Golden Foothill Insurance Services, LLC v. Spin Capital, LLC
- Subramanian
- 1:24-cv-08515
- U.S. District Court · Southern District of New York
- 2
In Golden Foothill v. Spin Capital, Judge Subramanian granted defendants’ motion to stay discovery while their Rule 12(b) motions are pending.
The stay affects all parties to the federal case by pausing discovery. It particularly prevents defendants from having to participate in discovery while their Rule 12(b) motions are pending; the plaintiffs were advised to consider voluntary dismissal if they lacked a good-faith basis to dispute preclusion.
What happened
Golden Foothill Insurance Services, LLC and other plaintiffs sued Spin Capital, LLC and other defendants. The defendants asked the court to pause discovery while their motions seeking dismissal under Federal Rule of Civil Procedure 12(b) were considered. The plaintiffs opposed the request.
The court noted that no discovery had yet been exchanged in the federal case and that related discovery had been completed in a state-court action. The court also said that the state-court litigation appeared likely to prevent the plaintiffs from relitigating their Racketeer Influenced and Corrupt Organizations Act claims in this case.
Judge Arun Subramanian granted the motion to stay discovery and directed the Clerk of Court to terminate the motion. The order did not decide the pending dismissal motions or dismiss the federal case, but advised the plaintiffs to voluntarily dismiss it if they had no good-faith basis to believe the state-court action did not bar it.
The detailed version
- Golden Foothill Insurance Services, LLC v. Spin Capital, LLC · No. 1:24-cv-08515
- Subramanian
- Mar. 5, 2025
Background
Defendants Spin Capital, LLC, Avrumi Lubin, BMF Advance, LLC, and Gavriel Yitzchakov jointly sought a stay, meaning a pause, of discovery and the existing discovery deadlines. They asked for the stay while the court considered their motions under Federal Rule of Civil Procedure 12(b). The plaintiffs opposed the letter-motion.
The defendants argued that no discovery requests had been served in the federal case. They also stated that the plaintiffs had already obtained documents from Spin and deposed Lubin in related state-court litigation, where discovery had been completed. The defendants further argued that they would be prejudiced by having to participate in duplicative discovery while Spin’s state-court summary-judgment motion remained pending.
Arguments About the Pending Motions
The defendants contended that their dismissal arguments were substantial. In particular, they argued that a state-court decision dismissing the Leer plaintiffs’ claims under the Racketeer Influenced and Corrupt Organizations Act had preclusive effect here. Preclusive effect means that a prior court determination may prevent the same issue or claim from being litigated again. The defendants also argued that the claims were barred by the Colorado River abstention doctrine, which can permit a federal court to defer to parallel state-court litigation in certain circumstances.
The order did not rule on the Rule 12(b) motions, decide whether the claims were precluded, or apply the Colorado River doctrine to dismiss the case.
Court’s Ruling
Judge Subramanian granted the motion to stay discovery. The court relied on the absence of any exchanged discovery in the federal case, the lack of prejudice from pausing discovery, and the apparent likelihood that the state-court litigation would have preclusive effect in this case.
The court advised the plaintiffs that a prior dismissal without prejudice may still have preclusive effect when the determination being relied on was essential to the prior dismissal. The court stated that, if the plaintiffs had no good-faith basis to believe this action was not precluded by the state-court action, they should voluntarily dismiss the case. The Clerk of Court was directed to terminate the motion at ECF No. 74.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.