Waste Away Consulting, LLC et al v. Environmental Waste Solutions, LLC et al

Filing 26

ORDER denying 17 Motion to Stay Proceedings Pending Outcome of 12(b)(6) 11 Motion to Dismiss. Signed by Magistrate Judge Richard L. Bourgeois, Jr. on 10/26/2016. (LLH)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
WASTE AWAY CONSULTING, LLC, ET AL.

CIVIL ACTION

VERSUS

NO. 16-389-JWD-RLB

ENVIRONMENTAL WASTE
SOLUTIONS, ET AL.
ORDER
Before the court is Defendant Environmental Waste Solutions, L.L.C.’s (“EWS”) and
Defendant Darwyn Williams’ Motion to Stay (R. Doc. 17) filed on September 16, 2016.
Defendants seek a stay of all deadlines set forth in the Court’s Order dated August 25, 2016 (R.
Doc. 15) pending the resolution of its previously filed Motion to Dismiss (R. Doc. 11).
Plaintiffs initiated this action on June 15, 2016. (R. Doc. 1). The class action complaint is
brought on behalf of certain Affiliates of Environmental Waste Solutions, LLC who were parties
to Joint Venture Agreements with EWS. Plaintiffs assert that federal jurisdiction exists because
the “amount in controversy exceeds $5,000,000.00; there are more than 100 claimants/class
members involved; and at least one defendant and one plaintiff and/or putative class members are
of diverse citizenship,” thus providing jurisdiction pursuant to 28 U.S.C. § 1332(d). (R. Doc. 1 at
1-2).
On August 8, 2016, Defendants filed a Motion to Dismiss for Lack of Subject Matter
Jurisdiction. (R. Doc. 11). That motion asserts that the “Plaintiffs cannot meet the jurisdictional
requirements” under the Class Action Fairness Act. Specifically, Defendants argue that the
affiliate program at issue, “at its high water mark, consisted of seventy-seven (77) affiliates with
Joint Venture Agreements.” (R. Doc. 11 at 5). Defendants provide additional specific information
about the seventy-seven affiliates, including representations that certain affiliates never signed a
consulting agreement or terminated such agreement, some affiliates still have an active

relationship with EWS, and others have previously compromised any claims with EWS. These
specific, factual assertions, offered to contradict the allegations in the Complaint, are supported
by a “Declaration of Darwyn Williams,” one of the aforementioned defendants in this matter.
Following a scheduling conference on August 25, 2016, the court issued a limited
scheduling order, providing certain deadlines pertaining to amending the pleadings, adding new
parties, exchanging initial disclosures, and conducting discovery “limited to class certification
issues.” (R. Doc. 15).
Rule 26(c) of the Federal Rules of Civil Procedure allows the court to issue a protective
order after a showing of good cause “to protect a party or person from annoyance, embarrassment,
oppression, or undue burden or expense.” Fed. R. Civ. P. 26(c)(1). Rule 26(c)’s “good cause”
requirement indicates that the party seeking a protective order has the burden “to show the
necessity of its issuance, which contemplates a particular and specific demonstration of fact as
distinguished from stereotyped and conclusory statements.” In re Terra Int'l, Inc., 134 F.3d 302,
306 (5th Cir. 1998) (quoting United States v. Garrett, 571 F.2d 1323, 1326 n.3 (5th Cir. 1978)).
“Trial courts possess broad discretion to supervise discovery.” Landry v. Air Line Pilots
Ass’n Int’l AFL-CIO, 901 F.2d 404, 436 n.114 (5th Cir. 1990) (citation omitted). “A trial court
has broad discretion and inherent power to stay discovery until preliminary questions that may
dispose of the case are determined.” Petrus v. Bowen, 833 F.2d 581, 583 (5th Cir. 1987).
Nevertheless, the court is not required to stay discovery while a dispositive motion based on the
pleadings is pending. See, e.g., Von Drake v. Nat’l Broad. Co., Inc., No. 04-0652, 2004 WL
1144142, at *1 (N.D. Tex. May 20, 2004) (“While discovery may be stayed pending the outcome
of a motion to dismiss, the issuance of stay is by no means automatic.”). Furthermore, “[c]ourts
have cautioned that a stay of all discovery is not appropriate when it could prevent a party from
having a sufficient opportunity to develop a factual base for defending against a dispositive
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motion.” Reich Album & Punkett, L.L.C., No. 06-10850, 2007 WL 1655677, at *3 (E.D. La. June
4, 2007) (quotation omitted).
Here, Defendant has not advanced sufficient “good cause” to warrant a stay of all
discovery and all deadlines pending the resolution of its Motion to Dismiss. Defendant Williams’
affidavit contains numerous assertions that, if true, may support a finding that jurisdiction is
lacking. How the district judge will treat such a factual affidavit in support of a Rule 12 motion
has not been decided. Defendants’ Motion to Stay merely references the current deadlines in
place. It does not identify any discovery conducted or sought by Plaintiff that would subject
Defendants to undue burden or expenses. Discovery is limited to class certification issues. This
same discovery may resolve the current jurisdictional dispute as well. Should Defendants be
confronted with undue burden or expenses, or otherwise unreasonable discovery, they may object
or seek appropriate relief at that time.1 Extensions of any deadlines can likewise be sought upon a
showing of good cause. While the Court has discretion to stay discovery and all deadlines under
certain circumstances, it does not find such discretion appropriately exercised in the instant
matter. Based on the foregoing,
IT IS ORDERED that Defendant’s Motion to Stay (R. Doc. 17) is DENIED.
Signed in Baton Rouge, Louisiana, on October 26, 2016.

S

RICHARD L. BOURGEOIS, JR.
UNITED STATES MAGISTRATE JUDGE

1

Defendants have, in fact, sought a Protective Order in this matter (R. Doc. 24) and have opposed a Motion to
Compel (R. Doc. 25). Both discovery related motions are pending before the Court.

3