SOLIDFX LLC v. Jeppesen Sanderson Inc

Filing 37

ORDER: denying 21 Motion to Stay, by Magistrate Judge Boyd N. Boland on 9/8/11.(bnbcd, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Magistrate Judge Boyd N. Boland
Civil Action No. 11-cv-01468-WJM-BNB
SOLIDFX, LLC,
Plaintiff,
v.
JEPPESEN SANDERSON, INC.,
Defendant.
______________________________________________________________________________
ORDER
______________________________________________________________________________
This matter arises on Jeppesen Sanderson, Inc.’s Motion to Stay Antitrust Discovery
[Doc. # 21, filed 8/3/2011] (the “Motion to Stay”), which is DENIED.
SOLIDFX is a software company that develops software applications that allow
customers to access, organize, and use critical data. In 2009, SOLIDFX and Jeppesen entered
into a five year license agreement that “provided that Jeppesen and SOLIDFX would cooperate
to allow SOLIDFX to develop and sell software applications (‘apps’) that would allow pilots to
access Jeppesen’s terminal charts electronically.” Scheduling Order [Doc. # 17] at p. 3.
SOLIDFX asserts that Jeppesen breached its contract with SOLIDFX and violated
Sections 1 and 2 of the Sherman Act through the following conduct:
On May 26, 2010, after several months of stalling, Jeppesen finally
informed SOLIDFX that it would not allow others, including
SOLIDFX, to develop an app for the iPad. Jeppesen further
informed SOLIDFX that Jeppesen was developing its own iPad
app and that ‘[d]irect competition with a Jeppesen offerings [sic]
will generally be avoided.’ In subsequent meetings, Jeppesen
confirmed that its decision to deny SOLIDFX the right to develop
an iPad app was motivated by its desire to exclude competition.

Jeppesen later denied SOLIDFX the right to develop apps for other
hardware platforms and operating systems. Upon information and
belief, Jeppesen has denied access to the market to other potential
competitors and currently controls nearly 100% of the market for
apps that display Jeppesen terminal charts.
Id.
With respect to the antitrust claims, Jeppesen defends its conduct as follows:
First, federal copyright law grants Jeppesen a legal monopoly over
its copyrighted material, including how to display and distribute
that material. Put simply, Jeppesen has the statutory right to
choose how to distribute its copyrighted charts, and case law is
clear that antitrust law does not prohibit the exercise of that
exclusivity.
Second, SOLIDFX cannot make out a claim for illegal tying
because the allegedly tied product (Jeppesen’s charts) is not
distinct from the tying product (the App)--the App is simply
another way for Jeppesen’s subscribers to view a product (the
charts) that they have already purchased.
Third, SOLIDFX’s antitrust claims are divorced from the
competitive realities of the charts market. SOLIDFX has defined
the market as a single product--Jeppesen’s own charts--and its
claims are premised on Jeppesen having monopoly power over this
single product. But any company has monopoly power over a
market that is defined as the company’s own product. In reality,
Jeppesen faces significant competition in aviation charts and iPad
applications. With regard to charts, Jeppesen competes with both
commercial chart providers and governmental entities, the latter of
which make their charts available to pilots at little to no cost. With
regard to applications, a recent New York Times article reported
that there are more than 250 aviation Apps for the iPad, and
pointed to a chart application called ForeFlight--which directly
competes with Jeppesen’s App--as one of the top grossing Apps on
iTunes.
Id. at pp. 5-6.

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Jeppesen has moved to dismiss all of SOLIDFX’s claims. Motion to Dismiss [Doc. #
14]. In the meantime, the Motion to Stay seeks an order staying all antitrust discovery pending a
ruling on Jeppesen’s motion to dismiss.
The Federal Rules of Civil Procedure presume that discovery may proceed despite the
filing of a motion to dismiss, absent special provisions such as those provided in the Private
Securities Litigation Reform Act or in connection with a motion seeking dismissal based on
qualified immunity. See Rio Grande Royalty Co., Inc. v. Energy Transfer Partners, L.P., 2008
WL 8465061 *1 (S.D. Tex. August 11, 2008). Although Jeppesen relies heavily on the Supreme
Court’s decision in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), that decision does not
“erect an automatic, blanket prohibition on any and all discovery before an antitrust plaintiff’s
complaint survives a motion to dismiss.” In re Graphics Processing Units Antitrust Litigation,
2007 WL 2127577 *4 (N.D. Calif. July 24, 2007). In addition, the court in Graphics Processing
noted:
[T]o allow antitrust discovery prior to sustaining a complaint
would defeat one of the rationales of Twombly, at least when the
discovery would be burdensome. When, however, the discovery
would not be so burdensome, a closer question is presented, a
question calling for the exercise of discretion and the balancing of
competing factors.
Id.
In an antitrust case, as in every case, the decision to issue a protective order staying
discovery pending the ruling on a motion to dismiss rests in the sound discretion of the district
court. Christou v. Beatport, LLC, 2011 WL 650377 *1 (D. Colo. Feb 10, 2011). In that regard:
A party seeking a protective order under Rule 26(c) has the burden
of demonstrating good cause and cannot sustain that burden simply
by offering conclusory statements. Accordingly, the party moving
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for a protective order must make a particular and specific
demonstration of fact in support of its request. The underlying
principle in determination of whether to grant or deny a stay
clearly is that the right to proceed in court should not be denied
except under the most extreme circumstances.
Id. (internal quotations and citations omitted). As a result, stays of discovery pending rulings on
motions to dismiss generally are disfavored in this district. Id.
In considering whether to grant a stay:
Five factors have been universally recognized as being critical to a
proper balancing of the competing interests at stake. Those factors
are: (1) the interests of the plaintiff in proceeding expeditiously
with the civil action and the potential prejudice to plaintiffs of a
delay; (2) the burden on the defendants; (3) the convenience to the
court; (4) the interests of persons not parties to the civil litigation;
and (5) the public interest.
Federal Deposit Ins. Corp. v. Renda, 1987 WL 348635 *2 (D. Kan. Aug. 6, 1987); accord String
Cheese Incident, LLC v. Stylus Shows, Inc., 2006 WL 894955 *3 (D. Colo. March 30,
2006)(same). Considering these factors leads me to conclude that the stay requested here is not
warranted and should be denied.
1. The Plaintiff’s Interest in Proceeding Expeditiously: In this district, the average time
from the filing to determination of dispositive motions exceeds six months. Thus, a stay is likely
to postpone discovery for a substantial period of time. In addition, motions to dismiss are denied
far more often than they are granted. From a purely statistical standpoint, the extended delay
normally is not justified.
SOLIDFX argues persuasively that it is a small company and that it cannot survive a
substantial delay. In addition, SOLIDFX notes that “[b]ecause third parties are not subject to a
litigation hold related to this matter, the longer this case is delayed, the greater the likelihood that

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evidence will be inadvertently destroyed or lost, or that witnesses’ memories will have faded.”
Response [Doc. # 32] at pp. 7-8.
2. The Burden on the Defendant: Jeppesen argues generally that antitrust discovery is
burdensome, but it fails to point to any pending discovery and provide evidence as to the burden
it imposes.1 Consequently, Jeppesen has failed to “make a particular and specific demonstration
of fact in support” of the claimed need for a stay. See Christou, 2011 WL 650377 at *1.
In addition, the burden of antitrust discovery in this case appears to be substantially less
than that involved in Twombly. There, a putative class composed of “all subscribers of local
telephone and/or highspeed internet services” since 1996 brought antitrust claims against the
four Incumbent Local Exchange Carriers who “allegedly control 90 percent or more of the
market for local telephone service in the 48 contiguous States.” Twombly, 550 U.S. at 550.
This action, by contrast, is brought by one company against another based on events surrounding
an alleged breach of a contract in May 2010. The scope of the cases, and the likely discovery
associated with them, is vastly different.
Jeppesen does not seek to stay all discovery. Instead, it recognizes that discovery related
to SOLIDFX’s claim for breach of contract may go forward. I am not persuaded, and Jeppesen
has not made an adequate showing, that the discovery related to the antitrust claims is
substantially greater than the discovery necessary for the rest of the case.
Discovery often involves burden. Environmental cases, patent infringement cases, and

1

Jeppesen quotes several of SOLIDFX’s discovery requests and argues that they
“demonstrate just how burdensome antitrust discovery promises to be. . . .” Motion to Stay
[Doc. # 21] at p. 4 n. 2. There is no evidence presented concerning the burden, however, and
unreasonable burden is not apparent to me simply from the text of the discovery requests.
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collective actions under the Fair Labor Standards Act come immediately to mind as complex
cases that may involve substantial discovery but which ordinarily are not stayed pending the
determination of preliminary motions. Jeppesen has failed to explain why this case, simply
because it involves antitrust claims, deserves special treatment not accorded other complex cases
not asserting antitrust claims.
3. Convenience to the Court: Jeppesen fails to demonstrate that staying antitrust
discovery will benefit the court. To the contrary, I can conceive of instances where staying the
antitrust discovery while allowing discovery on the breach of contract claim could lead to
increased discovery disputes requiring greater rather than less judicial involvement in the
discovery process.
4. Interests of Non-Parties: Jeppesen has pointed to anticipated depositions of non-party
witnesses related solely to the antitrust claims which will burden the non-party witnesses and
may prove unnecessary if Jeppesen’s motion to dismiss is granted. I agree that there may be
some burden to non-parties. That burden, alone, is not sufficient to justify the requested stay.
5. The Public Interest: The public has competing interests. Rule 1, Fed. R. Civ. P.,
requires the “just, speedy, and inexpensive determination of every action. . . .” Staying
discovery, potentially for an extended period of time, is contrary to a speedy resolution, while
allowing discovery before the motion to dismiss is decided may be counterproductive to an
inexpensive determination.
On balance, I find that the plaintiff’s greater interest in proceeding expeditiously and the
defendant’s failure to demonstrate a particular, substantial, and unusual burden resulting from
allowing antitrust discovery to proceed compel that the requested stay be denied.

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IT IS ORDERED that the Motion to Stay [Doc. # 21] is DENIED.
Dated September 8, 2011.
BY THE COURT:
s/ Boyd N. Boland
United States Magistrate Judge

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