Thani A.T. Al Thani v. Hanke
- John Cronan
- 1:20-cv-04765
- U.S. District Court · Southern District of New York
- 4
In Mohammed Thani v. Hanke, Judge Cronan granted in part Rogers’s motion to stay discovery, allowing only limited discovery about the funds’ location.
The ruling affected the plaintiff and Defendant Sidney Mills Rogers III. Discovery against Rogers was paused, except for limited discovery about the location of the funds at issue; the order did not decide Rogers’s motion to dismiss or the merits of the plaintiff’s claims.
What happened
In Mohammed Thani A.T. Al Thani v. Alan J. Hanke et al., the plaintiff alleged that the defendants participated in a fraudulent investment scheme. Defendant Sidney Mills Rogers III asked the court to pause discovery while it considered his motion to dismiss, which argued that the claims against him belonged in arbitration.
The court found good cause to pause discovery because Rogers had filed a fully briefed motion that could end the claims against him or send them to arbitration. Continuing ordinary court discovery could create unnecessary costs and could affect the parties’ arbitration rights. The court also found that the plaintiff would face limited prejudice because the court expected to decide the dismissal motions promptly.
Judge John P. Cronan granted in part Rogers’s motion to stay discovery. Discovery against Rogers was stayed, but the plaintiff could conduct limited discovery about the location of the funds at issue. The stay would end when the court resolved Rogers’s motion to dismiss.
The detailed version
- Thani A.T. Al Thani v. Hanke · No. 1:20-cv-04765
- John Cronan
- Jan. 4, 2021
Background
Mohammed Thani A.T. Al Thani sued Alan J. Hanke, IOLO Global LLC, Sidney Mills Rogers III, Laura Romeo, Amy Roy-Haeger, SubGallagher Investment Trust, and Sherry Sims. He alleged that the defendants engaged in a fraudulent investment scheme in which he was a victim. Several defendants filed motions to dismiss the amended complaint.
Rogers separately moved to dismiss the claims against him, arguing that they should be heard in arbitration under arbitration clauses in two escrow agreements involving Rogers and the plaintiff. While that motion was pending, Rogers moved under Rule 26(c) to stay, or pause, discovery as to him.
Court’s analysis
The court explained that a district court may stay discovery for good cause. Courts generally consider the scope of the requested discovery, the burden of responding, possible prejudice to the opposing party, and the strength of the motion supporting the requested stay.
The court found good cause here. Rogers’s motion to dismiss was fully briefed and potentially dispositive, meaning it could result in dismissal of the claims against him or a stay of those claims while they proceeded in arbitration. The court did not decide the merits of that motion, but found that Rogers had made several substantial arguments supporting dismissal.
The burden on Rogers also supported a stay. If the motion to dismiss succeeded and the dispute proceeded in arbitration, discovery would be governed by different rules from those used in federal court. A stay could prevent duplicative or inefficient litigation and help avoid circumstances in which participation in court litigation might waive a party’s arbitration rights.
The court found that the plaintiff would face little prejudice from a prompt stay because the court intended to rule promptly on the motions to dismiss. But it also recognized the plaintiff’s argument that Rogers was particularly positioned to know where the plaintiff’s funds had been transferred and that delay could make recovering the funds more difficult.
Disposition
Judge John P. Cronan granted in part Rogers’s Motion to Stay Discovery. Discovery was stayed as to Rogers, except that the plaintiff could conduct limited discovery regarding the location of the funds at issue. The stay would expire when the court resolved Rogers’s Motion to Dismiss. The clerk was directed to terminate the motion at docket number 100.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.