Egg and I, LLC v. U.S. Specialty Insurance Company

Opinion

1 ROBERT S. LARSEN, ESQ. Nevada Bar No. 7785 2 WING YAN WONG, ESQ. Nevada Bar No. 13622 3 GORDON REES SCULLY MANSUKHANI, LLP 300 South 4th Street, Suite 1550 4 Las Vegas, Nevada 89101 Telephone: (702) 577-9300 5 Facsimile: (702) 255-2858 E-Mail: rlarsen@grsm.com 6 wwong@grsm.com

7 MATTHEW S. FOY, ESQ. Admitted Pro Hac Vice 8 JENNIFER WAHLGREN, ESQ. Admitted Pro Hac Vice 9 GORDON REES SCULLY MANSUKHANI, LLP 275 Battery Street, Suite 2000 10 San Francisco, CA 94111 Telephone: (415)-875-3174 11 Facsimile: (415) 986-8054 Email: mfoy@grsm.com 12 jwahlgren@grsm.com

13 Attorneys for Defendants

14 UNITED STATES DISTRICT COURT 15 DISTRICT OF NEVADA 16 EGG AND I, LLC, a Nevada limited liability Case No.: 2:20-cv-00747-KJD-DJA 17 company; EGG WORKS, LLC, a Nevada limited liability company; EGG WORKS 2, LLC, a Nevada 18 limited liability company; EGG WORKS 3, LLC, a STIPULATION AND ORDER TO Nevada limited liability company; EGG WORKS 4, STAY DISCOVERY 19 LLC, a Nevada limited liability company; EGG WORKS 5, LLC, a Nevada limited liability 20 company; EGG WORKS 6, LLC, a Nevada limited liability company; and EW COMMISSARY, LLC, a 21 Nevada limited liability company,

22 Plaintiffs,

23 v.

24 U.S. SPECIALTY INSURANCE COMPANY, a Texas corporation; PROFESSIONAL INDEMNITY 25 AGENCY, INC. dba TOKIO MARINE, HCC- SPECIALTY GROUP, a New Jersey corporation, 26 Defendants. 27 1 STIPULATION AND ORDER TO STAY DISCOVERY

2 Plaintiffs Egg and I, LLC et al. (collectively as “Plaintiffs”), by and through their 3 attorneys of record, the law firms of Arias Sanguinetti Wang & Torrijos, LLP and Brayton 4 Purcell, LLP, and Defendants U.S. Specialty Insurance Company (“USSIC”) and Professional 5 Indemnity Agency, Inc. dba Tokio Marine, HCC-Specialty Group (“PIA,” collectively with 6 “USSIC” as “Defendants”), by and through their attorneys of record, the law firm of Gordon 7 Rees Scully Mansukhani, LLP, and hereby stipulate to stay discovery in the above-referenced 8 action. In support of this request, the Parties submit the following for the Court’s consideration: 9 A. Relevant Factual Allegations and Procedural History 10 1. Plaintiffs are a group of restaurants in Clark County, Nevada. ECF No. 1 at ¶ 1. 11 USSIC insured Plaintiffs under a Restaurant Recovery Insurance Policy, policy no. U719- 12 860374, in force from September 1, 2019 through September 1, 2020 (the “Policy”). Id. at ¶ 3; 13 ECF No. 1-3 (the Policy as attached to Complaint). Between March and April 2020, the 14 Governor of Nevada issued Declaration of Emergency Directive 003 and guidance in response to 15 the health crisis caused by COVID-19 (collectively as “Directives”). ECF No. 1 at ¶¶ 6-10. To 16 comply with the Directives, Plaintiffs suspended business operations at their restaurants, causing 17 Plaintiffs to suffer losses. Id. at ¶ 11. Plaintiffs claim that Defendants refused to pay for the 18 losses and expenses under the Policy. Id. at ¶¶ 12-13. Defendants claim that there is no 19 coverage under the Policy for the claimed losses and expenses. 20 2. On April 24, 2020, Plaintiffs filed their Complaint on behalf of themselves and a

21 putative class of persons and entities whose claims for losses under a Restaurant Recovery Policy 22 were denied by Defendants. Id. at ¶ 46. 23 3. On May 26, 2020, Defendants filed their Motion to Dismiss. ECF No. 24. 24 4. On June 30, 2020, Plaintiffs filed their Response to the Motion to Dismiss. ECF 25 No. 33. 26 5. Defendants’ Reply brief is currently due on July 28, 2020. ECF No. 32. 27 / / / 1 B. Stay of Discovery 2 6. The Parties both request a stay of discovery pending resolution of the Motion to 3 Dismiss. 4 7. Federal district courts have “wide discretion in controlling discovery.” Little v. 5 City of Seattle, 863 F.2d 681, 685 (9th Cir. 1988). In exercising this discretion, a district court 6 may stay discovery based on the filing of a motion that is “potentially dispositive of the entire 7 case.” Tradebay, LLC v. eBay, Inc., 278 F.R.D. 597, 601 (D. Nev. 2011); see Turner 8 Broadcasting Sys. v. Tracinda Corp., 175 F.R.D. 554, 556 (D. Nev. 1997) (holding that 9 “[w]hether to grant a stay is within the discretion of the Court…”); Ortega v. Harmony Homes, 10 Inc., No. 2:15-cv-00794-MMD-VCF, 2015 U.S. Dist. LEXIS 110352, *6 (D. Nev. Aug. 19, 11 2015) (granting motion to stay general discovery when motion was potentially dispositive and 12 foreseeable discovery costs were substantial). 13 8. “In evaluating the propriety of an order staying or limiting discovery while a 14 dispositive motion is pending, the court considers the goal of Federal Rule of Civil Procedure 1, 15 which provides that the Rules shall be construed and administered to secure the just, speedy, and 16 ‘inexpensive determination of every action.’” Carter v. Rent-A-Center, Inc., 2:15-cv-00178- 17 GMN-CWH (D. Nev. May 18, 2015) (granting parties’ stipulation to stay discovery pending 18 resolution of defendant’s motion to dismiss class action complaint). To that end, the Court also 19 “takes a ‘preliminary peek’ at the merits of the dispositive motion.” Id. (citing Tradebay, LLC, 20 278 F.R.D. at 603).

21 9. The Parties recognize that discovery in this putative class action will be 22 substantial, costly, and time-consuming. In this case there are eight named Plaintiffs and an 23 unknown amount of putative class members. Discovery related to the named Plaintiffs alone is 24 expected to require substantial attorney time and cost. Typically, class discovery can increase 25 the discovery time and costs. 26 10. Additionally, requiring discovery to proceed while a potentially dispositive 27 motion is pending increases the burden on the Court system and its scarce resources. 1 11. Federal Rule of Civil Procedure 1 strongly supports granting a stay of discovery 2 || to preserve the resources of the parties and the Court. “The stay furthers the goal of efficiency 3 || for the court and litigants.” Little, 863 F.2d at 685. 4 12. In the event the Court grants this Stipulation, the Parties will hold a Federal Rule 5 || of Procedure 26(f) conference and submit a proposed discovery plan and scheduling order within 6 || forty-five (45) days after the Order on the Motion to Dismiss is entered. 7 Dated this 14" day of July, 2020. 8 || ARIAS SANGUINETTI WANG & GORDON REES SCULLY TORRIJOS, LLP MANSUKHANI, LLP /s/ Gil Purcell /s/___ Robert S. Larsen 10 || Gregg A. Hubley, Esq. Robert S. Larsen, Esq. Nev. Bar No. 7386 Nev. Bar No. 7785 11 || Christopher A.J. Swift, Esq. Wing Yan Wong, Esq. ges Nev. Bar No. 11291 Nev. Bar No. 13622 4 12 || 7201 W. Lake Mead Blvd., Suite 570 300 South 4" Street, Suite 1550 Bes Las Vegas, Nevada 89128 Las Vegas, Nevada 89101 Ra. 13 Sot Mike Arias, Esq. Matthew S. Foy, Esq. 4 14 || Cal. Bar No. 115385 Cal. Bar No. 187238 (Admitted Pro Hac Vice) 2 Alfredo Torrijos, Esq. Jennifer Wahlgren, Esq. gg 15 || Cal. Bar No. 222458 Cal. Bar No. 249556 (Admitted Pro Hac een 6701 Center Drive West, 14" Floor Vice) 16 || Los Angeles, California 90045 275 Battery Street, Suite 200 San Francisco, California 94111 & 17 || BRAYTON PURCELL, LLP Alan Brayton, Esq. Attorneys for Defendants 18 || Cal Bar No. 73685 Gilbert Purcell, Esq. 19 || Cal Bar No. 113603 James Nevin, Esq. 20 || Cal. Bar No. 220816 Andrew Chew, Esq. 21 || Cal. Bar No. 225679 222 Rush Landing Road 22 || Novato, California 94945 Attorneys for Plaintiffs and the Proposed 23 || Class ORDER 24 35 IT IS SO ORDERED. July 17, 2020 DATED: 26 27 28 UNITED STATES, MAGISTRATE JUDGE