Opinion
02 Civ. 0711 (LAK)
July 8, 2002
ORDER
Certain of the defendants in this action seek a stay of discovery pending disposition of the motions of (1) Ernst Young LLP (an Ontario limited liability partnership) to dismiss for lack of personal jurisdiction and on other grounds, (2) Ernst Young LLP ("EY US") to dismiss for failure to state a claim upon which relief may be granted and on other grounds, (3) Douglas A.C. Davis, Albert Gnat and Kenneth C. Smith to dismiss for lack of personal jurisdiction, and (4) Frank E. Holmes for lack of personal jurisdiction. The discovery issues have been fully explored in the parties' letters, the Court rules as follows.
1. Discovery against defendants Ernst Young LLP (an Ontario limited liability partnership), Davis, Gnat, Smith and Holmes (collectively, the "Jurisdiction Contestants") shall be confined, pending the determination of their pending motions, to the existence or lack of personal jurisdiction over them.
2. Absent their consent, any oral depositions of the Jurisdiction Contestants shall be conducted in Canada pending determination of their pending motions.
3. The Court declines to require plaintiff to advance costs in connection with such depositions. See S.D.N.Y. Civ.R. 30.1.
4. The Court declines to restrict plaintiff to conducting depositions of the Jurisdiction Contestants by written questions or to require it to proceed against them only by way of written interrogatories.
5. The application of EY US to stay all discovery pending resolution of its so-called challenge to subject matter jurisdiction is denied. The motion in fact challenges subject matter jurisdiction only over allegedly pendent state law claims. Moreover, the motion is premised, at least in part, on the proposition that EY US is not responsible for actions of EY Canada and, perhaps, several other Ernst Young entities, a proposition that ought not lightly be assumed to be correct.