Rama Sou v. Michael Bash, 2:15-cv-00698

Plaintiffs Rama Sou, Tai Bui, and Scott Zimmerman sued Michael Bash, Jeremy Bash, and two LLCs for fraud-based claims (intentional misrepresentation, false promise, negligent misrepresentation, and rescission).
Defendants moved to stay all discovery while they pursue a dispositive motion (motion to dismiss/judicial notice of contracts).
Plaintiffs opposed, arguing factual issues (including alleged oral terms and parol evidence) could be necessary to interpret the contract and defeat dismissal.
The magistrate judge applied the Rule 1 and Rule 26(c) framework for discovery stays, requiring a preliminary peek at the merits of the dispositive motion and a showing that the motion raises no factual issues and will likely succeed.
The court found disputed factual issues (e.g., parol evidence and oral terms) that may require discovery and noted that even if dismissal were granted, leave to amend could be appropriate, so a stay would not serve Rule 1’s objectives.
The court therefore denied Defendants’ motion to stay discovery.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether discovery should be stayed pending a dispositive motion	Discovery should proceed because factual issues (oral terms, parol evidence) may be necessary to resolve contract meaning	Stay discovery because the dispositive motion can be decided by judicially noticing the contract and raises no factual issues	Denied — factual disputes exist that may require discovery
Whether the dispositive motion raises no factual issues	Parol evidence inapplicable; oral terms should be considered, creating factual disputes	Contract interpretation via judicial notice requires no additional facts	Court concluded factual issues exist; preliminary peek did not show dispositive motion clearly resolved the case
Whether the movant convinced the court the dispositive motion will be granted	Plaintiffs argued dismissal is not certain and leave to amend would follow, undermining a stay	Defendants argued they were “convinced” dismissal should be granted and discovery thus undue burden	Court not convinced dismissal will be granted; possibility of amendment and need for discovery weigh against stay
Whether Rule 26(c) protection standard is met for a blanket stay	Plaintiffs argued defendants did not show specific, particularized harm from discovery	Defendants argued undue burden/expense justifying protective stay	Court found defendants did not meet Rule 26(c) standard for a stay; broad conclusory allegations insufficient

Brown Shoe Co. v. United States, 370 U.S. 294 (Sup. Ct.) (courts must resolve civil matters fairly without undue cost)
Rae v. Union Bank, 725 F.2d 478 (9th Cir.) (dispositive motion must raise no factual issues to justify stay)
Wood v. McEwen, 644 F.2d 797 (9th Cir.) (movant must convince court dispositive motion will be granted to justify stay)
TradeBay, LLC v. eBay, Inc., 278 F.R.D. 597 (D. Nev.) (court takes a limited "preliminary peek" at merits when evaluating stay)
Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470 (9th Cir.) (broad, conclusory allegations of harm do not satisfy Rule 26(c))
Serrano v. Cintas Corp., 699 F.3d 884 (6th Cir.) (protective order requires particularized factual demonstration)
Skellerup Indus. Ltd. v. City of Los Angeles, 163 F.R.D. 598 (C.D. Cal.) (no automatic stay of discovery pending dispositive motion)
B. R. S. Land Investors v. United States, 596 F.2d 353 (9th Cir.) (stay may be proper where court is convinced plaintiff cannot state a claim)
Wyatt v. Kaplan, 686 F.2d 276 (5th Cir.) (stays appropriate for issues like immunity, jurisdiction, venue)
Ministerio Roca Solida v. U.S. Dep’t of Fish & Wildlife, 288 F.R.D. 500 (D. Nev.) (stay permitted where dispositive motion is potentially dispositive and decidable without discovery)