Allstate Insurance Company et al v. Belsky et al

Filing 183

ORDER denying Defendants' ECF No. 146 Motion to Stay. Signed by Magistrate Judge Carl W. Hoffman on 6/22/2017. (Copies have been distributed pursuant to the NEF - KR)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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ALLSTATE INSURANCE COMPANY, et al,

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Plaintiffs,
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v.
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MARJORIE BELSKY, et al.,
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Defendants.
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_______________________________________ )

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Case No. 2:15-cv-02265-MMD-CWH

ORDER

Presently before the court is Defendant Marjorie Belsky’s motion to stay (ECF No. 146),

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filed on May 9, 2017. Plaintiff Allstate Insurance Company filed a response (ECF No. 161) on May

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22, 2017, and Defendant filed a reply (ECF No. 168) on May 30, 2017.

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Defendant moves to stay all proceedings in this case pending the Court’s decision on her

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motions for disqualification of counsel (ECF No. 112). Defendant argues that she would be

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prejudiced by Plaintiff’s counsel’s continued involvement in this matter, and Plaintiff’s use of

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allegedly stolen material, and that the only way to prevent such prejudice is to stay this case pending

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the Court’s decision on the underlying motion. Plaintiff opposes a stay, arguing that Defendant’s

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motion to disqualify is unlikely to be granted, and that in any event, there is no controlling authority

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which holds that courts should grant a stay pending a motion to disqualify.

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I.

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Legal Standard
It is within the Court’s broad discretion over discovery to determine whether a stay of

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discovery is appropriate. Little v. City of Seattle, 863 F.2d 681, 685 (9th Cir. 1988). In order to

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determine if a stay is appropriate, courts considers whether (1) the pending motion is potentially

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dispositive of the entire case or at least dispositive of the issue on which discovery is sought, and (2)

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the motion can be decided without additional discovery. Ministerio Roca Solida v. U.S. Dep’t of

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Fish & Wildlife, 288 F.R.D. 500, 506 (D. Nev. 2013). Courts considering stays in this district have

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found that this standard is not easily met (Kor Media Grp., LLC v. Green, 294 F.R.D. 579, 583 (D.

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Nev. 2013)), and that “[a]bsent extraordinary circumstances, litigation should not be delayed simply

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because a non-frivolous motion has been filed.” Id. (quoting Trzaska v. Int'l Game Tech., 2011 WL

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1233298, at *3 (D. Nev. Mar. 29, 2011)). The Court’s presumption then, is that litigation should

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proceed uninterrupted.

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Here, the pending motions before the Court are not dispositive, and as both parties concede,

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there is no binding authority for this Court as to when a stay pending resolution of a motion to

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disqualify is appropriate. Def’s Resp. at 3 (ECF No. 161); Pl’s. Reply at 3-4 (ECF No. 168).

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Defendant argues that the Court should stay proceedings as a matter of course when a motion to

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disqualify is made. However, Defendant’s argument relies primarily on three cases that do not

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directly support her conclusion. The first two come to a much narrower holding--that it would be a

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mistake for a court to avoid considering a motion to disqualify by granting summary judgment and

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then denying the motion to disqualify as moot. Grimes v. D.C., 794 F.3d 83, 90 (D.C. Cir. 2015)

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(holding that a district court erred by denying as moot a plausible claim of a conflict of interest after

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granting a motion for summary judgment). See also Bowers v. Ophthalmology Grp., 733 F.3d 647,

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654 (6th Cir. 2013) (holding that a district court must rule on a motion for disqualification prior to

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ruling on a dispositive motion). Similarly, the third case Defendant relies on merely notes that a

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motion for disqualification should be resolved before moving on to “issues of fact.” Allergia, Inc. v.

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Bouboulis, No. 14-CV-1566 JLS (RBB), 2015 WL 11735651, at *5 (S.D. Cal. May 5, 2015). The

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Court does not find any persuasive authority among Defendant’s citations for a per se rule that a

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pending motion for disqualification warrants a general stay of all proceedings. On the contrary, the

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Allergia court makes specific note of the Ninth Circuit’s warning that “[b]ecause disqualification

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motions can be misused for tactical purposes, they should be subjected to particularly strict judicial

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scrutiny.” Shurance v. Planning Control Int'l, Inc., 839 F.2d 1347, 1349 (9th Cir. 1988). An

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automatic stay of all proceedings upon filing of a motion to disqualify would be inconsistent with the

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exercise of “particularly strict judicial scrutiny.”

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Given that Defendant’s pending motions are not dispositive, the fact that motions to
disqualify are prone to tactical misuse, and the general presumption against staying litigation, the
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Court not convinced a stay is necessary.

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IT IS THEREFORE ORDERED that Defendants’ motion to stay (ECF No. 146) is DENIED.

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DATED: June 22, 2017

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_________________________________
C.W. Hoffman, Jr.
United States Magistrate Judge

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