Configure Partners LLC v. RACI Holdings LLC

Background

The plaintiffs moved to stay, or pause, discovery while their recently filed motion for summary judgment was pending. RACI Holdings LLC opposed the stay, explaining that discovery had not begun and that it needed written discovery and depositions to obtain facts needed to oppose summary judgment. RACI also moved under Federal Rule of Civil Procedure 56(d), which allows a party to request discovery needed to respond to a summary-judgment motion. RACI requested 90 days after the order to file its opposition.

Legal standard

The court explained that a party seeking to stay discovery under Rule 26(c) must show good cause. The mere existence of a potentially case-ending motion does not automatically justify stopping discovery. The court considered three factors: whether the plaintiffs strongly showed that RACI’s position lacked merit, how broad or burdensome the discovery would be, and whether delaying discovery would unfairly harm RACI.

Court’s analysis

The court did not decide the plaintiffs’ summary-judgment motion. It concluded that the plaintiffs had not made the required strong showing because their argument for staying discovery depended entirely on their summary-judgment arguments, while RACI had presented opposing arguments and sought discovery under Rule 56(d).

The plaintiffs identified several proposed discovery subjects, including whether they breached an agreement; their involvement in negotiating the April 29, 2022 transaction; the meaning of contractual phrases; the amount of their claimed damages; and communications and documents concerning the transaction. But the court found the plaintiffs’ assertion that discovery would be burdensome conclusory. They did not identify a specific burden or explain how extensive their responses might be.

The court also rejected the plaintiffs’ claim that RACI would not be prejudiced by delaying discovery. RACI would be required to respond to summary judgment without any prior opportunity to obtain discovery concerning issues the plaintiffs claimed were undisputed. The court stated that the nonmoving party must have an opportunity to discover information essential to opposing summary judgment.

Disposition

Magistrate Judge Jennifer E. Willis denied the plaintiffs’ motion to stay discovery, docket entry 42. The court granted RACI’s Rule 56(d) motion, docket entry 44, and extended the time for RACI’s response by 90 days from the date the order was entered. The order did not decide the pending motion for summary judgment.