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Memorandum Opinion & Order — Oto Analytics v. Capital Plus Financial (Northern District of Texas, 2022)

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Memorandum Opinion & Order signed April 14, 2022, in Case 3:21-cv-02636-B, Oto Analytics, Inc. d/b/a Womply v. Capital Plus Financial, LLC, Crossroads Systems, Inc., and Eric Donnelly, in the United States District Court for the Northern District of Texas, Dallas Division. The Capital Plus Defendants moved to stay discovery pending the resolution of their motion to dismiss, and the Court denied the motion. The order states that a stay is the exception, not the rule. It notes that Womply later amended and added claims against these defendants that were not at issue in the Court's earlier order, and that the Court had resolved the other motion to dismiss filed by the other set of Defendants. The signature block names Jane J. Boyle, United States District Judge.

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Case 3:21-cv-02636-B Document 70 Filed 04/14/22                    Page 1 of 2 PageID <pageID>


                             UNITED STATES DISTRICT COURT
                              NORTHERN DISTRICT OF TEXAS
                                   DALLAS DIVISION

 OTO ANALYTICS, INC. d/b/a                         §
 WOMPLY,                                           §
                                                   §
      Plaintiff,                                   §
                                                   §
 v.                                                §    CIVIL ACTION NO. 3:21-CV-2636-B
                                                   §
 CAPITAL PLUS FINANCIAL, LLC,                      §
 CROSSROADS SYSTEMS, INC., and                     §
 ERIC DONNELLY,                                    §
                                                   §
      Defendants.                                  §

                             MEMORANDUM OPINION & ORDER

         Before the Court is Defendants Capital Plus Financial, LLC, Crossroads Systems, Inc., and

Eric Donnelly (collectively the “Capital Plus Defendants”)’s Motion to Stay Discovery by Plaintiff

Oto Analytics, Inc. (“Womply”) (Doc. 60) pending the resolution of their motion to dismiss (Doc.

42). The Capital Plus Defendants argue that their pending “motion to dismiss includes a purely legal

question that could resolve all claims against the Capital Plus Defendants” rendering discovery

“unnecessarily burdensome and expensive” and another pending motion to dismiss filed by other

Defendants “could affect the discovery available . . . and the viability of [the] claims in this Court.”

Doc. 60, Mot. Stay, 1. Because the court finds a stay is unwarranted, the Court DENIES the motion.

         A federal district court “may, for good cause, issue an order to protect a party or person from

annoyance, embarrassment, oppression, or undue burden or expense . . . forbidding the disclosure

or discovery.” Fed. R. Civ. P. 26(c). “A trial court has broad discretion and inherent power to stay

discovery until preliminary questions that may dispose of the case are determined.” Petrus v. Bowen,

833 F.2d 581, 583 (5th Cir. 1987). A stay is the exception, not the rule. James J. Flanagan Shipping

                                                  -1-
Case 3:21-cv-02636-B Document 70 Filed 04/14/22                 Page 2 of 2 PageID <pageID>


Corp. v. Port of Beaumont of Jefferson Cnty., 2020 WL 4365595, at *1 (E.D. Tex. July 29, 2020); Yeti

Coolers, LLC v. Magnum Solace, LLC, 2016 WL 10571903, at *1 (W.D. Tex. Oct. 19, 2016); Griffin

v. Am. Zurich Ins. Co., 2015 WL 11019132, at *2 (N.D. Tex. Mar. 18, 2015); Glazer’s Wholesale Drug

Co., Inc. v. Klein Foods, Inc., 2008 WL 2930482 at *1 (N.D. Tex. July 23, 2008).

       First, the Court stated that the interpretation of the Small Business Administration

regulations regarding the Paycheck Protection Program “is dispositive of Womply’s state law claims,”

Doc. 48, Order, 3, but the Court made this determination based on the parties then in the case and

the four claims in Womply’s Original Petition. See Doc. 1-4, Original Pet., ¶¶ 66–89 (listing claims

for fraud, tortious interference with a contract, conversion, and unjust enrichment). Womply later

amended and added additional claims against the Capital Plus Defendants not at issue in the Court’s

earlier order. See Doc. 20, Am. Compl, ¶¶ 116–77, 186–90 (listing claims for declaratory judgment,

tortious interference with contracts, fraud, negligent misrepresentation, promissory estoppel, unjust

enrichment, breach of contract, quantum meruit, and civil conspiracy). Second, the Court resolved

the other motion to dismiss filed by the other set of Defendants, Oto Analytics, Inc. v. Capital Plus

Fin., LLC, 2022 WL 1082368 (N.D. Tex. Apr. 11, 2022), and the parties may still obtain the

necessary discovery from this dismissed party through Federal Rules of Civil Procedure 26(b), 34, and

45. Accordingly, the Court DENIES the Capital Plus Defendants’ Motion to Stay.


       SO ORDERED.

       SIGNED: April 14, 2022.


                                              ______________________________
                                              JANE J. BOYLE
                                              UNITED STATES DISTRICT JUDGE



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