The City of New York v. YRC Worldwide Inc.

Filing 19

MEMORANDUM AND ORDER granting 16 Motion for Discovery; denying 17 Motion to Stay. For the reasons stated in the attached Memorandum and Order, the Court, in its discretion, denies YRC's motion to stay discovery, except (on consent) deposi tion discovery. Both parties are directed to confer on document discovery requests in order to minimize the burden imposed on YRC, including exploring the possibility of deferring hard-copy document review, pending the resolution of YRC's motion to dismiss. Ordered by Magistrate Judge Roanne L. Mann on 1/6/2015.(Williams, Jennifer)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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CITY OF NEW YORK,
Plaintiff,

-against-

MEMORANDUM
AND ORDER
14-CV-4322 (FB)

YRC WORLDWIDE INC.,
Defendant.
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ROANNE L. MANN, UNITED STATES MAGISTRATE JUDGE:
This action concerns the alleged shipment of contraband cigarettes into New York
State, and ultimately into New York City. See Amended Complaint (Nov. 13, 2014),
Electronic Case Filing Docket Entry (“DE”) #13. On November 13, 2014, plaintiff City of
New York (the “City”) filed an Amended Complaint, which defendant YRC Worldwide, Inc.
(“YRC”) has moved to dismiss. See Letter (Dec. 19, 2014), DE #18. Currently pending
before this Court are cross-motions related to the appropriate scope of discovery, in light of
YRC’s pending dispositive motion. See Motion to Stay Discovery (Nov. 24, 2014) (“Def.
Mot.”), DE #17; [The City’s] Letter Motion for Discovery (Nov. 21, 2014) (“Pl. Mot.”), DE
#16. The City requests that the parties commence document discovery, see Pl. Mot. at 3,
whereas YRC argues that all discovery should be stayed pending the resolution of its motion to
dismiss, or, alternatively, that discovery be limited to documents concerning the nine
shipments of cigarettes specified in the Amended Complaint. See Def. Mot. at 3-4. For the
reasons that follow, the Court denies YRC’s motion to stay discovery and directs that the
parties commence document discovery forthwith.

DISCUSSION
Pursuant to Rule 26(c) of the Federal Rules of Civil Procedure, a court may grant a
protective order, such as a stay of discovery, for “good cause.” See Fed. R. Civ. P. 26(c)(1).
While the filing of a dispositive motion may sometimes constitute good cause for a stay of
discovery, it by no means entitles a movant to an automatic stay. See Diaz v. Local 338 of the
Retail, Wholesale Dep’t Store Union, United Food & Comm. Workers, No. 13-CV-7187 (SJF)
(SIL), 2014 WL 4384712, at *2 (E.D.N.Y. Sept. 3, 2014) (collecting cases); Bachayeva v.
Americare Certified Special Servs., Inc., No. 12-CV-1466 (RRM) (SMG), 2013 WL 4495672,
at *4 (E.D.N.Y. Aug. 20, 2013). In deciding whether good cause has been shown, courts
consider the breadth of discovery and the burden entailed in responding to it, as well as the
prejudice to the adverse party in the event a stay is granted. See Diaz, 2014 WL 4384712, at
*2; Bachayeva, 2013 WL 4495672, at *4. A court may also consider whether the defendant
seeking a stay has made a “strong” or “substantial” showing that the claims lack merit. See
Diaz, 2014 WL 4384712, at *2; Bachayeva, 2013 WL 4495672, at *4.
Whether to grant a protective order lies within a court’s broad discretion. See Duling
v. Gristede’s Operating Corp., 266 F.R.D. 66, 71 (S.D.N.Y. 2010); see also Bachayeva, 2013
WL 4495672, at *4. The party seeking the protective order bears the ultimate burden of
persuading the Court that good cause has been shown. See Duling, 266 F.R.D. at 71
(collecting cases).
Here, YRC argues in conclusory fashion that “unlimited document discovery would be
costly and time consuming[.]” See Def. Mot. at 3. While YRC attempts to support this claim
by noting that it makes in excess of a million shipments annually to New York State, there is
2

no allegation or evidence placing that figure in proper context. See id. YRC proffers no
affidavit from a company officer attesting to how shipment records are stored, whether said
records can be searched electronically, or otherwise describing the nature of the burden of
production. Nor has YRC provided an estimate from a third-party litigation document
depository opining on the expected costs of searching YRC’s records or what that search
would entail. See generally Barella v. Village of Freeport, 296 F.R.D. 102, 105 (E.D.N.Y.
2013) (“The party objecting to the discovery demands must, with some degree of specificity,
illustrate the nature and extent of the burden of production.”). It is not even clear from the
parties’ submissions whether document demands have already been served on YRC. See
Brooks v. Macy’s, Inc., No. 10 CIV 5304 BSJ HBP, 2010 WL 5297756, at *2 (S.D.N.Y.
Dec. 21, 2010) (denying motion to stay discovery other than depositions, where lack of
document requests made it impossible to assess the breadth and burden of discovery sought).
In other words, YRC’s claims of burden are conclusory and bereft of support.
On the other hand, the prejudice to plaintiff, in terms of delay, would not be
inconsequential. YRC’s motion to dismiss identifies a multitude of issues, some of them
complex in nature, from which it may reasonably be inferred that a resolution of the motion
will not be an expeditious one, and that the case may be delayed from moving forward for a
substantial period of time.
Finally, with respect to the strength of YRC’s motion to dismiss, as of now, the initial
brief has been served on plaintiff, but not filed with the Court; the City has not served its
opposition papers; and the motion is not set to be fully briefed until next month. See Letter to
Judge Block (Nov. 17, 2014), DE #15. This Court cannot reliably opine, from the limited
3

factual and legal record before it, that YRC has made a strong or substantial showing that the
City’s claims are unmeritorious. See In re Term Commodities Cotton Futures Litig., No. 12
Civ. 5126 (ALC) (KNF), 2013 WL 1907738, at *5 (S.D.N.Y. May 8, 2013) (in deciding
motion to stay, magistrate judge considered the fact that a motion had been filed, but declined
to analyze the strength of that motion, which was pending before the district court, because to
do so would “represent[] an unnecessary and unjustified duplication of efforts”).
CONCLUSION
Therefore, for the above reasons, the Court, in its discretion, denies YRC’s motion to
stay discovery, except (on consent) deposition discovery.1 Both parties are directed to confer
on document discovery requests in order to minimize the burden imposed on YRC, including
exploring the possibility of deferring hard-copy document review, pending the resolution of
YRC’s motion to dismiss.
SO ORDERED.
Dated:

Brooklyn, New York
January 6, 2015

Roanne L. Mann

/s/
ROANNE L. MANN
UNITED STATES MAGISTRATE JUDGE

1

YRC’s request to limit discovery to the nine shipments specifically alleged in the Amended
Complaint is likewise denied. YRC offers no explanation as to why engaging in piecemeal
document discovery is a reasonable approach.
4