Kuklineski v. Binance Capital Management Co., Ltd. et al
ORDER granting in part and denying in part 74 Motion to Stay consistent with the attached Memorandum and Order. With the exception of conducting limited jurisdictional discovery, this matter is STAYED for ninety days. The parties are to file a stat us report on or before October 27, 2022. The Motions to Dismiss (Docs. 53 , 54 , and 55 ) are Taken Under Advisement and held in abeyance during stay. (Status Report due by 10/27/2022). Case stayed.Signed by Judge Stephen P. McGlynn on 7/29/2022. (jce)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
KAMIL KUKLINSKI, Individually
And On Behalf Of All Others Similarly
Case No. 21-cv-01425-SPM
BINANCE CAPITAL MANAGEMENT
CO., LTD. d/b/a BINANCE, BAM
TRADING SERVICES INC. d/b/a
BINANCE.US, and JUMIO
MEMORANDUM AND ORDER
McGLYNN, District Judge:
This matter arises out of Illinois Biometric Information Privacy Act (“BIPA”)
claims originally brought in the Twentieth Judicial Circuit, St. Clair County, Illinois by
plaintiff, Kamil Kuklinski (“Kuklinski”) individually and on behalf of a putative class,
against defendants, Binance Capital Management Co., Ltd. (“BCM”), BAM Trading
Services Inc. d/b/a Binance.US (“BUS”), and Jumio Corporation (“Jumio”) (collectively,
“defendants”) (Doc. 1). All three defendants filed individual motions to dismiss pursuant
to Rule 12(b)(6) of the Federal Rules of Civil Procedure, and BCM also seeks dismissal
based upon lack of personal jurisdiction pursuant to Rule 12(b)(2) (Docs. 53, 54 & 55).
At issue before the Court is a motion to stay, which was jointly filed by defendants
herein and which seeks to stay discovery while the motions to dismiss are pending (Doc.
74). Specifically, defendants cite to a sister district which has explained, “Stays are often
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deemed appropriate where the motion to dismiss can resolve the case – at least as to the
moving party, or where the issue is a threshold one, such as jurisdiction, standing, or
qualified immunity.” In re Clearview, AI, Inc. Consumer Priv. Litig., 2021 WL 5862495
(N.D.Ill. August 31, 2021). Kuklinski counters in his response that the stay should be
denied as it is not likely the pending motions to dismiss will dispose of this case in its
entirety (Doc. 77). Furthermore, in his response to the pending BCM motion to dismiss,
Kuklinski seeks the opportunity to conduct appropriate jurisdictional discovery into the
alter ego theory (Doc. 63). For the reasons set forth below, the motion to stay is
GRANTED in part and DENIED in part.
District courts have the power to control their own dockets, including the
discretion to stay proceedings. Munson v. Butler, 776 F. App’x 339, 342 (7th Cir. 2019)
(“[A] district court has inherent power to exercise its discretion to stay proceedings to
avoid unnecessary litigation of the same issues.”). To determine whether a stay is
necessary, courts consider “(1) whether a stay will simplify the issues in question and
streamline the trial; (2) whether a stay will reduce the burden of litigation on the parties
and on the court; and (3) whether a stay will unduly prejudice or tactically disadvantage
the nonmoving party.” Berkeley*IEOR v. Teradata Operations, Inc., 2019 WL 1077124,
at *5 (N.D. Ill. Mar. 7, 2019) (citations omitted). The party seeking the stay bears the
burden of proving that the court should exercise its discretion in staying the case. Ind.
State Police Pension Trust v. Chrysler LLC, 556 U.S. 960, 961 (2009).
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There is no requirement that discovery cease during the pendency of a motion to
dismiss. See SK Hand Tool Corp. v. Dresser Industries, Inc., 852 F.2d 936, 945 (7th Cir.
1988). In accordance with Federal Rule of Civil Procedure 26, a court may, for good
cause, limit the scope of discovery or control its sequence to “protect a party or person
from annoyance, embarrassment, oppression, or undue burden or expense.” Fed. R. Civ.
P. 26(c)(1); see Crawford-El, 523 U.S. 574, 599 (1998).
Defendants argue they have fulfilled their burden in showing that a stay of
discovery is warranted until the Court rules on the pending motions to dismiss. Plaintiff
counters that the stay should be denied as it will bring the litigation to a standstill, but
at a minimum, requests limited discovery to aid in resolution of certain threshold and/or
1. Simplifying the Issues
Defendants argue that the Court should stay discovery because the motions to
dismiss are potentially dispositive of the entire case as they raise threshold and
jurisdictional issues (Doc. 74, pp. 4, 5). However, any discussion into the merits of the
case is premature and inappropriate at this stage, and this Court is not inclined to
circumvent the procedures for the resolution of the various motions to dismiss. See
Robinson v. Walgreen Co., 2021 WL 2453069 (N.D. Ill. June 16, 2021).
It is true that BCM’s motion involves a jurisdictional issue, but it is important to
note that Kuklinski has requested the opportunity to take jurisdictional discovery from
BCM regarding its purported lack of conduct with Illinois and premised upon his alleged
alter ego theory of liability (Doc. 77, p. 6). Additionally, within his memorandum in
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response to BCM’s motion to dismiss, Kuklinski argues, “Absent denial, plaintiff should
be afforded the opportunity to conduct appropriate jurisdictional discovery into the alter
ego theory.” (Doc. 63, p. 10).
2. Burden of Litigation
It is true that class actions have the potential to entail costly and burdensome
discovery. Defendants argue that a stay of discovery will reduce the burden of litigation
on the parties; however, unless all three motions are dismissed with prejudice, this
action remains, at least in part if not whole. Indeed, the Court is generally inclined to
grant leave to amend after granting a motion to dismiss 1.
3. Prejudice or Tactical Disadvantage to Non-Moving Party
Defendants argue that a stay of discovery will not prejudice plaintiff, and plaintiff
has not articulated any potential prejudice or disadvantage in his response.
Nevertheless, this Court is inclined to order limited discovery in this case in an attempt
to resolve the pending motions, including the jurisdictional questions surrounding BCM,
before delving into the cost and burden of full discovery.
In accordance with the foregoing, the Motion to Stay is GRANTED in part and
DENIED in part. All proceedings and deadlines are stayed for 90 days, or until October
27, 2022; however, the parties are ORDERED to engage in limited jurisdictional
discovery. During this time, the Motions to Dismiss (Docs. 53-55) shall be held in
abeyance. Following jurisdictional discovery, the parties are to prepare a joint status
Unless it is certain from the face of the complaint that any amendment would be futile or otherwise
warranted, the district court should grant leave to amend after granting a motion to dismiss. Fed. R. Civ.
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report at which time plaintiff shall advise the Court of his intent to proceed on the
current complaint or whether he seeks leave to file amended complaint.
IT IS SO ORDERED.
DATED: July 29, 2022
s/ Stephen P. McGlynn_
STEPHEN P. McGLYNN
U.S. District Judge
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