Duane Morris Class Action Review - 2023 - Report - Page 269
G.
Stays In Class Actions
Courts often will stay a class action when there is an important procedural aspect of the
case that has not fully developed. This can be present when issues in the case are too
premature to be decided by the court, when discovery would be costly and unlikely to
resolve the dispute, and when other lawsuits may have a significant impact on the case.
In Scott LLC, et al. v. Grubhub Inc., 2022 U.S. Dist. LEXIS 189883 (N.D. Ill. Oct. 18,
2022), the court held that preliminary settlements in related matters can impact whether
a stay should be granted. The plaintiffs in Scott, a group of restaurant owners, filed a
class action alleging that the defendant listed misleading information regarding over
150,000 restaurants on its online meal delivery platform without authorization.
Specifically, the plaintiffs asserted that the defendant steered business to restaurants
that partnered with the defendant and away from unaffiliated restaurants by falsely
advertising that unaffiliated restaurants were closed or did not deliver, when they were
in fact open and accepting deliveries. Id. at *2. The court stayed the instant action after
the parties in a class action in Colorado, which had similar allegations and
encompassed the plaintiffs’ claims, filed a motion for preliminary settlement approval.
After the preliminary settlement approval was denied, the plaintiffs moved to lift the stay.
The contended that without a pending settlement in the Colorado, there was no longer
any reason for the stay. Id. at *8. The parties in the Colorado action subsequently
reached a new amended settlement, which was pending for preliminary approval. The
court found that that the circumstances had not “substantially changed,” and that the
stay was still warranted. Id. The court ruled that settlement of the Colorado action could
simplify the issues and reduce the burden of litigation in the instant case, with minimal
prejudice to the plaintiffs. The court opined that the stay was to permit the Colorado
action to resolve some of the injunctive relief issues, which would narrow the issues in
this case and possibly redress the class members’ injuries without expending additional
time and resources. For these reasons, the court denied the motion to lift the stay.
In Adamson, et al. v. Volkswagen Group Of America, Inc., 2022 U.S. Dist. LEXIS
180836 (D. Colo. Oct. 3, 2022), the court also imposed a stay when it was clear the
discovery would be wasteful and not promote resolution of the dispute. The plaintiffs
filed a putative class action alleging antitrust claims that the defendants acted together
to restrict the amount of Audi automobiles available to lessees. The defendant AOA filed
a motion to stay discovery pending resolution of its pending motion to dismiss on the
grounds that a discovery stay was warranted because its motion to dismiss sought
dismissal of the entire case “on multiple independent grounds,” including jurisdictional
grounds. Id. at *4. The court granted the motion. The plaintiff argued that she would be
unduly prejudiced in the entry of a stay because the discovery sought was narrowly
tailored to include documents only relevant to the plaintiff’s claims for purposes of filing
the motion for class certification. The court found that this factor weighed slightly in
favor of the plaintiff. The defendant argued that the discovery would be “significant” and
“burdensome.” Id. at *9. The court found that this factor supported the imposition of a
stay pending resolution of the defendant’s previously filed motion to dismiss because it
would resolve threshold questions of law, including several jurisdictional challenges.
The court further reasoned that judicial economy and resources would plainly be wasted
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Duane Morris Class Action Review – 2023
