Global Net Lease, Inc. v. Blackwells Capital LLC
- James Oetken
- 1:22-cv-10702
- U.S. District Court · Southern District of New York
- 3
Global Net Lease v. Blackwells Capital, Judge Oetken denied a request to pause discovery while a motion to dismiss counterclaims remained pending.
Global Net Lease, Inc., the Blackwells Parties—Blackwells Capital LLC, Blackwells Onshore I LLC, and Jason Aintabi—and the ongoing discovery process in their dispute.
What happened
Global Net Lease, Inc. asked the court to pause all discovery requested by Blackwells Capital LLC, Blackwells Onshore I LLC, and Jason Aintabi until the court decided Global Net Lease’s motion to dismiss their counterclaims.
The court found that the requested discovery was not too broad, that responding would not impose an especially high burden, and that discovery on the counterclaims would be needed whether those claims proceeded in this court or in Maryland. The court also found that pausing the Blackwells Parties’ discovery while allowing expedited discovery on Global Net Lease’s claims could unfairly harm them.
Judge J. Paul Oetken denied Global Net Lease’s motion to stay discovery and directed the clerk to close that motion.
The detailed version
- Global Net Lease, Inc. v. Blackwells Capital LLC · No. 1:22-cv-10702
- James Oetken
- Feb. 6, 2023
Background
Global Net Lease, Inc. moved under Rule 26(c) of the Federal Rules of Civil Procedure to stay, or pause, all discovery requested by Blackwells Capital LLC, Blackwells Onshore I LLC, and Jason Aintabi. Global Net Lease sought the stay until the court ruled on its pending motion to dismiss the counterclaims filed by the Blackwells Parties. The Blackwells Parties opposed the request.
Legal standard
The court explained that it may stay discovery when the party requesting the stay shows good cause. Courts generally consider the scope of the requested discovery, the burden of responding, the prejudice that a stay could cause the opposing party, and the strength of the pending motion that supports the stay. The party seeking the stay bears the burden of showing good cause.
Court’s analysis
The court concluded that Global Net Lease had not shown good cause. It found that the Blackwells Parties’ requests for production were not so broad that they justified a stay, and that Global Net Lease did not face an especially high burden in responding. The court also reasoned that discovery on the counterclaims would be inevitable because those claims would proceed either in this court or in a Maryland court.
The court rejected Global Net Lease’s argument that disputes about Maryland-related discovery should be heard by a Maryland judge under Maryland rules. It further found that allowing expedited discovery on Global Net Lease’s securities-law claims while denying expedited discovery on the Blackwells Parties’ state-law counterclaims could prejudice the Blackwells Parties. The parties had all asserted that their claims were equally urgent because of Global Net Lease’s upcoming annual shareholders meeting and related shareholder communications. The court did not reach a conclusion about the strength of Global Net Lease’s pending motion to dismiss, but found that the other factors weighed against a stay.
Disposition
Judge J. Paul Oetken denied Global Net Lease’s motion to stay discovery pending resolution of its motion to dismiss the counterclaims. The clerk was directed to close the motion at ECF No. 38.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.