Dobbs v. The Bank of New York Mellon

Background

The Bank filed a motion for a partial stay of discovery, asking the court to pause some discovery while its motion to dismiss was pending. The Bank argued that the parties had agreed to the partial stay in a June 17 letter and that the motion to dismiss would resolve the entire case. It also argued that discovery would be broad and time-consuming.

The plaintiffs opposed the request. They said they had not agreed to stay discovery and that no stay was warranted. They identified documents they said were in the Bank’s possession, including documents about authentication of the Barclays ETNs, the Bank’s authentication process under the indenture, related communications, and a ledger the Bank allegedly should have maintained.

Court’s analysis

The court applied the standard under Federal Rule of Civil Procedure 26(c)(1), which allows a court to protect a party from undue burden or expense when there is good cause. The party seeking a discovery stay has the burden of showing good cause. The court considered three factors: whether the defendant made a strong showing that the plaintiff’s claims were unmeritorious, the scope and burden of discovery, and the risk of unfair prejudice to the party opposing the stay.

For the first factor, the court noted that the Bank’s motion to dismiss did not raise jurisdictional challenges, although it sought dismissal of all three claims in the amended complaint. The court found that the issues in the motion to dismiss were complex and might benefit from the anticipated discovery. For purposes of the stay request, the court could not find that all of the plaintiffs’ claims were so clearly without merit that discovery should be paused.

For the second factor, the court found that the scope and burden of discovery favored the plaintiffs. The plaintiffs had not yet served discovery requests, and the Bank had not provided specific facts quantifying the expected document volume or expense. The Bank referred generally to potentially involving dozens of custodians and documents across three continents, but the court found that this did not sufficiently explain the burden. The court stated that it could consider objections to specific discovery requests after those requests were served.

For the third factor, the court noted that a discovery stay is the exception rather than the usual practice in the district. It did not find that the possibility that the motion to dismiss might be decided within a few months justified a stay.

Ruling

The court held that the Bank had not shown good cause to stay discovery. Judge Vargas therefore denied the Bank’s Motion to Stay Discovery. The clerk was directed to terminate ECF No. 43, and the parties were ordered to submit a revised case-management plan by July 25, 2025. The opinion did not decide the Bank’s separate motion to dismiss.