Lian v. Tuya Inc.

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK XIAOMENG LIAN, individually and on behalf of all others similarly situated, 22-CV-06792 (JPC) (RFT) Plain�ffs, OPINION AND ORDER -againstTUYA INC., et al., Defendants. ROBYN F. TARNOFSKY, United States Magistrate Judge: On April 25, 2024, the par�es submited a Report of Rule 26(f) Discovery Plan (“Report”) with compe�ng proposed deadlines. (See ECF 139, Report.) Defendants take the posi�on that their recently filed mo�on for judgment on the pleadings under Rule 12(c) of the Federal Rules of Civil Procedure (ECF 136, 137, 138) triggers the PSLRA automa�c stay; they argue that “a mo�on under Rule 12(c) is deemed to be a mo�on to dismiss for purposes of 15 U.S.C. § 78u4(b)(3)(B).” (ECF 139, Report at 8-9 (internal quota�on marks omited) (ci�ng cases).) The Rule 12(c) mo�on, if granted in its en�rety, would result in dismissal of the en�re case against all Defendants. Plain�ffs point out that “the purpose of the PSLRA’s discovery stay is to prevent abusive, expensive discovery in frivolous lawsuits by postponing discovery un�l a�er the Court has sustained the legal sufficiency of the complaint” and contend that the statutory purpose “has been fulfilled here by Judge Cronan’s denial of Defendants’ mo�on to dismiss in large measure.” (ECF 139, Report at 10 (internal quota�on marks and cita�ons omited).) I asked the par�es to briefly address this issue at the ini�al case management conference on May 2, 2024. Having considered the par�es’ posi�ons as set forth in the Report and orally at the conference, I conclude that Defendants’ pending mo�on under Rule 12(c) triggers the PSLRA automa�c stay of discovery. I start with the language of the PSLRA, which provides that “all discovery and other proceedings shall be stayed during the pendency of any motion to dismiss, unless the court finds upon the motion of any party that particularized discovery is necessary to preserve evidence or to prevent undue prejudice to that party.” 15 U.S.C. § 78u-4(b)(3)(B). Stays of discovery under the PSLRA are “automatic.” Chadbourne & Parke LLP v. Troice, 571 U.S. 377, 383 (2014). Plain�ffs suggest that a Rule 12(c) mo�on following a Rule 12(b) mo�on is somehow different from other mo�ons to dismiss. (See ECF 139, Report at 10.) I disagree and find persuasive the reasoning outlined in a case from the Northern District of California where the court issued an order in connec�on with a discovery dispute, In re eHealth Inc. Sec. Litig., No. 20-CV-02395 (JST) (LJC), 2023 WL 3951178 (N.D. Cal. June 12, 2023): Lead Plaintiff has not offered any compelling argument as to why this Court should interpret the PSLRA differently from district courts that treat a Rule 12(c) motion the same as a Rule 12(b)(6) motion for purposes of the discovery stay provision. In the Eastern District of New York, a court found that “a Rule 12(c) motion is a ‘motion to dismiss’ within the meaning of the PSLRA automatic stay provision, and that therefore the stay is triggered by defendants’ Rule 12(c) motion.” Gardner v. Major Auto. Companies, No. 11-CV-1664 FB, 2012 WL 1230135 , at *4 (E.D.N.Y. Apr. 12, 2012). . . . In the Southern District of Texas, a court found a “motion for judgment on the pleadings under Rule 12(c) may trigger the [PSLRA] stay in the same way as a Rule 12(b)(6) motion.” Fed. Deposit Ins. Corp. as Receiver for Franklin Bank v. Morgan Stanley & Co. LLC, No. CV H-12CV-1777, 2012 WL 12894738 , at *2 (S.D. Tex. Oct. 30, 2012). At most, Lead Plaintiff asserts a policy argument. Congress, however, has balanced the various policy interests at stake in securities litigation, including a plaintiff’s need for discovery, and adopted an automatic stay provision that necessarily entails some delay. [2] 2023 WL 3951178 , at *2; cf. Sedona v. Ladenburg Thalmann, No. 03-CV-3120 (LTS) (THK), 2005 WL 2647945 , at *3 (S.D.N.Y. Oct. 14, 2005) (explaining that courts have found the automa�c stay provision to apply both to ini�al and subsequent mo�ons to dismiss). Plain�ffs argue that Defendants filed the 12(c) mo�on to delay discovery. (See ECF 139.) They cite to In re Salomon Analyst Litigation, which raised the concern that “‘[t]o permit defendants indefinitely to renew the stay simply by filing successive mo�ons to dismiss would be to invite abuse.’” (Id., Report at 10 (quo�ng Salomon, 373 F. Supp. 2d 252, 254-55 (S.D.N.Y. 2004)).) But Defendants are correct that “the hypothe�cal concerns raised by the court there about applica�on of the PSLRA stay to a successive mo�on to dismiss are not present here” because the pending 12(c) mo�on “advances legal arguments that the Court had not considered when ruling on the prior-filed mo�on to dismiss and is thus ‘neither frivolous nor advanced solely to delay the proceedings.’” (ECF 139, Report at 9 (quo�ng Salomon, 373 F. Supp. 2d at 256 ).) Indeed, Judge Cronan’s decision to grant Defendants leave to file the mo�on (over Plain�ffs’ objec�on) (see ECF 132) undercuts the Plain�ffs’ argument that the mo�on is frivolous and was made solely to delay discovery. As the court noted in eHealth, Plaintiffs are “not without recourse to seek a court order allowing discovery. Under the PSLRA, the automatic stay of discovery can be lifted if ‘the court finds upon the motion of any party that particularized discovery is necessary to preserve evidence or to prevent undue prejudice to that party.’” eHealth, 2023 WL 3951178 , at *3 (quoting 15 U.S.C. § 78u-4(b)(3)(B)). [3] If any claims remain a�er the decision on the 12(c) mo�on is decided, discovery will proceed according to the schedule discussed at the ini�al case management conference, reflected below: 1. Formal Discovery a. Fact discovery must be complete within 14 months of a decision on the pending 12(c) mo�on. All remaining discovery must be complete within 18 months of a decision on the pending 12(c) mo�on. i. Deposi�ons shall be completed within 14 months of a decision on the pending 12(c) mo�on. The par�es should meet and confer within 30 days of a decision on the pending 12(c) mo�on regarding deposi�on limits per side and submit leters to the Court if they cannot agree. ii. Ini�al Interrogatories shall be served no earlier than the date of a decision on the pending 12(c) mo�on. Subsequent Interrogatories must be served at least 30 days prior to the fact discovery deadline. iii. Ini�al Requests for Admission shall be served no earlier than the date of a decision on the pending 12(c) mo�on. Subsequent Requests must be served at least 30 days prior to the fact discovery deadline. iv. Ini�al Requests for Produc�on shall be served no earlier than the date of a decision on the pending 12(c) mo�on. Subsequent Requests must be served at least 30 days prior to the fact discovery deadline. Document produc�on must be [4] substan�ally complete within 8 months of a decision on the pending 12(c) mo�on. 2. Joinder a. All par�es must be joined no later than 120 days before the close of fact discovery. 3. Expert a. Expert discovery must be complete within 18 months of a decision on the pending 12(c) mo�on. 4. Class Cer�fica�on a. Class cer�fica�on mo�on is due 6 months a�er a decision on the pending 12(c) mo�on. b. Defendant’s Opposi�on is due 60 days a�er the filing of the class cer�fica�on mo�on. c. Plain�ffs’ Reply is due 60 days a�er Defendants’ opposi�on. 5. Discovery Reports a. The par�es shall file joint monthly reports on the status of discovery every 30 days, beginning 60 days a�er a decision on the pending 12(c) mo�on, addressing: the discovery exchanged in the past month, discovery that will be exchanged in the next month, any an�cipated issues, and whether it would be produc�ve to atempt to setle the case via court-annexed media�on or a setlement conference before me. [5] b. One week after the discovery deadline the parties shall file a joint letter (i) confirming discovery is complete or explaining why discovery is not complete, (ii) proposing dates for a settlement conference or requesting a mediation referral and (iii) proposing a summary judgment briefing schedule. DATED: May 2, 2024 New York, New York SO ORDERED. ROBYN F. TARNOFSKY United States Magistrate Judge