The opinion
1
2
3 UNITED STATES DISTRICT COURT
4 NORTHERN DISTRICT OF CALIFORNIA
5 SAN JOSE DIVISION
6
7 JUDY MAY, Case No. 24-cv-01314-BLF
8 Plaintiff,
ORDER GRANTING IN PART AND
9 v. DENYING IN PART MOTION TO
STAY
10 GOOGLE LLC, et al.,
[Re: ECF No. 41]
11 Defendants.
12
13 On March 5, 2024, Plaintiff Judy May filed a complaint alleging violations of the
14 California Unfair Competition Law (“UCL”), Cal. Bus. Prof. Code § 17200 et seq., the California
15 Consumers Legal Remedy Act (“CLRA”), Cal. Civ. Code § 1750 et seq., and Cal. Penal Code §
16 496, and conversion against Defendants Google LLC, Google Arizona LLC, Google Payment
17 Corp., and Alphabet, Inc. (collectively, “Google”).1 ECF No. 1 (“Compl.”). Google filed a
18 motion to dismiss, which will be fully briefed on July 18, 2024, and is set for hearing on
19 September 26, 2024. ECF Nos. 39, 45.
20 Before the Court is Google’s Motion to Stay Discovery Until Resolution of Motion to
21 Dismiss. ECF No. 41 (“Mot.”); ECF No. 46 (Opp.”); ECF No. 50 (“Reply”). The Court finds the
22 motion suitable for disposition without hearing. See Civil L.R. 7-1(b). For the reasons stated
23 below, the Court GRANTS IN PART AND DENIES IN PART Google’s motion to stay.
24 I. BACKGROUND
25 Plaintiff alleges that in April 2021 she was the victim of a scam in which a bad actor
26 posing as a “government agent” convinced her to purchase five Google Play gift cards and send
27
1 the redemption codes to them. Compl. ¶¶ 95–98. Plaintiff later realized it was a scam. Id. ¶ 102.
2 Nearly three years later, on March 5, 2024, Plaintiff initiated this action.
3 II. LEGAL STANDARD
4 A district court “may, for good cause, issue an order to protect a party or person from …
5 undue burden or expense,” including by staying discovery. Fed. R. Civ. P. 26(c)(1); see, e.g.,
6 Reveal Chat Holdco, LLC v. Facebook, Inc., 2020 WL 2843369, at *1 (N.D. Cal. Apr. 10, 2020);
7 In re Nexus 6P Prod. Liab. Litig., 2017 WL 3581188, at *1 (N.D. Cal. Aug. 18, 2017). A district
8 court has “wide discretion in controlling discovery.” Little v. City of Seattle, 863 F.2d 681, 685
9 (9th Cir. 1988); Chadwick v. BMO Harris Bank NA, 675 F. App’x 654, 655 (9th Cir. 2017).
10 Courts in this district apply a two-part test to determine whether to stay discovery pending
11 resolution of a dispositive motion. First, “a pending motion must be potentially dispositive of the
12 entire case, or at least dispositive on the issue at which discovery is directed.” Reveal Chat, 2020
13 WL 2843369, at *2 (citation omitted). The critical “question is only whether [movant’s] motion to
14 dismiss is ‘potentially dispositive[.]’” Id. at *3 (citation omitted). Second, “the court must
15 determine whether the pending motion can be decided absent additional discovery.” Id. at *2
16 (citation omitted). In applying this test, “the court must take a ‘preliminary peek’ at the merits of
17 the pending motion to assess whether a stay is warranted.” Id. (citation omitted).
18 III. DISCUSSION
19 A. Potentially Dispositive of the Case
20 Defendants argue that the motion to dismiss is dispositive for three reasons, which the
21 Court addresses in turn.
22 First, Defendants argue that they “identified a limitation of liability provision that
23 forecloses Plaintiff’s claims, which are premised on third-party actions.” Mot. at 3 (citing ECF
24 No. 39 at 5–6). Plaintiff responds that she “does not seek to hold Google liable for the conduct of
25 third parties, but instead seeks to hold Google liable for its own conduct.” Opp. at 3 (emphasis in
26 original). Plaintiff relies on Barrett v. Apple Inc., where the court granted in part and denied in
27 part the defendant Apple Inc.’s motion to dismiss similar claims regarding an alleged gift card
1 denied, 2023 WL 3977633 (N.D. Cal. June 13, 2023). The same court also denied a similar
2 motion to stay discovery pending the motion to dismiss. Barrett v. Apple Inc., 2020 WL
3 13815568 (N.D. Cal. Oct. 22, 2020). Defendants reply that Barrett does not apply because there,
4 it was alleged that “the defendants were directly involved in the alleged scam,” and here, Google
5 is not alleged to have perpetrated the underlying fraud. Reply at 2. Defendants claim that even if
6 Barrett did apply, the claims would be substantially narrowed here, like they were in Barrett. Id.
7 at 3; 2022 WL 2119131, at *14–15.
8 Defendants acknowledge that their motion to dismiss is not dispositive of all claims. See
9 Reply at 3. Indeed, Defendants have no explanation as to how third-party liability applies to
10 Plaintiff’s allegations that “Google engaged in violations of Section 496 and conversion.” See
11 Opp. at 3. Defendants insist instead that a “substantial narrowing of claims” alone warrants a stay.
12 Reply at 3. As the moving party, Defendants “must demonstrate that the pending motion is
13 ‘potentially dispositive of the entire case, or at least dispositive on the issue at which discovery is
14 directed.’” California Crane Sch., Inc. v. Google LLC, No. 21-CV-10001-HSG, 2022 WL
15 1271010, at *1 (N.D. Cal. Apr. 28, 2022) (quoting In re Nexus, 2017 WL 3581188, at *1 (N.D.
16 Cal. Aug. 18, 2017)); Reveal Chat, 2020 WL 2843369, at *2. But Defendants do not adequately
17 address Plaintiff’s allegation that Google is liable for its own conduct or Plaintiff’s argument that
18 Google’s liability waiver is unenforceable. Opp. at 3. As such, Defendants have not demonstrated
19 that their limited liability waiver theory is case-dispositive, even for some claims. Thus, a stay is
20 not warranted on these grounds.
21 Second, Defendants argue that “Plaintiff improperly relied on group pleading and did not
22 allege any misconduct on the part of several Defendants.” Mot. at 4. Plaintiff responds that she
23 “plausibly alleges that specific Google entities within the same corporate family each play a role
24 in the Google Play gift card business, citing to Google’s own terms of service as support.” Opp. at
25 3.
26 As Plaintiff notes in her opposition, the Complaint alleges actions taken by the various
27 Defendants. Id. at 3–4; Compl. ¶ 37 (“Gift Cards and Credits are issued by Google Arizona LLC
1 Corp. (‘GPC’), and thereafter maintained by GPC as Google Play balance in the user’s Google
2 Payments account.”). Defendants argue in their reply and motion to dismiss that this allegation
3 does not meet the Rule 9(b) pleading standard. Reply at 3; ECF No. 39 at 7. That may prove to
4 be true, but Defendants only raises the Rule 9(b) pleading standard in their reply.
5 Third, Defendants argue that “the bulk of the claims are time barred,” the “proposed class
6 period should be shortened by at least five years,” and thus, “the scope of the case will be
7 significantly narrowed.” Mot. at 4 (emphasis in original). Plaintiff responds that “Google ignores
8 that its statute of limitations arguments cannot reduce certain claims prior to the three and four
9 year statute of limitations periods for such claims” and argues that “minimal discovery should
10 include claims going at least as far back as 2020.” Opp. at 5.
11 As Defendants note, “[t]he Class Period is initially defined as the period between January
12 1, 2015 and the present.” Compl. ¶ 108. The parties don’t appear to dispute that the alleged class
13 period stretches far beyond the statute of limitations and Plaintiff does not argue that the class
14 period should stretch back any further than the statute of limitations for each claim. See Opp. at 5.
15 Thus, the motion to dismiss is potentially dispositive with respect to the lengths of the class
16 periods for each claim. This is, however, hardly a reason to stay all discovery, but instead only
17 reason to limit discovery for each claim to the class period consistent with its corresponding
18 statute of limitations.
19 B. Necessity of Discovery
20 Defendants argue that they “also satisfy[y] the second prong of the test because no
21 discovery is needed to rule on the Motion of Dismiss.” Mot. at 5. Plaintiff does not appear to
22 dispute this. See Opp. Thus, the Court finds that the motion to dismiss can be decided without
23 additional discovery.
24 C. Additional Considerations
25 Defendants argue that “[t]wo further considerations strengthen the case for a stay of
26 discovery here: (1) avoiding wasteful discovery that would prejudice Defendants and (2) the
27 absence of any prejudice to Plaintiff.” Mot. at 5. Defendants argue that it would be inefficient to
1 Id. at 6. As discussed above, Plaintiff argues that “discovery should include claims going at least
2 || as far back as 2020.” Opp. at 5.
3 In ruling on a motion to stay discovery, a district court may “consider whether a stay .. .
4 || will promote efficiency or conserve the parties’ resources, recognizing that engaging in discovery
5 || prior to adjudication of a strong motion to dismiss would represent a potential ‘waste of
6 resources.’” Kincheloe v. Am. Airlines, Inc., No. 21-CV-00515-BLF, 2021 WL 5847884, at *1
7 (N.D. Cal. Dec. 9, 2021). Courts may also consider potential prejudice to plaintiffs in deciding
8 whether to grant a stay of discovery. See, e.g., Reveal Chat, 2020 WL 2843369, at *4; Yiren
9 Huang v. Futurewei Techs., Inc., 2018 WL 1993503, at *4 (N.D. Cal. Apr. 27, 2018); In re Nexus,
10 || 2017 WL 3581188, at *2.
11 Plaintiff has provided no explanation for why the parties should engage in costly discovery
12 || for aclass period going as far back as January 1, 2015, and Defendants’ argument that such broad
13 discovery could be wasteful and prejudicial is well-taken. However, Defendants have identified
14 || no prejudice or inefficiency stemming from discovery corresponding to more the limited class
15 periods corresponding to the length of the statute of limitations. Thus, the additional
a 16 || considerations suggest the same outcome described above, that discovery should not be stayed, but
3 17 is appropriately limited to the class period consistent with the statute of limitations from each
18 || claim.
19 || IV. ORDER
20 For the foregoing reasons, IT IS HEREBY ORDERED that: Google’s motion to stay is
21 GRANTED IN PART AND DENIED IN PART. For each claim, Plaintiff may seek discovery for
22 || the class period consistent with the statute of limitations for that claim. Further disputes about the
23 scope of discovery will be referred to the Magistrate Judge.
24
25 || Dated: July 17, 2024
BETH LABSON FREEMAN
27 United States District Judge
28