United States District Court, M.D. Florida, Orlando Division
B. SMITH UNITED STATES MAGISTRATE JUDGE.
case comes before the Court without a hearing on Defendants
Infilaw Corporation and Charlotte School of Law, LLC's
Motion to Stay Discovery (Doc. 60). Plaintiff Barbara Bernier
opposes the motion (Doc. 61).
amended complaint alleges that Defendant Charlotte School of
Law (“CSL”) is controlled by Defendant Infilaw
Corporation (“Infilaw”), and that the Defendants
entered into the legal education business to make a profit
(Doc. 48, ¶¶ 24-25, 35, 38). Once CSL was fully
accredited by the American Bar Association
(“ABA”), it was eligible to participate in the
United States Department of Education's
(“DOE”) student loan programs under Title IV of
the Higher Education Act, 20 U.S.C. § 1070 et
seq. (Id., ¶ 16). CSL entered into a
program participation agreement (“PPA”) with the
DOE in exchange for federal financial aid under Title IV
(Id.). Plaintiff, a former professor at CSL, alleges
that after entering into the PPA, CSL intentionally and
recklessly admitted academically underqualified students, and
retained students who should have been dismissed for lack of
satisfactory progress (Id., ¶¶ 2, 17). She
asserts that CSL failed to maintain accreditation standards
set by the ABA; engaged in practices that violated Title
IV's ban on incentive compensation; awarded gift aid to
students; and deliberately failed to deduct the amount of the
gift aid from the financial aid CSL received from the DOE
(Id., ¶¶ 5, 19, 20, 23, 35-38). Plaintiff
alleges that the Dean of CSL manipulated its grading
structure so that students appeared to be making satisfactory
academic progress and could submit financial aid claims to
the government for payment; and that CSL deleted
students' grades so that they could “start
over” and borrow more federal student aid money from
the government (Id., ¶¶ 23, 25). Plaintiff
also contends that CSL manipulated its students' bar exam
passage rates and employment statistics (Id., ¶
28). She claims that when CSL received student aid from the
DOE, Infilaw used the money for its own purposes, and then
returned it just-in-time for mandatory distributions to
students (Id., ¶ 14). Based on these
allegations, Plaintiff sues Defendants for violations of the
False Claims Act (“FCA”), 31 U.S.C. § 3279,
et seq. (Id.).
authorizes private persons to file civil actions against, and
recover damages on behalf of the United States, from any
person who knowingly presents, or causes to be presented to
the government, a false or fraudulent claim for payment or
approval; or knowingly makes, uses, or causes to be made or
used, a false record or statement to get a false or
fraudulent claim paid or approved by the government. 31
U.S.C. § 3729(a)(1), (2). “To establish a cause of
action under the False Claims Act, a relator must prove three
elements: (1) a false or fraudulent claim; (2) which was
presented, or caused to be presented, by the defendant to the
United States for payment or approval; (3) with the knowledge
that the claim was false.” United States v. R &
F Properties of Lake Cty., Inc., 433 F.3d 1349, 1355
(11th Cir. 2005), cert. denied, 549 U.S. 1027
the FCA is a fraud statute, claims must be plead with the
particularity required by Fed.R.Civ.P. 9(b). U.S. ex rel.
Clausen v. Lab. Corp. of Am., Inc., 290 F.3d 1301,
1308-09 (11th Cir. 2002). “Rule 9 is satisfied if the
complaint sets forth (1) precisely what statements were made
in what documents or oral representations or what omissions
were made, and (2) the time and place of each such statement
and the person responsible for making (or, in the case of
omissions, not making) same, and (3) the content of such
statements and the manner in which they misled the plaintiff,
and (4) what the defendants obtained as a consequence of the
fraud.” Id., at 1310 (quoting Ziemba v.
Cascade Int'l, Inc., 256 F.3d 1194, 1202 (11th Cir.
2001) (quotations and citations omitted).
have moved to dismiss Plaintiff's amended complaint on
the grounds that Plaintiff lacks any personal knowledge of
Defendants' alleged fraudulent conduct; her claims were
previously disclosed so that she is not an original source;
and she has failed to plead scienter, falsity, presentment,
or proper parties to a conspiracy (Doc. 53). While the
parties await a ruling on the motion to dismiss, Plaintiff
propounded 68 requests for production to Defendants and
served notice of her intent to subpoena a total of 168
categories of documents and things from the ABA, BARBRI,
Inc., Dennis W. Archer, Esq., and Sterling Partners, (Doc.
60-2; Doc. 60-3; Doc. 60-4; Doc. 60-5; Doc.60-6). Defendants
now ask the Court to stay all discovery until it finds that
Plaintiff has stated a cause of action against them (Doc.
courts have inherent power to control their dockets and
manage their cases, including by staying discovery. Perez
v. Miami-Dade Cty., 297 F.3d 1255, 1263 (11th Cir.
2002); The Andersons, Inc. v. Enviro Granulation,
LLC, No. 8:13-cv-3004-T-33MAP, 2014 WL 4059886 at *2
(M.D. Fla. Aug. 14, 2014). The Eleventh Circuit has
“emphasized the responsibility of trial courts to
manage pretrial discovery properly in order to avoid a
massive waste of judicial and private resources and a loss of
society's confidence in the courts' ability to
administer justice.” Perez, 297 F.3d at 1263
(internal quotation marks omitted). “Granting a
discovery stay until an impending motion to dismiss is
resolved is a proper exercise of that responsibility.”
Rivas v. The Bank of New York Melon, 676 F.
App'x 926, 932 (11th Cir. 2017). The party seeking the
stay has the burden of showing good cause and reasonableness.
Holsapple v. Strong Indus., No. 2:12-cv-355-UA-SPC,
2012 U.S. Dist. LEXIS 128009, at *2 (M.D. Fla. Sept. 10,
2012); S.D. v. St. Johns Cnty. Sch. Dist., No.
3:09-cv-250-J-20TEM, 2009 U.S. Dist. LEXIS 97835, at * 4-5
(M.D. Fla. Oct. 1, 2009) (citing to Feldman v.
Flood, 176 F.R.D. 651, 652 (M.D. Fla. 1997)); McCabe
v. Foley, 233 F.R.D. 683, 687 (M.D. Fla. 2006).
deciding whether to grant a stay the district court,
[M]ust balance the harm produced by a delay in discovery
against the possibility that the motion will be granted and
entirely eliminate the need for such discovery. This involves
weighing the likely costs and burdens of proceeding with
discovery. It may be helpful to take a preliminary peek at
the merits of the allegedly dispositive motion to see if on
its face there appears to be an immediate and clear
possibility that it will be granted.
Simpson v. Specialty Retail Concepts, Inc., 121
F.R.D. 261, 263 (M.D. N.C. Aug. 15, 1988); see also Koock
v. Sugar & Felsenthal, LLP, No. 8:09-cv-609-T-17EAJ,
2009 WL 2579307, at *2 (M.D. Fla. Aug. 19, 2009) (“In
deciding whether to stay discovery pending resolution of a
motion to dismiss ... the court must take a
‘preliminary peek' at the merits of the dispositive
motion to see if it ‘appears to be clearly meritorious
and truly case dispositive.'”) (citing
McCabe, 233 F.R.D. at 685).
seeking stays of discovery pending a ruling on a motion to
dismiss invariably cite Chudasama v. Mazda Corp.,
123 F.3d 1353 (11th Cir. 1997), where the court said:
Facial challenges to the legal sufficiency of a claim or
defense, such as a motion to dismiss based on failure to
state a claim for relief, should, however, be resolved before
discovery begins. Such a dispute always presents a purely
legal question; there are no issues of fact because the
allegations contained in the pleading are presumed to be
true. Therefore, neither the parties nor the court have any
need for discovery before the court rules on the motion.
Id., at 1367 (internal footnote and citation
stands for the “proposition that courts should not
delay ruling on a likely meritorious motion to dismiss while
undue discovery costs mount.” Koock, LLP, 2009
WL 2579307, at *2 (citing In re Winn Dixie Stores,
Inc., No. 3:04-cv-194-J-33MCR, 2007 WL 1877887, *1 (M.D.
Fla. June 28, 2007)). “Since the Eleventh Circuit
handed down Chudasama, it has been analyzed on
numerous occasions, and courts have consistently rejected any
per se requirement to stay discovery pending
resolution of a dispositive motion.” Bocciolone v.
Solowsky, No. 08-20200-CIV, 2008 WL 2906719, at *1 (S.D.
Fla. July 24, 2008); Reilly v. Amy's Kitchen,
Inc., No. 13-21525-CIV, 2013 WL 3929709, at *1 (S.D.
Fla. July 31, 2013) ([T]there is no general rule that
discovery be stayed while a pending motion to dismiss is
resolved."); Simpson v. Specialty Retail Concepts,
Inc.,121 F.R.D. 261, 263 (M.D. N.C. 1988) (Motions to
stay discovery are disfavored because they tend to delay
resolution of cases.). The judges of this federal court have
advised litigants that “the ...