U.S. Tobacco Cooperative Inc. et al v. Big South Wholesale of Virginia, LLC d/b/a Big Sky International et al

Filing 209

ORDER GRANTING 144 MOTION to Intervene and Stay Discovery, DENYING as moot 129 Motion to Stay and DENYING as moot 208 Motion to Stay. Discovery is stayed until 11/24/2014. The Clerk of Court is DIRECTED to schedule and notice a hearing for 10 /22/2014 at 10:00 a.m. before the undersigned. At the hearing, the parties should be prepared to argue the pending Motion to Amend Protective Order [DE-127] and Motion for Equitable Relief [DE-162]. Signed by Senior Judge James C. Fox on 9/30/2014. (Grady, B.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
No. 5:13-CV-527-F
U.S. TOBACCO INC., U.S FLUECURED TOBACCO GROWERS, INC.,
and BIG SOUTH DISTRIBUTION, LLC,

Plaintiffs,

v.
BIG SOUTH WHOLESALE OF
VIRGINIA, LLC, d/b/a BIG SKY
INTERNATIONAL, BIG SOUTH
WHOLESALE, LLC, UNIVERSAL
SERVICES FIRST CONSULTING, a/k/a
UNIVERSAL SERVICES CONSULTING
GROUP, JASON CARPENTER,
CHRISTOPHER SMALL, EMORY
STEPHEN DANIEL, and other unnamed
co-conspirators,
Defendants.

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ORDER

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This matter is before the court on the Government's Motion to Intervene and Stay Discovery
[DE-144]. For the reasons more fully explained below, the Motion [DE-144] is ALLOWED.
Plaintiffs U.S. Tobacco, Inc., U.S. Flue-Cured Tobacco Growers, Inc., and Big South
Distribution, LLC, initiated this action by filing a complaint [DE-l] in this court on July 23, 2013,
alleging claims arising under the Racketeer Influenced and Corrupt Organizations ("RICO") Act,
18 U.S.C. § 1961 et seq. and North Carolina law, and naming Big South Wholesale ofVirginiaLLC,
d/b/a Big Sky International, Big South Wholesale, LLC, Universal Services Consulting Group, Jason
Carpenter, Christopher Small, and Emory Stephen Daniel as defendants. After the Defendants filed

their Answers and Counterclaims, discovery commenced between the parties, and numerous motions
concerning discovery have been filed.
On April23, 2014, the Government filed the Motion to Intervene and Stay Discovery [DE144]. Therein, the United States seeks to intervene in this case for a limited purpose; namely to seek
a temporary six-month stay of all discovery. The Government asserts that if discovery is allowed to
go forward, it will substantially interfere in an ongoing federal grand jury investigation pending in
this district. No parties object to the motion, although some parties have conditioned their consent.
The Blue Sky Defendants 1 consent to the motion, provided that (1) the Government submit to the
court certain documents allegedly prepared by the Government in connection with the Blue Sky
Defendants' pending Motion to Amend Protective Order [DE-127] and (2) the court rules on the said
motion. Plaintiffs also consent to the motion, but have requested an oral argument on the various
pending motions, and have separately filed a Motion for Equitable Relief and Request for Oral
Argument [DE-162], wherein they seek an order requiring the Defendants to submit to the court an
equitable accounting of their assets, as well as an order requiring Defendants to maintain a
reasonable and appropriate amount of their assets to satisfy a judgment in this action.
Rule 24(b)(1 )(B) provides that"[ o]n timely motion, the court may permit anyone to intervene
who ... has a claim or defense that shares with the main action a common question oflaw or fact."
Courts within the Fourth Circuit and elsewhere have allowed the Government to intervene in a civil
action under Rule 24(b) to seek a stay of discovery where there is a parallel criminal proceeding that
involves common questions oflaw or fact. See Ashworth v. Albers Medical, Inc., 229 F.R.D. 527,

1

The "Blue Sky Defendants" refers to Defendants Big South Wholesale of Virginia LLC, d/b/a Big Sky
International, Big South Wholesale, LLC, Jason Carpenter and Christopher Small.

2

529-33 (S.D. W.Va. 2005); Bridgeport Harbour Place L LLC v. Ganim, 269 F. Supp. 2d 6, 8 (D.
Conn. 2002). The court has examined the parties' filings, and is satisfied that the grand jury
investigation and this civil action share common questions of law and fact, and that the
Government's motion is timely. The Government's motion to intervene is therefore ALLOWED.
Additionally, the Government's request for a temporary stay of discovery is ALLOWED.
Federal courts have recognized that they have the authority and discretion to stay civil proceedings,
including staying discovery, pending a parallel criminal case where the interests of justice require.
Bridgeport Harbour Place, 269 F. Supp.2d at 8. Again, the court has examined the parties' briefing
and the authorities therein, and determines the interests of justice require a stay of discovery in this
case. 2 Additionally, the court does not find it necessary to condition the stay on any of the various
parties' requests for relief. Accordingly, it hereby is ORDERED that all discovery in this action is
stayed, until November 24, 2014. 3
Although the court is not conditioning the stay on any of the parties' requests, the court has
determined that a hearing is necessary on some of the parties' outstanding motions. Accordingly, the
Clerk of Court is DIRECTED to schedule and notice a hearing for Wednesday, October 22,2014,
at 10:00 a.m. before the undersigned. At the hearing, the parties should be prepared to argue the
pending Motion to Amend Protective Order [DE-127] and Motion for Equitable Relief [DE-162].
For the foregoing reasons, it is hereby ORDERED that:

2

The parties' various filings indicate that discovery has been essentially stayed by consent since the
Government's filling of the motion to intervene. See Consent Motion to Stay [DE-208].
3

Consequently, the Blue Sky Defendants' Motion to Stay [DE-129] is DENIED as moot, as is the parties'
Consent Motion to Stay Discovery [DE-208] to the extent they seek a stay of discovery. To the extent,
however, the consent motion requests that the parties be allowed to submit a proposed Amended Scheduling
order at the conclusion of the stay, the motion is ALLOWED.

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( 1) the Government's Motion to Intervene and Stay Discovery [DE-144] is ALLOWED, and
discovery in this action is stayed until November 24, 2014;
(2)the Motions to Stay [DE-129; DE-208] areDENIEDasmoottotheextenttheyseekastay
of discovery in this action; and
(3).the Clerk of Court is DIRECTED to schedule and notice a hearing for Wednesday,
October 22, 2014, at 10:00 a.m. before the undersigned. At the hearing, the parties should be

prepared to argue the pending Motion to Amend Protective Order [DE-127] and Motion for
Equitable Relief [DE-162].

SO ORDERED.

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This thegQ day of September, 2014.

J
S nior United States District Judge

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