Onn v. Carnival Corp.

Background

Carnival Corp. moved to stay, or pause, discovery while the court considered Carnival’s motion to dismiss. Carnival argued that all three of Daniel Onn’s claims failed as a matter of law and that the motion to dismiss could potentially dispose of the entire case. Onn opposed the stay, arguing that much of the discovery concerned facts Carnival had placed at issue in its own motion to dismiss. He also argued that, even if the motion to dismiss were granted, the court would likely allow him to amend his claims.

Legal standard

The court explained that the Federal Rules of Civil Procedure do not automatically pause discovery whenever a potentially case-ending motion is pending. Under Ninth Circuit law, the party seeking a discovery stay bears a heavy burden and must make a strong showing that discovery should be denied. Courts may stay discovery for good cause when they are convinced that the plaintiff will be unable to state a claim for relief.

The court applied a two-part test. First, the pending motion must potentially dispose of the entire case, or at least resolve the issue targeted by discovery. Second, the court must determine whether it can decide the motion without additional discovery. If either part is not established, discovery proceeds. In applying the test, the court takes a preliminary look at the merits of the pending motion.

Ruling

The court took a preliminary look at the briefing on Carnival’s motion to dismiss. It found contested issues that prevented it from deciding, before the motion-to-dismiss hearing, that the motion was potentially dispositive of the entire case. The court therefore concluded that Carnival had not met its heavy burden of making the required strong showing or demonstrated good cause for staying discovery. The court also was not convinced that Onn would be unable to state a claim for relief.

Judge Beth Labson Freeman denied Carnival’s motion to stay discovery. This order decided only the discovery-stay request; the opinion does not state that the court ruled on the motion to dismiss itself.