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Otter Products, LLC v. Outlook Acquisition, Corp.

United States District Court, D. Colorado

April 2, 2019

OTTER PRODUCTS LLC and TREEFROG DEVELOPMENTS INC., Plaintiffs,
v.
OUTLOOK ACQUISITION CORP., OUTLOOK FBA CORP., AVI SAKKAL, ELI SAKKAL, and JOHN DOES 1-10, Defendants.

          ORDER ON MOTION TO STAY

          NINA Y. WANG, MAGISTRATE JUDGE

         This matter comes before the court on Defendants' Outlook Acquisition Corp., Outlook FBA Corp., Avi Sakkal, Eli Sakkal, and the John Does' (collectively, “Defendants”) Motion to Stay Discovery Pending Resolution of its Motion to Dismiss Plaintiffs' Amended Complaint and Memorandum in Support (“the Motion” or “the Motion to Stay”) [#45, filed March 6, 2019]. The Motion was referred to the undersigned Magistrate Judge by the Order Referring Case dated December 13, 2018 [#5] and the Memorandum dated March 7, 2019 [#47]. Pursuant to D.C.COLO.LCivR 7.1(d), the undersigned Magistrate Judge ordered an abbreviated response deadline, and Plaintiffs Otter Products LLC and Treefrog Developments Inc., (collectively, “Plaintiffs”) filed a timely Response on March 15, 2019. Defendants then sought leave of court to file a Reply, which the undersigned granted, and Defendants filed their Reply on March 22, 2019, and thus the matter is now fully briefed and ready for decision. For the reasons stated in this Order, the Motion to Stay is DENIED.

         BACKGROUND

         Plaintiffs filed this case on December 13, 2018, bringing seven claims for trademark infringement, false advertising, unfair competition, trademark dilution, unfair and deceptive business practices in violation of the Colorado Consumer Protection Act (“CCPA”), and tortious interference with business relations. [#1]. Defendants moved to dismiss the Complaint on January 24, 2019 (“the First Motion to Dismiss”) [#21] before the Scheduling Conference held February 13, 2019 [#28]. The First Motion to Dismiss argued that the court lacked personal jurisdiction over the Defendants [#21 at 6] and that the Complaint failed to state a claim [id. at 11]. The First Motion to Dismiss remained pending and unaddressed by Plaintiffs at the Scheduling Conference.

         At the Scheduling Conference, the court set substantive deadlines for discovery and motions practice in this matter. [#28; #29]. At the Conference, the court discussed the personal jurisdiction argument and whether Plaintiffs sought jurisdictional discovery following the contemplated filing of an Amended Complaint. [#28 at 2]. The court instructed the Parties that “[i]f parties need jurisdictional discovery after the amended complaint is filed, parties can contact chambers to set an informal Discovery Conference.” [Id.]. Plaintiffs filed the Amended Complaint the next day. [#27]. Defendants filed a renewed Motion to Dismiss (“the Renewed Motion to Dismiss”) on February 28, 2019. [#44]. Defendants filed the instant Motion to Stay shortly thereafter [#45], and full briefing is now complete. [#49; #54]. Plaintiffs have not moved for jurisdictional discovery and neither Party has contacted chambers seeking a Discovery Conference. Instead, Plaintiffs have filed an Opposition to the Motion to Dismiss that is currently pending before the court. [#52].

         LEGAL STANDARD

         The Federal Rules of Civil Procedure do not expressly provide for a stay of proceedings; however, the power to stay “is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254-55 (1936) (citing Kansas City S. Ry. Co. v. United States, 282 U.S. 760, 763 (1931)). Whether to stay discovery is a matter left to the sound discretion of the trial court. Wang v. Hsu, 919 F.2d 130, 130 (10th Cir. 1990). In determining whether a stay is appropriate, the court weighs interests such as whether defendants are likely to prevail in the civil action, whether defendants will suffer irreparable harm, whether the stay will cause substantial harm to other parties to the proceeding, and the public interests at stake. United Steelworkers of Am. v. Oregon Steel Mills, Inc., 322 F.3d 1222, 1227 (10th Cir. 2003). The factors to be applied by the court in determining the propriety of a stay are: (1) Plaintiffs' interests in proceeding expeditiously with the action and the potential prejudice to Plaintiffs resulting from a delay; (2) the burden on the Defendants; (3) the convenience to the Court; (4) the interests of persons not parties to the litigation; and (5) the public interest. String Cheese Incident, LLC v. Stylus Shows, Inc., No. 1:02-CV-01934-LTB-PAC, 2006 WL 894955, at *2 (D. Colo. Mar. 30, 2006).

         Courts in this District generally disfavor the stay of all discovery. See Wason Ranch Corporation v. Hecla Mining Co., No. 07-cv-00267-EWN-MEH, 2007 WL 1655362, at *1 (D. Colo. 2007); see also Church Mut. Ins. Co. v. Coutu, No. 17-CV-00209-RM-NYW, 2017 WL 3283090, at *2 (D. Colo. Aug. 2, 2017) (“Stays of the normal proceedings of a court matter should be the exception rather than the rule, and stays in this District are generally disfavored.” (citations and quotations omitted) (formatting altered)). “This is particularly true in cases requesting indefinite stays, which could substantially delay the ultimate resolution of the case, with adverse consequences such as a decrease in evidentiary quality and witness availability.” Weatherspoon v. Miller, No. 11-CV-00312-REB-MEH, 2011 WL 1485935, at *2 (D. Colo. Apr. 19, 2011). District courts in this Circuit have declined requests to stay discovery based solely upon the disposition of dispositive motions. Basin Acquisition Corp. v. Mazda Motor of Am., Inc., No. 11-CV-179 JEC/ACT, 2011 WL 13289673, at *2 (D.N.M. Aug. 1, 2011).

         ANALYSIS

         The court now turns to considering each of the String Cheese factors.

         Plaintiffs' Interests in Proceeding Expeditiously with the Action and the Potential Prejudice to Plaintiffs Resulting from a Delay.

         Defendants claim that Plaintiffs “have no particular need for urgency in this action” and thus this factor does not weigh in favor of a stay. [#45 at 7]. Plaintiffs vigorously dispute this point, arguing that the alleged misconduct is ongoing as Defendants continue to engage in the at-issue business practices which Plaintiffs allege to constitute an ongoing harm. [#49 at 9-10]. In Reply, Defendants point to Plaintiffs' delay in bringing suit as evidence that Plaintiffs do not have a true interest in moving expeditiously. [#54 at 4-7].

         Although Plaintiffs have not moved to enjoin any of Defendants' business practices, the court finds that this factor weighs against a stay because, as Plaintiffs point out, the alleged harm is ongoing. Nothing in the record suggests that Defendants have agreed to cease and desist from selling the accused products or at least abstain from such sales pending the adjudication of the Renewed Motion to Dismiss or this action. In addition, though Plaintiffs filed an Opposition to the Motion to Dismiss, no Reply has been filed. And there is no indication as to how long it may be before the court can fully adjudicate the Renewed Motion to Dismiss. Given the lack of clarity as to how long a stay would be, this factor weighs against a stay.

         The Burden on ...


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