Cai v. Switch, Inc.

• Court: District Court, D. Nevada
• Decided: April 30, 2020
• Docket: 2:18-cv-01471
• Status: Unknown

Opinion

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 *** MINGBO CAI, Individually and On Behalf of 4 All Others Similarly Situated, 5 Plaintiff, 2:18-cv-01471-JCM-VCF ORDER 6 vs. SWITCH, INC., ROB ROY, GABE NACHT, 7 ZAREH SARRAFIAN, DONALD SNYDER, TOM THOMAS, BRYAN WOLF, 8 GOLDMAN SACHS & CO. LLC, J.P. 9 MORGAN SECURITIES LLC, BMO CAPITAL MARKETS CORP., WELLS 10 FARGO SECURITIES, LLC, CITIGROUP GLOBAL MARKETS INC., CREDIT 11 SUISSE SECURITIES, JEFFERIES LLC, BTIG, LLC, RAYMOND JAMES & 12 ASSOCIATES, INC., STIFEL, NICHOLAUS & COMPANY, INC., and WILLIAM BLAIR 13 & COMPANY, L.L.C., 14 Defendant. 15 For the reasons states below, Plaintiffs’ Motion To: (1) Withdraw Oscar Farach As Lead Plaintiff, 16 And To Withdraw Farach And Christian Avera As Proposed Class Representatives; And (2) Appoint 17 Proposed Class Representative Donald Powell As Lead Plaintiff And To Add Proposed Class 18 Representative Timothy Wylie As A Named Plaintiff (ECF No. 121) is denied without prejudice, and 19 Switch Defendants’ Motion To Stay Discovery And Plaintiff’s Motions Relating To Class Certification 20 Pending Resolution Of Motion For Judgment On The Pleadings (ECF No. 124) is granted. 21 22 LEGAL STANDARD 23 When evaluating a motion to stay discovery while a dispositive motion is pending, the court 24 initially considers the goal of Federal Rule of Civil Procedure 1. The guiding premise of the Rules is that 25 1 the Rules “should be construed and administered to secure the just, speedy, and inexpensive determination 2 of every action.” FED. R. CIV. P. 1. It needs no citation of authority to recognize that discovery is 3 expensive. The Supreme Court has long mandated that trial courts should resolve civil matters fairly but 4 without undue cost. Brown Shoe Co. v. United States, 370 U.S. 294, 306 (1962). This directive is echoed 5 by Rule 26, which instructs the court to balance the expense of discovery against its likely benefit. See 6 FED.R.CIV.P. 26(B)(2)(iii). 7 Consistent with the Supreme Court’s mandate that trial courts should balance fairness and cost, 8 the Rules do not provide for automatic or blanket stays of discovery when a potentially dispositive motion 9 is pending. Skellerup Indus. Ltd. v. City of Los Angeles, 163 F.R.D. 598, 600–01 (C.D. Cal. 1995). 10 Pursuant to Federal Rule of Civil Procedure 26(c)(1), “[t]he court may, for good cause, issue an order to 11 protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.” 12 Whether to grant a stay is within the discretion of the court. Munoz–Santana v. U.S. I.N.S., 742 F.2d 561, 13 562 (9th Cir. 1984). The party seeking the protective order, however, has the burden “to ‘show good cause’ 14 by demonstrating harm or prejudice that will result from the discovery.” FED. R. CIV. P. 26(c)(1). 15 Satisfying the “good cause” obligation is a challenging task. A party seeking “a stay of discovery carries 16 the heavy burden of making a ‘strong showing’ why discovery should be denied.” Gray v. First Winthrop 17 Corp., 133 F.R.D. 39, 40 (N.D.Cal.1990) (citing Blankenship v. Hearst Corp. 519 F.2d 418, 429 (9th Cir. 18 1975)). 19 Generally, imposing a stay of discovery pending a motion to dismiss is permissible if there are no 20 factual issues raised by the motion to dismiss, discovery is not required to address the issues raised by the 21 motion to dismiss, and the court is “convinced” that the plaintiff is unable to state a claim for relief. Rae 22 v. Union Bank, 725 F.2d 478, 481 (9th Cir. 1984); White v. Am. Tobacco Co., 125 F.R.D. 508 (D. Nev. 23 1989) (citing Wood v. McEwen, 644 F.2d 797, 801 (9th Cir. 1981) cert. denied, 455 U.S. 942 (1982). 24 Typical situations in which staying discovery pending a ruling on a dispositive motion are appropriate 25 1 would be where the dispositive motion raises issues of jurisdiction, venue, or immunity. TradeBay, LLC 2 v. Ebay, Inc., 278 F.R.D. 597, 600 (D. Nev. 2011). 3 Courts in the District of Nevada apply a two-part test when evaluating whether a discovery stay 4 should be imposed. Id. (citations omitted). First, the pending motion must be potentially dispositive of the 5 entire case or at least the issue on which discovery is sought. Id. Second, the court must determine whether 6 the pending motion to dismiss can be decided without additional discovery. Id. When applying this test, 7 the court must take a “preliminary peek” at the merits of the pending dispositive motion to assess whether 8 a stay is warranted. Id. The purpose of the “preliminary peek” is not to prejudge the outcome of the motion 9 to dismiss. Rather, the court’s role is to evaluate the propriety of an order staying or limiting discovery 10 with the goal of accomplishing the objectives of Rule 1. 11 DISCUSSION 12 Here, Switch Defendants have sufficiently established good cause for granting the stay of 13 discovery until the Motion for Judgment on the Pleadings (ECF No. 106) has been decided. The stay 14 would not result in any undue hardship to the Plaintiff as the Court has not yet decided on the proposed 15 substitute representative. In Plaintiff’s response, Plaintiff has consented to Defendants’ request to stay 16 this action pending resolution of the Motion for Judgment on the Pleadings. (ECF No. 131 at p. 5). 17 Plaintiffs state “that an interim stay pending resolution of the Motion for Judgment on Pleading would 18 contribute to the orderly prosecution of the action and thus serves the interests of the judicial economy.” 19 Id. 20 Switch Defendants’ Motion to Stay is granted on the merits. After a “preliminary peek" and in 21 light of the goals of Rule 1 to “secure the just, speedy, and inexpensive” determination of all cases, the 22 Court finds that the Motion for Judgment on the Pleadings (ECF NO. 106) has merit and may resolve all 23 issues in controversy and demonstrate good cause to stay discovery. 24 Accordingly, and for good cause shown, 25 1 IT IS HEREBY ORDERED that the Switch Defendants’ Motion To Stay Discovery And 2 || Plaintiff's Motions Relating To Class Certification Pending Resolution Of Motion For Judgment On The 3 || Pleadings (ECF No. 124) is hereby GRANTED. In the event resolution of the Motion for Judgment on 4 || the Pleadings (ECF No.106) does not result in the disposition of this case, the parties must file a new joint 5 || discovery plan within 21 days of the issuance of the order resolving that motion. 6 IT IS FURTHER ORDERED that the Motion To: (1) Withdraw Oscar Farach As Lead Plaintiff, 7 || And To Withdraw Farach And Christian Avera As Proposed Class Representatives; And (2) Appoint 8 || Proposed Class Representative Donald Powell As Lead Plaintiff And To Add Proposed Class 9 Representative Timothy Wylie As A Named Plaintiff No. 121) is DENIED without prejudice. 10 Plaintiff may refile the Motion To: (1) Withdraw Oscar Farach As Lead Plaintiff, And To 11 |} Withdraw Farach And Christian Avera As Proposed Class Representatives; And (2) Appoint Proposed 12 Representative Donald Powell As Lead Plaintiff And To Add Proposed Class Representative 13 || Timothy Wylie As A Named Plaintiff (ECF No. 121), if the Motion for Judgment on the Pleadings (ECF 14 || No.106) does not result in the disposition of this case. 15 IT IS FURTHER ORDERED that a status hearing is scheduled for 10:00 a.m., December 3, 2020, 16 courtroom 3D. 17 DATED this 29th day of April, 2020. Liaw Eee. i 19 UNITED STATES MAGISTRATE JUDGE

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