United States District Court, S.D. New York
MORTGAGE RESOLUTION SERVICING, LLC. 1ST FIDELITY LOAN SERVICING, LLC, and S&A CAPITAL PARTNERS, INC., Plaintiffs,
JPMORGAN CHASE BANK, N.A., CHASE HOME FINANCE LLC, and JPMORGAN CHASE & CO., Defendants.
S. Tantillo, Esq. Mary Jane Fait, Esq. Tantillo Law PLLC,
Gary F. Eisenberg, Esq. Perkins Coie LLP, Robert D. Wick,
Esq. Michael M. Maya, Esq. Christian J. Pistilli, Esq.
Covington & Burling LLP, Michael C. Nicholson, Esq.
Covington & Burling LLP, Glen A. Silverstein, Esq. Daniel
A. Johnson, Esq. Leader & Berkon LLP, William F. Jung,
Esq. Jung & Sisco, PA
MEMORANDUM AND ORDER
C. FRANCIS IV UNITED STATES MAGISTRATE JUDGE
action arises from the sale by the defendants of thousands of
residential mortgages to the plaintiffs. The plaintiffs have
filed a motion to compel compliance with their subpoena to
depose a third-party witness, Erika Lance, who refused to
answer certain questions on the basis that they called for
the disclosure of trade secrets. The motion is granted in
part and denied in part.
noted in a recent decision, discovery in this action is
currently limited to the plaintiffs' tort and breach of
contract claims, which concern “(1) the alleged
misrepresentations and omissions by the defendants about
loans sold to the plaintiffs and (2) the defendants'
practice of retaining payments made on the loans, forgiving
loans, or releasing liens on loans sold to the
plaintiffs.” Mortgage Resolution Servicing, LLC v.
JPMorgan Chase Bank, N.A., No. 15 Civ. 293, 2017 WL
2305398, at *1 (S.D.N.Y. May 18, 2017) (quoting Mortgage
Resolution Servicing, LLC v. JPMorgan Chase Bank, N.A.
(“Mortgage Resolution II”), No. 15 Civ.
293, 2016 WL 3906712, at *2 (S.D.N.Y. July 14, 2016)).
Information relevant to other claims, such as the
plaintiffs' (now dismissed) claim under the Racketeer
Influenced Corrupt Organizations Act (“RICO”), is
not subject to discovery. See id.; see also
Mortgage Resolution Servicing, LLC v. JP Morgan Chase Bank,
N.A., No. 15 Civ. 293, 2017 WL 570929, at *4-5 (S.D.N.Y.
Feb. 13, 2017) (dismissing civil RICO claim). 
Lance is an employee of Nationwide Title Clearing, Inc.
(“NTC”), a non-party that allegedly prepared and
filed on behalf of the defendants lien releases for mortgages
actually owned by the plaintiffs. (Pl. Memo. at 3-5). These
included releases prepared in connection with the “DOJ
Lien Release Process” (also known as the “Pre-DOJ
Lien Release Project”), a program the defendants
established to “excise from their books loans that
would otherwise require compliance with anti-blight
programs.” (Pl. Memo. at 5-6); Mortgage Resolution
II, 2016 WL 3906712, at *1. Documents produced pursuant
to subpoena revealed that Ms. Lance prepared many of the
allegedly “fraudulent lien releases and subsequent
Vacations of Modifications of Mortgages” that injured
the plaintiffs. (Pl. Memo. at 7).
February 2017, the plaintiffs served Ms. Lance with a
subpoena in her individual capacity, rather than as a witness
on behalf of the company pursuant to Rule 30(b)(6) of the
Federal Rules of Civil Procedure. (Pl. Memo. at 7). Her
deposition was eventually scheduled for March 21, 2017. (Pl.
Memo. at 8). Ms. Lance (on the advice of counsel) refused to
answer certain questions that would purportedly elicit
NTC's proprietary information, such as questions about
(1) NTC's clients or types of clients, and (2) the types
of systems Ms. Lance used to create certain documents on
which her name appears and the manner of creating certain
such documents. (Pl. Memo. at 9-12; Deposition of Erika Lance
dated March 21, 2017, in 15 Civ. 293 (“Lance
Dep.”) at 10-11, 21). When Ms. Lance asserted that she
would refuse to answer similar questions, plaintiffs'
counsel terminated the deposition. (Pl. Memo. at 12; Lance
Dep. at 21-22).
Lance asserts that Florida law applies to this privilege
dispute, and the plaintiffs do not argue otherwise.
(Non-Parties' Response to Plaintiffs' Motion to
Compel Compliance with Subpoena of Third-Party Witness Erika
Lance and for Sanctions (“Lance Memo.”) at 11;
Plaintiffs' Reply to Non-Parties' Response to
Plaintiffs' Motion to Compel Compliance with Subpoena of
Third- Party Witness Erika Lance and for Sanctions
(“Reply”) at 1, 5); Stephens v. American Home
Assurance Co., No. 91 Civ. 2898, 1995 WL 230333, at *7
(S.D.N.Y. April 17, 1995) (employing New York choice-of-law
rules in diversity case and applying law of jurisdiction
where conduct subject to privilege occurred); but see Del
Giudice v. Harlan, No. 15 Civ. 7330, 2016 WL 6875894, at
*2 (S.D.N.Y. Nov. 21, 2016) (“Pursuant to Federal Rule
of Evidence 501, ‘in a civil case, state law governs
privilege regarding a claim or defense for which state law
supplies the rule of decision.'”). I will not
disturb the parties' (implicit) agreement here.
Uniform Trade Secrets Act defines a trade secret as
information, including a formula, pattern, compilation,
program, device, method, technique, or process that:
(a) Derives independent economic value, actual or potential,
from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can
obtain economic value from its disclosure or use; and
(b) Is the subject of efforts that are reasonable under the
circumstances to ...