Barrett v. Apple Inc. ( 2020 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 CARL BARRETT, et al., 8 Case No. 5:20-cv-04812-EJD Plaintiffs, 9 ORDER DENYING ADMINISTRATIVE v. MOTION TO STAY DISCOVERY 10 PENDING RESOLUTION OF APPLE’S APPLE INC., et al., MOTION TO DISMISS 11 Defendants. Re: Dkt. No. 36 12 13 This case arises out of a criminal scheme in which scammers have found a way of tricking 14 victims into paying them large sums of money via iTunes gift cards. Plaintiffs brought this case 15 on behalf of a proposed class of all victims of this scam against Defendants Apple Inc. and Apple 16 Value Services, LLC (collectively “Apple”), seeking to hold Apple responsible for its alleged role 17 in failing to prevent the scam. 18 On October 8, 2020, Apple filed a motion to dismiss the case for failure to state a claim 19 pursuant to Federal Rule of Civil Procedure 12(b)(6). Plaintiffs have not yet responded to that 20 motion and it is not presently before the Court. One week after filing its motion to dismiss, Apple 21 filed the present administrative motion pursuant to Civil Local Rule 7-11, seeking to stay 22 discovery until the Court’s ruling on the pending motion to dismiss or, in the alternative, the 23 February 25, 2021 Case Management Conference. Dkt. No. 36. Plaintiff opposes a stay on 24 discovery. Dkt. No. 37. 25 The Court has the “inherent power to control the disposition of the cases on its docket in a 26 manner which will promote economy of time and effort for itself, for counsel and for litigants.” 27 Case No.: 5:20-cv-04812-EJD 1 Filtrol Corp. v. Kelleher, 467 F.2d 242, (9th Cir. 1973). In conjunction with that power, “[a] 2 district court may . . . stay discovery when it is convinced that the plaintiff will be unable to state a 3 claim for relief.” Wood v. McEwen, 644 F.2d 797, 801 (9th Cir. 1981) (per curiam). “In the 4 absence of a specific test from the Ninth Circuit, district courts generally consider two factors to 5 determine the appropriateness of a discovery stay: (1) whether the pending motion is potentially 6 dispositive of the entire case, and (2) whether the pending motion can be decided absent additional 7 discovery.” Optronic Techs., Inc. v. Ningbo Sunny Elec. Co., No. 5:16-CV-06370-EJD, 2018 WL 8 1569811, at *1-2 (N.D. Cal. Feb. 16, 2018) (citing S.F. Tech. v. Kraco Enters. LLC, No. 5:11-cv- 9 00355 EJD, 2011 WL 2193397, at *2 (N.D. Cal. June 6, 2011)). “A protective order may issue if 10 the moving party satisfies both prongs.” Id. 11 Discovery stays are not automatic, however, and “the two-factor test is not satisfied by 12 superficial statements or vague articulations demonstrating nothing more than the traditional 13 burdens of litigation.” Id. Rather, “[t]he moving party must show a particular and specific need 14 for the protective order, as opposed to making stereotyped or conclusory statements.” Skellerup 15 Indus. Ltd. v. City of L.A., 163 F.R.D. 598, 600 (C.D. Cal. 1995). This requirement accounts for 16 the fact that blanket stays of all discovery matters are an exception to the rules rather than 17 enunciated in the rules. Id. at 600-01 (“Had the Federal Rules contemplated that a motion to 18 dismiss under Fed. R. Civ. P. 12(b)(6) would stay discovery, the Rules would contain a provision 19 for that effect. In fact, such a notion is directly at odds with the need for expeditious resolution of 20 litigation” (citation and quotation marks omitted)). 21 Apple’s motion to dismiss argues that all eleven of Plaintiff’s claims are fatally flawed and 22 cannot be cured by amended. It is therefore possible that Apple’s motion to dismiss could be 23 dispositive of the entire case. It is also possible that certain of the claims will survive or that 24 certain claims will be dismissed with leave to amend such that the case will continue. Apple has 25 not demonstrated that the Complaint is “utterly frivolous, or filed merely in order to conduct a 26 ‘fishing expedition’ or for settlement value.” Gray v. First Winthrop Corp., 133 F.R.D. 39, 40 27 Case No.: 5:20-cv-04812-EJD 1 (N.D. Cal. 1990); see also Optronic, 2018 WL 1569811 at *1 (declining to stay discovery pending 2 a motion to dismiss where the defendants did not cite anything “outside of their own opinion of 3 || the Amended Complaint’s deficiencies” that rendered complete dismissal more likely than the 4 || not). In the absence of a clear showing that dismissal is likely, the Court declines to make a 5 premature determination on the merits of the motion to dismiss before Plaintiff has even filed its 6 || response. Thus, the mere possibility that the pending motion is dispositive of the suit only 7 “superficially satisfie[s]” the first factor. Id. 8 On the second factor, Apple is correct that a motion to dismiss under Rule 12(b)(6) is 9 generally decided with reference only to the complaint. This Court previously held, however, that 10 “granting a stay on such a basic notion is unwarranted” because “[t]he mere filing of a motion to 11 dismiss is not ordinarily sufficient to stop the discovery process.” /d. (citing Gray, 133 F.R.D. at 12 || 40). Apple argues that without a stay, “it is likely that Apple will need to devote significant time, 13 money, and resources to responding to discovery in a case that will likely not survive the pleading 14 || stage.” Motion at 4. The resources required to respond to discovery are part of the “the traditional 15 || burdens of litigation.” Optronic, 2018 WL 1569811, at *1. Apple does not explain why discovery 16 || in this case would be any more burdensome than it is on parties to other civil lawsuits. As this 3 17 || Court noted in Optronic, “any interest Defendants may have in resisting discovery is outweighed 18 || by the interests of Plaintiff, the public, and the court in maintaining an orderly and expeditious 19 schedule.” Jd, at *2. The Court finds that the same holds true in this case. 20 For these reasons, the motion to stay discovery pending resolution of the motion to dismiss 21 is DENIED. 22 IT IS SO ORDERED. 23 Dated: October 22, 2020 24 st □□□ VO NN EDWARD J. DAVILA 25 United States District Judge 26 Case No.: 5:20-cv-04812-EJD 28 || ORDER DENYING ADMINISTRATIVE MOTION TO STAY DISCOVERY PENDING RESOLUTION OF APPLE’S MOTION TO DISMISS