Cake Love Co. v. AmeriPride Services, LLC

Background

Cake Love brought a proposed class action alleging that AmeriPride breached its contracts with Cake Love and proposed class members. According to the complaint, AmeriPride imposed annual price increases exceeding the six-percent contractual threshold without first providing the notice required by the contracts.

The court’s scheduling order divided discovery into two phases. Phase I concerned Cake Love’s individual claims. Phase II concerned information about a possible nationwide class, including customer contracts, pricing and invoice data, notices of price increases, customer complaints, and communications about rejecting price increases. Phase I discovery had not yet ended when AmeriPride sought a stay.

Chief Judge Patrick J. Schiltz had previously denied AmeriPride’s motion to dismiss for failure to state a claim and to strike the class allegations. AmeriPride then sought permission to file an early summary-judgment motion after outstanding Phase I discovery issues were resolved. It also moved to stay Phase II discovery until that motion was decided and sought to deny class certification.

The parties’ arguments

AmeriPride argued that its anticipated summary-judgment motion would show that the invoices produced in the case contained written notice of price increases above six percent. It asserted that Cake Love had more than ten days after receiving the invoices to reject the increases but did not do so.

Cake Love argued that the contracts required at least ten days’ advance written notice before a price increase and an opportunity to reject the increase. It also argued that some invoices involving increases above six percent provided no notice and that AmeriPride did not provide prospective relief after Cake Love complained.

AmeriPride also argued that Phase II discovery would impose extensive costs and burdens while its dispositive motion was pending. It stated that more than 350,000 documents had already been collected for review, with additional documents, including emails, still to be collected.

Analysis and ruling

The court explained that filing a dispositive motion does not automatically justify staying discovery. The party seeking a stay has a heavy burden and must show why a stay is needed. Courts balance the potential harm from delaying discovery against the possibility that the dispositive motion will eliminate the need for further discovery, along with the parties’ interests and the efficient use of judicial resources.

Judge Wright declined to issue an advisory opinion about a summary-judgment motion that had not yet been filed and would be decided by Chief Judge Schiltz. She also noted that even if the invoice notices were legally sufficient, factual disputes could remain about whether each invoice gave Cake Love adequate notice. The court further declined to address the merits of class certification on the motion to stay because class-certification discovery had not yet begun and AmeriPride had not developed its argument sufficiently.

The court found that AmeriPride had offered only conclusory assertions, rather than specific factual support, for its claim of undue burden. The court noted that AmeriPride could seek protection from particular discovery requests that were not proportional to the case or were otherwise unduly burdensome. The court also found that delaying Phase II discovery could further delay the case, which had already been pending for more than a year, while Phase I discovery remained incomplete and Cake Love anticipated seeking leave to amend its complaint.

The court therefore held that a stay was not appropriate and DENIED AmeriPride’s Motion to Stay Phase II Discovery (Dkt. 83). The order did not decide the anticipated summary-judgment motion or the request concerning class certification.