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

U.S. District Court, District of Minnesota

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

Trial Court Opinion

                UNITED STATES DISTRICT COURT                             
                    DISTRICT OF MINNESOTA                                


PLUS ONE, LLC,                      Case No. 23-cv-2016 (KMM/JFD)        

               Plaintiff,                                                

v.                                            ORDER                      

CAPITAL RELOCATION SERVICES                                              
L.L.C.,                                                                  

               Defendant.                                                


    This matter is before the Court on Defendant Capital Relocation Services L.L.C.’s 
Motion to Compel Discovery and for Protective Order (Dkt. No. 131) and Plaintiff Plus 
One, LLC’s Motion to Compel Discovery (Dkt. No. 207). Plus One, LLC (“Plus”) is suing 
Capital Relocation Services L.L.C. (“CapRelo”) for misappropriation of trade secrets, 
breach  of  contract,  tortious  interference  with  contract,  and  tortious  interference  with 
business opportunity, among other claims. (See Am. Compl. ¶¶ 86–184, Dkt. No. 50.) With 
respect  to  the  misappropriation-of-trade-secrets  claim,  Plus  contends  that  CapRelo 
misappropriated  trade  secrets  from  Plus’s  “Point  C”  employee-relocation-benefits-
management software to develop a competing product, “CompanionFlex.” Plus further 
contends that CapRelo used CompanionFlex to solicit business from the parties’ common 
customer, Walmart, and other potential customers. The breach-of-contract claim is founded 
on a nondisclosure agreement (“NDA”) between Plus and CapRelo, pursuant to which Plus 
shared trade-secret information with CapRelo.                             
    Through  CapRelo’s  motion,  CapRelo  seeks  to  compel  Plus  to  supplement  its 
responses to Interrogatories No. 2 and 12 and a protective order staying depositions until 

Plus has identified its alleged trade secrets with reasonable particularity. Through Plus’s 
motion, Plus asks the Court to compel CapRelo to produce documents responsive to 
Requests for Production of Documents No. 9, 10, and 30.                   
I.   CapRelo’s Motion to Compel Discovery and for Protective Order        

    In CapRelo’s original motion, CapRelo sought to compel Plus to supplement its 
responses to Interrogatories No. 2 and 12 and for a protective order staying depositions 
until Plus identified its trade secrets with more particularity.          
    At the hearing on the motion, CapRelo clarified that it was asking Plus to (1) identify 
each distinct trade secret that it was claiming and (2) identify the source code for each 
claimed trade secret. Plus explained—for the first time—that there are 16 trade secrets at 
issue. According to Plus, there are seven distinct trade secrets and one “combination” trade 

secret—each of which has two parts—for a total of 16 trade secrets. Eight of the asserted 
trade secrets are source-code-based; the other eight are not. For lack of a better description 
from  Plus,  the  Court  referred  to  the  non-source-code  trade  secrets  at  the  hearing  as 
“something else.” With respect to the source-code trade secrets, CapRelo suggested that its 
expert, Mark Lanterman, could examine Plus’s source code on a standalone computer at 

Plus’s offices, following the source-code protocol in the protective order.  
    At the conclusion of the hearing, the Court denied the motion as to Interrogatory 
No. 12 and held the remainder of the motion in abeyance. The Court subsequently issued 
a short, written order with interim instructions and deadlines to allow Mr. Lanterman to 
review  the  source  code.  The  Court  stayed  depositions  until  further  order,  therefore 
effectively granting the protective-order component of the motion.        

    What remains before the Court is whether Plus should be compelled to supplement 
its trade-secret disclosure. In an August update letter emailed to the Court, Plus described 
a 104-page chart that details its trade secrets, which it created in response to the Court’s 
order and produced to CapRelo. Plus also described the inspection of its Point C product 
and source-code library by CapRelo and Mr. Lanterman. CapRelo submitted a separate 
update letter, in which it complained that the lengthy disclosure and inspection process 

only hampered its ability to understand the trade secrets at issue. CapRelo did not take issue 
with Plus’s identification of its source-code trade secrets. But, according to CapRelo, Plus 
has not identified its non-source-code trade secrets. When the source code is removed from 
the descriptions in Plus’s trade-secret disclosure, CapRelo contends, only functions and 
outcomes remain.                                                          

    Plus emailed another update letter to the Court on October 16, 2024. In that letter, 
Plus expressed its intent to narrow the scope of its asserted trade secrets, which Plus 
believes may reduce or eliminate CapRelo’s concerns.                      
    “In a suit for misappropriation of trade secrets, the plaintiff must specify what 
information it seeks to protect.” Fox Sports Net N., LLC v. Minn. Twins P’ship, 
319 F.3d 329
, 335 (8th Cir. 2003). A plaintiff must describe its trade secrets with the same specificity 
expected at summary judgment or trial. Porous Media Corp. v. Midland Brake Inc., 
187 F.R.D. 598, 600
 (D. Minn. 1999). When the trade secret involves software, a plaintiff must 
provide details such as source code and the specific designs, methods, and processes that 
underlie the public functionality. See NEXT Payment Sols., Inc. v. CLEAResult Consulting, 
Inc., No. 1:17-CV-8829, 
2020 WL 2836778
, at *14–15 (N.D. Ill. May 31, 2020). The 

plaintiff must “separate the secrets from the non-secrets,” specify “what was stolen,” and 
describe what the trade secrets are, not what they do. Id. at *11, 13. It is “not a Court’s job 
to parse out the trade secrets from the public-facing functions.” Id. at *11. A description of 
what a function does rather than what it is does not suffice; in other words, the plaintiff 
must describe “the underlying, secret methods of accomplishing those functions.” Id. at 
*14.  Although  NEXT  Payment  was  decided  on  summary  judgment,  it  illustrates  the 

specificity with which trade secrets must be described during discovery, as well as the risk 
if they are not. See Porous Media, 
187 F.R.D. at 600
.                     
    CapRelo asserts that Plus has not adequately identified certain trade secrets because 
Plus describes only what the output looks like, not the means by which that output is 
generated. CapRelo suggests that the “something else” trade secrets may not, in fact, exist. 

That is certainly possible and could explain why Plus intends to further amend its trade-
secret disclosure to narrow the scope of its asserted trade secrets.      
    Since the hearing on CapRelo’s motion, Plus has allowed CapRelo and its expert to 
inspect its Point C product and source-code library, created and produced a 104-page chart 
describing its asserted trade secrets and explaining how each trade secret operates, and 

identified by Bates number the documents constituting and identifying its asserted trade 
secrets. Plus has recently expressed its intention to further specify and narrow the trade 
secrets at issue. Given these developments, the Court will deny as moot CapRelo’s motion 
to compel Plus to further supplement its trade-secret descriptions. Plus has supplemented 
its trade-secret descriptions, and will again. The Court will not review each iteration of 
Plus’s  trade-secret  disclosure  to  determine  whether  it  meets  CapRelo’s  standards  of 

sufficiency.                                                              
II.  Plus’s Motion to Compel Discovery                                    
    Plus moves to compel CapRelo to produce documents in response to Requests for 
Production No. 9, 10, and 30. These three  requests ask for customer lists, customer 
communications,  marketing  presentations,  and  business  proposals  related  to 
CompanionFlex.                                                            

    Federal Rule of Civil Procedure 26 provides that “[p]arties may obtain discovery 
regarding any nonprivileged matter that is relevant to any party’s claim or defense and 
proportional  to  the  needs  of  the  case.”  Fed.  R.  Civ.  P.  26(b)(1).  In  determining 
proportionality, courts consider numerous factors, including “the importance of the issues 
at stake in the action, the amount in controversy, the parties’ relative access to the relevant 

information, the parties’ resources, and importance of the discovery in resolving the issues, 
and whether the burden or expense of the proposed discovery outweighs its likely benefit.” 
Id.
                                                                       
    If a party believes that the opposing party has failed to respond to discovery or 
served  insufficient  responses,  it  may  “move  for  an  order  compelling  disclosure  or 

discovery.” Fed. R. Civ. P. 37(a)(1). The moving party must make a threshold showing of 
relevance. Sherman v. Sheffield Fin., LLC, 
338 F.R.D. 247
, 252 (D. Minn. 2021). Once 
relevance is shown, then the burden shifts to the opposing party to show either that the 
discovery is not relevant or that it is unduly burdensome. Patterson Dental Supply, Inc. v. 
Pace, No. 19-CV-1940 (JNE/LIB), 
2020 WL 10223625
, at *20 (D. Minn. June 17, 2020); 
St. Paul Reinsurance Co., Ltd. v. Com. Fin. Corp., 
198 F.R.D. 508, 511
 (N.D. Iowa 2000). 

    A.   Request for Production No. 9                                    
    Plus’s Request for Production No. 9 asks CapRelo to produce “[a] list of all CapRelo 
Prospective  Customers  or  targeted  Customers  for  the  provision  of  CompanionFlex, 
including the date that each Prospective Customer was identified as a prospective customer 
and the date and manner by which each Prospective Customer was contacted by anyone 
acting on behalf of CapRelo.” (Talcott Decl. Ex. A, Dkt. No. 210-1.)      

    Plus  argues  that  a  list  of  prospective  or  targeted  customers  is  relevant  and 
proportional to its misappropriation-of-trade-secrets claim, breach-of-contract claim, and 
damages.  CapRelo  responds  that  information  about  all  prospective  customers  of 
CompanionFlex is neither relevant nor proportional and that CapRelo has already identified 
and produced documents related to the two customers who have entered into contracts to 

use CompanionFlex.                                                        
    The Court denies the motion to compel a list of prospective or targeted customers. 
A list of all potential customers, regardless of whether they have been contacted by 
CapRelo, does not provide the information that Plus claims it needs. If CapRelo has not 
communicated with a potential customer, that potential customer has not been given any 

information about CompanionFlex and the customer’s identity is irrelevant. If a potential 
customer has been contacted, that communication would fall under Request for Production 
No. 10, to which the Court now turns.                                     
    B.   Request for Production No. 10                                   
    Request for Production No. 10 asks for “[a]ll documents and communications 

showing CapRelo’s efforts to solicit CompanionFlex to any customer and/or prospective 
customer, including but not limited to agreements, requests for proposals, and/or licenses 
provided to any customer and/or prospective customer.” (Talcott Decl. Ex. A, Dkt. No. 
210-1.)                                                                   
    Plus argues that CapRelo’s communications to potential customers are relevant to 
the misappropriation claim if the communications used or disclosed Plus’s trade secrets 

that  are  allegedly  embodied  in  the  CompanionFlex  product.  Plus  contends  the 
communications  are  also  relevant  to  its  breach-of-contract  claim  because  responsive 
documents could show that CapRelo breached its nondisclosure agreement with Plus by 
using or disclosing Plus’s trade secrets to third parties. Finally, Plus argues, responsive 
documents could be relevant to damages in that the communications could reflect how 

potential customers valued each of the CompanionFlex features that allegedly contain 
Plus’s trade secrets.                                                     
    CapRelo responds that communications with all prospective customers is neither 
relevant nor proportional. CapRelo has agreed to produce documents for the two customers 
who have contracted to use CompanionFlex. As to Plus’s asserted damages, CapRelo 

argues that damages would be measured by either Plus’s actual loss (i.e., lost profits) or 
the amount of unjust enrichment caused by the misappropriation, which would be measured 
by any revenues that CapRelo actually obtained.                           
    The Court finds that responsive documents are relevant and proportional to Plus’s 
breach-of-contract claim, but not to the trade-secret-misappropriation claim or damages. 

Beginning with the misappropriation claim, relevant and discoverable information for such 
a claim may be limited to the customers that a plaintiff reasonably believes were actually 
“obtained as a result of the alleged wrongful conduct.” Lubrication Techs., Inc. v. Lee’s 
Oil Serv., LLC, No. 11-CV-2226 (DSD/LIB), 
2012 WL 1633259
, at *4 (D. Minn. Apr. 10, 
2012). In Patterson Dental Supply, Inc. v. Pace, No. 19-CV-1940 (JNE/LIB), 
2020 WL 10223625
  (D.  Minn.  June  17,  2020),  the  plaintiff  sought  communications  from  the 

defendant as to both existing and prospective customers. Id. at *22. The court denied the 
“overly  expansive  discovery”  in  part  because  the  requests  were  not  limited  to 
communications that mentioned the plaintiff’s confidential information or defendant’s use 
of that information. Id. at *24. Here, the merely prospective customers were not obtained 
as a result of the alleged misappropriation, nor is Request for Production No. 10 limited to 

communications mentioning or using Plus’s asserted trade secrets.         
    Turning to damages, Plus’s showing is scant. Plus cites no authority for its statement 
that  a  communication  reflecting  a  potential  customer’s  valuation  of  a  particular 
CompanionFlex feature could be relevant to determining the value of Plus’s asserted trade 
secrets. Rather, any damages for unjust enrichment or lost profits would be measured by 

the contractual terms and resulting revenue that CapRelo actually obtained. 
    Plus’s breach-of-contract claim is a different matter. If CapRelo disclosed Plus’s 
confidential and trade-secret information to prospective customers, that would be relevant 
to Plus’s claim that CapRelo breached the NDA. The NDA prohibits CapRelo from 
disclosing to third parties any of Plus’s confidential information that CapRelo received and 
reviewed pursuant to the NDA. (Compl. Ex. A ¶ 4, Dkt. No. 1-1.) Responsive documents 

could show that CapRelo breached the NDA by improperly using or disclosing Plus’s 
confidential or trade-secret information to third parties (potential customers) for a purpose 
not permitted by the NDA (gaining business). The communications are therefore relevant 
to the breach-of-contract claim. The discovery is also proportional. If an unauthorized 
disclosure occurred in a communication to a prospective client, the evidence would be that 
very communication. The discovery would be important in resolving an important issue, 

and CapRelo has not shown the discovery would be unduly burdensome or expensive to 
produce.                                                                  
    CapRelo  has  shown,  however,  that  the  documents  responsive  to  Request  for 
Production No. 10 would likely contain highly sensitive business information and that an 
amendment to the existing Amended Protective Order is therefore warranted. Specifically, 

a provision allowing CapRelo to designate discovery produced as a result of this Order as 
Outside  Counsel’s  Eyes  Only  should  be  added.  Documents  designated  as  Outside 
Counsel’s Eyes Only will be accessible only to outside counsel and experts, and explicitly 
not accessible to a party’s Designated Party Representatives, as that term is defined by the 
Amended Protective Order. Accordingly, the Court directs the parties to meet and confer 

about the precise provision to be added and to submit a stipulation and proposed protective 
order for the Court’s consideration within 14 days.                       
    C.   Request for Production No. 30                                   
    Request for Production No. 30 asks for “[a]ny marketing presentations and/or 

business proposals developed by CapRelo and/or JK Moving that mention, relate to, 
reference, or describe the benefit(s) of CompanionFlex, including all documents and 
communications mentioning, relating to, or referencing any such marketing presentations 
and/or business proposals.” (Talcott Decl. Ex. B, Dkt. No. 210-2.)        
    The parties make essentially the same relevance and proportionality arguments for 
Request for Production No. 30 that they made for No. 10. The Court similarly finds that 

responsive  documents  are  not  relevant  or  proportional  to  Plus’s  trade-secret-
misappropriation claim or to damages, but are relevant and proportional to the breach-of-
contract claim. With respect to the misappropriation claim, Request for Production No. 30 
is not limited to marketing presentations and business proposals given to customers who 
were actually procured as a result of the alleged misappropriation, nor is the request limited 

to marketing presentations and business proposals that mention or use Plus’s asserted trade 
secrets. In addition, Plus has not shown how the marketing presentations and business 
proposals would be relevant to the question of damages.                   
    Responsive documents could be relevant, however, to Plus’s breach-of-contract 
claim. If CapRelo disclosed Plus’s confidential and trade-secret information in marketing 

presentations or business proposals for CompanionFlex, those materials would be relevant 
to Plus’s claim that CapRelo breached the NDA through those very disclosures. The 
discovery  is also proportional. If an unauthorized disclosure  was made in marketing 
materials or a business proposal, the evidence would be that very document. The discovery 
would be important to resolving a central issue in the case, and producing responsive 
documents would not be unduly burdensome or expensive. The Outside-Counsel’s-Eyes-

Only provision would also apply to documents produced in response to Request for 
Production No. 30.                                                        
III.  Remaining Pretrial Deadlines                                        
    On September 13, 2024, the Court issued an order staying discovery deadlines and 
advised the parties that the Court would issue an amended scheduling order setting specific 
deadlines after the parties’ discovery disputes were resolved. The Court will issue a 

separate amended pretrial scheduling order lifting the stay of depositions and extending the 
remaining dates and deadlines.                                            

    Accordingly, IT IS HEREBY ORDERED that:                              
 1.  Defendant Capital Relocation Services L.L.C.’s Motion to Compel Discovery and 

    for  Protective  Order  (Dkt.  No.  131)  is  DENIED  as  to  Interrogatory  No.  12, 
    GRANTED as to a protective order staying depositions until further order of the 
    Court, and DENIED AS MOOT as to further amendment of Plus’s trade-secret 
    disclosure.                                                          
 2.  Plaintiff Plus One, LLC’s Motion to Compel Discovery (Dkt. No. 207) is DENIED 

    as to Request for Production No. 9 and GRANTED as to Requests for Production 
    No. 10 and 30.                                                       
3.  The parties shall meet and confer about an Outside-Counsel’s-Eyes-Only provision 
   to be added to the Amended Protective Order and submit a stipulation and proposed 

   protective order to the Court within 14 days.                        
4.  A separate amended pretrial scheduling order will be issued.        

Date: October 29, 2024             s/  John F. Docherty                  
                                  JOHN F. DOCHERTY                      
                                  United States Magistrate Judge        

Trial Court Opinion

                UNITED STATES DISTRICT COURT                             
                    DISTRICT OF MINNESOTA                                


PLUS ONE, LLC,                      Case No. 23-cv-2016 (KMM/JFD)        

               Plaintiff,                                                

v.                                            ORDER                      

CAPITAL RELOCATION SERVICES                                              
L.L.C.,                                                                  

               Defendant.                                                


    This matter is before the Court on Defendant Capital Relocation Services L.L.C.’s 
Motion to Compel Discovery and for Protective Order (Dkt. No. 131) and Plaintiff Plus 
One, LLC’s Motion to Compel Discovery (Dkt. No. 207). Plus One, LLC (“Plus”) is suing 
Capital Relocation Services L.L.C. (“CapRelo”) for misappropriation of trade secrets, 
breach  of  contract,  tortious  interference  with  contract,  and  tortious  interference  with 
business opportunity, among other claims. (See Am. Compl. ¶¶ 86–184, Dkt. No. 50.) With 
respect  to  the  misappropriation-of-trade-secrets  claim,  Plus  contends  that  CapRelo 
misappropriated  trade  secrets  from  Plus’s  “Point  C”  employee-relocation-benefits-
management software to develop a competing product, “CompanionFlex.” Plus further 
contends that CapRelo used CompanionFlex to solicit business from the parties’ common 
customer, Walmart, and other potential customers. The breach-of-contract claim is founded 
on a nondisclosure agreement (“NDA”) between Plus and CapRelo, pursuant to which Plus 
shared trade-secret information with CapRelo.                             
    Through  CapRelo’s  motion,  CapRelo  seeks  to  compel  Plus  to  supplement  its 
responses to Interrogatories No. 2 and 12 and a protective order staying depositions until 

Plus has identified its alleged trade secrets with reasonable particularity. Through Plus’s 
motion, Plus asks the Court to compel CapRelo to produce documents responsive to 
Requests for Production of Documents No. 9, 10, and 30.                   
I.   CapRelo’s Motion to Compel Discovery and for Protective Order        

    In CapRelo’s original motion, CapRelo sought to compel Plus to supplement its 
responses to Interrogatories No. 2 and 12 and for a protective order staying depositions 
until Plus identified its trade secrets with more particularity.          
    At the hearing on the motion, CapRelo clarified that it was asking Plus to (1) identify 
each distinct trade secret that it was claiming and (2) identify the source code for each 
claimed trade secret. Plus explained—for the first time—that there are 16 trade secrets at 
issue. According to Plus, there are seven distinct trade secrets and one “combination” trade 

secret—each of which has two parts—for a total of 16 trade secrets. Eight of the asserted 
trade secrets are source-code-based; the other eight are not. For lack of a better description 
from  Plus,  the  Court  referred  to  the  non-source-code  trade  secrets  at  the  hearing  as 
“something else.” With respect to the source-code trade secrets, CapRelo suggested that its 
expert, Mark Lanterman, could examine Plus’s source code on a standalone computer at 

Plus’s offices, following the source-code protocol in the protective order.  
    At the conclusion of the hearing, the Court denied the motion as to Interrogatory 
No. 12 and held the remainder of the motion in abeyance. The Court subsequently issued 
a short, written order with interim instructions and deadlines to allow Mr. Lanterman to 
review  the  source  code.  The  Court  stayed  depositions  until  further  order,  therefore 
effectively granting the protective-order component of the motion.        

    What remains before the Court is whether Plus should be compelled to supplement 
its trade-secret disclosure. In an August update letter emailed to the Court, Plus described 
a 104-page chart that details its trade secrets, which it created in response to the Court’s 
order and produced to CapRelo. Plus also described the inspection of its Point C product 
and source-code library by CapRelo and Mr. Lanterman. CapRelo submitted a separate 
update letter, in which it complained that the lengthy disclosure and inspection process 

only hampered its ability to understand the trade secrets at issue. CapRelo did not take issue 
with Plus’s identification of its source-code trade secrets. But, according to CapRelo, Plus 
has not identified its non-source-code trade secrets. When the source code is removed from 
the descriptions in Plus’s trade-secret disclosure, CapRelo contends, only functions and 
outcomes remain.                                                          

    Plus emailed another update letter to the Court on October 16, 2024. In that letter, 
Plus expressed its intent to narrow the scope of its asserted trade secrets, which Plus 
believes may reduce or eliminate CapRelo’s concerns.                      
    “In a suit for misappropriation of trade secrets, the plaintiff must specify what 
information it seeks to protect.” Fox Sports Net N., LLC v. Minn. Twins P’ship, 
319 F.3d 329
, 335 (8th Cir. 2003). A plaintiff must describe its trade secrets with the same specificity 
expected at summary judgment or trial. Porous Media Corp. v. Midland Brake Inc., 
187 F.R.D. 598, 600
 (D. Minn. 1999). When the trade secret involves software, a plaintiff must 
provide details such as source code and the specific designs, methods, and processes that 
underlie the public functionality. See NEXT Payment Sols., Inc. v. CLEAResult Consulting, 
Inc., No. 1:17-CV-8829, 
2020 WL 2836778
, at *14–15 (N.D. Ill. May 31, 2020). The 

plaintiff must “separate the secrets from the non-secrets,” specify “what was stolen,” and 
describe what the trade secrets are, not what they do. Id. at *11, 13. It is “not a Court’s job 
to parse out the trade secrets from the public-facing functions.” Id. at *11. A description of 
what a function does rather than what it is does not suffice; in other words, the plaintiff 
must describe “the underlying, secret methods of accomplishing those functions.” Id. at 
*14.  Although  NEXT  Payment  was  decided  on  summary  judgment,  it  illustrates  the 

specificity with which trade secrets must be described during discovery, as well as the risk 
if they are not. See Porous Media, 
187 F.R.D. at 600
.                     
    CapRelo asserts that Plus has not adequately identified certain trade secrets because 
Plus describes only what the output looks like, not the means by which that output is 
generated. CapRelo suggests that the “something else” trade secrets may not, in fact, exist. 

That is certainly possible and could explain why Plus intends to further amend its trade-
secret disclosure to narrow the scope of its asserted trade secrets.      
    Since the hearing on CapRelo’s motion, Plus has allowed CapRelo and its expert to 
inspect its Point C product and source-code library, created and produced a 104-page chart 
describing its asserted trade secrets and explaining how each trade secret operates, and 

identified by Bates number the documents constituting and identifying its asserted trade 
secrets. Plus has recently expressed its intention to further specify and narrow the trade 
secrets at issue. Given these developments, the Court will deny as moot CapRelo’s motion 
to compel Plus to further supplement its trade-secret descriptions. Plus has supplemented 
its trade-secret descriptions, and will again. The Court will not review each iteration of 
Plus’s  trade-secret  disclosure  to  determine  whether  it  meets  CapRelo’s  standards  of 

sufficiency.                                                              
II.  Plus’s Motion to Compel Discovery                                    
    Plus moves to compel CapRelo to produce documents in response to Requests for 
Production No. 9, 10, and 30. These three  requests ask for customer lists, customer 
communications,  marketing  presentations,  and  business  proposals  related  to 
CompanionFlex.                                                            

    Federal Rule of Civil Procedure 26 provides that “[p]arties may obtain discovery 
regarding any nonprivileged matter that is relevant to any party’s claim or defense and 
proportional  to  the  needs  of  the  case.”  Fed.  R.  Civ.  P.  26(b)(1).  In  determining 
proportionality, courts consider numerous factors, including “the importance of the issues 
at stake in the action, the amount in controversy, the parties’ relative access to the relevant 

information, the parties’ resources, and importance of the discovery in resolving the issues, 
and whether the burden or expense of the proposed discovery outweighs its likely benefit.” 
Id.
                                                                       
    If a party believes that the opposing party has failed to respond to discovery or 
served  insufficient  responses,  it  may  “move  for  an  order  compelling  disclosure  or 

discovery.” Fed. R. Civ. P. 37(a)(1). The moving party must make a threshold showing of 
relevance. Sherman v. Sheffield Fin., LLC, 
338 F.R.D. 247
, 252 (D. Minn. 2021). Once 
relevance is shown, then the burden shifts to the opposing party to show either that the 
discovery is not relevant or that it is unduly burdensome. Patterson Dental Supply, Inc. v. 
Pace, No. 19-CV-1940 (JNE/LIB), 
2020 WL 10223625
, at *20 (D. Minn. June 17, 2020); 
St. Paul Reinsurance Co., Ltd. v. Com. Fin. Corp., 
198 F.R.D. 508, 511
 (N.D. Iowa 2000). 

    A.   Request for Production No. 9                                    
    Plus’s Request for Production No. 9 asks CapRelo to produce “[a] list of all CapRelo 
Prospective  Customers  or  targeted  Customers  for  the  provision  of  CompanionFlex, 
including the date that each Prospective Customer was identified as a prospective customer 
and the date and manner by which each Prospective Customer was contacted by anyone 
acting on behalf of CapRelo.” (Talcott Decl. Ex. A, Dkt. No. 210-1.)      

    Plus  argues  that  a  list  of  prospective  or  targeted  customers  is  relevant  and 
proportional to its misappropriation-of-trade-secrets claim, breach-of-contract claim, and 
damages.  CapRelo  responds  that  information  about  all  prospective  customers  of 
CompanionFlex is neither relevant nor proportional and that CapRelo has already identified 
and produced documents related to the two customers who have entered into contracts to 

use CompanionFlex.                                                        
    The Court denies the motion to compel a list of prospective or targeted customers. 
A list of all potential customers, regardless of whether they have been contacted by 
CapRelo, does not provide the information that Plus claims it needs. If CapRelo has not 
communicated with a potential customer, that potential customer has not been given any 

information about CompanionFlex and the customer’s identity is irrelevant. If a potential 
customer has been contacted, that communication would fall under Request for Production 
No. 10, to which the Court now turns.                                     
    B.   Request for Production No. 10                                   
    Request for Production No. 10 asks for “[a]ll documents and communications 

showing CapRelo’s efforts to solicit CompanionFlex to any customer and/or prospective 
customer, including but not limited to agreements, requests for proposals, and/or licenses 
provided to any customer and/or prospective customer.” (Talcott Decl. Ex. A, Dkt. No. 
210-1.)                                                                   
    Plus argues that CapRelo’s communications to potential customers are relevant to 
the misappropriation claim if the communications used or disclosed Plus’s trade secrets 

that  are  allegedly  embodied  in  the  CompanionFlex  product.  Plus  contends  the 
communications  are  also  relevant  to  its  breach-of-contract  claim  because  responsive 
documents could show that CapRelo breached its nondisclosure agreement with Plus by 
using or disclosing Plus’s trade secrets to third parties. Finally, Plus argues, responsive 
documents could be relevant to damages in that the communications could reflect how 

potential customers valued each of the CompanionFlex features that allegedly contain 
Plus’s trade secrets.                                                     
    CapRelo responds that communications with all prospective customers is neither 
relevant nor proportional. CapRelo has agreed to produce documents for the two customers 
who have contracted to use CompanionFlex. As to Plus’s asserted damages, CapRelo 

argues that damages would be measured by either Plus’s actual loss (i.e., lost profits) or 
the amount of unjust enrichment caused by the misappropriation, which would be measured 
by any revenues that CapRelo actually obtained.                           
    The Court finds that responsive documents are relevant and proportional to Plus’s 
breach-of-contract claim, but not to the trade-secret-misappropriation claim or damages. 

Beginning with the misappropriation claim, relevant and discoverable information for such 
a claim may be limited to the customers that a plaintiff reasonably believes were actually 
“obtained as a result of the alleged wrongful conduct.” Lubrication Techs., Inc. v. Lee’s 
Oil Serv., LLC, No. 11-CV-2226 (DSD/LIB), 
2012 WL 1633259
, at *4 (D. Minn. Apr. 10, 
2012). In Patterson Dental Supply, Inc. v. Pace, No. 19-CV-1940 (JNE/LIB), 
2020 WL 10223625
  (D.  Minn.  June  17,  2020),  the  plaintiff  sought  communications  from  the 

defendant as to both existing and prospective customers. Id. at *22. The court denied the 
“overly  expansive  discovery”  in  part  because  the  requests  were  not  limited  to 
communications that mentioned the plaintiff’s confidential information or defendant’s use 
of that information. Id. at *24. Here, the merely prospective customers were not obtained 
as a result of the alleged misappropriation, nor is Request for Production No. 10 limited to 

communications mentioning or using Plus’s asserted trade secrets.         
    Turning to damages, Plus’s showing is scant. Plus cites no authority for its statement 
that  a  communication  reflecting  a  potential  customer’s  valuation  of  a  particular 
CompanionFlex feature could be relevant to determining the value of Plus’s asserted trade 
secrets. Rather, any damages for unjust enrichment or lost profits would be measured by 

the contractual terms and resulting revenue that CapRelo actually obtained. 
    Plus’s breach-of-contract claim is a different matter. If CapRelo disclosed Plus’s 
confidential and trade-secret information to prospective customers, that would be relevant 
to Plus’s claim that CapRelo breached the NDA. The NDA prohibits CapRelo from 
disclosing to third parties any of Plus’s confidential information that CapRelo received and 
reviewed pursuant to the NDA. (Compl. Ex. A ¶ 4, Dkt. No. 1-1.) Responsive documents 

could show that CapRelo breached the NDA by improperly using or disclosing Plus’s 
confidential or trade-secret information to third parties (potential customers) for a purpose 
not permitted by the NDA (gaining business). The communications are therefore relevant 
to the breach-of-contract claim. The discovery is also proportional. If an unauthorized 
disclosure occurred in a communication to a prospective client, the evidence would be that 
very communication. The discovery would be important in resolving an important issue, 

and CapRelo has not shown the discovery would be unduly burdensome or expensive to 
produce.                                                                  
    CapRelo  has  shown,  however,  that  the  documents  responsive  to  Request  for 
Production No. 10 would likely contain highly sensitive business information and that an 
amendment to the existing Amended Protective Order is therefore warranted. Specifically, 

a provision allowing CapRelo to designate discovery produced as a result of this Order as 
Outside  Counsel’s  Eyes  Only  should  be  added.  Documents  designated  as  Outside 
Counsel’s Eyes Only will be accessible only to outside counsel and experts, and explicitly 
not accessible to a party’s Designated Party Representatives, as that term is defined by the 
Amended Protective Order. Accordingly, the Court directs the parties to meet and confer 

about the precise provision to be added and to submit a stipulation and proposed protective 
order for the Court’s consideration within 14 days.                       
    C.   Request for Production No. 30                                   
    Request for Production No. 30 asks for “[a]ny marketing presentations and/or 

business proposals developed by CapRelo and/or JK Moving that mention, relate to, 
reference, or describe the benefit(s) of CompanionFlex, including all documents and 
communications mentioning, relating to, or referencing any such marketing presentations 
and/or business proposals.” (Talcott Decl. Ex. B, Dkt. No. 210-2.)        
    The parties make essentially the same relevance and proportionality arguments for 
Request for Production No. 30 that they made for No. 10. The Court similarly finds that 

responsive  documents  are  not  relevant  or  proportional  to  Plus’s  trade-secret-
misappropriation claim or to damages, but are relevant and proportional to the breach-of-
contract claim. With respect to the misappropriation claim, Request for Production No. 30 
is not limited to marketing presentations and business proposals given to customers who 
were actually procured as a result of the alleged misappropriation, nor is the request limited 

to marketing presentations and business proposals that mention or use Plus’s asserted trade 
secrets. In addition, Plus has not shown how the marketing presentations and business 
proposals would be relevant to the question of damages.                   
    Responsive documents could be relevant, however, to Plus’s breach-of-contract 
claim. If CapRelo disclosed Plus’s confidential and trade-secret information in marketing 

presentations or business proposals for CompanionFlex, those materials would be relevant 
to Plus’s claim that CapRelo breached the NDA through those very disclosures. The 
discovery  is also proportional. If an unauthorized disclosure  was made in marketing 
materials or a business proposal, the evidence would be that very document. The discovery 
would be important to resolving a central issue in the case, and producing responsive 
documents would not be unduly burdensome or expensive. The Outside-Counsel’s-Eyes-

Only provision would also apply to documents produced in response to Request for 
Production No. 30.                                                        
III.  Remaining Pretrial Deadlines                                        
    On September 13, 2024, the Court issued an order staying discovery deadlines and 
advised the parties that the Court would issue an amended scheduling order setting specific 
deadlines after the parties’ discovery disputes were resolved. The Court will issue a 

separate amended pretrial scheduling order lifting the stay of depositions and extending the 
remaining dates and deadlines.                                            

    Accordingly, IT IS HEREBY ORDERED that:                              
 1.  Defendant Capital Relocation Services L.L.C.’s Motion to Compel Discovery and 

    for  Protective  Order  (Dkt.  No.  131)  is  DENIED  as  to  Interrogatory  No.  12, 
    GRANTED as to a protective order staying depositions until further order of the 
    Court, and DENIED AS MOOT as to further amendment of Plus’s trade-secret 
    disclosure.                                                          
 2.  Plaintiff Plus One, LLC’s Motion to Compel Discovery (Dkt. No. 207) is DENIED 

    as to Request for Production No. 9 and GRANTED as to Requests for Production 
    No. 10 and 30.                                                       
3.  The parties shall meet and confer about an Outside-Counsel’s-Eyes-Only provision 
   to be added to the Amended Protective Order and submit a stipulation and proposed 

   protective order to the Court within 14 days.                        
4.  A separate amended pretrial scheduling order will be issued.        

Date: October 29, 2024             s/  John F. Docherty                  
                                  JOHN F. DOCHERTY                      
                                  United States Magistrate Judge        

Reference

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