The opinion
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
BLUE RIVER ENVIRONMENTAL AND )
RESTORATION SERVICES, INC., )
HIS CONSTRUCTORS, INC., )
HIS MANAGEMENT CORPORATION, )
)
Plaintiffs, )
)
v. ) No. 1:23-cv-00405-MPB-MKK
)
LEGACY RESTO, LLC, )
CHRIS MCCORMICK, )
)
Defendants. )
ORDER
This matter comes before the Court on Defendant Legacy Resto, LLC's
Motion to Stay Court Deadlines Pending Resolution of its Motion to Dismiss, Dkt.
[37]. The motion was referred to the undersigned for ruling. For the reasons set
forth below, the Court DENIES Defendant's motion.
District courts have "extremely broad discretion" in deciding whether a stay
of discovery should issue. United States ex rel. Robinson v. Indiana University
Health, Inc., No. 1:13-cv-02009-TWP-MJD, 2015 WL 3961221, at *1 (S.D. Ind. June
30, 2015). "Filing a motion to dismiss does not automatically stay discovery." Red
Barn Motors, Inc. v. Cox Enters., Inc., No. 1:14-cv-1589-TWP-DKL, 2016 WL
1731328, at *2 (S.D. Ind. May 2, 2016). As a general matter, "a stay of discovery is
warranted only when a party raises a potentially dispositive threshold issue such
[as] standing, jurisdiction, or qualified immunity." Id. Courts generally disfavor
stays of discovery because they bring resolution of the dispute to a standstill. Am.
Senior Communities, LLC v. Burkhart, No. 1:17-cv-3272-TWP-DML, 2019 WL
415614, at *2-3 (S.D. Ind. Feb. 1, 2019).
The party seeking a stay of discovery "bears the burden of proof to show that
the Court should exercise its discretion in staying the case." Id. In order to meet its
burden, the "movant must show that good cause exists for the stay" of discovery. Id.
The Court uses the following three factors to determine if good cause exists: "the
prejudice or tactical disadvantage to the non-moving party; whether or not issues
will be simplified . . .; and whether or not a stay will reduce the burden of litigation
on a party." Johnson v. Navient Solutions, Inc., 150 F. Supp. 3d 1005, 1007 (S.D.
Ind. 2015). The decision whether to stay must be made on a case-by-case basis.
United Leasing, Inc. v. Xcelerate Auto, LLC, No. 3:22-cv-76-RLY-MPB, 2022 WL
18540544, at *2 (S.D. Ind. Nov. 18, 2022).
Defendant Legacy Resto, LLC ("Legacy") argues that the Court should stay
all case deadlines, including any discovery or requirements related to the June 20,
2023 preliminary injunction hearing, as they relate to Legacy. (Dkt. 37). Legacy
argues that it should not be required to participate in the case until the issue of its
personal jurisdiction is resolved; Plaintiffs will not be prejudiced by a stay; and a
stay would reduce the burden of litigation and is in the interest of judicial efficiency.
(Dkt. 37 at 4-8; Dkt. 46).
Plaintiffs maintain in response that consideration of the three factors should
result in a finding that a stay is unnecessary. (Dkt. 45). Specifically, Plaintiffs
contend that Legacy is unlikely to succeed on its personal jurisdiction motion;
Plaintiffs have suffered and continue to suffer irreparable harm; there is no
material difference in the discovery burden whether the motion to stay is granted or
not; and the parties can conduct jurisdictional discovery and brief the personal
jurisdiction dispute while concurrently completing the expedited preliminary
injunction discovery and hearing, which would be the most efficient use of the
parties' and Court's resources. (Id.).
As to the first factor, Plaintiffs would certainly be prejudiced by a stay in this
case, especially as to the preliminary injunction proceedings, given the allegation of
past and present harm occurring. As to the second factor, whether the stay would
simplify the issues or streamline trial, the case would be streamlined insofar as one
of the defendants would be terminated if the motion to dismiss were granted –
however, as Plaintiffs point out, the discovery needed from both Legacy and
McCormick would largely overlap. The situation presented by this case is unique, as
only one of two defendants requests a stay – perhaps more uniquely, the company
defendant seeks a stay while the part-owner defendant does not.
As to the third factor, reducing the burden of litigation on the parties or
court, the undersigned cannot say with confidence that staying all case deadlines as
to Defendant Legacy only would reduce the burden of litigation on the court or the
parties. This is especially so because the parties have only been authorized to
pursue a limited universe of discovery targeted to jurisdictional and injunction-
related issues, all of which will conclude in advance of the June 2023 injunction
hearing. (See Dkts. 18, 47). Perhaps more importantly, that same discovery will be
conducted regardless of whether Legacy is dismissed, because discovery will proceed
as ordered as to Defendant McCormick.
As such, the Court concludes that Defendant Legacy has not met its burden
of establishing that good cause exists for a stay of all case deadlines and discovery.
However, the Court will note that Legacy does not waive its personal jurisdiction
defense by participating in injunction-related discovery or hearings.
For the reasons stated herein, Defendant Legacy Resto, LLC's Motion to Stay
Court Deadlines Pending Resolution of its Motion to Dismiss, Dkt. [37], is DENIED.
So ORDERED.
Midd
Date: 5/4/2023 United States Mapstate Judge
Southern District of Indiana
Distribution:
All ECF-registered counsel of record via email