loanDepot.com, LLC v. CrossCountry Mortgage, LLC

Background

CrossCountry filed a letter seeking a pre-motion conference about discovery disputes with LoanDepot. The requests arose in litigation involving allegations concerning trade secrets, loan officers, customer contact information, recruitment, and purported lost profits. The opinion addresses only these discovery requests.

Rulings on Discovery Requests

- RFPs 8 and 10 and Interrogatory 4: The court denied CrossCountry’s request. CrossCountry argued that contracts with LoanDepot’s loan officers could show that certain information was not kept secret. The court found that CrossCountry had not explained how additional evidence about drafting, negotiation, interpretation, or later changes to those contracts would help establish the contracts’ content or effect.

- RFP 14: The court denied the request. LoanDepot had produced documents showing that it solicited, and that the individual defendants provided and used, customer contact information when they joined LoanDepot. LoanDepot also agreed to produce all information those individuals uploaded when they joined. The court found that CrossCountry had not explained why more discovery was relevant.

- RFPs 16 and 42: The court granted in part and denied in part the request. It denied the request for documents about compensation paid to the individual defendants because the compensation information was irrelevant to information LoanDepot solicited from those individuals when they were recruited. It granted the request for documents about LoanDepot’s recruitment of CrossCountry loan officers. The court found that this information was highly relevant to CrossCountry’s defense that LoanDepot acted improperly, although it said the request for “all non-privileged documents” was likely too broad. The parties were ordered to meet and discuss the reasonable scope of LoanDepot’s search and production.

- RFPs 17 and 20: The court granted the request. It found that financial information from 2017 and 2018 of the same type LoanDepot had agreed to produce for 2020 through the present was highly relevant to evaluating whether the produced data accurately showed claimed lost profits.

- RFPs 23, 43, 44, 45, 46, and 47: The court denied the request. CrossCountry sought the discovery to support a possible request for attorney’s fees based on bad faith. The court explained that the applicable standard required a showing both that the claim lacked a legal or factual basis and that it was brought for an improper purpose. The court found no apparent basis for concluding that the misappropriation claim lacked any legal or factual basis. It also found that the counterclaims did not contain non-conclusory allegations connecting LoanDepot’s “Project Alpha” and merger proposal to CrossCountry with the lawsuit. The requested discovery was therefore largely irrelevant, overbroad, and unduly burdensome.

- RFPs 37, 38, and 39: The court denied the request for substantially the reasons stated in LoanDepot’s response letter.

Disposition

The court denied CrossCountry’s requests concerning RFPs 8 and 10, Interrogatory 4, RFP 14, RFPs 23, 43–47, and RFPs 37–39. It granted in part and denied in part the requests concerning RFPs 16 and 42, and granted the requests concerning RFPs 17 and 20. The Clerk was directed to close the motion at docket number 231. Judge Lorna G. Schofield’s order resolved discovery disputes and did not decide the parties’ underlying claims.