Case 2:22-cv-00828-CDS-BNW Document 44 Filed 09/06/22 Page 1 of 7
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`Joseph R. Ganley (5643)
`Brenoch R. Wirthlin (10282)
`HUTCHISON & STEFFEN, PLLC
`Peccole Professional Park
`10080 West Alta Drive, Suite 200
`Las Vegas, Nevada 89145
`Telephone: (702) 385-2500
`Facsimile: (702) 385-2086
`jganley@hutchlegal.com
`bwirthlin@hutchlegal.com
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`Edward R. Nelson III (Admitted Pro Hac Vice)
`Christopher G. Granaghan (Admitted Pro Hac Vice)
`John P. Murphy (Admitted Pro Hac Vice)
`Carder W. Brooks (Admitted Pro Hac Vice)
`NELSON BUMGARDNER CONROY PC
`3131 West 7th Street, Suite 300
`Fort Worth, TX 76107
`Telephone: (817) 377-9111
`ed@nelbum.com
`chris@nelbum.com
`murphy@nelbum.com
`carder@nelbum.com
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`Attorneys for Defendant R2 Solutions LLC
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`UNITED STATES DISTRICT COURT
`DISTRICT OF NEVADA
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`Case No. 2:22-cv-00828-CDS-BNW
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`DEFENDANT R2 SOLUTIONS LLC’S
`MOTION TO STAY DISCOVERY
`PENDING RESOLUTION OF MOTION
`TO DISMISS
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`ALLEGIANT TRAVEL COMPANY,
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`Plaintiff,
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`v.
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`R2 SOLUTIONS LLC,
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`Defendant.
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`MOTION TO STAY DISCOVERY
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`CASE NO: 2:22-CV-00828-CDS-BNW
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`Case 2:22-cv-00828-CDS-BNW Document 44 Filed 09/06/22 Page 2 of 7
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`Defendant R2 Solutions LLC (“R2”) respectfully requests that the Court stay discovery, including
`obligations imposed by the Local Patent Rules, pending resolution of R2’s Motion to Dismiss Pursuant to
`Federal Rules of Civil Procedure 12(b)(1) and 12(b)(2) (ECF 28). In its Complaint, Allegiant Travel
`Company (“Allegiant”) seeks a declaratory judgment of non-infringement of seven patents owned by R2.
`See ECF 1. R2’s motion to dismiss contends that (1) the Court lacks subject-matter jurisdiction because
`there is not a case or controversy between R2 and Allegiant relative to infringement of R2’s patents, (2)
`even if the Court has subject-matter jurisdiction, it should decline to exercise such jurisdiction under the
`Declaratory Judgment Act, and (3) the Court lacks personal jurisdiction over R2. R2 should not be forced
`to endure the burden of engaging in discovery while its dispositive motion is pending. Indeed, requiring
`R2 to engage in discovery in this case is antithetical to the very basis on which R2 seeks dismissal. R2
`asserts that the Court lacks jurisdiction because there is no justiciable dispute between the parties. Yet the
`Discovery Plan and Scheduling Order requires R2 to serve its Disclosure of Asserted Claims and
`Infringement Contentions pursuant to the Local Patent Rules by October 18, 2022, essentially forcing R2
`to create a dispute where none exists. ECF 39 at 4-5. The Court should therefore stay discovery until it
`rules on R2’s motion to dismiss.
`FACTUAL BACKGROUND
`I.
`On May 24, 2022, Allegiant filed its Complaint seeking a declaratory judgment of non-
`infringement of seven patents owned by R2. ECF 1. Allegiant alleged that the Court has subject-matter
`jurisdiction over the case and personal jurisdiction over R2 based on communications between R2 and
`Allegiant, many of which were subject to a Mutual Confidential Agreement (“the Agreement”) between
`the parties. Id., ¶¶ 12-39.
`R2 moved to dismiss the case under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(2). ECF
`28. R2 argued that the Court lacks subject matter jurisdiction because the communications between the
`parties were not sufficient to create a case or controversy relative to infringement of R2’s patents for two,
`alternative reasons. First, R2 argued that the Court should ignore all communications between the parties
`that post-dated the parties’ Agreement because the Agreement precluded the use of such communications
`“for any reason including . . . as a basis for a declaratory judgment action.” See ECF 28 at 6-9; see also
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`MOTION TO STAY DISCOVERY
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`CASE NO: 2:22-CV-00828-CDS-BNW
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`Case 2:22-cv-00828-CDS-BNW Document 44 Filed 09/06/22 Page 3 of 7
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`ECF 1.4, ¶ 3. Because the parties’ pre-Agreement communications had nothing to do with R2’s patents
`identified in the Complaint, Allegiant could not show a case or controversy. See id. Second, R2 argued
`that, even if the Court considered communications after the parties’ Agreement, the Agreement itself,
`which the parties entered into for the purpose of facilitating good faith negotiations, showed that there
`was no case or controversy between the parties. ECF 28 at 9-13. R2 alternatively argued that, even if the
`Court has jurisdiction, it should decline to exercise it under the Declaratory Judgment Act in light of
`Allegiant’s breach of the Agreement. Id. at 13-15.
`R2 also argued that, even if the Court has subject-matter jurisdiction, it lacks personal jurisdiction
`over R2 for two reasons. First, it argued that R2’s pre-Agreement communications with Allegiant, which
`is all that the Court should consider, did not constitute minimum contacts with Nevada. Id. at 17-18.
`Second, R2 argued that exercising personal jurisdiction would not “comport with traditional notions of
`fair play and substantial justice” in light of the parties’ agreement that their communications would not
`be used as the basis for a declaratory judgment action. Id. at 18-19.
`On August 29, 2022, the parties filed a Proposed Discovery Plan and Scheduling Order pursuant
`to Local Rule 26-1 (“the Rule 26(f) Report”). ECF 37. In the Rule 26(f) Report, Allegiant proposed a
`schedule based on the Court’s Local Patent Rules. Id. at 3-4. R2 objected to the entry of any discovery
`plan and scheduling order as premature in light of R2’s pending motion to dismiss. Id. at 4. The next day,
`the Court adopted Allegiant’s proposed schedule and directed R2 to “file an appropriate motion” if it
`“seeks to stay discovery.” ECF 39 at 7. On September 1, 2022, counsel for R2 sent an email to counsel
`for Allegiant informing them that R2 intended to move to stay discovery pending resolution of its motion
`to dismiss. See Ex. A, ¶ 6. The parties held a telephonic meet and confer on September 2, 2022, and
`counsel for Allegiant informed counsel for R2 that Allegiant would oppose R2’s motion. Id., ¶ 7.
`APPLICABLE LAW
`II.
`“Courts have broad discretionary power to control discovery.” Sean K. Claggett & Assocs., LLC
`v. Keenan, Case No. 2:21-cv-02237-GMN-DJA, 2022 U.S. Dist. LEXIS 125529, at *4 (D. Nev. July 14,
`2022) (citing Little v. City of Seattle, 863 F.2d 681, 685 (9th Cir. 1988)). “In deciding whether to grant a
`stay of discovery, the Court is guided by the objectives of Rule 1 to ensure a just, speedy, and
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`MOTION TO STAY DISCOVERY
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`Case 2:22-cv-00828-CDS-BNW Document 44 Filed 09/06/22 Page 4 of 7
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`inexpensive determination of every action.” Id. at *4-5 (citing Kidneigh v. Tournament One Corp., Case
`No. 2:12-cv-02209-APG-CWH, 2013 U.S. Dist. LEXIS 62217, at *2 (D. Nev. May 1, 2013)).
`In this District, “motions to stay discovery pending resolution of a motion may be granted when:
`(1) the pending motion is potentially dispositive; (2) the potentially dispositive motion can be decided
`without additional discovery; and (3) the Court has taken a ‘preliminary peek’ at the merits of the
`potentially dispositive motion to evaluate the likelihood of dismissal.”1 Id. at *5 (citing Kor Media Grp.,
`LLC v. Green, 294 F.R.D. 579, 581 (D. Nev. 2013)). “[P]reliminary issues such as jurisdiction, venue, or
`immunity questions are common situations that may justify a stay.” Sean K. Claggett & Assocs., 2022
`U.S. Dist. LEXIS 125529, at *5 (citing Twin City Fire Ins. Co. v. Employers Ins. Of Wausau, 124 F.R.D.
`652 (D. Nev. 1989) and Ministerio Roca Solida v. U.S. Dep’t of Fish & Wildlife, 288 F.R.D. 500, 506 (D.
`Nev. 2013)). “A defendant should not be required to participate in burdensome and costly discovery in a
`forum that has no jurisdiction over him . . . .” Grand Canyon Skywalk Dev. LLC v. Steele, Case No. 2:13-
`cv-00596-JAD-GWF, 2014 U.S. Dist. LEXIS 1550, at *11 (D. Nev. Jan. 7, 2014). “The court also has an
`interest in not providing a forum and being required to supervise discovery in a dispute over which it
`lacks subject matter jurisdiction.” Id.
`III. ARGUMENT
`The Court should stay discovery, including the parties’ obligations under the Local Patent Rules,
`pending resolution of R2’s motion to dismiss. All three requirements for staying discovery are met.
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`1 Some courts in this District have held that a stay “should only be ordered if the court is ‘convinced’ that
`a plaintiff will be unable to state a claim for relief.” Tradebay, LLC v. eBay, Inc., 278 F.R.D. 597, 603
`(D. Nev. 2011). However, “[t]he requirement that the court must be convinced that the underlying motion
`would be granted does not apply to motions which relate to preliminary issues of subject matter
`jurisdiction, personal jurisdiction, venue, or service of process.” Berm. Rd. Props., LLC v. Ecological
`Steel Sys., Case No. 2:12-cv-01579-JAD-GWF, 2016 U.S. Dist. LEXIS 18338, at *6-7 (D. Nev. Feb. 11,
`2016); see also Kabo Tool Co. v. Porauto Indus. Co., Case No. 2:12-cv-01859-LDG-NJK, 2013 U.S.
`Dist. LEXIS 53570, at *3 (D. Nev. Apr. 15, 2013) (“[C]ourts are more inclined to stay discovery pending
`resolution of a motion to dismiss challenging personal jurisdiction because it presents a ‘critical
`preliminary question.’”). In such situations, courts simply “take a ‘preliminary peek’ at the merits of the
`pending dispositive motion to assess whether a stay is warranted.” St. Clair v. Ienergizer, Inc., Case No.
`2:20-cv-01880-GMN-VCF, 2021 U.S. Dist. LEXIS 36899, at *4 (D. Nev. Jan. 22, 2021); see also
`Marque Motor Coach, LLC v. State Dep’t of Taxation, Case No. 2:18-cv-00522-GMN-PAL, 2018 U.S.
`Dist. LEXIS 158787, at *4 (D. Nev. Sep. 12, 2018) (staying case where the motion to dismiss “raises a
`serious question of [the] court’s subject matter jurisdiction”).
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`Case 2:22-cv-00828-CDS-BNW Document 44 Filed 09/06/22 Page 5 of 7
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`First, the motion to dismiss is dispositive of this case. R2 has challenged both the Court’s subject-
`matter jurisdiction over the case and personal jurisdiction over R2. If the Court finds either lacking, it
`must dismiss the case.
`Second, no discovery is needed to resolve the motion to dismiss. The motion is fully briefed, and
`both parties attached evidence to their briefs. See ECF 26, 27, 29. Neither party expressed the need for
`any additional discovery in their briefing.
`Finally, the merits of R2’s motion favor staying discovery. As explained in R2’s motion to
`dismiss, Allegiant filed this case in breach of a Mutual Confidentiality Agreement between the parties.
`See ECF 28 at 1-2, 6-7. According to the Agreement, the parties “desire[d] to enter into good faith
`licensing negotiations [defined as the ‘Discussions’], during which either Party may disclose certain
`Confidential Information with the other Party.” ECF 1.4, ¶ 1. The Agreement defines “Confidential
`Information” as “any information of a confidential nature provided by either Party . . . including but not
`limited to, the Discussions and that which relates to . . . patents, evidence of patent use, [and] . . . claim
`charts.” See ECF 1.4, ¶ 2. Both parties “agree[d] not to use or disclose any Confidential Information
`provided to it by or obtained by it from the other Party for any reason including its own use, as a basis
`for a declaratory judgment action, inter partes review, or for any purpose except to carry out the
`Discussions.” Id. (emphasis added).
`Allegiant’s Complaint is a blatant breach of the Agreement. It discloses and uses Confidential
`Information throughout the Complaint in an effort to demonstrate that the Court has subject-matter
`jurisdiction over the case and personal jurisdiction over R2. See ECF 28 at 6-7. As explained in R2’s
`motion to dismiss, the Court should disregard all Confidential Information, including all negotiations and
`information sharing between the parties after the date of the Agreement, from its jurisdictional analysis.
`ECF 28 at 7, 17-18. Without such information, Allegiant cannot show that there is a justiciable dispute
`between the parties or that the Court has personal jurisdiction over R2. Id. at 7-9, 17-18. Even if the
`Court considers information post-dating the Agreement, the Court lacks jurisdiction. The Agreement
`itself precludes finding a case or controversy because the parties entered into it for the express purpose of
`avoiding litigation. Id. at 9-13. And exercising personal jurisdiction over R2 would not comport with
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`Case 2:22-cv-00828-CDS-BNW Document 44 Filed 09/06/22 Page 6 of 7
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`traditional notions of fair play and substantial justice because R2 entered into the Agreement with the
`expectation that it would not be drawn into an anticipatory lawsuit in a forum with which it has no
`connection. Id. at 18-19. At the very least, Allegiant’s breach of the Agreement justifies the Court
`exercising its discretion to dismiss the case under the Declaratory Judgment Act. Id. at 13-15.
`A stay is particularly warranted here given the nature of R2’s motion to dismiss for lack of
`subject-matter jurisdiction and the requirements of the Local Patent Rules. R2 contends that the
`communications between the parties to date do not evidence a justiciable dispute as to infringement of
`R2’s patents. Yet the Local Patent Rules and the Court’s scheduling order require R2 to serve its
`response to Allegiant’s non-infringement contentions and its Disclosure of Asserted Claims and
`Infringement Contentions by October 18, 2022. See LPR 1-6, 1-11; ECF 39 at 4-5. As part of that
`disclosure, R2 must identify each claim of each patent that it contends Allegiant infringes, each Allegiant
`product that it contends infringes, and a chart specifying how each Allegiant product infringes. See LPR
`1-6. Requiring R2 to make disclosures accusing Allegiant of infringement (requiring an intensive factual
`investigation into Allegiant’s products) is antithetical to R2’s argument that there is no justiciable dispute
`about infringement. The Court should thus stay discovery, including the parties’ obligations under the
`Local Patent Rules.
`IV. CONCLUSION
`The Court should stay discovery, including deadlines imposed by the Local Patent Rules, pending
`resolution of R2’s motion to dismiss. R2’s motion challenges the Court’s jurisdiction, is fully dispositive,
`and requires no discovery. Requiring R2 to engage in discovery would be a waste of resources, and
`would require R2 to engage in conduct at odds with the basis of its motion to dismiss.
`Dated: September 2, 2022
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`Respectfully submitted,
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`/s/ Edward R. Nelson III
`Joseph R. Ganley (5643)
`Brenoch R. Wirthlin (10282)
`HUTCHISON & STEFFEN, PLLC
`Peccole Professional Park
`10080 West Alta Drive, Suite 200
`Las Vegas, Nevada 89145
`jganley@hutchlegal.com
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`Case 2:22-cv-00828-CDS-BNW Document 44 Filed 09/06/22 Page 7 of 7
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`bwirthlin@hutchlegal.com
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`Edward R. Nelson III
`Christopher G. Granaghan
`John P. Murphy
`Carder W. Brooks
`NELSON BUMGARDNER CONROY PC
`3131 West 7th Street, Suite 300
`Fort Worth, TX 76107
`Telephone: (817) 377-9111
`ed@nelbum.com
`chris@nelbum.com
`murphy@nelbum.com
`carder@nelbum.com
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`ATTORNEYS FOR DEFENDANT
`R2 SOLUTIONS LLC
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`CERTIFICATE OF SERVICE
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`I hereby certify that on September 6, 2022, I caused a true and correct copy of the foregoing
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`MOTION TO STAY DISCOVERY to be submitted electronically for filing and service with the United
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`States District Court for the District of Nevada via the Electronic Filing System to the following:
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`Patrick H. Hicks (4632)
`Kelsey E. Stegall (14279)
`LITTLER MENDELSON, P.C.
`3960 Howard Hughes Parkway, #300
`Las Vegas, Nevada 89169
`phicks@littler.com
`kstegall@littler.com
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`Michael A. Oblon
`JONES DAY
`51 Louisiana Avenue, N.W.
`Washington, D.C. 20001
`moblon@jonesday.com
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`Keith Davis
`JONES DAY
`2727 North Harwood
`Dallas, Texas 75201
`kbdavis@jonesday.com
`H. Albert Liou
`JONES DAY
`717 Texas Avenue, Suite 3300
`Houston, Texas 77002
`aliou@jonesday.com
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`Attorneys for plaintiff
`Allegiant Travel Company
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`/s/ Edward R. Nelson III
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`CASE NO: 2:22-CV-00828-CDS-BNW
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