Reed Smith Client Alerts

In a recent Delaware Court of Chancery decision, Deane v. Maginn, C.A. No. 2017-0346-LWW (Del. Ch. Sept. 8, 2021), the court denied the defendant’s motion to stay discovery despite a pending dispositive motion, finding that the “unique circumstances” of the case and the interests of justice favored requiring the parties to adhere to the discovery schedule to which they had previously agreed.

When a defendant files a case-dispositive motion early in a Delaware proceeding, the parties often informally agree to stay discovery pending resolution of the motion. Where the plaintiff seeks to proceed with discovery notwithstanding the pendency of the potentially case-dispositive motion, a common tactic used by defendants is to file a motion to stay discovery while the motion to dismiss is pending. The argument is that if the case is dismissed, the expense of undertaking discovery may be avoided while the motion to dismiss is pending.

Delaware courts have the power to stay discovery in appropriate cases, but a stay of discovery pending a dispositive motion is not automatic. Absent special circumstances, discovery will normally be stayed pending the determination of a motion to dismiss the complaint.

In Deane v. Maginn, C.A. No. 2017-0346-LWW (Del. Ch. Sept. 8, 2021), the court found that such special or unique circumstances warranted denying a stay. In its decision, the court outlined three specific, non-exhaustive factors in favor of denying a stay including: (1) where the dispositive motion does not offer a “reasonable expectation” of avoiding further litigation; (2) where the plaintiff seeks interim relief; and (3) where the plaintiff may be prejudiced by delay because information will not be available in the future. The party seeking to stay discovery bears the burden of establishing some practical reason why discovery should be stayed.