United States District Court, N.D. California
ORDER GRANTING DEFENDANT'S MOTION TO STAY
JEFFREY S. WHITE UNITED STATES DISTRICT JUDGE
before the Court is the motion to stay discovery filed by
Defendant Tile, Inc. (“Tile”). The Court has
considered the parties' papers, relevant legal authority,
and the record in this case, and GRANTS Defendant's
motion to stay discovery.
Cellwitch, Inc. (“Cellwitch”) filed the complaint
in this case on March 12, 2019. In brief, Cellwitch alleges
that Tile infringed on U.S. Patent No. 8, 872, 655 by copying
Cellwitch's technology and using it to establish a
dominate position in the personal object tracking sector.
Tile has moved to dismiss for failure to state a claim, and
it moves to stay discovery pending resolution of that motion.
The Court received the parties' joint letter dated
September 9, 2019, in which Cellwitch and Tile explain their
respective positions about the instant issue.
Rule of Civil Procedure 26(c) provides that a court may
“for good cause, issue an order to protect a party or
person from annoyance, embarrassment, oppression, or undue
burden or expense” by, inter alia, forbidding
discovery or by specifying terms, including time and place,
for disclosure or discovery. Fed. R. Civ. Proc.
26(c)(1)(A)-(B). The Court has discretion to stay discovery
pending the resolution of dispositive motions, including
motions to dismiss. See, e.g., Jarvis v.
Regan, 833 F.2d 149, 155 (9th Cir. 1987); see also
Wood v. McEwen, 644 F.2d 797, 801 (9th Cir. 1981) (good
cause to stay discovery may exist where a court is
“convinced that the plaintiff will be unable to state a
claim for relief”). “A party seeking a stay of
discovery carries the heavy burden of making a ‘strong
showing' why discovery should be denied.” Gray
v. First Winthrop Corp., 133 F.R.D. 39, 40 (N.D. Cal.
1990) (quoting Blankenship v. Hearst Corp., 519 F.2d
418, 429 (9th Cir. 1975)). “The moving party must show
a particular and specific need for the protective order, as
opposed to making stereotyped or conclusory
statements.” Id. (citations omitted).
determine whether to grant a protective order to stay
discovery pending resolution of dispositive motions, the
Court considers the following two factors: (1) whether the
pending motion is potentially dispositive of the entire case,
or at least dispositive on the issue at which discovery is
directed; and (2) whether the court can decide the pending
dispositive motion absent additional discovery. Pac.
Lumber Co. v. Nat'l Union Fire Ins. Co., 220 F.R.D.
349, 352 (N.D. Cal. 2003) (internal citations omitted);
see also In re Nexus 6p Prod. Liab. Litig., No.
17-cv-2185-BLF, 2017 WL 3581188, at *1 (N.D. Cal. Aug. 18,
2017) (citing cases). If these two questions are answered
affirmatively, the court may issue a protective order.
Pacific Lumber, 220 F.R.D. at 352. “However,
if either prong of this test is not established, discovery
proceeds.” Id. The nature of this two-factor
test requires the court to take a “preliminary
peek” at the merits of the pending, potentially
dispositive motion to determine whether a stay is granted.
See Tradebay, LLC v. eBay, Inc., 278 F.R.D. 597, 602
(D. Nev. 2011).
moves to dismiss for Cellwitch's failure to state a claim
for which relief can be granted. Cellwitch does not comment
on whether this motion would be dispositive, but instead
argues that Tile failed to meet its burden to stay discovery
pending the outcome of the motion. While the Court does not
provide an opinion on the merits of the pending motion to
dismiss, the Court concludes that the motion has the
potential to be dispositive. If granted, Cellwitch's
patent would be found invalid for lack of patentable
subject-matter under 35 U.S.C. section 101. As Cellwitch only
claims alleged patent infringement, every claim in its
complaint would be subject to dismissal. See Carter v.
Oath Holdings, Inc., No. 17-cv-07086-BLF, 2018 WL
3067985, at *4 (N.D. Cal. June 21, 2018). Accordingly, the
Court concludes that Tile has satisfied the first prong
of the Pacific Lumber test.
argues the second prong is met because the Court only needs
to look at the pleadings in order to issue a decision about
its motion to dismiss. The Court concludes no other discovery
is needed for the resolution of Tile's motion. See In
Re Nexus 6p Prods., 2017 WL 3581188, at *2 (“[t]he
Court also notes that the pending motions to dismiss are
fully briefed, and can be decided without additional
discovery.”). The Court therefore holds that Tile has
met its burden under the second prong of the Pacific
it did not address the Pacific Lumber prongs in its
analysis, Cellwitch argues that the Court should deny the
motion to stay discovery because (1) the stay would prejudice
Cellwith, (2) Tile would not suffer a hardship, and (3) the
stay would not benefit the orderly course of justice. (Dkt.
No. 52, Plaintiffs Opposition to Plaintiffs Motion to Stay
Discovery, at 8.) The Court is not persuaded. Cellwitch does
not demonstrate that it will suffer harm if the Court stays
discovery briefly until after the Court rules on Tile's
motion to dismiss. In the interest of judicial efficiency and
conserving the Court's resources, the Court finds that