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Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 31 5:57 PM-18CV002305
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IN THE COURT OF COMMON PLEAS
FRANKLIN COUNTY, OHIO
ED MAP, INC.,
Plaintiff, Case No. 18-CV-002305
vs.
DELTA CAREER EDUCATION Judge David Cain
CORPORATION, ET AL.,
Defendants.
ANCORA DEFENDANTS’ MOTION TO STAY DISCOVERY
PENDING RESOLUTION OF MOTION TO DISMISS
Pursuant to Civil Rule 26(C), Defendants STVT-AAI Education, Inc. dba Ancora
Education (“Ancora”) and Ancora Intermediate Holdings, LLC (“Ancora Holdings”) (collectively,
the “Ancora Defendants”) respectfully move this Court for a protective order to stay discovery
pending the Court’s resolution of the Ancora Defendants’ June 15, 2018 motion to dismiss for lack
of personal jurisdiction. Briefing on the motion to dismiss is closed, and it would be fundamentally
unfair to impose the cost and inconvenience of discovery on the Ancora Defendants while the
threshold jurisdictional issues they have raised are being determined
A short memorandum in support is attached. Also attached, per Civil Rule 26(C), is a
certificate reciting the reasonable efforts of counsel for the Ancora Defendants to resolve their stay
request before filing this motion.
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Respectfully submitted,
/s/ C. Craig Woods
C. Craig Woods (0010732)
Andrew H. King (0092539)
Michael T. Mullaly (0090202)
SQUIRE PATTON BoGcs (US) LLP
2000 Huntington Center
41 South High Street
Columbus, Ohio 43215
Telephone: (614) 365-2700
Facsimile: (614) 365-2499
craig. woods@squirepb.com
andrew.king@squirepb.com
michael.mullaly@squirepb.com
Attorneys for the Ancora Defendants
MEMORANDUM IN SUPPORT
I. INTRODUCTION
As the Court will recall, this is a commercial collection action in which Plaintiff seeks to
recover certain debts allegedly owed by the Delta Defendants. To date, the Delta Defendants have
not appeared or otherwise participated in this action. Plaintiff has also sued the Ancora
Defendants, with whom it had no direct dealings, but who recently acquired certain assets of Delta.
The Ancora Defendants vehemently deny that they assumed or are otherwise obligated to Plaintiff
for any of the Delta Defendants’ debt, and they have filed a motion to dismiss under Civil Rule
12(B)(2) for want of personal jurisdiction. That motion has been briefed and awaits decision
Notwithstanding the pendency of this motion, Plaintiff has recently initiated efforts to
conduct two depositions of current or former Delta officials in Virginia. The depositions are
scheduled to take place on August 15. The deponents, who also have been commanded to produce
documents concerning a series of topics, are individual residents of Virginia and are not parties to
this action
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Neither the subpoenaed individuals in Virginia nor the Ancora Defendants should be
required to shoulder the burden and expense of discovery under these circumstances, especially
here where there is substantial doubt as to whether it will serve any useful purpose. Indeed,
discovery of any kind carries an unacceptably high risk of futility under these conditions, and thus
the proposed depositions and attendant document discovery can and should be deferred pending
disposition of the pending motion to dismiss. Such deferral poses little or no risk of prejudice to
Plaintiff, and it would save the Ancora Defendants the considerable cost and inconvenience of
participating in discovery that may well be moot, at least as to them
IL. FACTS AND PROCEDURAL POSTURE
Plaintiff alleges in its First Amended Complaint that it entered a contract in 2012 (“Delta
Contract”) with Defendant Delta Career Education Corporation (“Delta”). Pursuant to the Delta
Contract, Plaintiff allegedly supplied textbooks and other educational materials to students
enrolled at various schools affiliated with Delta. Plaintiff now seeks to collect an alleged balance
due of approximately $2.4 million in connection with the Delta Contract.
Plaintiff has named as defendants Delta and a series of affiliated entities. Plaintiff has also
named as defendants Ancora and Ancora Holdings (collectively, the “Ancora Defendants”), which
on January 18, 2018 acquired certain assets of Delta or its affiliates. The Ancora Defendants did
not acquire Delta itself or any of Delta’s affiliates. Further, the Ancora Defendants did not assume
the Delta Contract or accept any of its benefits and liabilities. Incorrectly and without
substantiating evidence, Plaintiff insists otherwise and seeks to hold the Ancora Defendants liable
on that basis. Plaintiff also alleges, again without evidence and despite sworn testimony to the
contrary, that certain individuals were authorized to provide payment assurances to Plaintiff on
behalf of the Ancora Defendants and did so in relation to the Delta Contract
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On May 18, 2018, Ancora filed a motion to dismiss Plaintiffs claims against it for lack of
personal jurisdiction. In response, on June 1, 2018, Plaintiff filed its First Amended Complaint,
which advanced nearly identical claims but added Ancora Holdings as a defendant.
The Ancora Defendants moved to dismiss the First Amended Complaint on June 15, 2018,
again based on lack of personal jurisdiction. In support of the motion, the Ancora Defendants
submitted the detailed affidavit of their CEO, Michael Zawisky. Among other things, the affidavit
demonstrates that the Ancora Defendants are based in Texas, have no physical presence in Ohio,
did not acquire Delta or its affiliates, did not assume or benefit from the Delta Contract, did not
authorize payment assurances to Plaintiff, and are unaware of any payment assurances to Plaintiff
purporting to have been made on their behalf. Plaintiff filed a memorandum in opposition to the
motion on June 29, 2018, but introduced no evidence rebutting the affidavit offered by the Ancora
Defendants. Briefing on the motion closed with the July 7, 2018 filing of the Ancora Defendants’
reply brief.
On July 16, 2018, however, Plaintiff moved for leave to file a surreply, submitting a copy
of the proposed surreply along with its motion. The motion was initially rejected by the Court for
want ofa proper signature, but it was refiled by Plaintiff on July 30. On July 24, Plaintiff filed a
Notice of Issuance of Deposition Subpoenas. This represents the first discovery request Plaintiff
has propounded in this action.
The subpoenas indicate that Plaintiff seeks to depose two individuals on August 15, 2018
in Vienna, Virginia. One of the individuals, Timothy Ryder, is a current or former Delta employee
The other individual, Martina Hansen, appears to be the current or former CEO of Delta. Neither
is affiliated with or employed by the Ancora Defendants. The subpoenas command the deponents
to produce a wide variety of documents, including “all documents related to” agreements between
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Delta and Plaintiff and communications with Ancora about Plaintiff. At this point, it appears the
depositions will proceed as scheduled absent judicial intervention.
Til. LAW AND ARGUMENT
The Ohio Rules of Civil Procedure vest trial courts with broad authority to manage the
discovery process. In particular, Civil Rule 26(C) authorizes trial courts to limit discovery “to
protect a party or person from annoyance, embarrassment, oppression, or undue burden or
expense.” As a result, “[a] trial court acts within its discretion when it grants a stay of discovery
pending the resolution of a dispositive motion.” Thomson v. Ohio Dep't of Rehab. & Corr., 10th
Dist. Franklin No. O9AP-782, 2010-Ohio-416, 32 (Feb. 9, 2010); see also Grover v. Bartsch, 170
Ohio App.3d 188, 192-193 (2nd Dist. 2006) (affirming protective order staying discovery pending
determination of motion to dismiss for lack of personal jurisdiction and failure to state a claim)
Indeed, a stay of discovery pending the resolution of a dispositive motion “is an eminently logical
means to prevent wasting the time and effort of all concerned, and to make the most efficient use
of judicial resources.” Coastal States Gas Corp. v. Department of Energy, 84 F.R.D. 278, 282 (D
Del. 1979).
A. A Protective Order Is Appropriate Here Because The Ancora Defendants’
Motion To Dismiss For Lack Of Personal Jurisdiction Is Ripe For Decision,
And No Party Has Requested Or Pursued Discovery Relating To It
Briefing on the Ancora Defendants’ motion to dismiss is closed. Plaintiff filed its
memorandum contra without conducting jurisdictional discovery, thereby signaling its view that
jurisdictional discovery is unnecessary to resolve the motion. See Zate v. Ruth, No. 94-T-5157,
1995 Ohio App. LEXIS 3927, *9-10 (11th Dist. Sept. 8, 1995) (court did not abuse its discretion
in staying discovery because party’s filing of opposition to motion for summary judgment
indicated belief that no discovery was needed to oppose the motion). Although Plaintiff seeks
leave to file a surreply in connection with the Ancora Defendants’ motion to dismiss, neither that
Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 31 5:57 PM-18CV002305
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motion nor Plaintiff's proposed surreply professes any need to conduct jurisdictional discovery
Nor has Plaintiff served any jurisdictional discovery requests to date, although it has known since
the May 18, 2018 filing of Ancora’s motion to dismiss the original complaint that the defense of
lack of personal jurisdiction is at issue. A brief stay of other discovery, therefore, will have no
impact on the pending motion to dismiss and will not otherwise prejudice Plaintiff's opposition to
it.
B. A Protective Order Is Appropriate Because Merits Discovery As To The
Ancora Defendants May Be Mooted By The Outcome Of Their Motion To
Dismiss, And No Prejudice Accrues To Plaintiff Where No Other Defendants
Have Appeared
Stays deferring merits (i.e., non-jurisdictional) discovery pending resolution of motions to
dismiss for lack of personal jurisdiction are highly favored. Victoria's Secret Stores Brand Mgmt.,
Inc. v. Bob’s Stores, No. 2:13-cv-1261, 2014 U.S. Dist. LEXIS 34503, *6 (S.D. Ohio Mar. 17,
2014). “[B]ecause personal jurisdiction is a threshold issue that determines whether a court has
the power to bind the defendant, the nature of [a motion to dismiss for lack of personal jurisdiction]
supports a stay of merits discovery.” /d. Such stays effectuate the imperative that “discovery must
not undermine the due process considerations that personal jurisdiction is designed to protect.” Jd.
(internal quotation omitted)
In this case, the pending motion to dismiss is dispositive of all claims against the Ancora
Defendants. Accordingly, if merits discovery is allowed to proceed, there is a substantial risk of
wasted effort and expense. The risk is especially grave here because Plaintiff is seeking deposition
testimony and production of documents from two non-party individuals who reside in Virginia.
The necessary time and expense to the Ancora Defendants in having to cover these depositions,
not to mention the inconvenience to individual deponents, should not be permitted unless it is
nearly certain that their participation will serve a productive end. In any event, the Texas-based
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Ancora Defendants should not be put to the significant expense and burden of attending
depositions in Virginia unless it has been judicially determined that they are subject to this Court’s
personal jurisdiction.
Plaintiff may argue that discovery should not be stayed because even if the Ancora
Defendants are ultimately dismissed, Plaintiff still needs discovery on the merits as to the Delta
Defendants. Although normally that might be a sound consideration, here the Ancora Defendants
are the only defendants who have appeared or responded in any way to the complaint which was
first filed by Plaintiff over four months ago on March 15, 2018. The docket does not reflect that
any of the other defendants have been granted an enlargement of time to answer or otherwise
defend
Moreover, a review of the publicly-available court docket from a federal bankruptcy court
in Virginia suggests that each of the Delta Defendants has recently filed for bankruptcy protection.!
Presumably, the automatic stay provisions of the bankruptcy code will preclude further
proceedings against the Delta Defendants in this Court until such time as bankruptcy is terminated
or the stay is otherwise lifted.
Under these circumstances, there is no remaining justification for permitting expensive and
time-consuming discovery to proceed, at least not before resolution of the Ancora Defendants’
motion to dismiss. Further, there is no risk of prejudice to Plaintiff by deferring discovery. The
requested protective order will simply defer temporarily, and possibly avoid altogether, a burden
and expense that may be wholly unnecessary, particularly if the Court grants the Ancora
| These records reflect that, on July 26, 2018, Defendant Palmetto Technical College, Inc. filed a bankruptcy
petition in the United States Bankruptcy Court for the Eastern District of Virginia (No. 3:18-bk-33801). They further
reflect that, the following day, the remaining Delta Defendants filed their respective bankruptcy petitions in the same
court: Delta Career Education Corporation (No. 3:18-bk-33822); Atlantic Coast Colleges, Inc. (No. 3:18-bk-33820);
Berks Technical Institute, Inc. (No. 3:18-bk-33821); McCann Education Centers, Inc. (No. 3:18-bk-33828); McCann
School of Business and Technology, Inc. (No. 3:18-bk-33825); Miller-Motte Business College, Inc. (No. 3:18-bk-
33827); and Piedmont Business College, Inc. (No. 3:18-bk-33830).
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Defendants’ motion to dismiss. See Mack v. Ohio State Dental Bd., No. OOAP-578, 2001 Ohio
App. LEXIS 1513, *18-19 (10th Dist. Mar. 30, 2001) (trial court acted reasonably in deferring
discovery to minimize expense until a dispositive motion could be decided).
Iv. CONCLUSION
For the foregoing reasons, the Ancora Defendants respectfully request entry of a protective
order staying discovery in this action pending either the resolution of the Ancora Defendants’
motion to dismiss or the appearance of another party.
Respectfully submitted,
/s/ C. Craig Woods
C. Craig Woods (0010732)
Andrew H. King (0092539)
Michael T. Mullaly (0090202)
SQUIRE PATTON Boacs (US) LLP
2000 Huntington Center
41 South High Street
Columbus, Ohio 43215
Telephone: (614) 365-2700
Facsimile: (614) 365-2499
craig. woods@squirepb.com
andrew.king@squirepb.com
michael.mullaly@squirepb.com
Attorneys for the Ancora Defendants
CERTIFICATE OF EFFORT TO RESOLVE
Pursuant to Civil Rule 26(C), I hereby certify that I undertook reasonable efforts to resolve
the foregoing discovery dispute before the filing of this motion, including a telephone conference
with Plaintiff's counsel on July 26, 2018
/s/ Andrew H. King
Andrew H. King (0092539)
Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 31 5:57 PM-18CV002305
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CERTIFICATE OF SERVICE
The undersigned hereby certifies that a true and accurate copy of the foregoing was served
this 31st day of July, 2018, via the Court’s electronic filing system and/or by regular U.S. Mail,
upon the following
Elizabeth L. Moyo Delta Career Education Corporation
Allen T. Carter 99 Canal Center Plaza, Suite 501
Porter, Wright, Morris & Arthur LLP Alexandria, VA 22314
41 South High Street
Columbus, OH 43215
emoyo@porterwright.com
acarter@porterwright.com
Attorneys for Plaintiff
Atlantic Coast Colleges, Inc. Berks Technical Institute, Inc
c/o Corporation Service Company c/o Corporation Service Company
2626 Glenwood Ave., Suite 550 251 Little Falls Drive
Raleigh, NC 27608 Wilmington, DE 19808
McCann Education Centers, Inc. McCann School of Business and
c/o Corporation Service Company Technology, Inc.
2595 Interstate Drive, Suite 103 c/o Donald C. Douglass, Jr.
Harrisburg, PA 17110 3320 West Esplanade Ave. North
Metairie, LA 70002
Miller-Motte Business College, Inc Palmetto Technical College, Inc.
c/o Corporation Service Company c/o VB Business Services, LLC
2626 Glenwood Ave., Suite 550 500 World Trade Ctr.
Raleigh, NC 27608 101 W. Main Street
Norfolk, VA 23510
Piedmont Business Colleges, Inc.
c/o Corporation Service Company
2626 Glenwood Ave., Suite 550
Raleigh, NC 27608
/s/ Michael T. Mullaly
Michael T. Mullaly (0090202)
Preview
Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 31 5:57 PM-18CV002305 0E261 - E26 IN THE COURT OF COMMON PLEAS FRANKLIN COUNTY, OHIO ED MAP, INC., Plaintiff, Case No. 18-CV-002305 vs. DELTA CAREER EDUCATION Judge David Cain CORPORATION, ET AL., Defendants. ANCORA DEFENDANTS’ MOTION TO STAY DISCOVERY PENDING RESOLUTION OF MOTION TO DISMISS Pursuant to Civil Rule 26(C), Defendants STVT-AAI Education, Inc. dba Ancora Education (“Ancora”) and Ancora Intermediate Holdings, LLC (“Ancora Holdings”) (collectively, the “Ancora Defendants”) respectfully move this Court for a protective order to stay discovery pending the Court’s resolution of the Ancora Defendants’ June 15, 2018 motion to dismiss for lack of personal jurisdiction. Briefing on the motion to dismiss is closed, and it would be fundamentally unfair to impose the cost and inconvenience of discovery on the Ancora Defendants while the threshold jurisdictional issues they have raised are being determined A short memorandum in support is attached. Also attached, per Civil Rule 26(C), is a certificate reciting the reasonable efforts of counsel for the Ancora Defendants to resolve their stay request before filing this motion. Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 31 5:57 PM-18CV002305 0E261 - E27 Respectfully submitted, /s/ C. Craig Woods C. Craig Woods (0010732) Andrew H. King (0092539) Michael T. Mullaly (0090202) SQUIRE PATTON BoGcs (US) LLP 2000 Huntington Center 41 South High Street Columbus, Ohio 43215 Telephone: (614) 365-2700 Facsimile: (614) 365-2499 craig. woods@squirepb.com andrew.king@squirepb.com michael.mullaly@squirepb.com Attorneys for the Ancora Defendants MEMORANDUM IN SUPPORT I. INTRODUCTION As the Court will recall, this is a commercial collection action in which Plaintiff seeks to recover certain debts allegedly owed by the Delta Defendants. To date, the Delta Defendants have not appeared or otherwise participated in this action. Plaintiff has also sued the Ancora Defendants, with whom it had no direct dealings, but who recently acquired certain assets of Delta. The Ancora Defendants vehemently deny that they assumed or are otherwise obligated to Plaintiff for any of the Delta Defendants’ debt, and they have filed a motion to dismiss under Civil Rule 12(B)(2) for want of personal jurisdiction. That motion has been briefed and awaits decision Notwithstanding the pendency of this motion, Plaintiff has recently initiated efforts to conduct two depositions of current or former Delta officials in Virginia. The depositions are scheduled to take place on August 15. The deponents, who also have been commanded to produce documents concerning a series of topics, are individual residents of Virginia and are not parties to this action Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 31 5:57 PM-18CV002305 0E261 - E28 Neither the subpoenaed individuals in Virginia nor the Ancora Defendants should be required to shoulder the burden and expense of discovery under these circumstances, especially here where there is substantial doubt as to whether it will serve any useful purpose. Indeed, discovery of any kind carries an unacceptably high risk of futility under these conditions, and thus the proposed depositions and attendant document discovery can and should be deferred pending disposition of the pending motion to dismiss. Such deferral poses little or no risk of prejudice to Plaintiff, and it would save the Ancora Defendants the considerable cost and inconvenience of participating in discovery that may well be moot, at least as to them IL. FACTS AND PROCEDURAL POSTURE Plaintiff alleges in its First Amended Complaint that it entered a contract in 2012 (“Delta Contract”) with Defendant Delta Career Education Corporation (“Delta”). Pursuant to the Delta Contract, Plaintiff allegedly supplied textbooks and other educational materials to students enrolled at various schools affiliated with Delta. Plaintiff now seeks to collect an alleged balance due of approximately $2.4 million in connection with the Delta Contract. Plaintiff has named as defendants Delta and a series of affiliated entities. Plaintiff has also named as defendants Ancora and Ancora Holdings (collectively, the “Ancora Defendants”), which on January 18, 2018 acquired certain assets of Delta or its affiliates. The Ancora Defendants did not acquire Delta itself or any of Delta’s affiliates. Further, the Ancora Defendants did not assume the Delta Contract or accept any of its benefits and liabilities. Incorrectly and without substantiating evidence, Plaintiff insists otherwise and seeks to hold the Ancora Defendants liable on that basis. Plaintiff also alleges, again without evidence and despite sworn testimony to the contrary, that certain individuals were authorized to provide payment assurances to Plaintiff on behalf of the Ancora Defendants and did so in relation to the Delta Contract Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 31 5:57 PM-18CV002305 0E261 - E29 On May 18, 2018, Ancora filed a motion to dismiss Plaintiffs claims against it for lack of personal jurisdiction. In response, on June 1, 2018, Plaintiff filed its First Amended Complaint, which advanced nearly identical claims but added Ancora Holdings as a defendant. The Ancora Defendants moved to dismiss the First Amended Complaint on June 15, 2018, again based on lack of personal jurisdiction. In support of the motion, the Ancora Defendants submitted the detailed affidavit of their CEO, Michael Zawisky. Among other things, the affidavit demonstrates that the Ancora Defendants are based in Texas, have no physical presence in Ohio, did not acquire Delta or its affiliates, did not assume or benefit from the Delta Contract, did not authorize payment assurances to Plaintiff, and are unaware of any payment assurances to Plaintiff purporting to have been made on their behalf. Plaintiff filed a memorandum in opposition to the motion on June 29, 2018, but introduced no evidence rebutting the affidavit offered by the Ancora Defendants. Briefing on the motion closed with the July 7, 2018 filing of the Ancora Defendants’ reply brief. On July 16, 2018, however, Plaintiff moved for leave to file a surreply, submitting a copy of the proposed surreply along with its motion. The motion was initially rejected by the Court for want ofa proper signature, but it was refiled by Plaintiff on July 30. On July 24, Plaintiff filed a Notice of Issuance of Deposition Subpoenas. This represents the first discovery request Plaintiff has propounded in this action. The subpoenas indicate that Plaintiff seeks to depose two individuals on August 15, 2018 in Vienna, Virginia. One of the individuals, Timothy Ryder, is a current or former Delta employee The other individual, Martina Hansen, appears to be the current or former CEO of Delta. Neither is affiliated with or employed by the Ancora Defendants. The subpoenas command the deponents to produce a wide variety of documents, including “all documents related to” agreements between Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 31 5:57 PM-18CV002305 0E261 - E30 Delta and Plaintiff and communications with Ancora about Plaintiff. At this point, it appears the depositions will proceed as scheduled absent judicial intervention. Til. LAW AND ARGUMENT The Ohio Rules of Civil Procedure vest trial courts with broad authority to manage the discovery process. In particular, Civil Rule 26(C) authorizes trial courts to limit discovery “to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.” As a result, “[a] trial court acts within its discretion when it grants a stay of discovery pending the resolution of a dispositive motion.” Thomson v. Ohio Dep't of Rehab. & Corr., 10th Dist. Franklin No. O9AP-782, 2010-Ohio-416, 32 (Feb. 9, 2010); see also Grover v. Bartsch, 170 Ohio App.3d 188, 192-193 (2nd Dist. 2006) (affirming protective order staying discovery pending determination of motion to dismiss for lack of personal jurisdiction and failure to state a claim) Indeed, a stay of discovery pending the resolution of a dispositive motion “is an eminently logical means to prevent wasting the time and effort of all concerned, and to make the most efficient use of judicial resources.” Coastal States Gas Corp. v. Department of Energy, 84 F.R.D. 278, 282 (D Del. 1979). A. A Protective Order Is Appropriate Here Because The Ancora Defendants’ Motion To Dismiss For Lack Of Personal Jurisdiction Is Ripe For Decision, And No Party Has Requested Or Pursued Discovery Relating To It Briefing on the Ancora Defendants’ motion to dismiss is closed. Plaintiff filed its memorandum contra without conducting jurisdictional discovery, thereby signaling its view that jurisdictional discovery is unnecessary to resolve the motion. See Zate v. Ruth, No. 94-T-5157, 1995 Ohio App. LEXIS 3927, *9-10 (11th Dist. Sept. 8, 1995) (court did not abuse its discretion in staying discovery because party’s filing of opposition to motion for summary judgment indicated belief that no discovery was needed to oppose the motion). Although Plaintiff seeks leave to file a surreply in connection with the Ancora Defendants’ motion to dismiss, neither that Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 31 5:57 PM-18CV002305 0E261 - E31 motion nor Plaintiff's proposed surreply professes any need to conduct jurisdictional discovery Nor has Plaintiff served any jurisdictional discovery requests to date, although it has known since the May 18, 2018 filing of Ancora’s motion to dismiss the original complaint that the defense of lack of personal jurisdiction is at issue. A brief stay of other discovery, therefore, will have no impact on the pending motion to dismiss and will not otherwise prejudice Plaintiff's opposition to it. B. A Protective Order Is Appropriate Because Merits Discovery As To The Ancora Defendants May Be Mooted By The Outcome Of Their Motion To Dismiss, And No Prejudice Accrues To Plaintiff Where No Other Defendants Have Appeared Stays deferring merits (i.e., non-jurisdictional) discovery pending resolution of motions to dismiss for lack of personal jurisdiction are highly favored. Victoria's Secret Stores Brand Mgmt., Inc. v. Bob’s Stores, No. 2:13-cv-1261, 2014 U.S. Dist. LEXIS 34503, *6 (S.D. Ohio Mar. 17, 2014). “[B]ecause personal jurisdiction is a threshold issue that determines whether a court has the power to bind the defendant, the nature of [a motion to dismiss for lack of personal jurisdiction] supports a stay of merits discovery.” /d. Such stays effectuate the imperative that “discovery must not undermine the due process considerations that personal jurisdiction is designed to protect.” Jd. (internal quotation omitted) In this case, the pending motion to dismiss is dispositive of all claims against the Ancora Defendants. Accordingly, if merits discovery is allowed to proceed, there is a substantial risk of wasted effort and expense. The risk is especially grave here because Plaintiff is seeking deposition testimony and production of documents from two non-party individuals who reside in Virginia. The necessary time and expense to the Ancora Defendants in having to cover these depositions, not to mention the inconvenience to individual deponents, should not be permitted unless it is nearly certain that their participation will serve a productive end. In any event, the Texas-based Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 31 5:57 PM-18CV002305 0E261 - E32 Ancora Defendants should not be put to the significant expense and burden of attending depositions in Virginia unless it has been judicially determined that they are subject to this Court’s personal jurisdiction. Plaintiff may argue that discovery should not be stayed because even if the Ancora Defendants are ultimately dismissed, Plaintiff still needs discovery on the merits as to the Delta Defendants. Although normally that might be a sound consideration, here the Ancora Defendants are the only defendants who have appeared or responded in any way to the complaint which was first filed by Plaintiff over four months ago on March 15, 2018. The docket does not reflect that any of the other defendants have been granted an enlargement of time to answer or otherwise defend Moreover, a review of the publicly-available court docket from a federal bankruptcy court in Virginia suggests that each of the Delta Defendants has recently filed for bankruptcy protection.! Presumably, the automatic stay provisions of the bankruptcy code will preclude further proceedings against the Delta Defendants in this Court until such time as bankruptcy is terminated or the stay is otherwise lifted. Under these circumstances, there is no remaining justification for permitting expensive and time-consuming discovery to proceed, at least not before resolution of the Ancora Defendants’ motion to dismiss. Further, there is no risk of prejudice to Plaintiff by deferring discovery. The requested protective order will simply defer temporarily, and possibly avoid altogether, a burden and expense that may be wholly unnecessary, particularly if the Court grants the Ancora | These records reflect that, on July 26, 2018, Defendant Palmetto Technical College, Inc. filed a bankruptcy petition in the United States Bankruptcy Court for the Eastern District of Virginia (No. 3:18-bk-33801). They further reflect that, the following day, the remaining Delta Defendants filed their respective bankruptcy petitions in the same court: Delta Career Education Corporation (No. 3:18-bk-33822); Atlantic Coast Colleges, Inc. (No. 3:18-bk-33820); Berks Technical Institute, Inc. (No. 3:18-bk-33821); McCann Education Centers, Inc. (No. 3:18-bk-33828); McCann School of Business and Technology, Inc. (No. 3:18-bk-33825); Miller-Motte Business College, Inc. (No. 3:18-bk- 33827); and Piedmont Business College, Inc. (No. 3:18-bk-33830). Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 31 5:57 PM-18CV002305 0E261 - E33 Defendants’ motion to dismiss. See Mack v. Ohio State Dental Bd., No. OOAP-578, 2001 Ohio App. LEXIS 1513, *18-19 (10th Dist. Mar. 30, 2001) (trial court acted reasonably in deferring discovery to minimize expense until a dispositive motion could be decided). Iv. CONCLUSION For the foregoing reasons, the Ancora Defendants respectfully request entry of a protective order staying discovery in this action pending either the resolution of the Ancora Defendants’ motion to dismiss or the appearance of another party. Respectfully submitted, /s/ C. Craig Woods C. Craig Woods (0010732) Andrew H. King (0092539) Michael T. Mullaly (0090202) SQUIRE PATTON Boacs (US) LLP 2000 Huntington Center 41 South High Street Columbus, Ohio 43215 Telephone: (614) 365-2700 Facsimile: (614) 365-2499 craig. woods@squirepb.com andrew.king@squirepb.com michael.mullaly@squirepb.com Attorneys for the Ancora Defendants CERTIFICATE OF EFFORT TO RESOLVE Pursuant to Civil Rule 26(C), I hereby certify that I undertook reasonable efforts to resolve the foregoing discovery dispute before the filing of this motion, including a telephone conference with Plaintiff's counsel on July 26, 2018 /s/ Andrew H. King Andrew H. King (0092539) Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 31 5:57 PM-18CV002305 0E261 - E34 CERTIFICATE OF SERVICE The undersigned hereby certifies that a true and accurate copy of the foregoing was served this 31st day of July, 2018, via the Court’s electronic filing system and/or by regular U.S. Mail, upon the following Elizabeth L. Moyo Delta Career Education Corporation Allen T. Carter 99 Canal Center Plaza, Suite 501 Porter, Wright, Morris & Arthur LLP Alexandria, VA 22314 41 South High Street Columbus, OH 43215 emoyo@porterwright.com acarter@porterwright.com Attorneys for Plaintiff Atlantic Coast Colleges, Inc. Berks Technical Institute, Inc c/o Corporation Service Company c/o Corporation Service Company 2626 Glenwood Ave., Suite 550 251 Little Falls Drive Raleigh, NC 27608 Wilmington, DE 19808 McCann Education Centers, Inc. McCann School of Business and c/o Corporation Service Company Technology, Inc. 2595 Interstate Drive, Suite 103 c/o Donald C. Douglass, Jr. Harrisburg, PA 17110 3320 West Esplanade Ave. North Metairie, LA 70002 Miller-Motte Business College, Inc Palmetto Technical College, Inc. c/o Corporation Service Company c/o VB Business Services, LLC 2626 Glenwood Ave., Suite 550 500 World Trade Ctr. Raleigh, NC 27608 101 W. Main Street Norfolk, VA 23510 Piedmont Business Colleges, Inc. c/o Corporation Service Company 2626 Glenwood Ave., Suite 550 Raleigh, NC 27608 /s/ Michael T. Mullaly Michael T. Mullaly (0090202)