Abouelmakarem v. MDNMA INC.

Background

Plaintiff Nader Abouelmakarem moved under Federal Rule of Civil Procedure 37(a)(1) to compel discovery from MDNMA Inc., MSSMINJA Inc., Mahmoud Mustafa, and Nazih K. Mustafa. He argued that the defendants had not responded to his first request for document production, which originally required responses by May 11, 2022. He also argued that MDNMA Inc.’s answers to interrogatories—written questions used in discovery—were inadequate.

After the court ordered the defendants to respond to the motion, counsel for MDNMA Inc. informed the court that MDNMA had filed for Chapter 7 bankruptcy and requested a stay, meaning a pause in the case. The letter did not specifically address MSSMINJA Inc. or Mahmoud Mustafa and Nazih K. Mustafa, and it did not address the alleged discovery failures. Abouelmakarem opposed a stay, arguing that a bankruptcy filing by one defendant does not automatically pause claims against other defendants.

Rulings

The court stayed the case as against MDNMA Inc. under 11 U.S.C. § 362(a)(1), the federal bankruptcy provision providing for an automatic stay. The court directed counsel to update it about the bankruptcy case on September 30, 2022, and every two months afterward, including on whether the stay could be lifted. The court therefore denied the motion to compel as against MDNMA Inc.

The court granted the motion to compel as against MSSMINJA Inc., Mahmoud Mustafa, and Nazih K. Mustafa. It ordered those defendants to respond to Abouelmakarem’s first request for production of documents by September 12, 2022, subject to possible sanctions if they failed to comply. The court explained that the bankruptcy stay generally applies only to the bankrupt debtor and that the nondebtor defendants had not shown that an exception applied or justified their failure to respond. The Clerk of Court was directed to close Docket No. 40.