Pernick v. Computershare Trust Company, Inc.

Filing 52

ORDER. ORDERED that the Motion [#48] is GRANTED in part to the extent it seeks a stay of discovery. To the extent the Motion's request to stay "all deadlines set forth in the Scheduling Order" includes the June 16, 2015 Final Pretrial Conference, it is DENIED without prejudice in part. ORDERED that all discovery is STAYED pending resolution of Defendants' Motion to Dismiss 21 by Magistrate Judge Kristen L. Mix on 08/21/14.(jhawk, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 13-cv-02975-PAB-KLM
NORMAN L. PERNICK, as Chapter 11 Trustee of the Bankruptcy Estate of Industrial
Enterprises of America, Inc., on behalf of itself, the estate and as assignee of its
shareholders,
Plaintiff,
v.
COMPUTERSHARE TRUST COMPANY, INC.,
Defendant.
______________________________________________________________________
ORDER
______________________________________________________________________
ENTERED BY MAGISTRATE JUDGE KRISTEN L. MIX
This matter is before the Court on Plaintiff’s Opposed Motion For a Protective
Order to Stay Discovery and the Scheduling Order [#48]1 (the “Motion”). In the Motion,
Plaintiff states that “Defendant’s counsel has advised that Defendant has not yet made a
determination as to whether Defendant will oppose the Motion. Given the importance of
bringing these issues to the Court’s attention in advance of the August 11, 2014 deadline
to amend the Complaint, Plaintiff’s counsel assumes, as a default position, that Defendant
will oppose the relief requested.” Motion [#48] at 2. On August 20, 2014, Defendant filed
its Response and Consent With Respect to Plaintiff’s Motion For a Protective Order to Stay
Discovery and the Scheduling Order [#51] (the “Response”), in which it states that it

1

“[#48]” is an example of the convention I use to identify the docket number assigned to
a specific paper by the Court’s case management and electronic case filing system (CM/ECF). I
use this convention throughout this Minute Order.

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“consents to the relief requested in the [Motion] until Computershare’s motion to dismiss2
(including the Supplemental Motion) is ruled upon by this Court.” Response [#51] at 2.
In the Motion, Plaintiff seeks a “stay of discovery and all deadlines set forth in the
Scheduling Order pending” resolution of the Motion to Dismiss, and “the Bankruptcy Court’s
approval of the Plaintiff’s retention of new counsel.” Motion [#48] at 2.
Although a stay of proceedings in a case is generally disfavored, the Court has
discretion to stay discovery while a dispositive motion is pending. See Wason Ranch Corp.
v. Hecla Mining Co., No. 07-cv-00267-EWN-MEH, 2007 WL 1655362, at *1 (D. Colo. June
6, 2007) (“A stay of all discovery is generally disfavored in this District.” (citation omitted));
String Cheese Incident, LLC v. Stylus Shows, Inc., No. 02-cv-01934-LTB-PAC, 2006 WL
894955, at *2 (D. Colo. Mar. 30, 2006) (finding that a thirty day stay of discovery was
appropriate when a motion to dismiss for lack of personal jurisdiction was pending);
Nankivil v. Lockheed Martin Corp., 216 F.R.D. 689, 692 (M.D. Fla. 2003) (finding that a stay
may be appropriate if “resolution of a preliminary motion may dispose of the entire action.”);
8 Charles Alan Wright, et al., Federal Practice and Procedure § 2040, at 521-22 (2d ed.
1994) (“[W]hen one issue may be determinative of a case, the court has discretion to stay
discovery on other issues until the critical issue has been decided.”); Vivid Techs., Inc. v.
Am. Sci. & Eng’g, Inc., 200 F.3d 795, 804 (Fed. Cir. 1999) (“When a particular issue may
be dispositive, the court may stay discovery concerning other issues until the critical issue
is resolved.”); Gilbert v. Ferry, 401 F.3d 411, 415-16 (6th Cir. 2005) (finding that staying
discovery is not an abuse of discretion when a defendant has filed a motion to dismiss

2
Defendant Computershare Trust Company, N.A.’s Motion to Dismiss the Complaint Pursuant to Fed.
R. Civ. P. 12(b)(6) [#21] (the “Motion to Dismiss”) is pending before the District Judge.

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challenging the court’s actual subject matter jurisdiction); 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)).
When exercising its discretion to enter a stay, the Court considers the following
factors: (1) the interest of the plaintiff in proceeding expeditiously and the potential
prejudice to the plaintiff of a delay; (2) the burden on the defendant; (3) the convenience
to the Court; (4) the interests of nonparties; and (5) the public interest. String Cheese
Incident, LLC, 2006 WL 894955, at *2 (citing FDIC v. Renda, No. 85-2216-O, 1987 WL
348635, at *2 (D. Kan. Aug. 6, 1987)).
In this case, staying discovery would apparently not prejudice Plaintiff, as he
requests the stay, and does not burden Defendants, as it does not oppose the Motion.
Therefore, the Court finds that the first and second String Cheese Incident factors weigh
in favor of a stay. With regard to the third factor, it is certainly more convenient for the
Court to enter a stay until it is clear which claims, if any, will move forward. The Court
therefore finds that the third String Cheese Incident factor weighs in favor of a stay. With
regard to the fourth factor, there are no nonparties with significant particularized interests
in this case. Accordingly, the fourth String Cheese Incident factor neither weighs in favor
nor against a stay. With regard to the fifth and final factor, the Court finds that the public’s
only interest in this case is a general interest in its efficient and just resolution. Avoiding
wasteful efforts by the Court and litigants serves this interest. Thus, the fifth String Cheese
Incident factor weighs in favor of a stay.
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IT IS HEREBY ORDERED that the Motion [#48] is GRANTED in part to the extent
it seeks a stay of discovery. To the extent the Motion’s request to stay “all deadlines set
forth in the Scheduling Order” includes the June 16, 2015 Final Pretrial Conference, it is
DENIED without prejudice in part. If the parties eventually determine that the Final
Pretrial Conference should not move forward on June 16, 2015, they may request that it
be vacated and reset to a later date. Accordingly,
IT IS FURTHER ORDERED that all discovery is STAYED pending resolution of
Defendants’ Motion to Dismiss [#21].
Dated: August 21, 2014

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