Exom v. Brock & Scott, PLLC ( 2024 )

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 * * * 4 AZIZA EXOM, an individual, Case No. 2:24-cv-00773-APG-EJY 5 Plaintiff, ORDER 6 v. 7 BROCK & SCOTT, PLLC, a foreign professional limit-liability company, 8 Defendant. 9 10 I. Introduction 11 Pending before the Court is Defendant’s Motion to Stay Discovery. ECF No. 14. The Court 12 considered the Motion, the Opposition (ECF No. 15), and the Reply (ECF No. 16). The Court finds 13 fact discovery is properly stayed. Limited jurisdictional discovery is granted. 14 II. Discussion 15 As recently explained in Flynn v. Nevada, 345 F.R.D. 338, 343-44 (D. Nev. 2024): 16 In 1989, Chief United States District Judge Edward C. Reed, Jr. articulated several guiding principles for analyzing a motion to stay discovery. Twin City Fire Ins. 17 Co. v. Emps. Ins. of Wausau, 124 F.R.D. 652 (D. Nev. 1989). “A pending [m]otion to [d]ismiss is not ordinarily a situation that in and of itself would warrant a stay of 18 discovery.” Id. at 653. “To show good cause in the Ninth Circuit, the moving party must show more than an apparently meritorious 12(b)(6) claim: ‘A district court 19 may ... stay discovery when it is convinced that the plaintiff will be unable to state a claim for relief.’” Id. (quoting Wood, 644 F.2d at 801) (emphasis added by Judge 20 Reed). “Finally, while Fed. R. Civ. P. 26(c) protects against oppression or undue burden and expense, a showing that discovery may involve some inconvenience 21 and expense does not suffice to establish good cause for issuance of a protective order.” Id. Rather than bald assertions of undue burden or expense, “[s]ome 22 extraordinary justification must be shown to satisfy the good cause requirement of Fed. R. Civ. P. 26(c).” Id. “In addition, the burden is on the party seeking relief to 23 show some plainly adequate reason for the order.” Id. 24 Further, as a practical matter “[a] stay of all discovery should only be ordered if the court is 25 ‘convinced’ that a plaintiff will be unable to state a claim for relief.” Tradebay, LLC v. eBay, Inc., 26 278 F.R.D. 597, 603 (D. Nev. 2011). When deciding whether to issue a stay, the Court must take a 27 “preliminary peek” at the merits of the dispositive motion pending in the case. Buckwalter v. Nevada 1 7, 2011). In doing so, the Court must consider whether the pending motion is potentially dispositive 2 of the entire case, and whether that motion can be decided without additional discovery. Tradebay, 3 278 F.R.D. at 602. Motions to dismiss are frequently part of federal practice and “[a]n overly lenient 4 standard for granting motions to stay all discovery is likely to result in unnecessary discovery delay 5 in many cases.” Trzaska v. Int’l Game Tech., Case No. 2:10-cv-02268-JCM-GWF, 2011 WL 6 1233298, at *4 (D. Nev. Mar. 29, 2011). 7 Here, Defendant filed a Motion to Dismiss arguing there is a lack of personal jurisdiction 8 such that this case cannot be heard in the District of Nevada. Underlying this argument is 9 Defendant’s proceedings in Tennessee on a debt collection action in which Plaintiff was found in 10 default and a judgement was entered. Plaintiff’s Complaint ¶ 14. Defendant obtained a writ of 11 garnishment in Tennessee and served the Notice of Garnishment on Plaintiff’s employer also in 12 Tennessee. Id. ¶ 15; ECF No. 8-5. The garnishee provided the Shelby County, Tennessee Clerk of 13 Court with payment on the garnishment from Plaintiff’s wages earned in Nevada to which she had 14 moved. ECF No. 1 ¶ 18. 15 Plaintiff contends she left her employer in Tennessee and moved to Nevada six months 16 before the events at issue took place and that “this fact necessitated … [Defendant’s] search for … 17 [Plaintiff’s] location and employment … in Nevada ….” ECF No. 15 at 6. Plaintiff therefore argues 18 personal jurisdiction over Defendant arises from case law holding a single debt collection letter sent 19 to a plaintiff in Nevada is sufficient to establish jurisdiction. Id. In Paradise Robinson v. Hoover, 20 883 F.Supp. 521 (D. Nev. 1995), on which Plaintiff relies, the court stated: “it is well-settled that a 21 single contact with the forum state, not involving the physical presence of the defendant, can be a 22 sufficient basis upon which to establish jurisdiction over the defendant. … This is not a case where 23 the communication involved is merely a means of conducting some other primary business within 24 the forum. Here, the … Defendants’ ‘communications in the forum state ... are the precise subject 25 matter of this action pursuant to the FDCPA.’” Russey v. Rankin, 837 F.Supp. 1103, 1105 (D.N.M. 26 1993) (quoting Bailey v. Clegg, Brush & Assoc., Inc., 1991 WL 143461 (N.D.Ga.1991)).” Id. at 27 525. 1 In contrast to the facts in Paradise Robinson, the contact with Plaintiff in this case was not 2 debt collection or notice of garnishment, but the Release of Garnishment that was sent to Plaintiff’s 3 Nevada residence. Thus, unlike Paradise Robinson, the communication in Nevada is not the precise 4 subject matter of this action. 5 The Ninth Circuit has adopted a “but for” test for determining whether a plaintiff’s claim 6 arises out of a defendant’s forum related activities for purposes of determining the second prong of 7 the specific jurisdiction test. Doe v. American Nat’l Red Cross, 112 F.3d 1048, 1051 (9th Cir. 8 1997).1 The “arising out of” requirement of the specific jurisdiction test is met if, “but for” the 9 contacts between the defendant and the forum state, the cause of action would not have arisen. 10 Terracom v. Valley National Bank, 49 F.3d 555, 561 (9th Cir. 1995) (internal citation omitted). The 11 Court finds Plaintiff’s underlying claim does not arise “but for” the result of the release of 12 garnishment; instead, the claim arises from the garnishment itself. Thus, the Court finds the single 13 letter sent by Defendant to Plaintiff in Nevada may not allow Plaintiff to establish the second prong 14 of the specific jurisdiction test. Id. at 560-61. Plaintiff may well have a FDCPA claim under which 15 she can proceed, but she may have to proceed in Tennessee, not Nevada. Further, because the issue 16 is one of personal jurisdiction, and it is questionable whether Nevada may properly exercise the 17 same, the Court finds granting the stay of fact discovery effects the overall goals of Rule 1 of the 18 Federal Rules of Civil Procedure. 19 III. Order 20 Accordingly, IT IS HEREBY ORDERED that Defendant’s Motion to Stay Discovery (ECF 21 No. 14) is GRANTED in part and DENIED in part. 22 IT IS FURTHER ORDERED that discovery is opened for a 60 day period, measured from 23 the date of this Order, in which Plaintiff may conduct discovery related solely to whether personal 24 jurisdiction is properly exercised over Defendant Brock & Scott, PLLC by the U.S. District Court 25 for the District of Nevada. This discovery may include no more than 5 interrogatories, 5 document 26 1 The three prong test to determine whether specific jurisdiction may be applied to a defendant includes: (1) The nonresident defendant must do some act or consummate some transaction with the forum or perform some act by which 27 he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and 1 requests, and one deposition of the person most knowledgeable regarding the facts that would impact 2 jurisdiction. 3 IT IS FURTHER ORDERED that all discovery relating to the underlying facts of this dispute 4 is stayed pending the Court’s ruling on the Motion to Dismiss. 5 IT IS FURTHER ORDERED that within fourteen (14) days of the date on an Order 6 resolving the Motion to Dismiss, if such Motion is not dispositive of this case proceeding in the 7 District of Nevada, the parties must file a status report regarding what if any claims remain pending, 8 whether fact discovery should commence, and, if fact discovery should commence, the scope of the 9 discovery and all applicable deadlines. 10 IT IS FURTHER ORDERED that if the parties wish to supplement their arguments relating 11 to the Motion to Dismiss, they must seek permission to do so from Judge Gordon in front of whom 12 that motion is pending. 13 Dated this 2nd day of October, 2024. 14 15 ELAYNA J. YOUCHAH 16 UNITED STATES MAGISTRATE JUDGE 17 18 19 20 21 22 23 24 25 26 27