it actually bound Chew and Perez. The court noted that Del Grande testified at the hearing that Chew and Perez co-owned Tappollo Media, but had not identified that relationship during his deposition.

The court determined that a continuance could address the prejudice for the permanent-injunction request, because the hearing on that request had been combined with the preliminary-injunction hearing for convenience and could be reopened for limited discovery. But the court concluded that a continuance was not an effective and practical remedy for the preliminary-injunction motion because the hearing on that motion had already concluded.

Disposition

The court granted Defendants’ motion to strike the NDA from the record before the court on Plaintiffs’ motion for preliminary injunctive relief.

For the permanent-injunction request, Plaintiffs were permitted to inform the court at closing argument on July 1, 2025, whether they wished to proceed with limited discovery concerning the NDA. That process could include a supplemental deposition of Del Grande of no more than four hours and a supplemental hearing limited to the NDA. Plaintiffs would bear the reasonable costs and attorney fees associated with taking the deposition and attending the hearing, while any other discovery concerning the NDA would be at Defendants’ expense.