In re Nexus 6P Products Liability Litigation

Filing 144

ORDER GRANTING 133 PLAINTIFFS' MOTION TO LIFT DISCOVERY STAY. Signed by Judge Beth Labson Freeman on 6/19/2018. (blflc2S, COURT STAFF) (Filed on 6/19/2018)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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Case No. 17-cv-02185-BLF
In re NEXUS 6P PRODUCTS LIABILITY
LITIGATION

ORDER GRANTING PLAINTIFFS’
MOTION TO LIFT DISCOVERY STAY

United States District Court
Northern District of California

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Before the Court is Plaintiffs’ motion to lift the discovery stay in this action. See ECF 133.

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For the reasons that follow, the Court GRANTS Plaintiffs’ request to lift the discovery stay.
I.

BACKGROUND
This case is a putative consumer class action against Defendants Huawei Device USA, Inc.

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(“Huawei”) and Google LLC (“Google”) (collectively “Defendants”), regarding severe defects in

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Nexus 6P smartphones. On August 18, 2017, this Court granted Defendants’ motion to stay

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discovery until the hearing on Defendants’ motions to dismiss the Consolidated Amended

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Complaint. See ECF 84. In particular, the Court noted that Huawei raised a personal jurisdiction

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argument that was potentially dispositive of the entire case as to Huawei. Id. at 3. The Court

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further noted that Google’s motion to dismiss could be potentially dispositive of the express

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warranty claims, which in turn would limit the scope of discovery. Id. At the hearing on the

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motions to dismiss, the Court continued the discovery stay until further notice. See ECF 106.

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On March 5, 2018, the Court ruled on Defendants’ motions to dismiss the Consolidated

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Amended Complaint. ECF 115. On May 10, 2018, Plaintiffs filed a Second Consolidated

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Amended Complaint (“SAC”). ECF 117. The SAC pleads a single nationwide class and alleges

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seven claims for relief. Id. Although the Court granted with leave to amend Huawei’s motion to

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dismiss for lack of personal jurisdiction (ECF 113), Huawei has now withdrawn its personal

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jurisdiction defense. On June 14, 2018, Defendants moved to dismiss the SAC. ECF 134, 135.

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No discovery has occurred to date. Plaintiffs now move to lift the stay of discovery, and

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Defendants oppose. ECF 133 (“Mot.”); ECF 138 (“Opp’n”).

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II.

LEGAL STANDARD

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“The Federal Rules of Civil Procedure do not provide for automatic or blanket stays of

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discovery when a potentially dispositive motion is pending.” Tradebay, LLC v. eBay, Inc., 278

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F.R.D. 597, 600 (D. Nev. 2011). “Had the Federal Rules contemplated that a motion to dismiss
under Fed. R. Civ. Pro. 12(b)(6) would stay discovery, the Rules would contain a provision to that

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United States District Court
Northern District of California

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effect. In fact, such a notion is directly at odds with the need for expeditious resolution of

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litigation.” Gray v. First Winthrop Corp., 133 F.R.D. 39, 40 (N.D. Cal. 1990). However, a district

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court does have “wide discretion in controlling discovery,” Little v. City of Seattle, 863 F.2d 681,

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685 (9th Cir. 1988), and that discretion extends to staying discovery upon a showing of “good

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cause,” see Fed. R. Civ. P. 26(c)(1)(A). Good cause for staying discovery may exist when the

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district court is “‘convinced that the plaintiff will be unable to state a claim for relief.’” Wenger v.

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Monroe, 282 F.3d 1068, 1077 (9th Cir. 2002) (quoting Wood v. McEwen, 644 F.2d 797, 801 (9th

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Cir. 1981)); see also Tradebay, 278 F.R.D. at 601 (“Staying discovery when a court is convinced

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that the plaintiff will be unable to state a claim for relief furthers the goal of efficiency for the

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court and the litigants.”). Under Ninth Circuit law, “[a] party seeking a stay of discovery carries

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the heavy burden of making a ‘strong showing’ why discovery should be denied.” Gray, 133

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F.R.D. at 40 (citation omitted).

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Courts in this district have applied a two-pronged test to determine whether discovery

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should be stayed pending resolution of a dispositive motion. See, e.g., Gibbs v. Carson, No. C-13-

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0860, 2014 WL172187, at *3 (N.D. Cal. Jan. 15, 2014); Hamilton v. Rhoads, No. C 11-0227

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RMW (PR), 2011 WL 5085504, at *1 (N.D. Cal. Oct. 25, 2011); Pac. Lumber Co. v. Nat’l Union

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Fire Ins. Co. of Pittsburgh, PA, 220 F.R.D. 349, 351 (N.D. Cal. 2003). First, a pending motion

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must be potentially dispositive of the entire case, or at least dispositive on the issue at which
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discovery is directed. Pac. Lumber Co., 220 F.R.D. at 351 (citation omitted). Second, the court

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must determine whether the pending motion can be decided absent discovery. Id. at 352 (citation

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omitted). “If the Court answers these two questions in the affirmative, a protective order may

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issue. However, if either prong of this test is not established, discovery proceeds.” Id. In applying

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this two-factor test, the court must take a “preliminary peek” at the merits of the pending

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dispositive motion to assess whether a stay is warranted. Tradebay, 278 F.R.D. at 602.
III.

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Plaintiffs request that this Court lift the discovery stay immediately, pointing out that

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DISCUSSION

Huawei no longer has a personal jurisdiction defense to dispose of this action, and the discovery
stay will needlessly delay the resolution of this litigation on the merits. See Mot. Defendants

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United States District Court
Northern District of California

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oppose, arguing that the SAC remains overreaching and unwieldy, and continuing the discovery

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stay until the pleadings are settled will not prejudice Plaintiffs. See Opp’n at 1.
The Court has once again taken a “preliminary peek” at the merits of the underlying

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motions to dismiss the SAC in considering whether Defendants continue to be able to justify a

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stay of all discovery—which has already been in place at their request for ten months. Tradebay,

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278 F.R.D. at 602. Defendants’ pending motions to dismiss do not appear to be potentially case

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dispositive or even dispositive on the issue at which discovery is directed. Defendants focus on a

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choice of law issue regarding whether Plaintiffs can bring their claims on behalf of a nationwide

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class, but Plaintiffs have a persuasive argument that such class issues are premature at the pleading

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stage. See Reply, ECF 139. Otherwise, Defendants’ arguments challenge a wide variety of

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specific allegations in the complaint that do not amount to “good cause” or a “strong showing” as

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to why discovery should be denied. See Wenger, 282 F.3d at 1077 (finding that good cause for

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staying discovery may exist when the district court is “convinced that the plaintiff will be unable

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to state a claim for relief.”); see also Tradebay, 278 F.R.D. at 601. Without determining the

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merits of Defendants’ motions at this time, the Court envisions that while some modifications to

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the pleadings may be necessary, it appears that the case may move forward.1

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Indeed, several of Plaintiffs’ express warranty, implied warranty, Magnuson-Moss and UCL
claims against Huawei survived the first round of motions to dismiss. See, e.g., ECF 115 at 34.
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Turning to the second factor, the pending motions to dismiss address the sufficiency of the

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allegations and thus they can be decided without discovery. Pac. Lumber Co., 220 F.R.D. at 352.

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However, Defendants must prevail on both prongs to justify a protective order, and “if either

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prong of this test is not established, discovery proceeds.” Id. Because the Court is not satisfied

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that Defendants’ motions are potentially dispositive of the case as to either Google or Huawei, the

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Court declines to exercise its discretion to continue the discovery stay. The circumstances that

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existed on August 18, 2017 when the Court entered what it deemed a “limited” discovery stay—

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such as Huawei’s personal jurisdiction defense and the sprawling complaint before the Court at

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that time—no longer exist. The Court has provided significant guidance to the parties in an 88page opinion on the state of the pleadings, which resulted in a narrowed set of claims against

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United States District Court
Northern District of California

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Defendants on behalf of a single nationwide class. After a 10-month stay of discovery and trial set

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for 2020, there is no good cause to continue the discovery stay.

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IV.

ORDER
For the foregoing reasons, Plaintiffs’ motion to lift the discovery stay is GRANTED in its

entirety. The Court will issue a revised Case Schedule in a separate order.

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IT IS SO ORDERED.

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Dated: June 19, 2018
______________________________________
BETH LABSON FREEMAN
United States District Judge

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