United States District Court, D. Colorado
JASON BROCKMAN, as trustee of the MENDY BROCKMAN DISABILITY TRUST, and MENDY BROCKMAN, individually, Plaintiffs,
KIM BIMESTEFER, in her official capacity as Executive Director of the Colorado Department of Health Care Policy & Financing, TOM MASSEY, in his official capacity as the Deputy Executive Director and Chief Operating Officer of the Policy, Communications, and Administration Office of the Colorado Department of Health Care Policy & Financing, DAVID L. SMITH, in his official capacity as Manager of Benefits Coordination Section for the Colorado Department of Health Care Policy & Financing, and ASHLEY DIRIENZO, in her official capacity as Recovery Officer for the Colorado Department of Health Care Policy & Financing, Defendants.
Kathleen M. Tafoya Magistrate Judge
matter is before the court on Defendants'
“Unopposed Motion to Stay Discovery.”
([“Mot.”], Doc. No. 46.) In their Motion,
Defendants ask that discovery be stayed, pending resolution
of their Motion to Dismiss the Second Amended Complaint, in
its entirety, under Federal Rule of Civil Procedure 12(b)(6).
(Id. at 1; see Doc. No. 49.) Plaintiffs
have not responded to Defendant's motion to stay
case centers around a Medicaid Special Needs Trust. Medicaid
is a cooperative federal-state program that provides medical
assistance to needy individuals. Douglas v. Indep. Living
Ctr. of S. Cal., Inc., 565 U.S. 606, 610 (2012). Each
state, including the State of Colorado, sets income and
resource limits for Medicaid eligibility. See Houghton v.
Reinertson, 382 F.3d 1162, 1165 (10th Cir. 2004).
Pursuant to 42 U.S.C. § 1396p(d)(4)(A), a disabled
individual who exceeds the Medicaid resource limit can,
nevertheless, qualify for Medicaid benefits, by transferring
his or her excess funds into an approved Special Needs Trust.
42 U.S.C. § 1396p(d)(4)(A).
Jason Brockman and Mendy Brockman are, respectively, the
trustee and beneficiary of the Mendy Brockman Disability
Trust, a Colorado trust created in compliance with §
1396p(d)(4)(A). ([“Compl.”], Doc. No. 39 Ex. 4,
at ¶¶ 5-6, 18.) Defendant Kim Bimestefer is the
Executive Director of the Colorado Department of Health Care
Policy and Financing [“HCPF”], an agency tasked
with the administration of the Medicaid program in the State
of Colorado. (Id. at ¶ 19, 21.) Defendant Tom
Massey is an HCPF Deputy Executive Director and Chief
Operating Officer. (Id. at 19.) Defendant David L.
Smith is Manager of the Benefits Coordination Section of
HCPF. (Id.) Defendant Ashley DiRienzo is an HCPF
Recovery Officer. (Id.)
Mendy Brockman, a former Medicaid recipient, was reportedly
injured in a car accident in July 2013. (Id. at
¶¶ 5-6.) She is said to have subsequently received
a monetary settlement for her injuries, which placed her in
excess of the Medicaid resource limit for the State of
Colorado. (Id. at ¶ 5.) To preserve her
eligibility for assistance under Medicaid, the El Paso County
Court established the Mendy Brockman Disability Trust, on May
7, 2014. (Id.) Defendants reportedly affirmed the
Trust to be compliant with federal and Colorado law.
(Id. at ¶ 6.)
to the Second Amended Complaint, Plaintiff thereafter
voluntarily removed herself from the Medicaid program,
effective January 1, 2019, “for reasons personal to
her.” (Id. at ¶ 7.) In response,
Defendant DiRienzo reportedly sent Plaintiffs a letter, dated
March 19, 2019, in which she directed them to terminate the
Trust, and to reimburse the State of Colorado, in the amount
of $422, 486.60, for Plaintiff Mendy Brockman's previous
expenses covered by Medicaid. (Id. at ¶ 9.)
Defendant DiRienzo is said to have relied on two Colorado
laws, 10 C.C.R. 2505-10, § 8.100.7.E.6.b.i.e., and
C.R.S. § 15-14-412.8, as the basis for those demands.
(Id. at ¶¶ 9, 42-44.)
23, 2019, Plaintiffs filed a Second Amended Complaint in this
lawsuit, pursuant to 42 U.S.C. § 1983 and 28 U.S.C.
§§ 2201 and 2202, asserting violations of federal
Medicaid law by Defendants, in their official and individual
capacities. (Id. at ¶¶ 61-82.) As the
primary basis for their lawsuit, Plaintiffs contend that the
two Colorado laws at issue, 10 C.C.R. 2505-10, §
8.100.7.E.6.b.i.e. and C.R.S. § 15-14-412.8, conflict
with federal Medicaid law. (Id.) Plaintiffs seek
declaratory and injunctive relief, but no monetary damages.
(Id. at 28-30.)
August 1, 2019, Defendants responded to the Second Amended
Complaint by filing a motion to stay discovery, pending
resolution of their motion to dismiss, and on August 6, 2019,
filed a Motion to Dismiss. (See Mot. 1; Doc. No.
49.) Defendants argue that a discovery stay is appropriate in
this case, because “[e]ach Defendant will assert the
defense of qualified immunity.” (Mot. 6.) In addition,
Defendants argue that “[a] stay of discovery will
result in the efficient use of the parties' and judicial
resources by helping to avoid significant costs and time
involved with engaging in discovery until the parties know
which, if any, of Plaintiff's claims survive.”
(Id. at 4.)
Federal Rules of Civil Procedure do not expressly provide for
a stay of proceedings. Rule 26(c), however, permits a court
to “make an order which justice requires to protect a
party . . . from annoyance, embarrassment, oppression, or
undue burden or expense.” Fed.R.Civ.P. 26(c). Further,
“[t]he power to stay proceedings 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 Kan.
City S. Ry. Co. v. United States, 282 U.S. 760, 763
District, a stay of discovery is generally disfavored.
See, e.g., Rocha v. CCF Admin., No.
09-cv-01432, 2010 WL 291966, at *1 (D. Colo. Jan. 20, 2010);
Jackson v. Denver Water Bd., No. 08-cv-01984, at *1
(D. Colo. Dec. 15, 2008); Chavez v. Young Am. Ins.
Co., No. 06-cv-02419, at *2 (D. Colo. Mar. 2, 2007).
Nevertheless, the decision whether to stay discovery rests
firmly within the sound discretion of the court. United
Steelworkers of Am. v. Or. Steel Mills, Inc., 322 F.3d
1222, 1227 (10th Cir. 2003) (quoting Landis, 299
U.S. at 254).
ruling on a motion to stay discovery, five factors are
generally considered: “(1) [the] plaintiff's
interests in proceeding expeditiously with the civil action
and the potential prejudice to [the] plaintiff of a delay;
(2) the burden on the defendants; (3) the convenience to the
court; (4) the interests of persons not parties to the civil
litigation; and (5) the public interest.” String
Cheese Incident, LLC v. Stylus Shows, Inc., No.
02-cv-01934, 2006 WL 8949955, at *2 (D. Colo. Mar. 30, 2006);
see United Steelworkers, 322 F.3d at 1227. Further,
“a court may decide that in a particular case it would
be wise to stay discovery on the merits until [certain
challenges] have been resolved.” 8A Charles Alan Wright
& Arthur R. Miller, Federal Practice and Procedure §
2040, at 198 (3d ed. 2010). “[A] stay may be
appropriate if resolution of a preliminary motion may dispose
of the entire action.” Serv. First Permits, LLC v.
Lightmaker Vancouver (Internet) Inc., No. 18-cv-02089,
2019 WL 109335, at *3 (D. Colo. Jan. 4, 2019) (quoting
Elec. Payment Sols. of Am., Inc., No. 14-cv-02624,
2015 WL 3940615, at *1 (D. Colo. June 25, 2015)).
case, as to the first factor, there is no evidence to suggest
that Plaintiffs will be prejudiced by a discovery stay.
Indeed, Plaintiffs are unopposed to, and would prefer, a stay
in the proceedings. (Mot. 2.) The first factor, therefore,
weighs in favor of the imposition of a stay. See Frasier
v. Evans, No. 15-cv-01759, 2015 WL 6751136, at *2 (D.
Colo. Nov. 5, 2015) (finding the first factor to weigh in
favor of a stay, because the plaintiff did not oppose the
the second factor, Defendants argue that they would be
burdened by moving forward with discovery, because they have
each asserted a qualified immunity defense to Plaintiffs'
claims. (Mot. 6.) Qualified immunity “give[s]
government officials a right, not merely to avoid standing
trial, but also to avoid the burdens of such pretrial matters
as discovery.” Behrens v. Pelletier, 516 U.S.
299, 308 (1996) (alterations omitted) (quoting Mitchell
v. Forsyth, 472 U.S. 511, 526 (1985)). It is worth
noting, however, that an assertion of qualified immunity
“is not a bar to all discovery.” Rome v.
Romero, 225 F.R.D. 640, 643 (D. Colo. 2004). Indeed,
qualified immunity is applicable only to individual capacity
claims for monetary damages; it is not a defense against
claims for declaratory or injunctive relief. Meiners v.
Univ. of Kan., 359 F.3d 1222, 1233 n.3 (10th Cir. 2004)
(citing Frank v. Relin, 1 F.3d 1317, 1327 (2d Cir.
1993)). In this case, Plaintiffs have requested declaratory
and injunctive relief only. (See Doc. No. 39 Ex. 4
at 28-30.) As a result, Defendants cannot rely on a qualified
immunity defense as the sole basis to impose a stay of
discovery. See Harris v. City & Cnty. of Denver,
No. 11-cv-01201, 2011 WL 3793778, at *3 (D. Colo. Aug. 25,
2011) (denying a motion to stay discovery relating to claims
for declaratory and injunctive relief). This factor, then, is
neutral in the analysis.
third “court convenience” factor, however, weighs
heavily in favor of the imposition of a stay. There is no
question that the ultimate outcome of this case will turn on
a distinct legal issue: the extent to which Colorado law
conflicts with federal law. (See Compl. ¶¶
61-82.) It is also clear, based on the allegations in the
Second Amended Complaint, that discovery as to the individual
capacity claims against Defendants will be of a limited
nature. Indeed, the parties do not appear to dispute the
relevant facts in this case, but rather, the legal
significance of those facts. By imposing a discovery stay in
this case, judicial economy will be enhanced, because
scheduling and discovery issues will not be raised, and the
court will be able to focus its attention on the dispositive
legal issues raised in Defendants' motion to dismiss.
See Burkitt v. Pomeroy, 15-cv-02386, 2016 WL 696107,
at *2 (D. Colo. Feb. 22, 2016) (“[I]t is certainly more
convenient for the Court to stay discovery until it is clear
that the case will proceed.”); Hildebrand v.
Douglas Dynamics, Inc., 15-cv-00486, 2015 WL 2207773, at
*1 (D. Colo. May 6, 2015) (“[I]t is early in the
litigation and resolving legal issues at the early stage
before discovery ...