North Bay Credit Union v. MRB Direct, Inc. ( 2024 )

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 Case No.: 2:24-cv-00212-MMD-CSD NORTH BAY CREDIT UNION, 4 Order Plaintiff 5 Re: ECF No. 58 v. 6 MRB DIRECT, INC., et al., 7 Defendants 8 9 Before the court is Plaintiff North Bay Credit Union’s motion to stay discovery pending 10 a decision on the motion to dismiss. (ECF Nos. 58, 58-1.) Defendants filed a response. (ECF No. 11 63.) Plaintiff filed a reply. (ECF No. 65.) 12 I. DISCUSSION 13 “Courts have broad discretionary power to control discovery.” Kor Media Group, LLC v. 14 Green, 294 F.R.D. 579, 581 (D. Nev. 2013) (citation omitted). “The Federal Rules of Civil 15 Procedure do not provide for automatic or blanket stays of discovery when a potentially 16 dispositive motion is pending.” Id. (quotation marks and citation omitted). “Instead, a party 17 seeking to stay discovery carries the heavy burden of making a strong showing why discovery 18 should be denied.” Id. (citation omitted). At the outset, courts are guided by Federal Rule of Civil 19 Procedure 1 to ensure a “just, speedy, and inexpensive determination of every action and 20 proceeding.” 21 Judges within the District of Nevada have used varying approaches to determine whether 22 a stay of discovery is warranted while a potentially dispositive motion is pending: the 23 “preliminary peek” approach and the “good cause” approach. 1 Under the “preliminary peek” approach, courts look at whether: (1) the pending motion is 2 potentially dispositive; (2) the potentially dispositive motion can be decided without additional 3 discovery; and (3) the court has taken a ‘preliminary peek’ at the merits of the potentially 4 dispositive motion and is convinced that the motion may be successful and the claim(s) will be 5 dismissed. Id. (citation omitted). 6 “The fact that discovery may involve inconvenience and expense is not sufficient, 7 standing alone, to support a stay of discovery.” Kor Media, 294 F.R.D. at 583 (citation omitted). 8 “[T]here must be no question in the court’s mind that the dispositive motion will prevail, and 9 therefore, discovery is a waste of effort.” Trzaska v. Int’l Game Tech., No. 2:10-cv-02268-JCM- 10 GWF, 2011 WL 1233298, at *3 (D. Nev. Mar. 29, 2011) (emphasis original). 11 Under the more lenient “good cause” approach, courts evaluate: (1) whether the 12 dispositive motion can be decided without further discovery; and (2) whether good cause exists 13 to stay discovery. See Schrader v. Wynn Las Vegas, LLC, 2:19-cv-02159-JCM-BNW, 2021 WL 14 4810324, at *4 (D. Nev. Oct. 14, 2021) (citations omitted). Good cause may exist if the moving 15 party convinces the court the plaintiff cannot state a claim. Id. It may also exist when other 16 factors are present, such as undue burden or expense or prejudice. Id. 17 The undersigned has evaluated the motions to stay discovery while a potentially 18 dispositive motion is pending under the “preliminary peek” framework. In any event, the court 19 finds Plaintiff has not demonstrated that discovery should be stayed under either approach. 20 Plaintiff originally filed this action in state court in California on August 9, 2023, 21 asserting claims for intentional and negligent interference with prospective economic advance as 22 well as for violation of California Business and Professions Code Sections 17200, et seq. On 23 October 13, 2023, Defendants removed it to the United States District Court for the Central 1 District of California based on diversity jurisdiction. (ECF Nos. 1, 1-1, 1-2.) On November 15, 2 2023, Defendants each filed a motion to dismiss for failure to state a claim and for improper 3 venue. (ECF Nos. 25, 27.) On January 26, 2024, District Judge David O. Carter granted the 4 motions to transfer and transferred this case to the District of Nevada. (ECF No. 36.) Defendants 5 have filed a motion to dismiss which is currently pending before Chief District Judge Du arguing 6 that the complaint fails to state a claim upon which relief may be granted, and insufficient 7 service as to Mr. Park. (ECF No. 61.) 8 On September 7, 2023, a related case, Austin Capital Trust Company, LLC v. North Bay 9 Credit Union, et al., case 3:23-cv-00444-MMD-CSD, was filed. 10 Motions to stay discovery were filed in both cases, and both assert that the related cases 11 have significant overlap. The motions also argue that a stay is warranted under both the 12 “preliminary peek” and “good cause” frameworks. The “preliminary peak” analysis addresses 13 only the motion to dismiss filed in the Austin Capital action. The “good cause” analysis only 14 discusses discovery propounded in the Austin Capital action, the motion to dismiss filed in the 15 Austin Capital action, and the overlap between the two cases. 16 Judge Du recently granted the Defendants’ motion to dismiss filed in the Austin Capital 17 case and that action has been dismissed without prejudice. (ECF No. 52 in case 3:23-cv-00444- 18 MMD-CSD.) This renders moot the argument that discovery should be stayed because there is 19 overlap between the cases. Moreover, Plaintiff has not addressed the motion to dismiss filed by 20 Defendants in this action. Nor has Plaintiff articulated any other viable basis for staying 21 discovery pending District Judge Du’s resolution of the motion to dismiss filed in this action. 22 23 1 Il. CONCLUSION 2 Plaintiff's motion to stay discovery (ECF No. 58) is DENIED. If the parties need any extension of the existing deadlines, a motion or stipulation should be filed which complies with the Federal Rules of Civil Procedure and Local Rules. 5 6 IS SO ORDERED. Dated: August 20, 2024 CS oy Craig S. Denney 10 United States Magistrate Judge 1] 12 13 14 15 16 17 18 19 20 21 22 23