Edwards v. Juan Martinez, Inc.

PAUL D.S. EDWARDS, Plaintiff, v. JUAN MARTINEZ, INC., d/b/a CENTURY 21 AMERICANA, f/d/b/a CENTURY 21 MARTINEZ & ASSOCIATES,and REDX, LLC, a/d/b/a/ REAL ESTATE DATA X-CHANGE, INC., and COLE INFORMATION SERVICES, INC.,a/d/b/a COLE REALTY RESOURCE, and JUAN MARTINEZ, a/k/aJUAN A. MARTINEZ, JR., a/k/a JUAN ANTONIO MAYEN, and ELIZABETHMARTINEZ, a/k/a ELIZABETH A. MARTINEZ, and SERGIO BRANDON TAMEZ, a/k/a SERGIO TAMEZ,and MARK HARRIS LECK, a/k/a MARK H. LECK, a/k/a MARK H. LEC, a/k/a M. L. ECK,and JIM EGGLESTON, a/k/a JAMES EGGLESTON, and DOES I-X, and ROE CORPORATIONS XI-XX, et al., Defendants.

Case No. 2:20-cv-00570-JAD-EJY

UNITED STATES DISTRICT COURT DISTRICT OF NEVADA

September 22, 2020

ORDER

Before the Court is Defendants Cole Information Services, Inc. and James Eggleston's Motion to Stay Discovery.¹ The Court has considered the Motion, Plaintiff's Opposition,² Defendants RedX LLC and Mark Leck's Opposition,³ and Defendants Cole and Eggleston's Reply in Support of their Motion to Stay Discovery.⁴ Defendants Juan Martinez, Inc. d/b/a Century 21 Americana, Juan Martinez, Elizabeth Martinez, and Sergio Brandon Tamez (collectively, the "Century 21 Defendants") did not file a joinder to Cole and Eggleston's Motion to Stay Discovery; nor did they file a separate motion requesting the same relief.

Also before the Court is Plaintiff's Motion to Compel.⁵ Cole and Eggleston filed an Opposition to Plaintiff's Motion in which RedX and Leck joined.⁶ The Century 21 Defendants filed a separate Opposition to Plaintiff's Motion to Compel.⁷ Plaintiff filed Replies to both Oppositions.⁸

Finally, the Court has considered Plaintiff's Motion for Leave to Conduct Limited Expedited Discovery,⁹ Cole and Eggleston's Opposition,¹⁰ RedX and Leck's Opposition,¹¹ the Century 21 Defendants' Joinders to the Opposition,¹² and Plaintiff's Replies.¹³

I. RELEVANT BACKGROUND

This action concerns four unsolicited phone calls Plaintiff claims Defendants authorized and/or placed to his cellular and landline telephones in violation of the Telephone Consumer Protection Act (the "TCPA"), three Nevada Revised Statutes, and his right to privacy.¹⁴ On February 10, 2020, Plaintiff filed his operative Amended Complaint in Nevada state court, and on March 23, 2020, Cole and Eggleston removed this action to federal court.

On March 25, 2020, RedX and Leck filed their Motion to Dismiss Plaintiff's Amended Complaint arguing that the Court lacks personal jurisdiction over Leck only and that Plaintiff fails to state claims upon which relief can be granted. Specifically, RedX and Leck contend Edwards fails to state claims: (1) under the TCPA because neither RedX nor Leck directly placed the calls at issue, (2) for consumer fraud under the Nevada Revised Statutes with sufficient particularity, (3) for vicarious liability, and (4) for concert of action.¹⁵

On March 30, 2020, Cole and Eggleston filed their Motion to Dismiss Plaintiff's Amended Complaint, arguing that the Court lacks personal jurisdiction over both Defendants, and that Plaintiff fails to state claims upon which relief can be granted.¹⁶

On April 10, 2020, Cole and Eggleston filed their Motion to Stay Discovery pending resolution of their Motion to Dismiss.¹⁷ Cole and Eggleston maintain their Motion to Dismiss will be granted because Cole is a Nebraska corporation with its principal place of business in Nebraska while Eggleston is domiciled in Nebraska.¹⁸ Further, Cole and Eggleston claim neither expressly aimed intentional, harmful conduct at Nevada necessary to establish specific personal jurisdiction.¹⁹ Cole and Eggleston argue that Plaintiff fails to state claims upon which relief can be granted because neither of these Defendants directly placed the phone calls at issue, which they allege is a necessary element of a TCPA claim.²⁰ Finally, Cole and Eggleston insist Plaintiff's state law claims fail because Nevada's Deceptive Trade Practices Act also requires a defendant to directly place a call, and the other two statutes pleaded do not provide for a private right of action.²¹

On April 24, 2020, Plaintiff filed his Opposition to Cole and Eggleston's Motion to Stay Discovery.²² Plaintiff argues discovery will determine whether Cole and Eggleston have sufficient contacts with Nevada necessary for the exercise personal jurisdiction over these Defendants.²³ This is the entire focus of Plaintiff's Opposition.

On April 30, 2020, Cole and Eggleston filed their Reply in support of their Motion to Stay Discovery. These Defendants reiterate that the Court cannot exercise personal jurisdiction over them but, even if personal jurisdiction is present, Plaintiff's claims fail on the merits.²⁴

II. DISCUSSION

A. Cole and Eggleston's Motion to Stay Discovery is denied because the Court finds it unlikely that the Motion to Dismiss will dispose of the entire action.

Generally, a dispositive motion does not warrant a stay of discovery.²⁵ "The party seeking a stay . . . has the burden to show good cause by demonstrating harm or prejudice that will result from the discovery."²⁶ Under certain circumstances it is an abuse of discretion to deny discovery while a dispositive motion is pending.²⁷ For this reason, a party seeking a discovery stay carries the "heavy burden" of making a strong showing why the discovery process should be halted.²⁸ When deciding whether to issue a stay, a court must take a "preliminary peek" at the merits of the dispositive motion pending in the case.²⁹ A court must consider whether the pending motion is potentially dispositive of the entire case, and whether that motion can be decided without additional discovery.³⁰

1. There is a serious question as to whether the Court can exercise general jurisdiction over Cole and Eggleston, but much less of a question regarding whether the Court may exercise specific jurisdiction over these Defendants.

Federal courts may exercise either specific or general personal jurisdiction over a defendant.³¹ A defendant challenging personal jurisdiction carries the burden of establishing that discovery should be stayed.³² Whether the Court can exercise personal jurisdiction over a defendant is a "critical preliminary question. However, it is not a question that mandates a stay of discovery. The Court retains its discretion to determine whether discovery should go forward."³³

i. It is unlikely that the Court can exercise general personal jurisdiction over Cole and Eggleston.

To establish general jurisdiction, a defendant must have sufficient contacts with the forum state to constitute the "kind of continuous and systematic general business contacts that approximate physical presence."³⁴ "For an individual, the paradigm forum for the exercise of general jurisdiction is the individual's domicile[.]"³⁵ "The paradigmatic locations where general jurisdiction is appropriate over a corporation are its place of incorporation and its principal place of business. . . . Only in an 'exceptional case' will general jurisdiction be available anywhere else."³⁶

Here, Eggleston is domiciled in Nebraska, and Cole is a corporation with its principal place of business in Nebraska.³⁷ Further, Cole represents that it "has no offices or employees in Nevada," is "not registered to do business in Nevada, . . . does not have a registered agent for service of process in Nevada, and . . . pays no Nevada taxes."³⁸ These "contacts fall well short of the requisite showing of general jurisdiction."³⁹ Moreover, it may be true that Cole's employees visit Nevada three to four times per year to attend trade shows,⁴⁰ but "the attendance of trade shows is insufficient to give this Court general jurisdiction" over Cole and Eggleston.⁴¹ Finally, Cole's operation of a website, even a "highly interactive" website, does not confer general jurisdiction upon this defendant.⁴² Based on the above, the Court is reasonably convinced that it cannot exercise general personal jurisdiction over Cole nor Eggleston.

ii. The Court may be able to exercise specific personal jurisdiction over Cole and Eggleston.

A district court may exercise specific jurisdiction over a defendant if the cause of action "arises out of or relate to" the defendant's in-state activity.⁴³ Determining whether specificjurisdiction exists over an out-of-state defendant involves two inquiries: whether a forum state's long-arm statute permits service of process, and whether the assertion of personal jurisdiction would violate due process.⁴⁴ Because Nevada's long-arm statute, NRS § 14.065, reaches the "outer limits of federal constitutional due process," the Court need only analyze whether exercising specific jurisdiction over Cole and Eggleston comports with due process.⁴⁵

To determine whether exercising personal jurisdiction over a particular defendant would violate due process, the presiding court applies a three-prong "minimum contacts" test that asks whether: "(1) the defendant has performed some act or transaction within the forum or purposefully availed himself of the privileges of conducting activities within the forum, (2) the plaintiff's claim arises out of or results from the defendant's forum-related activities, and (3) the exercise of jurisdiction over the defendant is reasonable."⁴⁶ "If any of the three requirements is not satisfied, jurisdiction in the forum would deprive the defendant of due process of law."⁴⁷ The minimum contacts test focuses on "the defendant's contacts with the forum State itself, not the defendant's contacts with persons who reside there. . . . It follows that a defendant's relationship with a plaintiff or third party, standing alone, is an insufficient basis for jurisdiction."⁴⁸

a. Purposeful Direction or Availment

In the Ninth Circuit, the test used to establish purposeful direction or availment depends on the nature of the underlying claim.⁴⁹ A "purposeful availment analysis is used in suits sounding in contract" while a "purposeful direction analysis is used in suits sounding in tort."⁵⁰ Here, the allegations...