KCG Holdings, Inc. v. Khandekar

Background

KCG Holdings, Inc. and KCG Americas LLC sued Rohit Khandekar, who had formerly worked for the company as a Quantitative Strategist. The opinion states that, before leaving for another firm, Khandekar accessed and reviewed electronic data belonging to other Quantitative Strategists in violation of company policy. The plaintiffs asserted breach-of-contract and trade-secret claims under federal and state law.

In the earlier summary-judgment decision, the court granted the plaintiffs summary judgment on their breach-of-contract, Defend Trade Secrets Act, and New York common-law claims. It also granted summary judgment against Khandekar on his breach-of-contract and bad-faith claims. The court granted Khandekar summary judgment on the plaintiffs’ Computer Fraud and Abuse Act claims, ordered him to pay the plaintiffs’ attorneys’ fees, costs, and expenses, and barred him from using or sharing the trade secrets he had reviewed without authorization.

Motion for Reconsideration

Khandekar moved for reconsideration under Local Civil Rule 6.3. Reconsideration is an extraordinary remedy generally limited to an intervening change in controlling law, newly available evidence, or a need to correct clear error or prevent manifest injustice. The court emphasized that such a motion cannot be used to relitigate old issues, present new theories, or obtain another hearing on the merits.

Khandekar argued that two material facts were disputed. First, he argued that he did not know the files contained proprietary “secret sauce” information. The court rejected this argument because he had not raised it during summary judgment and had instead argued that he was authorized to access the files and was acting for KCG’s benefit. The court also stated that he had searched other Quantitative Strategists’ storage spaces for unencrypted files without explicit authorization or permission, and that the lack of access restrictions did not create a genuine factual dispute under the court’s earlier analysis.

Second, Khandekar argued that he had not actually reviewed the “secret sauce” in the files. The court rejected that argument as another new position. It noted that he had admitted copying the documents, placing them on his desktop, reviewing them, and sorting them. The court therefore would not consider the newly asserted argument on reconsideration.

Khandekar also argued that KCG had waived its breach-of-employment-contract claim by making a non-compete payment after knowing that he had deleted files from his laptop. The court held that he had raised waiver only in his reply brief on summary judgment, so the argument had been waived and did not have to be considered. The court further stated that, even if it considered the argument, Khandekar had not explained how one payment showed an intent to waive the claim, particularly in light of the contract’s explicit no-waiver provision.

Finally, Khandekar argued that reconsideration was needed to prevent manifest injustice because he had not benefited from his conduct, his career had been seriously harmed, the judgment might force him into bankruptcy, and the plaintiff financial institution had suffered no actual damages. The court concluded that the earlier decision correctly applied the law and that the claimed impact did not establish manifest injustice.

Disposition

Judge Alison J. Nathan denied Defendants’ motion for reconsideration and stated that the order resolved Docket Number 180. This order did not alter the earlier summary-judgment rulings, fee and cost award, or injunction described in the opinion.

Classification

This is a procedural order because the court ruled on a motion asking it to reconsider an earlier decision rather than making a new merits determination on the underlying claims.