United States District Court, D. Colorado
KRISTEN L. MIX UNITED STATES MAGISTRATE JUDGE.
matter is before the Court on the following discovery related
motions filed by Defendant Rota Fortunae
(“Rota”): (1) Rota's Motion for a
Stay Pending Appeal [#52](the “Motion to
Stay”); and (2) Rota's Motion for a
Protective Order and/or Stay of Discovery Pursuant to
F.R.C.P. 26(c) [#56] (the “Motion for a
Protective Order”) (collectively, the
“Motions”). Plaintiff filed Responses [#59, #67]
in opposition to the Motions and Defendant Rota filed Replies
[#64, #68]. The Court has reviewed the Motions, Responses,
Replies, the entire case file, and the applicable law, and is
sufficiently advised in the premises. For the reasons set
forth below, the Motion to Stay [#52] is
DENIED and the Motion for a Protective Order
[#56] is GRANTED in part and DENIED without prejudice
Summary of the Case
initiated this action against Defendants on July 23, 2018, in
Denver District Court. Compl. [#3]. In short,
Plaintiff alleges that Defendants engaged in a “short
and distort” scheme whereby Defendants conspired to
publish false and misleading statements regarding
Plaintiff's company in order to profit from short
positions taken against Plaintiff's stock price.
Id. at 1-7. The Complaint asserts claims for
defamation/defamation by libel per se, disparagement,
intentional interference with prospective business relations,
unjust enrichment, deceptive trade practice in violation of
the Colorado Consumer Protection Act, and civil conspiracy.
Id. at 7-12.
August 16, 2018, Plaintiff served Rota in state court by
substituted service through Rota's former counsel.
Proof of Service of Rota [#1-3].; see Order
Granting Plaintiff's Motion to Allow Substituted
Service [#1-4]. On August 29, 2018, the state court
granted Plaintiff's request to serve Defendants John/Jane
Does 2-10 (the “Doe Defendants”) also by
substituted service through Rota's current counsel, John
Chanin (“Chanin”). Order Granting
Plaintiff's August 28, 2018, Motion to Allow Substituted
Service [#1-7] (the “State Court Order”).
Accordingly, Plaintiff delivered service to Mr. Chanin and
filed its Proof of Service [#15-10] with respect to the Doe
Defendants on August 30, 2018.
same day, August 30, 2018, Rota filed his Motion to
Reconsider Order Granting Substituted Service of Fictitious
Defendants John/Jane Does 2-10 [#72] (the “Motion to
Reconsider Substituted Service”),  requesting that
the state court reconsider its order permitting Plaintiff to
serve the Doe Defendants by substituted service. On August
31, 2018, the state court ordered expedited briefing on
Rota's Motion to Reconsider Substituted Service. See
Register of Actions [#1-11] at 1. Before the state court
could rule, however, Rota removed the case to this Court on
September 14, 2018, leaving the Motion to Reconsider
Substituted Service unresolved. Notice of Removal
after the case was removed, Plaintiff filed its Motion to
Remand [#15] on October 5, 2018. In the Motion to Remand,
Plaintiff argued that removal was procedurally defective
because none of the served Doe Defendants had joined in or
consented to Rota's removal of the case pursuant to 28
U.S.C. § 1446(b)(2)(A). See generally [#15].
Plaintiff sought to remand the case to state court and, in
the alternative, requested that the Court permit early
limited discovery in order to determine the citizenship of
the Doe Defendants for diversity jurisdiction purposes and
whether consent was in fact provided for removal. See
Id. at 11-13. Rota opposed remand and, throughout the
proceedings thus far, has denied the existence of any Doe
Defendants. See, e.g., Response to Motion to Remand
[#29] at 3; Motion to Reconsider [#72] at 3.
October 5, 2018, Rota filed its Motion to Dismiss the
Complaint [#18] (the “Motion to Dismiss”)
pursuant to Fed.R.Civ.P. 12(b)(2), (3) and (6). Ten days
later, on October 15, 2018, Rota again moved to dismiss the
case, this time pursuant to Texas'
anti-SLAPP statute, the Texas Citizens'
Participation Act (“TCPA”), Tex. Civ. Practice.
& Rem. Code § 27.004 et seq. Motion to
Dismiss Under the Texas Citizens' Participation Act
[#22] (the “TCPA Motion”). Pursuant to the
TCPA's procedural requirements, Rota moved for a hearing
on the TCPA Motion [#22] on October 31, 2018. Motion to
Set Hearing on Defendant Rota Fortunae's Motion to
Dismiss Under the Texas Citizens['] Participation
Act [#32] (the “Motion for a Hearing on the TCPA
Motion”); see Tex. Civ. Practice. & Rem.
Code § 27.004. On November 28, 2018, Plaintiff filed its
Motion for a Default Judgment Against John/Jane Does 2-10
[#37] (the “Motion for Default
December 20, 2018, Plaintiff and Rota appeared before the
Court for the initial Rule 16(b) Scheduling Conference.
See Minute Entry [#45]. At the hearing, the Court
vacated the Scheduling Conference in light of the
parties' pending motions, specifically Plaintiff's
Motion to Remand [#15]. Id. Moreover, given the
issues raised by the Motion to Remand [#15] and
Plaintiff's alternative request for limited discovery,
the Court directed Rota to answer four interrogatories
propounded by Plaintiff regarding the existence or
non-existence of the Doe Defendants. Id.
Specifically, the Court found that four interrogatories
proffered by Plaintiff sought appropriate information from
Rota regarding two issues raised by the Motion to Remand
[#15] concerning the existence or non- existence of the Doe
Defendants. The first issue was jurisdictional, i.e., whether
the citizenship of the Doe Defendants could be ascertained at
that time to satisfy the Court of its subject matter
jurisdiction over this case pursuant to 28 U.S.C. §
1332(a)(1). The second issue was procedural, i.e., whether
the Doe Defendants were required to consent to removal of
this case pursuant to 28 U.S.C. § 1446(b)(2)(A), given
the state court's grant of substituted service. Finally,
given the uncertainty surrounding this Court's
jurisdiction, the Court denied without prejudice the Motion
to Dismiss [#18], the TCPA Motion [#22], the Motion for a
Hearing on the TCPA Motion [#32], and the Motion for Default
Judgment [#37]. Id.
deadline to submit responses to Plaintiff's
interrogatories was January 4, 2019, and the Court set a
Status Conference for January 11, 2019, for purposes of
addressing Rota's responses. Id. On the January
4, 2019 deadline to respond, however, Rota filed a Motion to
Reconsider [#46] that portion of the Court's December 20,
2018 Order directing Rota to respond to the interrogatories.
On January 9, 2019, the Court granted Rota's Motion to
Reconsider [#46] in part, by reducing the number of
interrogatories to which Rota was required to respond.
Order [#48]. Later that same day, January 9, 2019,
Rota filed the Notice of Appeal [#49] with respect to the
Court's December 20, 2018 Order and the Order [#48] on
the Motion to Reconsider [#46].
January 11, 2019 Status Conference, the Court extended
Rota's deadline to respond to Plaintiff's
interrogatories until January 14, 2019. See Minute
Entry [#54]. During the Status Conference, Rota's
counsel, Mr. Chanin, stated that it was Rota's position
that the Notice of Appeal effectively stayed the Court's
prior orders and divested this Court of jurisdiction. Tr.
of January 11, 2019 Status Conference [#58] at 3:25-4:3.
January 13, 2019, Rota filed the Motion to Stay [#52]
presently before the Court in which Rota seeks an order
confirming that this case is stayed pending the Notice of
Appeal. Motion to Stay [#52] at 1. On January 14,
2019, Rota filed a Notice [#55] indicating that Rota had
responded to Plaintiff's interrogatories in compliance
with the Court's prior Order [#48]. Four days later, on
January 18, 2019, Rota filed its Motion for a Protective
Order [#56] which again seeks a stay of discovery in this
case or a protective order “shielding” Rota from
answering Plaintiff's discovery requests. Motion for
a Protective Order [#56] at 1.
January 18, 2019, Plaintiff requested a hearing before the
Court to address the impact of and issues related to
Rota's interrogatory responses. Motion for
Hearing [#57]. The Court granted Plaintiff's request
and, after Rota's unopposed motion to reschedule, the
Court set a Status Conference for March 5, 2019. See
Minute Order [#63]; Unopposed Motion to Reschedule
Status Conference [#65]; Minute Order [#66].
March 5, 2019 Status Conference, the Court directed Rota to
supplement his interrogatory responses with respect to the
citizenship of a company previously identified in Rota's
responses by no later than March 19, 2019. Minute
Entry [#69]. Following the Status Conference, Plaintiff
filed a Renewed Motion for Default Judgment Against John/Jane
Does 2-10 [#70] on March 8, 2019. On March 14, 2019, Rota
separately filed the Motion to Reconsider Substituted Service
[#72] regarding the substituted service of the Doe Defendants
which had previously been filed in state court. On April 24,
2019, Rota filed his Motion to Quash [#79] which seeks a
protective order that precludes Goldman Sachs & Co, LLC
(“Goldman Sachs”) from responding to a subpoena
duces tecum served by Plaintiff or, in the
alternative, an order quashing the subpoena.
11, 2019, the Court issued its Order [#83] granting
Rota's Motion to Reconsider Substituted Service [#72],
thereby vacating the State Court Order [#1-7] which had
granted Plaintiff's request to serve the Doe Defendants
by substituted service; and striking Plaintiff's Proof of
Service [#15-10] of process on the Doe Defendants.
Order [#83] at 18. Accordingly, the Court further
denied as moot Plaintiff's Motion to Remand [#15] and
Renewed Motion for Default Judgment Against John/Jane Does
2-10 [#70]. See Orders [#84, #85]. Finally, in light
of these Orders [#83, #84, #85], the Court reset the Rule
16(b) Scheduling Conference in this case, which is now
currently set for August 1, 2019, at 10:00 a.m. Minute
Order [#86]; Minute Order [#89].
The Motion to Stay [#52]
Motion to Stay, Rota seeks an order from the Court
“confirming that the entire underlying case is stayed
pending the Notice of Appeal [#49] filed on January 9,
2019.” [#52] at 1. In short, Rota contends that the
Court is required to stay this case while the appeal is
pending because “filing the notice of appeal of the
denial of the TCPA Motion was a jurisdictionally significant
act” and “divested the Court of jurisdiction to
proceed with any part of the action against [Rota].”
Id. at 4. In opposition to the stay, Plaintiff
argues that the Court's jurisdiction remains intact
because the order denying the ...