Pfaff v. USA

Filing 38

ORDER by Magistrate Judge Nina Y. Wang on 11/13/15. The Joint Motion to Stay Discovery and Trial Deadlines Pending Decision on Motion to Dismiss 36 is GRANTED. Discovery in this matter is STAYED and the deadlines for expert disclosures, written discovery, discovery cut-off, dispositive motions, and the Final Pretrial Conference are hereby VACATED. The Parties are DIRECTED to file a Status Report within five (5) days of any Order denying, in whole or in part, the Motion to Dismiss.(bsimm, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO

Civil Action No. 14-cv-03349-PAB-NYW
ROBERT A. PFAFF
Plaintiff,
v.
UNITED STATES OF AMERICA
Defendant.
_____________________________________________________________________________
ORDER
_____________________________________________________________________________
Magistrate Judge Nina Y. Wang
This civil action comes before the court on the Plaintiff Robert A. Pfaff (“Plaintiff” or
“Mr. Pfaff”) and Defendant United States of America’s (“Defendant” or “United States”) Joint
Motion to Stay Discovery and Trial Deadlines Pending Decision on Motion to Dismiss, filed on
October 26, 2015 [#36] (the “Motion to Stay”). Pursuant to the Order Referring Case dated
December 15, 2014 [#4], the Reassignment dated February 10, 2015 [#6], and the Memorandum
dated October 26, 2015 [#37], the Motion to Stay is before this Magistrate Judge. For the
reasons set forth in this Order, the Motion to Stay is GRANTED.
BACKGROUND
Plaintiff filed his Complaint in this action on December 10, 2015 (the “Complaint”).
[#1]. Plaintiff seeks a refund of civil penalties assessed by the Internal Revenue Service (“IRS”)
in September of 2011 (and paid in part by Plaintiff in April of 2012) based on Plaintiff’s alleged
failure to properly register tax shelters with the IRS, and seeks declaratory relief and injunctive
relief abating the unpaid portions of the levied penalties and barring Defendant from pursuing

further collection efforts. [Id. at ¶¶ 8-12, ¶¶ 21-22]. On April 10, 2015, the United States filed a
motion to dismiss, and supporting brief. [#13-14]. That motion to dismiss and supporting brief
were stricken for failure to comply with the page limitations of the Practice Standards of the
presiding judge, the Honorable Philip A. Brimmer. [#15]. On April 15, 2015, the United States
refiled its Motion to Dismiss (“Motion to Dismiss”), in which Defendant contends that the court
lacks subject matter jurisdiction over Plaintiff’s claims due to sovereign immunity. [#18, #19].
The Motion to Dismiss is pending before Judge Brimmer.
On April 16, 2015, the Parties filed their Joint Proposed Scheduling Order. [#20]. The
Parties proposed the following deadlines for discovery and the filing of dispositive motion:
November 15, 2015 for the disclosure of any affirmative expert witness pursuant to Fed. Rule
Civ. P. 26(a)(2); December 15, 2015 for the disclosure of any rebuttal experts pursuant to Fed.
Rule Civ. P. 26(a)(2); January 15, 2016 for the cut-off of all discovery; and February 15, 2016
for the filing of dispositive motions. [#20 at 9]. The Parties noted that they did not anticipate
calling any expert witnesses to testify in this case.

[Id.].

The court held a Scheduling

Conference on April 23, 2015 [#23] and entered a Scheduling Order that same day adopting the
Parties’ proposed deadlines for expert witness disclosures, the discovery cut-off, and the filing of
dispositive motions. [#24 at 9]. The Final Pretrial Conference was set for April 26, 2016. [Id. at
10].
On October 26, 2015, the Parties filed the instant joint Motion to Stay, requesting a stay
of the Scheduling Order deadlines referenced above pending the court’s determination of the
United States’ Motion to Dismiss. [#36].

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ANALYSIS
As the Parties note, courts within this district disfavor stays of discovery premised on the
mere pendency of a dispositive motion. [#36 at 4] (citing Sandoval v. United States, No. 11–cv–
01533–REB–KLM, 2011 WL 3682768, at *1 (D. Colo. 2011) (Mix, J.)). The Parties argue that
a stay is nevertheless warranted in this case because Defendant has raised sovereign immunity in
challenging subject matter jurisdiction. [Id. at 4-6]. Both Parties agree that if Defendant prevails
on the Motion to Dismiss, then it is “dispositive and no discovery would be necessary.” [Id. at
3]. Indeed, it is axiomatic that the United States is not subject to suit unless it has waived its
sovereign immunity. See United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767 (1941);
Gass v. United States Dep’t of Treasury, No. 98–B–75, 1999 WL 250890, *5 (D. Colo. Mar. 30,
1999).
Courts have recognized that stays of discovery during the pendency of a dispositive
motion asserting a jurisdictional challenge may be appropriate and efficient, particularly when
that jurisdictional challenge would be fully dispositive. Sandoval, 2011 WL 3682768 at *2.
Indeed, the Tenth Circuit recognized in Liverman v. Committee on the Judiciary, U.S. House of
Representatives that there was no “logical reason” why the general rule of staying discovery
pending a qualified immunity defense “should not apply where the defendant raises the defense
of sovereign immunity and the defense is primarily one of law.” 51 F. App’x 825, 827-28 (10th
Cir. 2002).
This court finds that the United States’ invocation of sovereign immunity as a
jurisdictional defense is primarily one of law and that it is appropriate to stay discovery and other
pre-trial proceedings, pending Judge Brimmer’s disposition of the Motion to Dismiss to spare
both sides of the expense and burden of discovery that may ultimately be unnecessary. See

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Lindhurst v. United States of America, Social Security Administration, No. 12–cv–02450–CMA–
KLM, 2012 WL 5381576, *2 (D. Colo. Oct. 31, 2012); Widjaja v. Nicholson, No. 08–cv–00204–
MSK–MEH, 2008 WL 2811802, *1 (D. Colo. July 18, 2008); Herlik v. United States of America,
No. 07–cv–00658–WDM–KMT, 2008 WL 356513, *2 (D. Colo. Feb. 7, 2008).
Accordingly, IT IS ORDERED that:
(1)

The Parties’ Joint Motion to Stay [#36] is GRANTED;

(2)

Discovery in this matter is STAYED and the deadlines for expert disclosures,

written discovery, discovery cut-off, dispositive motions, and the Final Pretrial Conference are
hereby VACATED;
(2)

The Parties are DIRECTED to file a Status Report, including a proposed

amended schedule and a description of any remaining claims or contemplated counterclaims, to
contact chambers to schedule a further Scheduling Conference within five (5) days of any Order
denying, in whole or in part, the Motion to Dismiss.
.
DATED: November 13, 2015

BY THE COURT:

s/ Nina Y. Wang
Nina Y. Wang
United States Magistrate Judge

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