United States District Court, E.D. New York
For Bethpage Water District, Plaintiff: Robin L. Greenwald, PRO HAC VICE, Curt Marshall, LEAD ATTORNEY, Weitz & Luxenberg, P.C., New York, NY.
For Northrop Grumman Corporation, Northrop Grumman Systems Corporation, Defendants: Elizabeth Read Knauer, Mark A. Chertok, LEAD ATTORNEYS, Adam Micheal Stolorow, Victoria Shiah Treanor, Sive Paget & Riesel, P.C., New York, NY.
Sandra J. Feuerstein, United States District Judge.
Defendants Northrop Grumman Corporation and Northrop Grumman Systems Corporation (collectively " defendants" or " NG") have moved to dismiss plaintiff Bethpage Water District's (" plaintiff" or " BWD") amended complaint. [Docket Entry No. 43 (" Motion to Dismiss")]. Defendants have also moved to stay all discovery pending a decision on the Motion to Dismiss. [Docket Entry No. 53 (" Motion to Stay Discovery")]. Plaintiff opposes both the Motion to Dismiss and the Motion to Stay Discovery [Docket Entry Nos. 47, 56]. For the reasons that follow, defendants' Motion to Stay Discovery is granted in part and defendants' Motion to Dismiss is converted to a motion for summary judgment.
On November 18, 2013, plaintiff initiated the instant action against defendants to recover " damages for expenses incurred to install new water treatment and to upgrade existing water treatment technologies...to forestall a water quality emergency and attendant irreparable harm" created by the release of " hazardous substances" at facilities owned and/or operated by defendants. [Docket Entry No. 27 (" Amended Complaint") ¶ ¶ 1-2]. Defendants moved to dismiss plaintiff's lawsuit, claiming it is " barred by the applicable three-year statute of limitations...under New York Civil Practice Law and Rules (" CPLR") § 214-c(2)" because plaintiff discovered its alleged injury " no later than 2009." [Docket Entry No. 44 (Def. Mem. in Support of Motion to Dismiss), at 1]. Plaintiff opposes the Motion to Dismiss, arguing that a determination of " when a plaintiff water provider knew it had been injured and when it should have known about the injury is by definition a fact-intensive inquiry warranting denial of a motion to dismiss" [Docket Entry No. 47 (Pl. Opp. to Motion to Dismiss), at 1], and that in any event, its lawsuit is not time barred as " there was no injury as of November 18, 2010" ( id. at 2) because as of that date, plaintiff " did not know if or when OU3 would reach Plant No. 4." Id.
Defendants also moved for a stay of discovery, alleging a stay is warranted because they are " likely to prevail on [their] Motion to Dismiss...the burdens of discovery are substantial...[and] the requested stay would not unfairly prejudice [plaintiff]." [Docket Entry No. 54 (Def. Mem. in Support of Motion to Stay Discovery), at 1-2]. In opposition, plaintiff argues that the Motion to Stay Discovery should be denied because " [defendants'] motion to dismiss should be denied and therefore [defendants] [have] not made a strong showing that BWD's claims are unmeritorious...the discovery involved in this case is not unduly broad or burdensome; and...the risk of unfair prejudice to BWD if a stay is granted is significant." [Docket Entry No. 56 (Pl. Opp. to Motion to Stay Discovery), at 1].
A. Standard of Review
Under Federal Rule of Civil Procedure 26(c), a district court may stay discovery " for good cause shown." Fed.R.Civ.P. 26(c). " [T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants." Landis v. N. Am. Co., 299 U.S. 248, 254, 57 S.Ct. 163, 81 L.Ed. 153 (1936). " The pendency of a dispositive motion is not, without more, grounds for an automatic stay...[r]ather, a case-by-case analysis is required, since such an inquiry is necessarily fact-specific and depends on the particular circumstances and posture of each case." Thomas v. New York City Dep't of Educ., No. 09-civ-5167, 2010 WL 3709923, at *3 (E.D.N.Y. Sept. 14, 2010) (internal citations and quotations omitted).
In determining whether to issue a stay, a district court considers " the nature and complexity of the particular case" ( id.), as well as the following factors: " (1) whether the defendant has made a strong showing that the plaintiff's claim is unmeritorious; (2) the breadth of discovery and the burden of responding to it; and (3) the risk of unfair prejudice to the party opposing the stay." Rivera v. Inc. Vill. of Farmingdale, No. 06-civ-2613, 2007 WL 3047089, at *1 (E.D.N.Y. Oct. 17, 2007)(citing Port Dock and Stone Corp. v. Oldcastle Northeast, Inc., No. 05-civ-4294, 2006 WL 897996 (E.D.N.Y. March 31, 2006)).
" [T]he discovery rules vest broad discretion in the trial court" ( H.L. Moore Drug Exch., Inc. v. Smith. Kline & French Labs., 384 F.2d 97, 97 (2d Cir. 1967)), including the power to direct partial discovery limited to certain issues pending resolution of dispositive motions. See David Tunick, Inc. v. Kornfeld, No. 91-civ-7027, 1993 WL 6211, at *2 (S.D.N.Y. Jan. 6, 1993) (staying the majority of discovery pending decision on defendants' motion to dismiss but permitting " limited discovery" on the issue of jurisdiction); Spira v. Ashwood Fin., Inc., 371 F.Supp.2d 232, 234-35 (E.D.N.Y. 2005) (staying " all discovery other than those pertaining to the issues involved in the parties' dispositive motions"); Kanowitz v. Broadridge Fin. Solutions, Inc., No. 13-civ-649, 2014 WL 1338370, at *11-12 (E.D.N.Y. Mar. 31, 2014)(granting in part and denying in part motion to stay discovery pending disposition of an anticipated motion to dismiss to permit " limited, expedited discovery to bring closure to the jurisdictional issues presented").
B. A Partial Stay of Discovery is Warranted
Defendants have made an adequate showing of good cause to warrant the issuance of a partial stay of discovery. Defendants' Motion to Dismiss argues that plaintiff " commenced the instant action more than three years after it discovered the relevant contamination in the form of a VOC [Volatile Organic Compound] contamination plume upgradient from, and threatening to impact, Plant No. 4 and determined that the actions for which it now seeks compensation were necessary to protect its water supply." Def. Mem. in Support of Motion to Dismiss, at 2 (internal citations omitted). In opposition, plaintiff contends that, while it undisputedly " spent money and made plans prior to November 18, 2010, for additional Plant No.4 treatment...what [it] knew about contamination from the OU3 plume, if and when the plume would impact Plant No. 4, whether the plume's 'hot' spot would ever reach Plant No. 4, and many more issues are in dispute." Pl. Opp. to Motion to Dismiss, at 20. Defendants respond by pointing to " public records [which allegedly] show that [plaintiff] believed as of 2009 that the subject contamination originated from OU3." Def. Mem. in Support of Motion to Dismiss, at 4. Without expressing any opinion as to the outcome of defendants' motion, the Court notes that defendants' motion raises a substantial issue-when plaintiff knew or should have known of its injuries-that is not frivolous, raises doubts as to the viability of plaintiff's claims and is potentially dispositive of the entire action. See United States v. Cnty. of Nassau, 188 F.R.D. 187, 188 (E.D.N.Y. 1999) (staying discovery where pending motion dismiss, " if successful, [would be] dispositive of the entire action"); Giminez v. Law Offices of Hoffman & Hoffman, No. 12-civ-0669, 2012 WL 2861014, at *2 (E.D.N.Y. July 11, 2012) (staying ...