BMA LLC v. HDR Global Trading Limited
- William Orrick
- 3:20-cv-03345
- U.S. District Court · Northern District of California
- 3
In BMA LLC v. HDR Global Trading Limited, Judge Orrick denied plaintiffs’ motion to lift the discovery stay pending defendants’ motion to dismiss.
The plaintiffs’ ability to obtain discovery is paused while defendants’ pending motion to dismiss is resolved. The order does not decide the merits of that motion or the adequacy of plaintiffs’ claims.
What happened
In BMA LLC v. HDR Global Trading Limited, the court had previously paused discovery while defendants’ motion to dismiss was pending. Plaintiffs filed an amended complaint and asked the court to end that pause.
The court denied the motion to lift the discovery stay. It found good cause to keep discovery paused because the motion to dismiss could resolve the case and could be decided without discovery. The court said it had not decided whether plaintiffs’ 33 claims were adequately pleaded and that the discovery ruling did not address the motion to dismiss’s merits.
Judge William H. Orrick also rejected plaintiffs’ concern about the possible destruction of third-party records because plaintiffs did not identify evidence likely to be deleted, and a discovery stay did not prevent preservation requests. The order vacated the scheduled hearing on the motion to lift the stay and stated that defendants’ motion to dismiss would be heard on August 25, 2021.
The detailed version
- BMA LLC v. HDR Global Trading Limited · No. 3:20-cv-03345
- William Orrick
- July 6, 2021
Background
On November 10, 2020, the court stayed discovery until after a hearing on later motions to dismiss. On March 12, 2021, the court dismissed plaintiffs’ Consolidated Complaint with leave to amend. Plaintiffs then filed amended complaints, ultimately filing a Second Amended Consolidated Complaint containing 33 causes of action. Defendants’ forthcoming motion to dismiss was scheduled for hearing on August 25, 2021. Plaintiffs moved to lift the discovery stay.
Court’s analysis
The court applied the two-part approach used in the Ninth Circuit and the Northern District of California. Under that approach, discovery may be stayed when a pending motion could dispose of the entire case, or the issue for which discovery is sought, and the motion can be decided without discovery. The court found good cause for a limited stay and said it had taken a preliminary look at the pending motion to dismiss. It concluded that deciding whether the amended complaint alleged viable causes of action would be premature before the motion to dismiss was fully briefed and heard.
Plaintiffs also argued that lifting the stay was needed to prevent the destruction of records held by third parties. The court noted that it had previously denied an application for an evidence-preservation order concerning Twilio, SendGrid, and Intercom because plaintiffs had not shown an imminent risk of document destruction. Plaintiffs identified BitStamp, Kraken, and Coinbase in their current argument but did not explain what relevant evidence might be deleted, and they abandoned the argument in their reply. The court added that the discovery stay did not prevent plaintiffs from sending letters asking third parties to preserve potentially relevant evidence. Defendants also certified that they had taken steps to preserve relevant evidence.
Disposition
The court denied plaintiffs’ motion to lift the discovery stay. It expressly stated that this ruling did not address the merits of defendants’ pending motion to dismiss. The court vacated the scheduled July 14, 2021 hearing on the motion to lift the stay because it found the motion suitable for decision without oral argument. The court also stated that it would not consider plaintiffs’ supplemental reply brief, which was filed without permission after the reply and violated the applicable local rule. Judge William H. Orrick signed the order.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.