WalkMe Ltd., an Israeli company v. Whatfix, Inc., a Delaware corporation

Background

The plaintiffs filed a second amended complaint on April 12, 2024. The defendants moved to dismiss claims for misappropriation of trade secrets under federal and state law, violations of the Computer Fraud and Abuse Act (CFAA), and a claim under California Penal Code section 502. The defendants also moved to stay discovery while the dismissal motion was pending.

Legal standard

The court explained that Federal Rule of Civil Procedure 26(c) permits a protective order, including an order limiting or pausing discovery, when good cause exists to protect a party from undue burden or expense. For a discovery stay based on a potentially case-ending motion, the court considered whether the motion could dispose of the entire case or the issues targeted by discovery and whether the motion could be decided without additional discovery. If either condition is not met, discovery proceeds.

Ruling

The court found no dispute that the motion to dismiss could be decided without additional discovery, satisfying the second part of the test. The plaintiffs did not oppose staying discovery on the trade-secret claims, so the court granted the motion to stay discovery on those claims.

The court denied the motion to stay discovery on the false-advertising claim and on the unfair-competition claim, but only to the extent that the unfair-competition claim was derivative of the false-advertising claim. The court also concluded, after a preliminary review of the arguments in the defendants’ latest dismissal motion, that the defendants had shown the dismissal motion could resolve the issues targeted by discovery and had shown good cause to stay discovery on the CFAA and California Section 502 claims.

The court therefore granted the motion to stay discovery in part. It vacated the scheduled June 7, 2024 hearing and stated that the order was issued on May 29, 2024.