Case 1:14-cv-02901-RM-KMT Document 41 Filed 03/09/15 USDC Colorado Page 1 of 5
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLORADO
`Magistrate Judge Kathleen M. Tafoya
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`Civil Action No. 14–cv–02901–RM–KMT
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`XTOMIC, LLC, a Colorado limited liability company,
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`v.
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`ACTIVE RELEASE TECHNIQUES, LLC, a Colorado limited liability company,
`ART CORPORATE SOLUTIONS, INC., a Colorado corporation, and
`ART BUSINESS SOLUTIONS, LLC, a Colorado limited liability company,
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`Plaintiff,
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`Defendants.
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`ORDER
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`This matter is before the court on “Defendants’ Motion to Stay” (Doc. No. 28 [Mot.],
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`filed January 30, 2015). Plaintiff filed its response on February 20, 2015 (Doc. No. 38 [Resp.]),
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`and Defendants filed their reply on February 27, 2015 (Doc. No. 40 [Reply]).
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`This is a copyright infringement action. (See Doc. No. 1.) Defendants ask the Court to
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`stay discovery in this case until after ruling on their Motion to Dismiss pursuant to Fed. R. Civ.
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`P. 12(b)(6) and 17 U.S.C. § 411(a) (Doc. No. 30, filed February 5, 2015).
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`Although the stay of proceedings in a case is generally disfavored, the Court has
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`discretion to stay discovery while a dispositive motion is pending. See Wason Ranch Corp. v.
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`Hecla Mining Co., No. 07–cv–00267–EWN–MEH, 2007 WL 1655362, at *1 (D. Colo. June 6,
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`2007) (“A stay of all discovery is generally disfavored in this District.” (citation omitted));
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`String Cheese Incident, LLC v. Stylus Shows, Inc., No. 1:02–cv–01934–LTB–PAC, 2006 WL
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`Case 1:14-cv-02901-RM-KMT Document 41 Filed 03/09/15 USDC Colorado Page 2 of 5
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`894955, at *2 (D. Colo. Mar. 30, 2006) (finding that a thirty day stay of discovery was
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`appropriate when a motion to dismiss for lack of personal jurisdiction was pending); Nankivil v.
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`Lockheed Martin Corp., 216 F.R.D. 689, 692 (M.D. Fla. 2003) (A stay may be appropriate if
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`“resolution of a preliminary motion may dispose of the entire action.”); 8 Charles Alan Wright,
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`et al., Federal Practice and Procedure § 2040, at 521–22 (2d ed. 1994) (“[W]hen one issue may
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`be determinative of a case, the court has discretion to stay discovery on other issues until the
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`critical issue has been decided.”); Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F .3d 795, 804
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`(Fed. Cir. 1999) (“When a particular issue may be dispositive, the court may stay discovery
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`concerning other issues until the critical issue is resolved.”); Gilbert v. Ferry, 401 F.3d 411, 415–
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`16 (6th Cir. 2005) (finding that ordering a stay of discovery is not an abuse of discretion when a
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`defendant has filed a motion to dismiss challenging the court’s actual subject matter
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`jurisdiction); Chavous v. D.C. Fin. Responsibility & Mgmt. Assistance Auth., 201 F.R.D. 1, 2
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`(D.D.C. 2005) (“A stay of discovery pending the determination of a dispositive motion is an
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`eminently logical means to prevent wasting the time and effort of all concerned, and to make the
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`most efficient use of judicial resources.” (internal quotation omitted)).
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`When exercising its discretion, the court considers the following factors: (1) the interest
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`of the plaintiff in proceeding expeditiously with discovery and the potential prejudice to the
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`plaintiff of a delay; (2) the burden on the defendant of proceeding with discovery; (3) the
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`convenience to the court of staying discovery; (4) the interests of nonparties in either staying or
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`proceeding with discovery; and (5) the public interest in either staying or proceeding with
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`discovery. String Cheese Incident, 2006 WL 894955, at *2 (citing FDIC v. Renda, No. 85–
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`2216–O, 1987 WL 348635, at *2 (D. Kan. Aug. 6, 1987)).
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`Case 1:14-cv-02901-RM-KMT Document 41 Filed 03/09/15 USDC Colorado Page 3 of 5
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`The first factor that the court considers is the interest of Plaintiff in proceeding
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`expeditiously with discovery and the potential prejudice to Plaintiff of a delay. See String
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`Cheese Incident, 2006 WL 894955, at *2. On August 22, 2013, the ART Companies filed a
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`complaint against Xtomic and three other entities in the El Paso County District Court (“State
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`Court Case”). (See Doc. No. 1, Ex. A.) Plaintiff avers that it will be prejudiced by a delay in
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`this case because it cannot assert or protect its copyrights in State Court Case. (Resp. at 15.)
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`Defendants argue that the State Court dismissed Xtomic’s copyright claims on June 18, 2014,
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`that it waited until October 24, 2014 to file its Complaint in this action recently filed a motion to
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`amend its Complaint for a second time. (Reply at 4.) The court agrees with the defendants that,
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`because the copyright ownership issue is not relevant to the State Court Case, the prejudice of
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`which Xtomic complains will not be resolved even if the motion to stay is denied, as the
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`copyright issues are not relevant to the State Court Case. Moreover, the court agrees that, to the
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`extent Plaintiff argues it will be prejudiced unless this matter is litigated and tried before July
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`2015, when the State Court Case is set for trial, it is extremely unlikely, given the posture of this
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`case, that this case will be resolved prior to trial in the State Court Case. Thus, the Court finds
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`that the first String Cheese Incident factor weighs in favor of the entry of a stay.
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`With regard to the second factor, Defendants argue that they will be prejudiced by being
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`forced to engage in unnecessary discovery in this action while at the same time preparing for trial
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`in the State Court Case. (Mot. at 13.) The court finds that Defendants have not demonstrated
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`that proceeding with the discovery process presents an undue burden. Nevertheless, proceeding
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`with discovery will be wasteful if the Court grants Defendants’ Motion to Dismiss, which would
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`Case 1:14-cv-02901-RM-KMT Document 41 Filed 03/09/15 USDC Colorado Page 4 of 5
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`fully resolve the case. The court therefore finds that the second String Cheese Incident factor
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`weights in favor of a stay.
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`With regard to the third factor, it is certainly more convenient for the court to stay
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`discovery until it is clear that the case will proceed on its merits in this jurisdiction. See
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`Chavous, 201 F.R.D. at 5 (stating that staying discovery pending decision on a dispositive
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`motion that would fully resolve the case “furthers the ends of economy and efficiency, since if
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`[the motion] is granted, there will be no need for [further proceedings]”). The court therefore
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`finds that the third String Cheese Incident factor weighs in favor of granting a stay.
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`With regard to the fourth factor, Defendant does not point to any nonparties with
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`significant particularized interests in this case. Plaintiff argues Response that nonparties have
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`been and continue to be directly impacted by its inability to exercise its copyrights. However,
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`Plaintiff fails to specify any nonparties who have been affected or the impacts of the inability to
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`exercise the copyrights. (See Resp. at 16.) Accordingly, the fourth String Cheese Incident factor
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`is a neutral factor.
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`With regard to the fifth and final factor, the Court finds that the public’s only interest in
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`this case is a general interest in its efficient and just resolution. Avoiding wasteful efforts by the
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`Court clearly serves this interest, weighing in favor of a stay. The Court finds that the fifth
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`String Cheese Incident factor is a neutral factor under the circumstances of this case.
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`Weighing the relevant factors, the Court concludes that staying discovery pending
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`resolution of Defendants’ Motion to Dismiss is appropriate. Accordingly, it is
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`ORDERED that “Defendants’ Motion to Stay” (Doc. No. 28) is GRANTED. All
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`discovery and deadlines in the case are STAYED pending ruling on the Motion to Dismiss. The
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`Case 1:14-cv-02901-RM-KMT Document 41 Filed 03/09/15 USDC Colorado Page 5 of 5
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`parties shall file a joint status report within ten days of ruling on the Motion to Dismiss to advise
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`if a scheduling conference should be set.
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`Dated this 9th day of March, 2015.
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