Richards Layton & Finger
 

Judge Burke Grants Motion to Stay Pending Motion to Dismiss

January 13, 2017

In North Star Innovations Inc. v. Sharp Corp., C.A. No. 16-351-LPS-CJB (D. Del. Dec. 12, 2016) (ORAL ORDER), Magistrate Judge Burke granted defendant Sharp’s motion to stay pending resolution of its motion to dismiss. The defendant filed the motion to stay in the midst of briefing on the motion to dismiss—purportedly in response to the Court’s oral order requiring counsel to meet and confer and propose a scheduling order within 30 days. The defendant also filed a letter request to stay the scheduling order deadlines while the motion to stay was pending. These requests were referred to Magistrate Judge Burke, who granted both. First, Magistrate Judge Burke granted the conditional stay of the scheduling order deadlines until a decision was rendered on the motion to stay. Magistrate Judge Burke then set a briefing schedule on the motion to stay, shortening the page limits to ten pages for the answering brief and five pages for the reply.

In its briefing, Sharp argued that a stay was appropriate because service was defective and it should not be required to engage in scheduling/discovery when jurisdiction had not been established. It argued that the three stay factors (simplification of the issues, early stage of the case, and no undue prejudice) all weighed strongly in its favor. The plaintiff, North Star Innovations Inc., countered that the Court’s Revised Procedures for Managing Patent Cases strongly discouraged motions to stay pending motions to dismiss and that consideration of the stay factors was unnecessary.

Ultimately, Magistrate Judge Burke held that a stay was warranted because the factors weighed in favor of a stay and the motion to dismiss “not only relates to a ‘threshold jurisdictional issue’ as Defendant suggests, but really to a kind of threshold issue among threshold issues—whether Defendant has even received proper service, such that the action can begin in earnest.” Thus, Magistrate Judge Burke granted a stay until after the Court ruled on the motion to dismiss.

Key Points:  Motions to stay pending “routine” motions to dismiss are generally disfavored in the District of Delaware, but due to the “threshold” nature of the motion here, the Court found good grounds to stay.