Moonlight Mountain Recovery, Inc. v. McCoy

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF IDAHO

MOONLIGHT MOUNTAIN RECOVERY, INC., an Idaho Case No. 1:24-cv-00012-BLW Corporation, MEMORANDUM DECISION AND ORDER Plaintiff,

v.

JUSTIN MCCOY, an individual; ERIC MINNIG, an individual; COREY RICHARDSON, an individual; XAVIER “FRANCISCO” FLORES, an individual; JONATHON HUNT, an individual; JOHN DOES 1- 10; ROE ENTITIES 11-20,

Defendants.

INTRODUCTION Before the Court is Moonlight Mountain Recovery’s motion to amend the scheduling order (Dkt. 71). For the reasons set forth below, the Court will grant the motion. BACKGROUND In January 2024, Moonlight filed this action against several former employees and their business partner alleging violations of the Computer Fraud and Abuse Act and state law. Complaint, Dkt. 1. Several defendants moved to dismiss for lack of subject matter jurisdiction, which the Court granted with leave

to amend. Dkt. 45. Moonlight filed an amended complaint and some of the defendants, again, moved to dismiss. Dkts. 46, 48, 50, 51. Shortly after these motions were filed, the Court entered a scheduling order setting forth the deadlines

to govern the litigation. Dkt. 54. In February 2025, the Court denied the motions to dismiss, and the parties quickly agreed to a protective order to govern disclosure of material during discover. Dkts. 60, 62. Fact discovery closed on June 30, 2025 with expert discover to close a month later on July 31, 2025. Dkt. 54.

Moonlight now moves to amend the scheduling order to extend the remaining deadlines by 90 days. Defendants Hunt, Minnig, and McCoy all oppose the motion.

LEGAL STANDARD Pursuant to Federal Rule of Civil Procedure 16(b)(5), the Court may only amend a scheduling order if good cause exists to do so. Johnson v. Mammoth Recreations, 975 F.2d 604, 609 (9th Cir. 1992). The “good cause” standard focuses

primarily on the “diligence of the party seeking amendment” but “a court may also consider the existence or degree of prejudice to the opposing party.” Id. at 608. To demonstrate diligence, the moving party must show it “could not reasonably meet the established timeline in a scheduling order despite [its] diligence.” DirectTV, Inc. v. Busdon, No. CV-04-265-S-LMB, 2005 WL 1364571, at *1 (D. Idaho 2005).

If the moving party “was not diligent, the inquiry should end.” Johnson, 975 F.2d at 610. ANALYSIS Moonlight insists it has diligently pursued discovery in this case. It attributes

its inability to complete discovery in the time allotted to delays caused by the two rounds of motion practice and protracted negotiations over the protective order. The second set of motions to dismiss were resolved in early February 2025 and a

stipulated protected order was entered about two weeks later. Dkts. 60, 63. At that point, over four months remained in the discovery period. See Dkt. 54. Despite its knowledge that the discovery period would expire in just a few months, Moonlight waited until April 28, 2025 to serve its first set of discovery requests. As the

defendants point out, this delay certainly raises questions about Moonlight’s diligence. The defendants argue that in addition to delaying discovery, Moonlight has failed to fulfill its discovery obligations. These failures include incomplete

initial disclosures, delayed responses to written discovery, and, even when it did respond, those responses consisted largely of improper objections. Moonlight, in turn, points the finger back at the defendants, faulting them for the lack of documents produced in response to Moonlight’s requests. This argument is, largely, irrelevant as the proper consideration is Moonlight’s diligence as it is the

moving party. That said, the Court cannot completely ignore the delay caused, mainly, by the second round of motion practice, which resulted in a roughly three-month delay

of discovery. Delaying discovery during this period was, at least somewhat justified, given the resolution of the motions to dismiss could impact not only the scope of the case, but whether it proceeded in federal court. The defendants argue that an extension of the discovery period will prejudice them. They claim its unfair

for Moonlight to drag them into federal court, not engage meaningfully in discovery, and then get bailed out by an extension. This sentiment is understandable; however, this prejudice does not outweigh other considerations.

Front of mind in this case is the preference to resolve cased on their merits. So far it appears the parties have conducted limited discovery. The additional time from an extension will allow the defendants to get answers to some of their outstanding questions and facilitate a resolution of this case on the merits. To the extent any

specific discovery violations do cause prejudice, the defendants have other remedies to mitigate that prejudice. Accordingly, the Court will grant the motion to amend. Candidly, it was a close call whether to grant or deny Moonlight’s request as Moonlight just barely meets threshold for good cause. The Court is therefore

unlikely to grant any additional extension of these deadlines absent some unforeseen event or agreement among the parties. ORDER IT IS ORDERED that:

1. Plaintiff’s Motion to Amend the Scheduling Order (Dkt. 65) is GRANTED. 2. The Court’s Scheduling Order (Dkt. 54) is amended as follows:

Event Old Deadline New Deadline Dispositive Motions August 30, 2025 November 28, 2025 ADR May 31, 2025 August 29, 2025 Completion of Fact June 30, 2025 September 29, 2025 Discovery Plaintiff’s Expert May 1, 2025 July 30, 2025 Disclosure Defendant’s Expert June 2, 2025 September 2, 2025 Disclosure Plaintiff’s Rebuttal June 16, 2025 September 15, 2025 Expert Disclosure Completion of Expert July 31, 2025 October 29, 2025 Discovery DATED: July 3, 2025 US, OF Wal te / 8 B. Lynn Winmill cy U.S. District Court Judge

MEMORANDUM DECISION AND ORDER - 6