Hurricane Electric LLC v. Millennium Funding, Inc.
2:20-cv-01034
D. Nev.Nov 16, 2020Background
- Plaintiff Hurricane Electric, LLC sued numerous film-related defendants in this action; related copyright litigation (Hurricane Electric v. Dallas Buyers Club, 3:20-cv-03813-CRB) and an insurance coverage action (Hurricane Electric v. National Fire Insurance Company of Hartford, 3:20-cv-05840-CRB) are pending in the Northern District of California.
- The parties jointly stipulated to stay the Nevada action pending resolution (or substantial progress) of the insurer’s duty-to-defend dispute in the Co-Pending Insurance Action, because the duty issue affects settlement and defense obligations in the other suits.
- Magistrate Judge Hixson (N.D. Cal.) agreed that an early settlement conference would be unproductive until the insurance duty dispute is resolved; the N.D. Cal. court entered a stay in the related copyright action.
- The parties agreed limited third‑party discovery may proceed during the stay to preserve ephemeral evidence (ISP subscriber logs, email-provider logs, and transcripts/documents from prior related cases), and sought leave to issue Rule 45 subpoenas for that purpose.
- Parties agreed defendants’ answers/responses would be due no sooner than 60 days after the stay is lifted to allow time for a settlement conference; all parties expressly reserved all rights and agreed the stay creates no substantive or procedural waiver.
- The parties will file a status report by January 4, 2021 (or sooner after the settlement conference) and the stipulation was endorsed/ordered by the court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether to stay this action pending resolution of insurer’s duty to defend in the Co-Pending Insurance Action | Stay appropriate because insurer duty will materially affect litigation posture and settlement prospects; avoids duplicative motion practice | Defendants concur that stay will simplify issues and facilitate coordinated resolution | Parties stipulated to a stay; court endorsed/ordered the stay and set a status-report deadline (Jan 4, 2021) |
| Whether limited third‑party discovery (ISP/email logs; prior-case transcripts) may proceed during the stay | Limited subpoenas necessary to preserve ephemeral ISP/email logs and third‑party materials | Defendants requested leave to serve Rule 45 subpoenas for the identified categories; agreed subpoenas subject to objections | Court authorized limited early third‑party discovery subject to parties’ and third‑parties’ rights to object/quash |
| Whether deadlines (including answers/responses) should be extended while stay in effect | Plaintiff agreed to 60‑day post‑stay timing for responses to permit settlement conference | Defendants requested responses be set at least 60 days after stay lifted | Parties agreed defendants’ responses to be set minimum 60 days after stay lifted; prior extensions (to Nov 2, 2020) noted |
| Whether stay will prejudice parties or alter rights | Plaintiff: stay with limited discovery poses no undue prejudice; preserves orderly course of justice | Defendants: same; agreed all rights reserved and stay not evidence for/against parties | Parties expressly reserved all rights; stay to be without prejudice and not construed for/against any party |
Key Cases Cited
- Lockyer v. Mirant Corp., 398 F.3d 1098 (9th Cir. 2005) (discussing stay factors, including potential prejudice and simplifying or complicating issues)
- CMAX, Inc. v. Hall, 300 F.2d 265 (9th Cir. 1962) (stay standard: consider possible damage from stay, hardship, and orderly course of justice)