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1346328.3 PLFS.’ MEMO. OF POINTS AND AUTHORITIES IN 

OPP. TO DEFS.’ MOT. TO STAY DISCOVERY 

CASE NO.: 4:17-cv-00618-PJH 

Kelly M. Dermody (State Bar No. 171716)

kdermody@lchb.com 

Michelle A. Lamy (State Bar No. 308174) 

mlamy@lchb.com 

LIEFF CABRASER HEIMANN & BERNSTEIN, LLP 

275 Battery Street, 29th Floor 

San Francisco, CA 94111-3339 

Telephone: 415.956.1000 

Facsimile: 415.956.1008 

Rachel Geman (pro hac vice) 

rgeman@lchb.com 

LIEFF CABRASER HEIMANN & BERNSTEIN, LLP 

250 Hudson Street, 8th Floor 

New York, NY 10013-1413 

Telephone: 212.355.9500 

Facsimile: 212.355.9592 

Allen Carney (pro hac vice) 

acarney@cbplaw.com 

David Slade (pro hac vice) 

dslade@cbplaw.com 

CARNEY BATES & PULLIAM, PLLC 

519 W. 7th Street 

Little Rock, AR 72201 

Telephone: 501.312.8500 

Facsimile: 501.312.8505 

Attorneys for Plaintiffs

Michael J. Flannery (State Bar No. 

196266) 

mflannery@cuneolaw.com 

CUNEO GILBERT LADUCA, LLP 

7733 Forsyth Boulevard, Suite 1675 

St. Louis, MO 63105 

Telephone: 314.226.1015 

Facsimile: 202.789.1813 

Matthew Prewitt (State Bar No. 

291593) 

mprewitt@cuneolaw.com 

CUNEO GILBERT LADUCA, LLP 

16 Court Street, Suite 1012 

Brooklyn, NY 11241 

Telephone: 202.789.3960 

Facsimile: 202.789.1813 

Jay Angoff (pro hac vice) 

jay.angoff@findjustice.com 

MEHRI & SKALET 

1250 Connecticut Avenue, NW 

Suite 300 

Washington, D.C. 20036 

Telephone: 202.822.5100 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

OAKLAND DIVISION 

MOHAMMED AZAD and DANIELLE 

BUCKLEY, on behalf of themselves and 

all others similarly situated, 

Plaintiffs, 

v. 

TOKIO MARINE HCC—MEDICAL 

INSURANCE SERVICES GROUP, 

HEALTH INSURANCE INNOVATIONS, 

INC., HCC LIFE INSURANCE 

COMPANY, and CONSUMER 

BENEFITS OF AMERICA, 

Defendants. 

Case No.: 4:17-cv-00618-PJH 

PLAINTIFFS’ MEMORANDUM OF 

POINTS AND AUTHORITIES IN 

OPPOSITION TO DEFENDANTS’ 

MOTION TO STAY DISCOVERY 

PENDING RESOLUTION OF RULE 12 

MOTIONS 

DATE: 

TIME: 

CTRM: 3 

FILED: February 7, 2017 

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PLFS.’ MEMO. OF POINTS AND AUTHORITIES IN 

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CASE NO.: 4:17-cv-00618-PJH 

I. INTRODUCTION ........................................................................................................... 1

II. RELEVANT FACTUAL BACKGROUND .................................................................... 2

A. Defendants’ Sale and Administration of Short-Term Medical 

Insurance Policies. ...................................................................................... 2

B. Defendants’ Common Alleged Practices Cause Common Injuries. ........... 2

III. ARGUMENT ................................................................................................................... 4

A. Defendants’ Motion Will Not Succeed. ...................................................... 5

B. Defendants’ Inconsistent Positions About Discovery Underscore 

the Need to Move Forward. ........................................................................ 7

C. A Stay Would Prejudice Plaintiffs. ............................................................. 7

D. Defendants’ Conflation of the Discovery Standards of Rule 

26(b)(1) With the Standards for a Motion to Stay Does Not Permit 

an End-Run to Justify an Otherwise-Unwarranted Stay. ............................ 8

IV. CONCLUSION ................................................................................................................ 9

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CASE NO.: 4:17-cv-00618-PJH 

Cases

Baker v. Ark. Blue Cross, 

No. C-08-03974 SBA (EDL), 2009 WL 904150 (N.D. Cal. Mar. 31, 2009) .............................. 4 

Ciuffitelli v. Deloitte Touche, LLP, 

Case No. 3:16–cv–0580–AC, 2016 WL 6963039 (D. Or. Nov. 28, 2016) .................................. 8 

Fosselman v. Evans, 

No. C 07-2606 PJH (PR), 2011 WL 939616 (N.D. Ca. Mar. 15, 2011) ...................................... 6 

Gilead Sciences, Inc. v. Merck & Co., 

No. 5:13-cv-04057-BLF, 2016 WL 146574 (N.D. Cal. Jan. 13, 2016) ....................................... 8 

Gray v. First Winthrop Corp., 

133 F.R.D. 39 40 (N.D. Cal. 1990) .............................................................................................. 5 

Hall v. Tilton, 

No. C 07-3233 RMW (PR), 2010 WL 539679 (N.D. Cal. Feb. 9, 2010) .................................... 4 

In re Graphics Processing Units Antitrust Litig., 

No. C 06-07417 WHA, 2007 WL 2127577 (N.D. Cal. July 24, 2007) ....................................... 5 

Mlejnecky v. Olympus Imaging Amer., Inc., 

No. 2:10-cv-02630, 2011 WL 489743 (E.D. Cal. Feb. 7, 2011) ......................................... 1, 4, 5 

Mortg. Resolution Servicing, LLC v. JPMorgan Chase Bank, N.A., 

15 Civ. 0293 (LTS) (JCF), 2016 WL 3906712 (S.D.N.Y. July 14, 2016)................................... 9 

Mujica v. AirScan Inc., 771 F.3d 580 (9th Cir. 2014)........................................................................................................ 7 

Nat’l Union Fire Ins. Co. of Pittsburgh, PA. v. Res. Dev. Servs. Inc., No. C 10-01324 JF PVT, 2010 WL 3746290 (N.D. Cal. Sept. 18, 2010) ................................... 4 

Pettit v. Pulte Mortg., LLC, 2:11-cv-00149-GMN-PAL, 2011 WL 5546422 (D. Nev. Nov. 14, 2011) .................................. 5 

Seven Springs Ltd. P’ship v. Fox Capital Mgmt. Corp., No. C17F-070142LKKGGH, 2007 WL 1146607 (E.D. Cal. Apr. 18, 2007) .......................... 4, 6 

Skellercup Indus. Ltd. v. City of L.A., 

163 F.R.D. 598 (C.D. Cal. 1995) ................................................................................................. 5 

Wenger v. Monroe, 

282 F.3d 1068 (9th Cir. 2002)...................................................................................................... 4 

Wood v. McEwen, 

644 F.2d 797 (9th Cir. 1981)........................................................................................................ 4 

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CASE NO.: 4:17-cv-00618-PJH 

Other Authorities

Pat Wechsler, 63% of Americans Can’t Cover Unexpected Expenses, Fortune (Jan. 6, 

2016) available at http://fortune.com/2016/01/06/savings-unexpected-expenses/ ...................... 7 

Report to the Chief Justice of the United States on the 2010 Conference on Civil Litigation 

(May 2010) ................................................................................................................................... 8 

Roberts, C.J., 2015 Year-End Report on the Federal Judiciary (Dec. 31, 2015) ............................ 8 

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OPP. TO DEFS.’ MOT. TO STAY DISCOVERY 

CASE NO.: 4:17-cv-00618-PJH 

I. INTRODUCTION 

Defendants’ Motion to Stay Discovery misstates and ignores the well-pleaded allegations 

in Plaintiffs’ Complaint and should be denied. Plaintiffs assert that Defendants’ misleading 

marketing and bad-faith administration of their short-term insurance plans results in the 

systematic non-payment of (often very costly) claims, and violates California laws. This is an 

ongoing scheme, harming consumers every day. 

A discovery stay in these circumstances is contrary to the Federal Rules and is disfavored 

under applicable case law (Defendants’ assertion to the contrary notwithstanding). Although the 

Ninth Circuit has not specifically addressed the issue, district courts addressing this question have 

looked at whether the motion to dismiss is dispositive and whether the motion can be decided 

without additional discovery. In so doing, Defendants must, at minimum, show an “immediate 

and clear possibility” that their motion will succeed. Mlejnecky v. Olympus Imaging Amer., Inc., 

No. 2:10-cv-02630, 2011 WL 489743, at *8 (E.D. Cal. Feb. 7, 2011). And, even when that heavy 

standard is met, there is discretion by the Court; a stay is not required. 

Defendants have not shown, and cannot show, that their motions to dismiss will succeed. 

They rely on disputed fact-based assertions that will require discovery. Notably, Defendants also 

seek to have it both ways: having opted—improperly—to include extensive one-sided evidence 

with their motion to dismiss (material this Court should not consider, but that, in any event, does 

not advance Defendants’ motions), here they claim that no discovery is needed. Defendants 

discuss, without providing any context, the “proportionality” standards, although they refuse to 

consider any discovery. 

The cases and additional arguments on which Defendants rely further demonstrate the 

unsuitability of their requested relief. Their cases, in the main, either allow discovery or involve 

outlier scenarios—often with pro se plaintiffs—in atypical procedural postures. Finally, 

Defendants’ unspecified argument that they will need to spend untold amounts on discovery 

before the motion is ruled on presupposes a lengthy interval between the briefing and a ruling, 

which, if true, would only exacerbate Plaintiffs’ prejudice if the case is stayed. 

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CASE NO.: 4:17-cv-00618-PJH 

II. RELEVANT FACTUAL BACKGROUND 

Defendants1 distort the allegations in Plaintiffs’ Complaint. Briefly, Plaintiffs’ allegations 

are as follows: 

A. Defendants’ Sale and Administration of Short-Term Medical Insurance 

Policies. 

Defendants HCC, HII, and CBA collectively market and administer short-term medical 

insurance policies (“STMs”) to California consumers. Complaint (Dkt. No. 1) (“Compl.”) at ¶¶ 

17-18, 22, 22 n.5, 51-53, 55, 57. Defendants HCC and HII have jointly developed—and market 

and provide—their STM in 45 states, including California. Id. at ¶¶ 17, 22, 22 n.5, 51-53, 55. 

Defendant CBA colludes with HCC and HII by acting as the group administrator for the STMs, 

thereby allowing HCC and HII to avoid more stringent regulatory requirements governing 

individually-issued health insurance policies. Id. at ¶¶ 18, 57. 

B. Defendants’ Common Alleged Practices Cause Common Injuries. 

Defendants’ claim processing procedures for their STMs—and the requirements placed 

upon the insureds—are purposely engineered and uniformly applied to allow Defendants to delay 

and deny the claims of their policyholders. Id. at ¶¶ 3, 54, 56, 58-73. Upon submitting claims, 

insureds are required to provide every identifiable medical record in their history, regardless of 

whether such record relates to the claim at issue, and notwithstanding that this requirement is not 

disclosed in advance. Id. at ¶¶ 3, 26-27, 33-36, 39-73. This requirement, common to all Class 

members, gives Defendants three common avenues for denying valid claims, effectively and 

improperly guaranteeing that Class members’ (often large) bills go unpaid. 

First, Defendants comb through all records provided by the insured in an effort to 

characterize the claim at issue as a “pre-existing condition.” Id. at ¶¶ 3, 26-27, 33-36, 39-57, 62-

73. Defendants uniformly omit any appropriate explanation of the scope of this exclusion from 

their marketing materials. Id. at ¶¶ 3, 39-57, 62-73. However, once a claim is submitted, 

Defendants interpret the term so broadly and incorrectly, and in such bad faith, as to encompass 

 

1

 Defendants are HCC Life Insurance Company and HCC Medical Insurance Services LLC 

(“HCC”), Health Insurance Innovations, Inc. (“HII”), and Consumer Benefits of America 

(“CBA”). 

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virtually any medical condition, regardless of when—or even whether—it was diagnosed or 

treated. Id. If Defendants can link the insured’s presented claim to anything in the insured’s past, 

from any point in time, the claim is denied. Id. 

Second, when there is no plausible way to link an insured’s claim to a prior medical 

condition, Defendants again demand to search through all available records—regardless of their 

relation to the claim—seeking evidence of a condition that would have rendered the claimant 

ineligible for coverage under Defendants’ STM, thereby allowing Defendants to void the policy 

and not pay the claim. Id. at ¶¶ 3, 26-27, 33-36, 56-73. This practice is also uniform to all Class 

members. Id. 

Third, Defendants’ policy and practice is to premise refusals to pay on false assertions that 

there is insufficient information to process claims. Id. at ¶¶ 3, 26-27, 33-36, 54, 58-73. This 

allows Defendants to sidestep paying proper claims because it is extremely difficult or impossible 

for the insured to provide the level of detail purportedly needed. Id. 

Defendants’ internal policies and procedures, marketing materials, and customer service 

scripts reveal that the above-described practices are uniform to the Class. A whistleblower 

contractor in HCC’s customer service department confirmed that these policies and procedures 

are designed to frustrate Class members’ attempts to appeal a claim’s denial or provide the 

information purportedly sought by Defendants, and further confirmed that Defendants have 

created a rigid script for dealing with insureds, from which their employees cannot deviate. Id. at 

¶¶ 58-72. As the whistleblower states: “[T]he name of the game is runaround. . . . It really felt 

like everything was designed to be so cumbersome that the customer would either get frustrated 

and give up or they could stall long enough to not have to pay out on the claim. . . . The whole 

idea here is that we’re a legal buffer between HCC and [the insured] as was made crystal clear in 

training when they said outright that we’d be thrown under the bus if we ever deviated from the 

script.” Id. at ¶ 67. 

Defendants minimize and misconstrue the Complaint in their respective motions to 

dismiss, asserting that ‘Plaintiffs say X is non-disclosed but it is disclosed.’ This completely 

misses the point. Defendants engage in a common and fraudulent scheme whereby they take 

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Class members’ premium payments, only to subject those insureds to a claims process that is 

designed to uniformly and unconscionably deny the payment of valid claims. Plaintiffs’ wellpleaded claims seek to hold Defendants accountable for their fraudulent scheme. Compl. at ¶¶ 

90-146. 

III. ARGUMENT 

Defendants’ suggestion that courts in the Ninth Circuit “favor” discovery stays is flatly 

wrong. In fact, to the contrary, “district courts look unfavorably upon [] blanket stays of 

discovery.” Mlejnecky, 2011 WL 489743, at *6 (emphasis added; citing numerous cases in and 

out of this District); see also, e.g., Seven Springs Ltd. P’ship v. Fox Capital Mgmt. Corp., No. S07-0142 LKK GGH, 2007 WL 1146607, at *2-4 (E.D. Cal. Apr. 18, 2007) (any “lesser standard” 

than forcing defendants to make a “clear and convincing showing” of success on a motion to 

dismiss “encourages blanket discovery stays where such stays are probably not warranted”); Nat’l 

Union Fire Ins. Co. of Pittsburgh, PA. v. Res. Dev. Servs. Inc., No. C 10-01324 JF (PVT), 2010 

WL 3746290, at *2 (N.D. Cal. Sept. 18, 2010) (denying stay). 

Defendants reference four cases, but none express a general preference for discovery 

stays. In Wenger v. Monroe, 282 F.3d 1068 (9th Cir. 2002), the court noted only that a “district 

court may . . . stay discovery when it is convinced that the plaintiff will be unable to state a claim 

for relief. Id. at 1077 (emphasis added). Wood v. McEwen, 644 F.2d 797 (9th Cir. 1981), also 

using the strong “convinced” language, arose in the context of a pro se plaintiff who had refiled a 

case against more than 100 defendants after his earlier case was dismissed and otherwise engaged 

in sanctionable conduct. Hall v. Tilton, No. C 07-3233 RMW (PR), 2010 WL 539679 (N.D. Cal. 

Feb. 9, 2010), also involving a pro se plaintiff (a prisoner), granted the discovery stay without 

stating any general rule,2

 and in In re Graphics Processing Units Antitrust Litig., No. C 06-07417 

 

2

 Defendants’ emphasis on Hall’s “two-part test” distorts the full and proper inquiry. While it is 

true that a court considers whether the pending motion is potentially dispositive, and whether 

such a motion can be considered absent discovery—2010 WL 539679, at *2—there must also be 

“an immediate and clear possibility” that the moving party will prevail on its dispositive motion. 

Baker v. Ark. Blue Cross, No. C-08-03974 SBA (EDL), 2009 WL 904150, at *1 (N.D. Cal. Mar. 

31, 2009). See also id. (“[T]he Court notes that it is not clear that Plaintiffs will fail to state a 

claim, so a stay of discovery is not warranted.”). Indeed, the Ninth Circuit holds that it is proper 

to stay discovery only “when [the district court] is convinced that the plaintiff will be unable to 

state a claim for relief.” Wenger, 282 F.3d at 1077 (emphasis added). 

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WHA, 2007 WL 2127577 (N.D. Cal. July 24, 2007) the court granted the stay but at the same 

time entertained the possibility of “revisiting the issue of focused, limited discovery in the event 

the motions to dismiss are granted.” Id. at *1. 

Overall, it is “well established that a party seeking a stay of discovery carries the heavy 

burden of making a strong showing why discovery should be denied.” Pettit v. Pulte Mortg., 

LLC, 2:11-cv-00149-GMN-PAL, 2011 WL 5546422, at *3 (D. Nev. Nov. 14, 2011)3; Skellercup 

Indus. Ltd. v. City of L.A., 163 F.R.D. 598, 600-01 (C.D. Cal. 1995) (noting that “[h]ad the 

Federal Rules contemplated that a motion to dismiss under Fed. R. Civ. P. 12(b)(6) would stay 

discovery, the Rules would contain a provision for that effect,” and that stays are “directly at odds 

with the need for expeditious resolution of litigation”) (quoting Gray v. First Winthrop Corp., 

133 F.R.D. 39, 40 (N.D. Cal. 1990). Against the backdrop of that heavy burden, courts engage in 

the two-part test of examining whether the motion is potentially dispositive of the entire case and 

whether the motion can be decided without additional discovery. 

A. Defendants’ Motion Will Not Succeed. 

Defendants cannot show that they will, or even might or should, succeed on their motion 

to dismiss. Their three sentences purportedly supporting their assertion that the motion will 

“dispose of this entire case” actually demonstrate exactly the opposite: that there are no clear 

legal infirmities, but rather factual disputes, and discovery must go forward. Def. Mot. at 7. 

First, Defendants assert that they “did not falsely advertise or misrepresent” facts relating 

to their pre-existing conditions exclusions, and offer the defense that “HCC made several 

disclosures related to this exclusion on its website, the application for insurance, and the 

certificate of coverage.” Id. The conclusion that they did not falsely advertise or misrepresent 

(coupled with the implicit acknowledgement of common representations), when Plaintiffs have 

clearly and adequately alleged otherwise, creates a quintessential factual issue. See, e.g., 

Mlejnecky, 2011 WL 489743, at *2, *10 (denying motion to stay in consumer class action under, 

among other laws, California’s Unfair Competition Law). 

 

3

 Defendants also rely on Pettit, where the district judge had already granted motions to dismiss 

filed by two of the defendants, a factor that, along with others, militated in favor of a stay. That 

case is factually inapposite. 

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Second, Defendants assert that Plaintiffs “fail to allege facts supporting a conclusion” that 

Plaintiffs’ claims were improperly handled in any way. Def. Mot. at 7. Again, this is flatly 

contradicted by the pleadings. For example, Plaintiffs cite to a whistleblower contractor of 

Defendants detailing Defendants’ systemic acts of obstruction and bad faith. Compl. at ¶¶ 58-72. 

Further, the Complaint tethers this internal information to Plaintiffs’ own experiences, in which 

Defendants unceasingly, and in bad faith, sought “all medical records, provider notes, and labs” 

from Plaintiffs despite the irrelevance of those records to Plaintiffs’ claims. Id. at ¶¶ 3, 26-27, 33-

37. Defendants’ bald assertion to the contrary does nothing more than raise questions of fact. See 

Seven Springs Ltd. P’ship, 2007 WL 1146607, at *2-4 (defendant could not make a clear and 

convincing showing that it would prevail on its motion to dismiss where, as here, the facts were 

complicated and disputed).4

 

Third, Defendants state that the Complaint does not allege any wrongdoing as to CBA, 

and that it cannot determine which allegations apply to HII. As a threshold matter, Plaintiffs 

vigorously dispute this assertion, as the Complaint makes clear that HII develops and administers 

the sub-standard STMs hand-in-glove with HCC throughout the United States (Compl. at ¶¶ 17, 

22, 22 n.5, 51-53, 55), and further specifies that CBA operates with HCC and HII in bad faith to 

provide the sub-standard STMs to Class members, and is in fact integral to Defendants’ attempts 

to evade regulation (id. at ¶¶ 18, 57). However, even if Defendants’ position is correct, these are 

misplaced arguments on a motion to stay, because these arguments contemplate dismissal of the 

entire case. Assuming, arguendo, that CBA or HII were to be dismissed, Plaintiffs’ case would 

nonetheless proceed. See, e.g., Fosselman v. Evans, No. C 07-2606 PJH (PR), 2011 WL 939616, 

at *1-2 (N.D. Cal. Mar. 15, 2011) (denying motion to stay discovery in context where qualified 

immunity motion at issue would not dispose of entire case) (Hamilton, J.). 

 

4

 Notably, in Seven Springs, the court denied the motion to stay even while acknowledging that 

defendant appeared to have the “more logical argument.” Id. at *4. Here, Plaintiffs respectfully 

submit that their basic allegation—that Defendants fraudulently marketed, and unlawfully and in 

bad faith administered, STMs in a manner that violated well-established laws—is the more 

logical of the arguments in that resolution of the allegations simply needs factual development. 

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B. Defendants’ Inconsistent Positions About Discovery Underscore the Need to 

Move Forward.

Defendants assert in this motion that there is no need for discovery. Plaintiffs, to be clear, 

take the position that Defendants’ motions should be denied on their face, but also observe that 

Defendants attached an extensive and one-sided record to their motions to dismiss, in the form of 

declarations and certain Plaintiff-specific discovery. See Dkt. Nos. 50-52. 

As Plaintiffs will address in their opposition, these submissions were inappropriate and, 

more importantly, do not remotely establish infirmities with the Complaint. But most important 

for the instant issue before the Court, Defendants cannot have it both ways, denying Plaintiffs the 

opportunity for discovery while simultaneously bolstering their 12(b) motions with cherry-picked 

internal documents and employee declarations. Defendants cite cases for a converse proposition 

not implicated here: that when a complaint is not sufficient, a plaintiff is not entitled to discovery 

to make it so. See, e.g., Mujica v. AirScan Inc., 771 F.3d 580 (9th Cir. 2014). Here, taking 

alleged facts as true, Plaintiffs satisfy the pleading standards. Again, the rule is and has always 

been that the mere filing of a motion to dismiss, which by definition challenges the plaintiffs’ 

pleading, does not warrant a stay in itself. 

C. A Stay Would Prejudice Plaintiffs. 

Defendants claim the stay would not prejudice Plaintiffs because it might not last more 

than a few weeks. Later, Defendants raise the specter of intrusions on their business and 

significant cost to discovery, implying they believe the stay would, in fact, be lengthy. Aside 

from Defendants’ desire to have it both ways, the reality is that Plaintiffs are prejudiced by a stay 

of discovery. Defendants cavalierly dismiss the thousands of dollars of damages each Plaintiff 

suffered as “nominal,”5 but unfortunately Plaintiffs, typical of the Class, face mounting medical 

bills that should be paid by Defendants but improperly are not. Plaintiffs raise serious allegations 

 

5

 Defendants’ characterization of Plaintiffs’ respective losses of $3,500 and $12,000 as “nominal” 

(Def. Mot. at n.4) is not well taken. Roughly two in three American households do not have 

enough savings to pay for an unexpected expense—medical or otherwise—of $1,000, let alone a 

sum three or even twelve times that amount. See, e.g., Pat Wechsler, 63% of Americans Can’t 

Cover Unexpected Expenses, Fortune (Jan. 6, 2016) available at 

http://fortune.com/2016/01/06/savings-unexpected-expenses/. 

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OPP. TO DEFS.’ MOT. TO STAY DISCOVERY 

CASE NO.: 4:17-cv-00618-PJH 

of delay and denial of meritorious claims, which acts have left Plaintiffs and Class members 

profoundly injured both financially and with regard to prospects for future medical treatment, and 

there is no reason this case should be different from other cases, i.e., proceed to appropriate 

discovery. 

D. Defendants’ Conflation of the Discovery Standards of Rule 26(b)(1) with the 

Standards for a Motion to Stay Does Not Permit an End-Run to Justify an 

Otherwise-Unwarranted Stay. 

Defendants’ argument about “proportionality”—that the existence of the word 

“proportional” in the discovery rules (even though “[p]roportionality in discovery under the 

Federal Rules is nothing new”6) changes the standards in their favor—is another end-run around 

the rules. A motion to dismiss does not stay discovery, and this has remained the case after the 

most recent amendments to the Federal Rules. 

If anything, the amendments place greater emphasis on efficient processes. The 2015 

Year-End Report on the Federal Judiciary, cited by Defendants, does not address motions to stay, 

and indeed touts the importance of “early and effective case management,” which is not wellserved by Defendant’s desire to categorically foreclose any early discovery discussions. Roberts, 

C.J., 2015 Year-End Report on the Federal Judiciary at 7 (Dec. 31, 2015); see also id. (the 

amended rules “have shortened the deadline for that [Rule 16] meeting”). Likewise, the Report to 

the Chief Justice of the United States on the 2010 Conference on Civil Litigation (May 2010) 

does not address discovery stays and makes the unremarkable observation, among many others, 

that lawyers on both sides of the bar have various complaints about discovery, cost, 

obstructiveness, and other issues. 

Perhaps, then, it is not surprising that most of the cases Defendants cite allow certain 

discovery. See Ciuffitelli v. Deloitte Touche, LLP, No. 3:16–cv–0580–AC, 2016 WL 6963039, at 

*9 (D. Or. Nov. 28, 2016) (requiring the production of audit work papers and four other 

categories of documents from two defendants); Mortg. Resolution Servicing, LLC v. JPMorgan 

Chase Bank, N.A., No. 15 Civ. 0293 (LTS) (JCF), 2016 WL 3906712, at *6-9 (S.D.N.Y. July 14, 

 

6 Gilead Sciences, Inc. v. Merck & Co., No. 5:13-cv-04057-BLF, 2016 WL 146574, at *1 (N.D. 

Cal. Jan. 13, 2016). 

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2016) (deciding cross motions in a complex mortgage case, allowing plaintiffs various categories 

of discovery, granting defendants’ motion for a protective order for certain RICO discovery only, 

noting the specific discovery included hundreds of thousands of emails and that, and starkly 

unlike here, the plaintiffs had not argued that the motion to dismiss was “insufficiently 

substantial”). 

Defendants’ argument about proportionality is thus misplaced as legally unsupported and 

belied by their own refusal to produce any documents, despite the fact that, for example, they 

have centralized scripts and marketing materials, general materials gathered to respond to other 

investigations, and uniformly-applied claims processing policies designed to frustrate the 

payment of valid claims. 

IV. CONCLUSION 

For the reasons set forth above, Defendants’ motion to stay discovery should be denied. 

Dated: April 27, 2017 LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP

By: /s/ Rachel Geman 

Rachel Geman (pro hac vice) 

rgeman@lchb.com 

250 Hudson Street, 8th Floor 

New York, NY 10013-1413 

Telephone: (212) 355-9500 

Facsimile: (212) 355-9592 

 Kelly M. Dermody (State Bar No. 171716) 

kdermody@lchb.com 

Michelle A. Lamy (State Bar No. 308174) 

mlamy@lchb.com 

Lieff Cabraser Heimann & Bernstein, LLP 

275 Battery Street, 29th Floor 

San Francisco, CA 94111-3339 

Telephone: (415) 956-1000 

Facsimile: (415) 956-1008 

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 Allen Carney (pro hac vice)

acarney@cbplaw.com 

David Slade (pro hac vice) 

dslade@cbplaw.com 

Carney Bates & Pulliam, PLLC 

519 W. 7th Street 

Little Rock, AR 72201 

Telephone: (501) 312-8500 

Facsimile: (501) 312-8505 

 Michael J. Flannery (State Bar No. 196266) 

mflannery@cuneolaw.com 

Cuneo Gilbert Laduca, LLP 

7733 Forsyth Boulevard, Suite 1675 

St. Louis, MO 63105 

Telephone: (314) 226-1015 

Facsimile: (202) 789-1813 

 Matthew Prewitt (State Bar No. 291593) 

mprewitt@cuneolaw.com 

Cuneo Gilbert Laduca, LLP 

16 Court Street, Suite 1012 

Brooklyn, NY 11241 

Telephone: (202) 789-3960 

Facsimile: (202) 789-1813 

 Jay Angoff (pro hac vice)

jay.angoff@findjustice.com 

Mehri & Skalet 

1250 Connecticut Avenue, NW 

Suite 300 

Washington, DC 20036 

Telephone: (202) 822-5100 

Attorneys for Plaintiffs and the Proposed Class

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