Marsh & McLennan Agency, LLC v. Alliant Insurance Services, Inc.
- Vargas
- 1:25-cv-01260
- U.S. District Court · Southern District of New York
- 3
In Marsh & McLennan Agency v. Alliant Insurance Services, Judge Vargas denied defendants’ motion to stay discovery while a dismissal motion was pending.
The ruling affects Marsh & McLennan Agency, LLC and the defendants because discovery was not stayed while Alliant’s motion to dismiss remained pending.
What happened
Marsh & McLennan Agency, LLC sued Alliant Insurance Services, Inc. and other defendants. The defendants asked the court to pause discovery until the court decided Alliant’s motion to dismiss, which argued that the court lacked authority over Alliant because of personal jurisdiction.
The defendants argued that pausing discovery would avoid potentially broad, costly, and time-consuming discovery and would cause the plaintiff little harm. The court applied three factors: the strength of the dismissal arguments, the scope and burden of discovery, and the risk of unfair prejudice to the party opposing the pause.
The court found no good cause to pause discovery and denied the defendants’ motion. Judge Vargas said the jurisdiction argument was sharply disputed, discovery had not yet been exchanged, and the defendants had not provided specific facts showing the likely burden. The court stated that its order was not a preview of its decision on the motion to dismiss.
The detailed version
- Marsh & McLennan Agency, LLC v. Alliant Insurance Services, Inc. · No. 1:25-cv-01260
- Vargas
- June 6, 2025
Background
On April 24, 2025, the defendants moved to stay discovery while the court considered Alliant’s motion to dismiss under Federal Rule of Civil Procedure 12(b)(2). That rule allows a defendant to challenge the court’s personal jurisdiction—its authority over that defendant. Oral argument on the motion to dismiss was scheduled for June 11, 2025.
The defendants argued that a discovery stay would cause the plaintiff minimal prejudice while avoiding the significant burden of potentially broad discovery. They also relied on the strength of their arguments for dismissal.
Legal Standard
The court explained that filing a motion to dismiss does not automatically pause discovery, and discovery should not ordinarily be paused merely because such a motion has been filed. Under Rule 26(c)(1), a court may stay discovery when the party seeking the stay shows “good cause.” Courts assess good cause by considering: (1) whether the defendant has made a strong showing that the plaintiff’s claims are unmeritorious, (2) the breadth and burden of discovery, and (3) the risk of unfair prejudice to the party opposing the stay. The party seeking the stay bears the burden of showing good cause.
Court’s Analysis
The court found that the first factor did not support a stay. Although the defendants raised a personal-jurisdiction argument, the court said that argument was sharply disputed and did not, on its face, make a strong showing that the plaintiff’s claims lacked merit. The court cautioned that nothing in the order should be understood as a preview of how it would rule on the motion to dismiss.
The court found that the second factor weighed in the plaintiff’s favor. Discovery had not yet been exchanged, and the defendants’ assertion that discovery “may” be broad, costly, and time-consuming was insufficient. The defendants had not presented specific facts showing the burden they would face.
Regarding the third factor, the court noted that the motion to dismiss might remain pending for only a few months, which could reduce the possible prejudice. But the court emphasized that a discovery stay is the exception rather than the usual practice in the district.
Disposition
The court found no good cause to stay discovery and DENIED the defendants’ Motion to Stay Discovery. The Clerk of Court was directed to terminate ECF No. 41. The order did not decide the pending motion to dismiss or the personal-jurisdiction issue.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.