Ray v. Spirit Airlines, Inc.

Filing 23

ORDER denying 18 Motion to Stay Discovery. See attached ORDER for details. Joint Scheduling Report due by 11/27/2012. Signed by Judge Robert N. Scola, Jr. on 11/9/12. (jky)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 12-61528-Civ-SCOLA
BRYAN RAY et al.,
Plaintiffs,
vs.
SPIRIT AIRLINES, INC.,
Defendant.
_____________________________________/
ORDER DENYING MOTION TO STAY DISCOVERY
THIS MATTER is before the Court upon the Motion to Stay Discovery and the
Deadlines Set Forth within this Court’s August 7, 2012 Order Pending Ruling on Spirit’s Motion
to Dismiss [ECF No. 18], filed by Defendant Spirit Airlines, Inc. (“Spirit”). For the reasons
explained below, this motion is denied.
Introduction
This is a putative class action case brought under the Racketeer Influenced and Corrupt
Organizations Act (“RICO”) that centers on Spirit’s allegedly fraudulent and deceptive practice
of collecting a so-called “Passenger Usage Fee” in connection with online ticket sales. Spirit has
moved to dismiss the Complaint for failure to state a claim, pursuant to Federal Rule of Civil
Procedure 12(b)(6). By way of the instant motion, Spirit seeks a stay of discovery pending a
ruling on its motion to dismiss. According to Spirit, Plaintiffs’ claims will likely be dismissed
and discovery, if allowed to proceed, will prove especially difficult and expensive. Therefore,
the argument goes, no discovery should take place until the Court rules, lest Spirit face
unwarranted costs and burdens.
Legal Standard
District courts are given “broad discretion over the management of pre-trial activities,
including discovery and scheduling.” Johnson v. Bd. of Regents of Univ. of Ga., 263 F.3d 1234,
1269 (11th Cir. 2001). As a general rule, motions to dismiss should be resolved as soon as
practicable to obviate avoidable discovery costs, especially where a dubious claim appears
destined for dismissal. See Chudasama v. Mazda Motor Corp., 123 F.3d 1353, 1368 (11th Cir.
1997) (“If the district court dismisses a nonmeritorious claim before discovery has begun,

unnecessary costs to the litigants and to the court system can be avoided.”). This District’s Local
Rules make clear, however, that a stay of discovery pending the determination of a motion to
dismiss is the exception rather than the rule. See S.D. Fla. Local Rules, App. A, Discovery
Practices Handbook I.D(5) (unilateral motions to stay discovery are generally denied). Indeed,
“[a] request to stay discovery pending a resolution of a motion is rarely appropriate unless
resolution of the motion will dispose of the entire case.” See McCabe v. Foley, 233 F.R.D. 683,
685 (M.D. Fla. 2006) (Morris, J.).
To evaluate whether there is a strong likelihood “the [dismissal] motion will be granted
and entirely eliminate the need for such discovery,” the district court must take a “preliminary
peek” at the merits of the motion. Feldman v. Flood, 176 F.R.D. 651, 652-53 (M.D. Fla. 1997)
(Corrigan, J.) (citations omitted). The court must also weigh “the harm produced by a delay in
discovery” against “the likely costs and burdens of proceeding with discovery.” See id. at 652
(citations omitted). Both concerns are important – while a defendant should not be forced to
expend substantial resources answering discovery when the plaintiff’s claims clearly lack merit,
the delay and prolongation of discovery can also create case management and scheduling
problems and unfairly hold up the prosecution of the case. See Chudasama, 123 F.3d at 136869; Feldman, 176 F.R.D. at 652-53; see also Kron Med. Corp. v. Groth, 119 F.R.D. 636, 638
(M.D.N.C. 1988) (Eliason, J.).

Ultimately, the proponent of the stay bears the burden of

demonstrating its necessity, appropriateness, and reasonableness. McCabe, 233 F.R.D. at 685.
Legal Analysis
Spirit requests a stay of the meet-and-confer requirement, mandated by this Court’s initial
case management order [ECF No. 5], and a wholesale stay of all discovery, until the Court rules
upon its motion to dismiss.
First of all, there is no basis to stall the meet-and-confer requirement. In order to obtain a
stay, “[t]he moving party must show a particular and specific need for [it], as opposed to making
stereotyped or conclusory statements.” Skellerup Indus. Ltd. v. City of Los Angeles, 163 F.R.D.
598, 600 (C.D. Cal. 1995) (Chapman, J.). While Spirit complains that coordinating a discovery
plan “will raise innumerable and complicated issues, and preparation for that effort would
require substantial resources,” it fails to offer any specifics. See Mot. at 6-7. In point of fact,
little in the way of judicial or litigant economy would be saved by a stay of that requirement.
The Court’s initial order does not impose burdens upon the parties that are particularly
onerous or time consuming; it merely requires them to get together and discuss discovery and

other case issues and to file a Rule 26(f) report. The joint report is not meant to be a lengthy
exposition, hyper-focused on every detail. Rather, it is merely designed to provide a general
roadmap for the litigation and to identify potential problem areas of which the parties and the
Court should be mindful as the case progresses. It also enables the Court to enter an appropriate
scheduling order, which is integral to the Court’s duty as coxswain of the litigation. The Court is
not at liberty to abdicate its case management responsibilities just because the defendant files a
motion to dismiss that may have merit. Thus, the Court will not excuse the parties from their
obligation to meet-and-confer and file a joint report.
Nor will it grant a wholesale stay of discovery either. Dismissal of the case with
prejudice is not a foregone conclusion. Spirit muses that Plaintiffs’ RICO claims are “untested”
and “comprised of allegations that have never been sustained against an airline,” and regulation
of airline price advertising falls into the exclusive domain of the Department of Transportation.
Mot. at 5. The problem is, these arguments do no more than rehash Spirit’s position, made in its
motion to dismiss, that it should win. While the Court must conduct a “preliminary peek” at the
motion and the Complaint to see whether the Plaintiffs’ claims are likely baseless or dubious,
Feldman, 176 F.R.D. at 652-53, the Court is not required to move Spirit’s dismissal motion to
the front of the line, ahead of other cases with pending motions, and fully adjudicate it on the
spot. Such a requirement would be unfair to other parties, as well as to the Court.
Having preliminarily examined the motion to dismiss and the Complaint here, the Court
cannot say that this case is surely destined for dismissal. Spirit advances several detailed
arguments for dismissal, but Plaintiff also offers several detailed arguments in response.1 Should
Plaintiffs’ claims prove as utterly meritless as Spirit suggests, Rule 11 may afford a remedy. See
Indus. Risk Ins. v. M.A.N. Gutehoffnungshutte GmbH, 141 F.3d 1434, 1448 (11th Cir. 1998); but
1

The Court notes that Plaintiffs, in their response to the stay motion, have identified the wrong legal standard
applicable to Rule 12(b)(6) motions. They state that “Spirit will not be able to demonstrate ‘beyond doubt that
the plaintiff[s] can prove no set of facts in support of [their] claim which would entitle [them] to relief,’” citing
Spain v. Brown & Williamson Tobacco Corp., 363 F.3d 1183. 1187 (11th Cir. 2004), in turn quoting Conley v.
Gibson, 355 U.S. 41, 45-46 (1957). Since 2007, the “no set of facts” standard from Conley has been deadletter law. See Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1288-89 (11th Cir. 2010) (“In Twombly, the
Supreme Court expressly ‘retired’ the ‘no set of facts’ pleading standard under Rule 8(a)(2) that the Court had
previously established in Conley v. Gibson.”). The pertinent inquiry today, in deciding a Rule 12(b)(6)
motion, is whether a complaint contains sufficient factual matter, accepted as true, to “state a claim to relief
that is plausible on its face.” See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). While not akin to a
“probability requirement,” this pleading standard requires a plaintiff to offer something more than “an
unadorned, the-defendant-unlawfully-harmed-me accusation.” See Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). Despite getting it confused in their stay response, Plaintiffs appear to recognize in their dismissal
opposition that Twombly, not Conley, controls. See Dis. Resp. [ECF No. 20] at 2 (citing Twombly and Iqbal).

see Davis v. Carl, 906 F.2d 533, 538 (11th Cir. 1990) (“Rule 11 is intended to deter claims with
no factual or legal basis at all; creative claims, coupled even with ambiguous or inconsequential
facts, may merit dismissal, but not punishment.”). This case may end in dismissal, but that
outcome is not apparent enough after a “preliminary peek” to warrant an across-the-board stay of
discovery right now – an outcome that is considered the exception, rather than the rule.
Moreover, Spirit has not identified in any specific and tangible way the unreasonable
discovery burdens it will face absent a stay. See Bocciolone v. Solowsky, 2008 WL 2906719, at
*2 (S.D. Fla. July 24, 2008) (Cooke, J.). Instead, it resorts to bland generalizations such as:
“[t]he scope and breadth of Plaintiffs’ RICO allegations would require a substantial amount of
discovery, nearly all of which would be borne by Spirit and its outside vendors”; and “Plaintiffs’
claim that the RICO enterprise consists of numerous other non-parties further heightens the
likely discovery burden on Spirit and also forces the imposition of similar discovery burdens on
those non-parties”; and “if discovery were to proceed on Plaintiffs’ RICO claim, Spirit’s
representatives on advertising, pricing, Department regulations, website management, and
electronically stored date, as well as Spirit’s external technology and communications vendors,
would be enveloped in extensive discovery based on a single claim that may ultimately be
dismissed with prejudice.” Mot. at 6-7. Spirit also insinuates that discovery should be stayed
simply because this a complex RICO case, as cases of this kind always involve burdensome and
costly discovery. Reply at 6-7. These arguments won’t do. They are premature and speculative:
“extensive, expensive discovery has not yet proceeded and likely will not have proceeded very
far by the time the Court issues a ruling.” Gannon v. Flood, 2008 WL 793682, at *1 (S.D. Fla.
Mar. 24, 2008) (Dimitrouleas, J.). Because Spirit has not come forward with the kind of
“specific showing of prejudice or burdensomeness” demanded by this District’s Local Rules, no
stay will issue. See Bocciolone, 2008 WL 2906719, at *2.
The Court is, of course, not unsympathetic to the sometimes unfair costs and burdens
discovery can impose upon defendants where a case is ultimately dismissed for failure to state a
claim. Even so, a stay of discovery should be a sparingly ordered thing. The decision in
Chudasama is illustrative. There, the Eleventh Circuit held that the district court abused its
discretion in compelling discovery and waiting over a year-and-a-half before ruling on a motion
to dismiss, where the plaintiff’s allegations of fraud appeared particularly meritless.

See

Chudasama, 123 F.3d at 1368-69. The Eleventh Circuit did not, however, prescribe “a broad
rule that discovery should be deferred whenever there is a pending motion to dismiss.” See

Gannon, 2008 WL 793682, at *1; Romacorp, Inc. v. Prescient, Inc., 2011 WL 2312563, at *2
(S.D. Fla. June 8, 2011) (“Various courts have recognized that Chudasama does not stand for the
broad proposition that a court must stay discovery when there is a pending motion to dismiss.”).
Instead, the court of appeals confronted a very specific situation involving a threefold
problem – unjustifiable delay by the district court in ruling on the motion to dismiss, an
erroneous decision to compel discovery from the defendant prior to adjudicating the motion to
dismiss, and an especially dubious fraud claim that was likely to be dismissed. See Chudasama,
123 F.3d at 1368-69. Thus, as many district courts have recognized, Chudasama involved
particularly egregious facts which one hopes will be seldom, if ever, duplicated again. See, e.g.,
Gannon, 2008 WL 793682, at *1; Romacorp, Inc., 2011 WL 2312563, at *2. Here, by contrast,
Spirit’s motion was filed barely more than a month ago and has just now become ripe. “The
procedural posture here is a far cry from the bizarre situation in Chudasama, and this Court has
not unduly delayed any rulings in this case.” See Bocciolone, 2008 WL 2906719, at *2. A
reasonably timely ruling on Spirit’s motion to dismiss should suffice to meet any looming threat
of unwarranted discovery costs and burdens. See Gannon, 2008 WL 793682, at *1.
In the interim, nothing herein should be construed as a blank check for Plaintiffs to
burden or harass Spirit with ridiculous discovery requests.

Should that come to pass, the

multitude of tools provided by the discovery rules remain at Spirit’s disposal. Any appropriate
motions seeking protection or relief from discovery may be addressed by the Magistrate Judge,
under this Court’s automatic reference of such matters. That will allow particularized discovery
issues to be addressed and resolved on a case-by-case basis, which is a more prudent approach
than an indiscriminate blanket stay of discovery.
Conclusion
Accordingly, for the reasons stated above, it is hereby ORDERED and ADJUDGED
that Spirit’s Motion to Stay Discovery [ECF No. 18] is DENIED. The parties shall meet-andconfer and file their joint report no later than November 27, 2012.
DONE and ORDERED in chambers, at Miami, Florida on November 9, 2012.

Copies to:
Counsel of record

________________________________
ROBERT N. SCOLA, JR.
UNITED STATES DISTRICT JUDGE