McMillian v. Musk

Background

The defendants filed an administrative motion asking the court to stay, or pause, discovery while their motion to dismiss the plaintiffs’ amended complaint was pending before Judge Thompson. The defendants argued that the dismissal motion could potentially dispose of the entire case, could be decided without further discovery, and that a stay would promote efficiency and avoid burden and expense.

The plaintiffs opposed the motion. They argued that the request should have been filed as an ordinary motion and that the defendants should have submitted a joint discovery-dispute letter. Judge Illman rejected those procedural objections as placing form over substance because the parties had adequately presented their arguments. The plaintiffs also argued that the dismissal motion might not end the case because the court could allow an amended complaint, that the defendants had not shown a sufficient discovery burden, and that limited discovery should at least proceed on the question whether the Employee Retirement Income Security Act applied to the Twitter Severance Plan.

Legal standard

Judge Illman applied a two-part test used by courts in the Northern District of California for staying discovery while a potentially dispositive motion is pending. First, the pending motion must potentially dispose of the entire case or at least the issue targeted by discovery. Second, the motion must be capable of being decided without additional discovery. If either requirement is not met, discovery proceeds.

Ruling

Judge Illman found that the defendants’ motion to dismiss was potentially dispositive of the entire case. He emphasized that the motion needed to be potentially, rather than certainly, dispositive. He also noted that the motion to dismiss had already been fully briefed and submitted to Judge Thompson, and after a preliminary review of its merits, concluded that a discovery stay was warranted.

The defendants’ request was GRANTED, and discovery in the case was STAYED pending the resolution of the motion to dismiss. The opinion did not decide the motion to dismiss itself.