Barrett v. Apple Inc.

Background

The case arises from a criminal scheme in which scammers persuaded victims to pay large sums through iTunes gift cards. Carl Barrett and other plaintiffs brought the proposed class action against Apple Inc. and Apple Value Services, LLC, collectively referred to in the opinion as Apple. They seek to hold Apple responsible for allegedly failing to prevent the scam.

On October 8, 2020, Apple filed a motion under Federal Rule of Civil Procedure 12(b)(6), which asks whether a complaint states a legally sufficient claim. The plaintiffs had not yet responded, and that motion was not before the court when it decided the discovery issue.

Motion to Stay Discovery

Apple separately filed an administrative motion asking the court to pause discovery until the court ruled on the motion to dismiss or until the February 25, 2021 Case Management Conference. Apple argued that its motion to dismiss challenged all eleven claims and could dispose of the entire case. It also argued that, without a stay, Apple would spend substantial time, money, and resources responding to discovery in a case that might not survive the pleading stage. The plaintiffs opposed the requested stay.

The court explained that discovery stays are not automatic. Under the factors generally considered by district courts, Apple had to show both that the pending motion could potentially dispose of the entire case and that the motion could be decided without additional discovery. Apple also had to identify a specific need for a protective order rather than rely on the ordinary burdens of litigation.

Ruling

Judge Davila denied the motion to stay discovery. The court recognized that Apple's motion to dismiss could potentially end the case, but it also noted that some claims might survive or might be dismissed with permission to amend. Apple had not shown that the complaint was clearly frivolous or that complete dismissal was likely. The court therefore declined to make a premature merits determination before the plaintiffs had responded to the motion to dismiss.

The court also agreed that a Rule 12(b)(6) motion is generally decided based on the complaint, but held that this general point did not justify stopping discovery. Apple had not explained why discovery in this case would be more burdensome than discovery in other civil cases. For those reasons, the court denied Apple's motion to stay discovery pending resolution of the motion to dismiss. The opinion did not decide Apple's motion to dismiss.