Mortgage technology vendor DocMagic is claiming an early victory in its lawsuit against origination system provider Ellie Mae, as both sides await a federal judge's written ruling from a pretrial hearing held on Monday.
While choosing to issue a written opinion rather than rule immediately after the proceeding in the U.S. District Court for the Northern District of California in San Francisco, Senior District Judge Marilyn Hall Patel lifted a stay of discovery that's limited the amount of information either side has been able to obtain since DocMagic filed its initial lawsuit in August 2009. The ban prevented either side from requesting documents, issuing subpoenas or scheduling depositions of parties involved in the case.
(The 2009 lawsuit and two subsequent amended complaints allege 14 claims against Ellie Mae. DocMagic, which provides technology for mortgage document preparation, claims Ellie Mae used intellectual property it obtained from a technology sharing agreement with DocMagic to build its own competing document software, called Ellie Mae Docs.)
At the hearing, Patel heard oral arguments in support of written claims from both sides on a motion for summary judgement that Ellie Mae filed to remove DocMagic's antitrust claims from the case. Stuart Plunkett, a litigation partner at the San Francisco office of law firm Morrison and Foerster and a member of DocMagic's legal team, told National Mortgage News the court "strongly indicated" it would deny Ellie Mae's motion.
"As one indication that the court intends to deny the motion and allow the case to go forward, she lifted the stay of discovery and told the parties they could proceed with discovery on all claims," Plunkett said.
"It is a very significant victory because it means DocMagic is open to full and open discovery of Ellie Mae's business practices with respect to our claims," he continued.
A spokesperson for Ellie Mae declined repeated requests for comment, citing the company's ongoing "quiet period" as it pursues an initial public stock offering. (
