MD District Court Denies Motion to Dismiss Where Trade Secret Adequately Pled

Friday, April 5, 2019

In an action between competing mortgage lenders, the plaintiff asserted in its Complaint that the defendant misappropriated trade secrets under the Maryland Uniform Trade Secrets Act (“MUTSA”) by hiring the plaintiff’s employees, and encouraging and assisting those employees to transfer internal personnel and financial information to the defendant.  The defendant moved to dismiss the complaint for failure to state a claim, specifically arguing that the Complaint did not identify a trade secret.  U.S. District Court Judge George L. Russell, III denied the motion to dismiss, finding that the plaintiff adequately pled that:  (1) its trade secrets were processes, procedures, methods, innovations, and production, including a loan pipeline program; (2) it derived independent economic value from those processes and methods, (3) the trade secret information was not known to the public; and (4) it exercised reasonable efforts to maintain the secrecy of the trade secret information, including using Employment Agreements to identify categories of confidential information and using keys, access cards, and software on laptops to protect the information.  Equity Prime Mortgage, LLC v. 1st Fin., Inc., No. GLR-17-3754 (D. Md. Feb. 22, 2019).