JustM2J LLC v. Brewer, 2:25-cv-00380

Plaintiff, a Delaware entity assigned claims by 13 victims of a cryptocurrency theft, sues three named defendants (Brewer, Litz, St. George) for participation in the “Bittensor Attack,” a theft of over $30 million in TAO tokens via malware inserted in a software update.
Defendants were former Bittensor developers and key holders at Opentensor Foundation and later operated the FileTAO subnet, which made users download the compromised software; attacks involved sophisticated money laundering techniques.
Plaintiff asserts claims under the Computer Fraud and Abuse Act (CFAA), Wiretap Act, California Penal Code § 496, and state law causes such as fraud, conversion, unjust enrichment, and constructive trust/disgorgement.
Defendants moved to dismiss for failure to state a claim and (for Litz and St. George) lack of personal jurisdiction; motions were fully briefed and pending at the time of this decision.
Defendants moved to stay discovery (in full, or except for Doe identification) until the district judge decides the motions to dismiss; Plaintiff served third-party subpoenas but not formal discovery on Defendants.
The magistrate judge was asked to decide whether discovery should be stayed pending the motions to dismiss, applying Ninth Circuit and local precedent on stays.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Should all discovery be stayed pending motions?	Discovery should proceed except jurisdictional; FAC likely withstands dismissal or can be amended.	All discovery should be stayed (or limited to Doe IDs) due to burdens and pending challenges.	Denied; only jurisdictional discovery stayed.
Jurisdictional discovery pre-motion ruling	Will tailor request if motion denied.	Should be stayed until motions decided.	Stayed until court rules on personal jurisdiction.
Sufficiency of FAC (fraud, conversion, etc.)	Allegations are sufficient or curable by amendment.	FAC lacks specific factual allegations and fails Rule 9(b) for fraud claims.	FAC likely sufficient or can be amended; not clearly futile.
Discovery burden and prejudice	Discovery relevant to tracing assets and claims; burden on Defendants minimal.	Subpoenas are burdensome, harassing, and irrelevant.	No sufficient prejudice to justify a full stay.

Little v. City of Seattle, 863 F.2d 681 (9th Cir. 1988) (district courts have wide discretion in controlling discovery)
Clinton v. Jones, 520 U.S. 681 (1997) (court's general power to stay proceedings)
Lockyer v. Mirant Corp., 398 F.3d 1098 (9th Cir. 2005) (stay power incidental to docket management)
Bell Atlantic v. Twombly, 550 U.S. 544 (2007) (parallel conduct insufficient for conspiracy absent additional facts)
Soo Park v. Thompson, 851 F.3d 910 (9th Cir. 2017) (contextual allegations can support conspiracy inference)
Boquist v. Courtney, 32 F.4th 764 (9th Cir. 2024) (plausibility standard and reasonable inferences on motions to dismiss)