Atomic Wallet Defendant ‘Contemporaneously’ Files Motions to Dismiss, Strike, Stay Discovery

Evercode Infinite seeks a discovery stay pending resolution of its “contemporaneously” filed motions to dismiss the plaintiffs’ first amended complaint and its motion to strike the plaintiffs’ class allegations, said the company’s motion to stay discovery Friday (docket 1:23-cv-01582) in U.S. District Court for Colorado in Denver. Evercode is one of multiple defendants in a negligence class action in which 21 plaintiffs allege that “countless” user accounts of Atomic Wallet, the cryptocurrency exchange platform, were hacked June 3, resulting in the loss of more than $100 million in global crypto assets (see 2306220003). Evercode’s motion to dismiss seeks dismissal of the first amended complaint under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction, 12(b)(5) for improper service of process and 12(b)(6) for failure to state a claim, said the motion to stay discovery. Evercode’s motion to strike asks the court to strike the complaint’s class allegations under Rules 12(f) and 23(d)(1)(D) because the plaintiffs have failed to satisfy Rule 23, it said. In light of those “considerable threshold issues,” Evercode seeks a stay of discovery pending the court’s resolution of those two motions, it said. Evercode also asks that the discovery stay should also encompass the issuance of a scheduling order, because no case deadlines should be set until Evercode’s motions are resolved, it said. The decision to stay discovery is within the court’s discretion, and the five factors that courts “typically consider” in determining whether to stay discovery “weigh strongly” in Evercore’s favor, it said. A stay wouldn’t prejudice the plaintiffs, it said. Its motions to strike and to dismiss “raise jurisdictional issues and questions of law,” it said. The plaintiffs don’t need discovery “to properly respond,” it said. If the court denies Evercode’s motions, then the plaintiffs will be able to engage in discovery, it said. If the court grants the motions in part or in whole, then the case, the plaintiffs’ associated discovery efforts, “will be narrowed or dismissed entirely,” it said. The burden on Evercode is “significant,” said the motion. Two of Evercode’s bases for dismissal “implicate threshold issues of jurisdiction,” it said. As a foreign entity “already incurring significant costs in this action,” Evercode shouldn’t have to undergo discovery until the court “has determined whether it has jurisdiction over Evercode,” it said. Granting a stay also would preserve the court’s resources, “and allow for more efficient resolution of the claims,” it said. The motion to dismiss “stands to either narrow or dispose of the entire action, thus preventing unnecessary efforts” by the court, it said.