Arcell v. Google LLC

[3] 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION [7] 8 MARY KATHERINE ARCELL, et al., Case No. 5:22-cv-02499-EJD 9 Plaintiffs, ORDER GRANTING MOTION TO STAY DISCOVERY PENDING 10 v. RULING ON MOTION TO DISMISS 11 GOOGLE LLC, et al., Re: Dkt. No. 36 Defendants. [12] 13 Plaintiffs initiated this antitrust suit on April 22, 2022. Dkt. No. 1. Plaintiffs essentially 14 allege that Defendants Apple, Inc. (“Apple”) and Google LLC (“Google”) violated federal 15 antitrust laws by agreeing not to compete in the internet search business. Id. Defendants’ motion 16 to dismiss the Complaint is fully briefed (Dkt. Nos. 25, 32, 35) and was taken under submission on 17 October 26, 2022 (Dkt. No. 46). 18 Pending before the Court is Defendants’ “Motion for a Protective Order Temporarily 19 Staying Discovery” (“Motion”) until the Court issues a ruling on Defendants’ motion to dismiss 20 the Complaint. Dkt. Nos. 36 -38. The Motion is suitable for disposition without oral argument 21 pursuant to Civil Local Rule 7-1(b). For the reasons stated below, the Motion will be granted. 22 “The district court has wide discretion in controlling discovery.” Little v. City of Seattle, [23] 863 F.2d 681, 685 (9th Cir. 1988); Hall v. Tilton, 2010 WL 539679 , at *2 (N.D. Cal. Feb. 9, 2010) 24 (“A district court has broad discretion to stay discovery pending the disposition of a dispositive 25 motion.”). Under Federal Rule of Civil Procedure 26(c), “[t]he court may, for good cause, issue 26 an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden 27 or expense[.]” Fed. R. Civ. P. 26(c). Many courts in this district apply a two-prong test to 1 determine whether a stay of discovery is appropriate: “(1) will the motion dispose of the entire 2 case (or at least the issue at which discovery is aimed)? and (2) can the motion be decided without 3 further discovery?” Onuoha v. Facebook, Inc., 2017 WL 11681325 , at *1 (N.D. Cal. Apr. 7, 4 2017) (collecting cases). 5 Here, both elements favor a stay. First, Defendants’ motion to dismiss may dispose of the 6 entire case. Defendants raise numerous significant challenges to the Complaint, including the 7 failure to plead direct or circumstantial evidence of a horizontal conspiracy to support the Section 8 1 claim; failure to plead a conspiracy, a relevant market, and the requisite intent to support the 9 Section 2 claim; failure to plead antitrust standing; statute of limitations; and laches. Defendants 10 also argue that some of the forms of relief Plaintiffs seek are unavailable as a matter of law. At a 11 minimum, Defendants have established that their motion is “potentially dispositive” of the entire 12 case, which weighs in favor of granting a stay of discovery until the Court issues a ruling on 13 Defendants’ motion to dismiss. Malley v. San Jose Midtown Dev. LLC, 2020 WL 5877575 , at *7 14 (N.D. Cal. Oct. 2, 2020). 15 Second, Defendants’ motion to dismiss can be decided without further discovery because 16 the motion “is based solely on the allegations in the Complaint and does not raise any factual 17 issues.” Reveal Chat Holdco, LLC v. Facebook, Inc., 2020 WL 2843369 , at *3 (N.D. Cal. Apr. 18 10, 2020). 19 Further, there is good cause to stay discovery at this time because it will promote 20 efficiency and avoid undue burden to Defendants; discovery in antitrust cases tends to be “broad, 21 time-consuming and expensive.” In re Netflix Antitrust Litig., 506 F. Supp. 2d 308, 321 (N.D. 22 Cal. June 14, 2007) (citing Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1967 (2007)). 23 Plaintiffs assert that a stay of discovery is not warranted because they are presently seeking only 24 “limited” discovery. This “limited discovery” consists of the depositions of Defendants Tim 25 Cook, Sundar Pichai, Eric Schmidt, and other Apple and Google executives; interrogatories 26 regarding Google’s payments to Apple; and production of any written contracts between Google 27 and Apple regarding Google’s payments to Apple. However, “[t]he purpose of F.R.Civ.P. 1 12(b)(6) is to enable defendants to challenge the legal sufficiency of complaints without subjecting 2 themselves to discovery.” Rutman Wine Co. v. E. & J. Gallo Winery, 829 F.2d 729, 738 (9th Cir. 3 1987) (citing Greene v. Emersons Ltd., 86 F.R.D. 66, 73 (S.D.N.Y. 1980), aff'd, 736 F.2d 29 (2d 4 || Cir. 1984)). “In antitrust cases this procedure especially makes sense because the costs of 5 discovery in such actions are prohibitive.” /d. (citing Car Carriers v. Ford Motor Company, 745 6 || F.2d 1101, 1105-07 (7th Cir. 1984), cert. denied, 470 U.S. 1054 , 105 S.Ct. 1758 , 84 L.Ed.2d 821 7 |} (1985)). 8 Accordingly, Defendants’ Motion to Stay Discovery is GRANTED. Discovery is 9 || STAYED until the Court issues a ruling on Defendants’ motion to dismiss. 10 IT IS SO ORDERED. 11 Dated: October 31, 2022 [12] EDWARD J. DAVILA 14 United States District Judge [16] = 17 Z 18 [27] 28 || Case No.: 5:22-cv-02499-EJD ORDER GRANTING MOTION TO STAY DISCOVERY