West Side Salvage, Inc v. RSUI Indemnity Company

Filing 30

ORDER denying as moot 12 Motion to Dismiss Case for Lack of Jurisdiction; denying 20 Motion to Stay. See attached order for details. Signed by Judge Michael J. Reagan on 6/26/2013. (jls)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
WEST SIDE SALVAGE, INC.,
Plaintiff,
vs.
RSUI INDEMNITY CO.,
Defendant.

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Case No. 13–cv–0363–MJR–PMF

ORDER
REAGAN, District Judge:
In this diversity action, West Side Salvage (against whom judgments totaling $24
million were entered after a 17-day jury trial last year—“the underlying litigation”) has sued RSUI
Indemnity Company for bad faith refusal to negotiate and settle the underlying litigation. Now
before the Court are two motions: Defendant’s Motion to Dismiss for Lack of Jurisdiction (Doc.
12), and its Motion to Stay Discovery (Doc. 20). The Court takes the motions in turn.
Defendant moves to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1),
which allows a party to challenge the Court’s subject matter jurisdiction. Defendant’s motion was
filed on May 20, 2013—exactly 21 days before June 10, 2013, when Plaintiff filed its Amended
Complaint. The Federal Rules give a party an opportunity to amend its pleadings once “as a matter
of course within” 21 days after service of a Rule 12(b) motion. FED. R. CIV. P. 15(a)(1)(B).
Plaintiff’s Amended Complaint was timely filed, and when an amended complaint is filed, the “prior
pleading is withdrawn and the amended pleading is controlling.” Johnson v. Dossey , 515 F.3d
778, 780 (7th Cir. 2008). Defendant’s Motion to Dismiss (Doc. 12) the original complaint is
therefore DENIED as MOOT.

As to the second motion, “[t]he power to stay proceedings is incidental to the power
inherent in every court to control the disposition of the causes on its docket with economy of time
and effort for itself, for counsel, and for litigants.” Texas Independent Producers & Royalty

Owners Association v. E.P.A. , 410 F.3d 964, 980 (7th Cir. 2005) (quoting Landis v. N. Am.
Co. , 299 U.S. 248, 254 (1936)). Defendant premised its motion on the pendency of its motion to
dismiss—a motion that is now moot. Even if it were not, this Court is well within its discretion to
deny a stay in discovery. See SK Hand Tool Corp. v. Dresser Indus., Inc. , 852 F.2d 936, 945
n.11 (7th Cir. 1988) (“Discovery need not cease during the pendency of a motion to
dismiss.”). See also New England Carpenters Health & Welfare Fund v. Abbott Labs. , No.
12 C 1662, 2013 WL 690613, at *2 (N.D. Ill. Feb. 20, 2013) (“It may well be that [the] motion
to dismiss will be successful, but until [the district court rules on it, that] assertion is mere
speculation.”). The circumstances of the case at this time do not warrant staying discovery, and
Defendant’s Motion to Stay Discovery (Doc. 20) is accordingly DENIED.

IT IS SO ORDERED.
DATE: June 26, 2013___

s/ Michael J. Reagan ______
MICHAEL J. REAGAN
United States District Judge