United States District Court, E.D. California
ARMANDO ZAVALA, individually and on behalf of all others similarly situated, Plaintiff,
KRUSE-WESTERN, INC., et al., Defendants.
ORDER DENYING MOTION TO COMPEL (DOC. 21)
filed a class action complaint in this case on February 2,
2019 (Doc. 1) and sought to commence discovery by proposing a
Federal Rule of Civil Procedure 26(f) conference of counsel.
Defendants declined to meet and, on April 15, 2019, filed a
motion to dismiss. (Doc. 17.) On May 28, 2019, Plaintiff
filed a motion to compel seeking an order compelling
Defendants to participate in a Rule 26(f) conference. (Doc.
21.) The parties filed their “Joint Statement re
Discovery Dispute” setting forth their respective
positions pursuant to Eastern District of California Local
Rule 251 on July 10, 2019. (Doc. 26.)
having reviewed the motion and supporting documents, the
motion to compel was deemed suitable for decision without
oral argument pursuant to Local Rule 230(g), and the
undersigned vacated the hearing set for July 17, 2019. (Doc.
28.) For the reasons set forth below, the motion shall be
February 2, 2019, Plaintiff filed a civil enforcement action
pursuant to the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), 29 U.S.C. §
1132(a)(2) and (a)(3), on behalf of himself and other
participants in the Western Milling Employee Stock Ownership
Plan (the “Plan”), arising out of the November 4,
2015 sale of Defendant Kruse-Western, Inc. stock to the Plan
for an allegedly inflated value that resulted in the loss of
tens of millions of dollars to the Plan. (See Doc.
responsive pleading had been filed, Plaintiff proposed dates
for a conference pursuant to Rule 26(f), which were rejected
by Defendants as premature. (Doc. 26-1 at ¶¶ 3-4.)
Defendants thereafter filed a motion to dismiss on April 15,
2019, contending that Plaintiff “failed to fulfill his
pleading obligations as required” under Federal Rules
of Civil Procedure 8(a)(2) and 10(b), and that his complaint
is “nearly devoid of facts sufficient to make out a
claim upon which relief can be granted” under Rule
12(b)(6). (See Doc. 17-1 at 1-2.) The
hearing on the motion to dismiss was held on July 16, 2019,
after which the assigned district judge took the motion under
submission. (See Doc. 29.)
after the motion to dismiss was filed, Plaintiff requested
limited discovery from Defendants, which was refused on the
ground that “discovery should not proceed until the
Motion to Dismiss is resolved.” (See Doc. 26-2
at ¶ 6.) On May 1, 2019, the undersigned, sua
sponte, continued the mandatory scheduling conference to
October 3, 2019, in view of the pending motion to dismiss.
(See Doc. 18.)
parties met and conferred in writing and over the telephone
and, on May 15, 2019, determined that they were “at an
impasse regarding whether to engage in a [Rule] 26(f)
conference at this time.” (Doc. 26-1 at ¶ 8.)
Plaintiff filed the instant motion to compel on May 28, 2019
(Doc. 21), and the parties submitted their “Joint
Statement re Discovery Dispute” setting forth their
respective positions pursuant to Local Rule 251 on July 10,
2019. (Doc. 26.) The motion was taken under submission on
July 15, 2019. (See Doc. 28.)
parties' dispute concerns the timing of discovery in a
civil case. Federal Rule of Civil Procedure 26(d) states:
A party may not seek discovery from any source before the
parties have conferred as required by Rule 26(f), except in a
proceeding exempted from initial disclosure under Rule
26(a)(1)(B), or when authorized by these rules, by
stipulation, or by court order.
parties have not yet held a Rule 26(f) conference, and in the
absence of a stipulation, Plaintiff may obtain discovery at
this stage of the proceedings only by court order. See
Id. Courts within the Ninth Circuit generally use the
“good cause” standard to determine whether to
permit discovery prior to a Rule 26(f) conference. See,
e.g., Roadrunner Intermodal Servs., LLC v. T.G.S
Transportation, Inc., No. 1:17-cv-01056-DAD-BAM, 2017 WL
3783017, at *3 (E.D. Cal. Aug. 31, 2017); Apple Inc. v.
Samsung Elecs. Co., 768 F.Supp.2d 1040, 1044 (N.D. Cal.
2011); In re Countrywide Fin. Corp. Derivative
Litig, 542 F.Supp.2d 1160, 1179 (CD. Cal. 2008). See
also 8 A Charles Alan Wright, Arthur R. Miller &
Richard L. Marcus, Federal Practice and Procedure §
2046.1 (3d ed. 2010) (“[I]t is implicit that some
showing of good cause should be made to justify such an
order” permitting discovery prior to a Rule 26(f)
conference.). “Good cause may be found where the need
for expedited discovery, in consideration of the
administration of justice, outweighs the prejudice to the
responding party.” Semitool, Inc. v. Tokyo Electron
America, Inc., 208 F.RD. 273, 276 (N.D. Cal. 2002).
motion, Plaintiff is not seeking expedited discovery pursuant
to Rule 26(d). Instead, in an interesting departure,
Plaintiff seeks to compel Defendants to participate in a Rule
26(f) conference. Once the Rule 26(f) conference is
completed, Plaintiff would then proceed to commence
discovery. In this way, Plaintiff presumably would be able to
obtain discovery in advance of the pleadings being settled
without showing “good cause” under Rule 26(d).
relies on the language of Rule 26(f) to support his position.
Rule 26(f)(1) governs the timing of the discovery conference.
It provides, in relevant part,
Except . . . when the court orders otherwise, the parties
must confer as soon as practicable-and in any event at least
21 days before a scheduling conference is to be held or a