Plaintiffs Permitted to Proceed With “Plainly Relevant And Core Discovery” Pending Motion To Dismiss
In Udeen v. Subaru of America, Inc., Civ. No. 18-17334(RBK/JS)(D. NJ Mar. 12, 2019), the Magistrate Judge denied Defendant’s request to stay all discovery pending a ruling on their Motion to Dismiss on the grounds that a stay would impose an undue prejudice on the non-moving Plaintiffs.
This putative nationwide class action was brought against Defendant Subaru alleging that Defendant sold and leased its cars with a defective entertainment system that created a safety hazard. Defendant denied all allegations and subsequently brought a Motion to Dismiss along with a request that all discovery be stayed until their Motion to Dismiss was decided.
At the outset, the Court held that the mere filing of a motion to dismiss does not stay discovery. Rather, the Court held that the following four factors are to be examined: (1) whether a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party; (2) whether denial of the stay would create a clear case of hardship or inequity for the moving party; (3) whether a stay would simplify the issues and the trial of the case; and (4) whether discovery is complete and/or a trial date has been set. Jackson v. Trump Entertainment Resorts, Inc., C.A. 13-1605 (JHR/JS), 2015 WL 13637411, at *4 (D.N.J. Feb. 11, 2015).
In analyzing the factors, the Court quickly held that Plaintiffs would indeed suffer prejudice if all discovery were stayed while waiting for Defendant’s motion to be decided. Of importance, the Court noted that given the complexity and extensive briefing on the Motion, it would likely take the Court months to reach a decision on the matter. Having filed their complaint, the Court stated that Plaintiffs have a right to move forward with their case without being stuck in a hold and to proceed with obtaining “plainly relevant and important core discovery.” Finally, the Court noted that the allegations of a safety hazard made it even more important that the case progressed without delay.
Next, the Court held that Defendants would not be prejudiced nor would they be subject to “extremely expensive” discovery should the stay be denied. In contrast to the Defendants position, the Court held that a discovery stay would in fact increase the complexity of the issues for trial. The Court stated that the parties’ initial discovery should focus on the core issues in the case to assure that only the most relevant and important discovery was produced no matter what claims remained in the case. The discovery would serve to educate plaintiffs concerning the most important individuals and issues in the case. The Court also expected Defendants to benefit from this staging so that the parties do not chase discovery “down a rabbit hole.”