American Tradition Institute et al v. State of Colorado, The et al

Filing 46

ORDER Granting 31 Defendants Motion to Stay All Proceedings Pending Jurisdictional and Immunity Determinations; Granting in part and Denying as Moot in part 43 Defendants Unopposed Motion for Extension of Time to File Reply Briefs, Defendants may file a reply in support of their motion to dismiss on or before September 12, 2011. by Magistrate Judge Kristen L. Mix on 8/23/2011.(erv, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 11-cv-00859-WJM-KLM
AMERICAN TRADITION INSTITUTE,
AMERICAN TRADITION PARTNERSHIP, and
ROD LUECK,
Plaintiffs,
v.
THE STATE OF COLORADO,
JOHN HICKENLOOPER, individually and in his official capacity as Governor of Colorado,
BARBARA J. KELLEY, individually and in her official capacity as the Executive Director of
the Colorado Department of Regulatory Agencies,
JOSHUA EPEL, individually and in his official capacity as Chairman of the Colorado Public
Utilities Commission,
JAMES TARPEY, individually and in his official capacity as a Commissioner of the
Colorado Public Utilities Commission,
MATT BAKER, individually and in his official capacity as a Commissioner of the Colorado
Public Utilities Commission, and
DOUG DEAN, individually and in his official capacity as Director of the Colorado Public
Utilities Commission,
Defendants.
_____________________________________________________________________
ORDER
_____________________________________________________________________
This matter is before the Court on Defendants’ Motion to Stay All Proceedings
Pending Jurisdictional and Immunity Determinations [Docket No. 31; Filed July 14,
2011] (the “Motion”). Plaintiff filed a Response in opposition to the Motion on August 16,
2011 [Docket No. 40]. The Motion is ripe for review.1 For the reasons set forth below, the
Court GRANTS the Motion.

1

Pursuant to D.C.COLO.LCivR 7.1C, a judicial officer may rule on a motion at any time
after it is filed.

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Procedural Background
Plaintiffs initiated this lawsuit on April 4, 2011, challenging the constitutionality of a
Colorado state statute affecting the regulation of electricity [Docket No. 1]. On April 22,
2011, Plaintiffs filed an Amended Complaint, which is the governing pleading [Docket No.
12]. Defendants responded to the Amended Complaint with a motion to dismiss pursuant
to Fed. R. Civ. P. 12(b)(1) and (b) and with an Answer, simultaneously filed on July 12,
2011 [Docket Nos. 28, 29].2 Shortly thereafter, Defendants submitted the Motion at hand,
requesting a stay of all proceedings pending the adjudication of the jurisdictional and
immunity issues presented in the motion to dismiss.
Defendants set forth four primary arguments in their motion to dismiss: 1) Plaintiffs
lack standing; 2) Eleventh Amendment state sovereign immunity bars all claims against the
State of Colorado and Governor John Hickenlooper; 3) Plaintiffs fail to allege personal
participation on part of Defendants Kelley and Epel; and 4) 42 U.S.C. § 1983 and the
Eleventh Amendment preclude any request for damages against the individual defendants
in their official capacities. Motion to Dismiss, Docket No. 28 at 5-6. Defendants request
that Plaintiffs’ Amended Complaint be dismissed in its entirety. Id. at 24.
In their motion to stay, Defendants assert that the Eleventh Amendment protects
them from the burdens of litigation, and the jurisdictional and immunity issues should be
resolved before state resources are expended for discovery. Motion, Docket No. 31 at 2-3.

2

Also of note, four entities identified as Interested Parties filed a motion to intervene as
defendants on June 13, 2011 [Docket No. 21]. The motion remains pending before the District
Court. The Interested Parties included a proposed Answer with their motion and filed a
proposed motion to dismiss, seeking dismissal of Plaintiffs’ Amended Complaint pursuant to
Fed. R. Civ. P. 12(b)(6) [Docket No. 37].

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Moreover, Defendants contend that Plaintiffs need not conduct discovery before responding
to the motion to dismiss, thus the balance weighs in favor of a stay, as Plaintiffs will not be
prejudiced by first adjudicating the jurisdictional and immunity issues. Id. at 4-5. Finally,
Defendants suggest that the interests of judicial economy support the granting of a stay.
Id. at 6.
Plaintiffs oppose the imposition of a stay. Response, Docket No. 40 at 2. Plaintiffs
cite to String Cheese Incident, LLC v. Stylus Shows, Inc., No. 02-cv-01934-LTB-PA, 2006
WL 894955 (D. Colo. Mar. 30, 2006) in support of their position. Id. at 2-3. Plaintiffs argue
that the five factors articulated in String Cheese Incident demonstrate that a stay is not
appropriate here. Plaintiffs believe the costs imposed upon them by the challenged state
statute tip the balance away from a stay. Id. at 3. Plaintiffs assert that the “fair and speedy
administration of justice” would be delayed by a stay. Id. at 5. Plaintiffs express concern
that the general public will also be harmed if a stay is imposed, as the public suffers from
the same alleged injuries as those described in the Amended Complaint. Id. at 5-6.
Analysis
Although the stay of proceedings in a case is generally disfavored, the Court has
discretion to stay discovery while a dispositive motion is pending. Wason Ranch Corp. v.
Hecla Mining Co., No. 07-cv-00267-EWN-MEH, 2007 WL 1655362, at *1 (D. Colo. June
6, 2007) (unreported decision) (“A stay of all discovery is generally disfavored in this
District.” (citation omitted)). See also Gilbert v. Ferry, 401 F.3d 411, 415-16 (6th Cir. 2005)
(finding that ordering a stay of discovery is not an abuse of discretion when a defendant
has filed a motion to dismiss challenging the court’s actual subject matter jurisdiction); Vivid
Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 804 (Fed. Cir. 1999) (“When a
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particular issue may be dispositive, the court may stay discovery concerning other issues
until the critical issue is resolved.”); String Cheese Incident, LLC, 2006 WL 894955 at *2
(finding that a thirty day stay of discovery was appropriate when a motion to dismiss for
lack of personal jurisdiction was pending); Chavous v. D.C. Fin. Responsibility & Mgmt.
Assistance Auth., 201 F.R.D. 1, 2 (D.D.C. 2005) (“A stay of discovery pending the
determination of a dispositive motion is an eminently logical means to prevent wasting the
time and effort of all concerned, and to make the most efficient use of judicial resources.”
(internal quotation omitted)); Nankivil v. Lockheed Martin Corp., 216 F.R.D. 689, 692 (M.D.
Fla. 2003) (A stay may be appropriate if “resolution of a preliminary motion may dispose
of the entire action.”).
Questions of jurisdiction should be resolved at the earliest stages of litigation, so as
to conserve the time and resources of the Court and the parties. Thus, a stay of discovery
during the pendency of a dispositive motion asserting a jurisdictional challenge may be
appropriate and efficient. See Behrens v. Pelletier, 516 U.S. 299, 308 & 310 (1996) (noting
that discovery can be particularly disruptive when a dispositive motion regarding immunity
is pending); Moore v. Busby, 92 F. App'x 699, 702 (10th Cir. 2004) (affirming trial court's
stay of discovery pending resolution of absolute immunity question); Albright v. Rodriguez,
51 F.3d 1531, 1534 (10th Cir. 1995) (“the Supreme Court has repeatedly ‘stressed the
importance of resolving immunity questions at the earliest possible stage in litigation.’”
(citation omitted)).
“Eleventh Amendment immunity entitles a state not only to protection from liability,
but also from suit, including the burden of discovery, as a party, within the suit.” Univ. of
Tex. at Austin v. Vratil, 96 F.3d 1337, 1340 (10th Cir. 1996) (citation omitted). Eleventh
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Amendment state sovereign immunity applies to the state itself as well as “to state officials
sued in their official capacities for retrospective monetary relief.” Brock v. Herbert, No. 104148, 2011 WL 3154230, at *3 (10th Cir. 2011) (unpublished) (citation omitted).
In this matter, Plaintiffs sue the State of Colorado as well as six individual
defendants in their individual and official capacities. Plaintiffs seek an award of damages,
in addition to declaratory and injunctive relief. Am. Compl., Docket No. 12 at 49. Thus, the
Court finds that the claims against the State of Colorado and the individual defendants in
their official capacities for money damages are potentially precluded by Eleventh
Amendment sovereign immunity.

In consideration of the Tenth Circuit’s instruction

regarding the protections inherent in Eleventh Amendment immunity, the Court concludes
that a stay is appropriate pending resolution of the immunity issue.
Consideration of the String Cheese Incident factors prompts no different result. The
factors for the Court’s review include: (1) the interest of the plaintiff in proceeding
expeditiously with discovery and the potential prejudice to the plaintiff of a delay; (2) the
burden on the defendants of proceeding with discovery; (3) the convenience to the Court
of staying discovery; (4) the interests of nonparties in either staying or proceeding with
discovery; and (5) the public interest in either staying or proceeding with discovery. String
Cheese Incident, 2006 WL 894955 at *2 (citation omitted).
Regarding the first factor, Defendants explain that the statute at issue was adopted
by Colorado voters in 2004. Motion, Docket No. 31 at 6. As Plaintiffs have been subject
to the provisions of the challenged statute for the past seven years (effective December 1,
2004), the Court finds Plaintiffs’ claim of harm by delay unpersuasive. See Colo. Rev. Stat.
§ 40-2-124 (2004).

In light of the above-stated case law, the burden on the state
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defendants of proceeding in litigation during the pendency of jurisdictional and immunity
issues is well-observed by the federal courts, as related to the second factor.
The third factor concerning the convenience to the Court weighs heavily in favor of
a stay. The motion to dismiss not only challenges this Court’s subject matter jurisdiction,
which must be satisfied at all stages of litigation, but also could dispose of the Amended
Complaint in its entirety. Judicial resources would best be conserved by imposing a stay
until the jurisdictional challenge is resolved. Consideration of the fourth and fifth factors
does not sway the Court from its conclusion. Weighing the String Cheese Incident factors
as well as the law favoring a stay of proceedings when immunity and jurisdiction are at
issue, the Court concludes that a stay of all proceedings is appropriate, pending the District
Court’s adjudication of Defendants’ motion to dismiss.
Conclusion
It is hereby ORDERED that Defendants’ Motion to Stay All Proceedings Pending
Jurisdictional and Immunity Determinations is GRANTED. This matter is hereby
STAYED pending the District Court’s resolution of Defendants’ Motion to Dismiss [Docket
No. 28; Filed July 12, 2011].
It is further ORDERED that the Scheduling Conference set for October 18, 2011, is
VACATED. The Court will set a Scheduling Conference, if necessary, after resolution of
the motion to dismiss.
It is further ORDERED that Defendants’ Unopposed Motion for Extension of Time
to File Reply Briefs [Docket No. 43; Filed August 19, 2011] is GRANTED IN PART and
DENIED AS MOOT IN PART. The request for an extension of time to file a reply in support

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of the motion to stay is mooted by this Order. Defendants may file a reply in support of
their motion to dismiss on or before September 12, 2011.
DATED: August 23, 2011 at Denver, Colorado.

BY THE COURT:
s/ Kristen L. Mix
Kristen L. Mix
United States Magistrate Judge

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