A major digital lender is taking a smaller competitor to trial, after a federal judge recently ordered its lawsuit over an alleged theft of trade secrets to proceed.
Better.com claims Beeline Loans stole and used confidential information obtained from a former marketing analyst who switched jobs between the firms in 2020. The larger lender is suing Beeline for its alleged misappropriation in possessing data about Better's operational model, Facebook advertising and partner agreements.
U.S. District Judge John Cronan last week ordered the lawsuit in the U.S. District Court for the Southern District of New York to go to trial in January 2024. The order came weeks after he granted a partial victory to Beeline in a lengthy opinion and order.
Neither company nor their respective attorneys responded to requests for comment this week.
Better filed the complaint in 2020 as it exponentially grew during the refinance boom. The lender has since endured
The complaint revolves around the alleged actions of Jack Abramowitz, a former marketing analyst at Better who moved to a position at Beeline in July 2020. Abramowitz was fired by Beeline a few months after his hire, following Better's accusations of wrongdoing, and he is not a named party in the complaint.
As Abramowitz was beginning his transition to Beeline in June 2020, he downloaded Better corporate documents and shared them with Beeline executives, Better claims. Among the information was a plethora of marketing data and an excel workbook detailing Better's operating model, financial information and projections.
"Taken together, this information 'constitutes a roadmap of Better's strategies which, in the hands of a competitor, could be used to replicate in a short time what Better has spent years developing," court filings said.
Abramowitz improperly retained access to the data after his departure due to an oversight, Better said. He was also subject to data disclosure and security agreements. Despite this, he shared the data with Beeline executives, including a projected valuation of Beeline drawn from Better's excel workbook, the suit claims.
That August, Better discovered Abramowitz's access and demanded to its competitor he be terminated, and Beeline fired him in September. Abramowitz and Better reached a settlement agreement in fall 2020, according to court filings.
Better filed its lawsuit that October, accusing Beeline of five counts. The court that month issued a preliminary injunction, requiring Beeline to destroy the Better information in its possession. Judge Cronan dismissed one of the counts in July 2021, and the sides in the following year argued the remaining counts and expert testimony admissions in numerous filings before Cronan's recent orders.
Cronan on March 30 granted and denied various expert testimony from technical experts to be presented at trial, while granting Beeline motion for summary judgment on tortious interference and aiding and abetting counts. The judge denied Beeline's request for summary judgment against a Defend Trade Secrets Act count, suggesting "a reasonable jury could find that the Facebook Ad Data and Operating Model constitute trade secrets under the DTSA."
The complaint doesn't specify damages sought, but an expert retained by Better assumes a one-time royalty payment from Beeline up to $6.31 million in Better's favor, according to a court filing. Cronan rejected Beeline's move to exclude that expert's testimony.
Better meanwhile remains locked in separate litigation with its former second-in-command Sarah Pierce, who
Better, which
