Cafe, Gelato & Panini LLC v. Simon Prop. Grp., Inc.

Decision Date21 May 2021
Docket NumberCASE NO. 20-60981-CIV-CANNON/Hunt
CourtUnited States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Southern District of Florida
PartiesCAFE, GELATO & PANINI LLC, d/b/a Cafe Gelato Panini, and DJAMES FOODS, INC., on behalf of themselves and all others similarly situated, Plaintiffs, v. SIMON PROPERTY GROUP, INC., SIMON PROPERTY GROUP, L.P., M.S. MANAGEMENT ASSOCIATES, INC., and THE TOWN CENTER AT BOCA RATON TRUST, Defendants.
ORDER DENYING DEFENDANTS' MOTION TO STAY DISCOVERY

THIS CAUSE comes before the Court upon the Motion to Stay Discovery filed by Defendants Simon Property Group, Inc. ("Simon Property"), Simon Property Group, L.P. ("Simon Partnership"), M.S. Management Associates, Inc. ("M.S. Management"), and The Town Center at Boca Raton Trust's (the "Trust") (collectively, "Simon" or "Defendants") [ECF No. 40]. Defendants seek a stay of discovery pending a Court ruling on Defendant's Motion to Abstain or to Dismiss Plaintiffs' Amended Complaint [ECF No. 39].

The Court has reviewed the parties' submissions and the relevant portions of the record [ECF Nos. 19, 40, 47, 51]. The Court also held a hearing on the Motion on May 17, 2021 [ECF No. 77]. For the reasons set forth below, Defendants' Motion to Stay [ECF No. 40] is DENIED.

I. FACTUAL & PROCEDURAL BACKGROUND

Plaintiffs, Cafe, Gelato & Panini, LLC, ("Cafe Gelato") and Djames Foods, Inc. d/b/a Pete's Burgers, Wings & Drinks ("Pete's Burgers") (collectively, "Plaintiffs"), initiated this putative class action in May 2020, on behalf of themselves and other similarly situated tenants [ECF No. 1]. Subsequently, in September 2020, Plaintiffs filed the current operative pleading—the First Amended Complaint ("FAC")—in which they assert seven counts against Defendants [ECF No. 19]. The FAC alleges that, during a period exceeding fifteen years, Defendants, a commercial real estate company that owns malls across the country [ECF No. 19 ¶11] and its real estate management entities (also named defendants in this action), acted in concert with one another to fraudulently misrepresent, through inflated invoices, the actual amount of electrical energy consumption at Plaintiffs' leased commercial spaces. These inflated invoices, the FAC alleges, then were sent to tenants across the country through the United States mail system to receive payments in excess of what the tenants actually consumed in electricity [ECF No. 19 ¶¶1, 3, 4]. Furthermore, Plaintiffs allege that Simon, Inc., Simon Partnership, and M.S. Management perpetrated a nationwide scheme to implement a standard clause into leases that barred tenants from performing independent audits on their energy usage [ECF No. 19 ¶4]. In turn, Defendants allegedly overcharged tenants for electricity and used the federal mail and wire system to distribute the leases and the inflated energy bills, thereby deriving illicit profits from the scheme. Plaintiffs also aver that, in furtherance of this scheme, Defendants enlisted the aid of nonparty Valquest Systems, Inc. ("Valquest"), an independent energy company in Texas that provided surveys of how much energy Plaintiffs consumed [ECF No. 19 ¶34]. Valquest then overstated Plaintiffs and the class members' energy consumption in order to hide the intentional electrical cost markups by Simon, Inc., Simon Partnership, and M.S. Management.

Based on these allegations, Plaintiffs assert the following seven causes of action: (1) Violation of Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(a), (c)-(d), against all Defendants (Count I); (2) Unjust Enrichment against Defendants Simon, Inc., Simon Partnership, and M.S. Management on behalf of all putative classes1 (Count II); (3) Violation of Florida's Deceptive and Unfair Trade Practices Act ("FDUPTA"), Fla. Stat. § 501.201, et seq., against Defendants Simon, Inc., Simon Partnership, and M.S. Management on behalf of the Florida Statutory Class and the TCBR class (Count III); (4) Violation of Florida's Civil Remedies for Criminal Practices Act ("Florida Rico Act"), Fla. Stat. §§ 772.103(1), (3)-(4), 772.104(1), 777.011, and 777.03(1)(a), against all Defendants on behalf of the Florida Statutory Class and the TCBR Class (Count IV); (5) Breach of Contract against the Defendant Trust on behalf of the TCBR Class (Count V); (6) Breach of the Implied Covenant of Good Faith and Fair Dealing against the Trust and on behalf of the TCBR Class (Count VI); and (7) Breach of Texas Deceptive Trade Practices-Consumer Protection Act ("DTPA"), Tex. Bus. & Com. Code § 17.41, et seq., against Defendants Simon, Inc., Simon Partnership, and M.S. Management and on behalf of the Texas Statutory Class (Count VII).

Following the submission of Plaintiffs' FAC, Defendants filed a Motion to Abstain or Alternatively to Dismiss the FAC [ECF No. 39 ("Motion to Abstain or Dismiss")]. The Motion to Abstain or Dismiss asks this Court to abstain from adjudicating this case, or, alternatively, to dismiss all counts in the FAC pursuant to Federal Rule of Civil Procedure 12(b). Shortly thereafter, Defendants filed the Motion to Stay at issue here, seeking an order staying discovery pending a Court ruling on Defendant's Motion to Abstain or to Dismiss [ECF No. 40]. The parties thenengaged in discovery-related litigation. Plaintiffs moved to compel discovery from Defendants [ECF No. 48; see ECF No. 53]; Defendants opposed the motion [ECF No. 52]; and Magistrate Judge Hunt ultimately entered an order granting in part Plaintiffs' motion to compel, where he crystallized the scope of discovery on certain disputed matters and instructed the parties to confer to resolve outstanding discovery issues [ECF No. 60].

On May 13, 2021—almost exactly one year after the case was filed [ECF No. 1 (May 19, 2020)], and four days before the noticed hearing on Defendants' Motions—Defendants filed a Notice with the Court indicating that, on May 12, 2021, they submitted a Petition to the Public Utility Commission of Texas ("PUCT") [ECF No. 76]. Defendants' Petition seeks a declaration from the PUCT that clarifies whether Defendants are "required to obtain a retail electric provider certificate, under 16 Texas Administrative Code § 25.107(a)(1), to provide electric service to [Plaintiff Pete's Burgers]" [ECF No. 78-1 (Public Utility Commission of Texas's Order No. 1)]. According to Defendants, they have filed this petition because Plaintiff Pete's Burger's alleges in the FAC that Defendants "illegally provided retail electric service to Pete's Burgers without first obtaining a certificate to operate as a retail electric provider (REP) pursuant to 16 Tex. Admin. Code § 25.107(a)(1)," and that rule applies only "in areas of the state that have adopted customer choice, and as noted above, the area served by GP&L is not such an area" [ECF No. 76-1 pp. 3-4]. Defendants argue that a declaratory order by the PUCT on this issue "is necessary to avoid the possibility that Commission rules are inappropriately interpreted or misapplied by the Florida court as part of Pete's Burgers' suit in Florida" [ECF No. 76-1 p. 4].

PARTIES' ARGUMENTS

Defendants believe that a stay of discovery is warranted because they are likely to prevail on their Motion to Abstain and/or Dismiss [ECF No. 40 p. 4]. Defendants' Motion to Abstain asksthis Court to decline to adjudicate the case based upon the doctrines of Burford abstention and primary jurisdiction [ECF No. 40 pp. 1-2]. Defendants assert that Plaintiffs have alleged purported violations of Florida and Texas's administrative codes governing utilities, see Fla. Admin. R. 25-6.049(9)(b), see also 16 TAC 25, et. seq., and hence that the Court should abstain from adjudicating the case to permit the relevant state agencies—Florida's Public Service Commission ("PSC") and the PUCT (Public Utility Commission of Texas)—to decide whether state regulatory policy precludes Defendants' conduct [ECF No. 40 pp. 4-5]. Defendants further claim that the Court's adjudication of this controversy could result in undue federal interference in those two states' regulatory processes [ECF No. 40 p. 5]. With respect to Rule 12(b), Defendants argue that the FAC is legally deficient in multiple respects and is premised on a misreading of the relevant lease provisions [ECF No. 40 pp. 5-6].

Beyond the foregoing merits arguments, Defendants assert that, absent a stay, Defendants will be forced to incur significant expense in responding to voluminous discovery requests spanning many properties nationwide over a fifteen-year period [ECF No. 40 pp. 6-9].

In opposition, Plaintiffs assert that Defendants are not likely to prevail in their Motion to Abstain under Burford and/or primary jurisdiction, or in their Motion to Dismiss under Rule 12(b) [ECF No. 47 p. 4]. As to abstention and primary jurisdiction, Plaintiffs dispute Defendants' assertion that the claims in the FAC are grounded upon purported regulatory violations, noting that none of the counts in the FAC raises claims under any state regulatory codes [ECF No. 47 p. 4]. Plaintiffs also assert that federal district courts resolve the type of claims asserted in the FAC in a commonplace fashion, including in the relatively recent and similar CBL Litigation in the MiddleDistrict of Florida [ECF No. 47 p. 13].2 As to Rule 12(b), Plaintiffs respond that the FAC contains well-pled allegations and states plausible claims for relief as to all counts alleged [ECF No. 47 pp. 12-18]. Finally, on the question of discovery burden, Plaintiffs argue that Defendants misrepresent the scope of the discovery requests, and that any stay would prejudice them and the class members with an undue delay in the progression of the case [ECF No. 47 pp. 18-20].

II. LEGAL STANDARDS

"District courts are given 'broad discretion over the management of pre-trial activities, including discovery and scheduling."' Cabrera v. Progressive Behav. Sci., Inc., 331 F.R.D. 185, 186 (S.D. Fla. 2019) (quoting Johnson v. Bd. of Regents of Univ. of Ga., 263 F.3d 1234, 1269 (...

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