BRIGADE CALVARY FUND LTD v. Kieran J. McGrath, Defendant–Appellant. (2025)

Order, Supreme Court, New York County (Melissa A. Crane, J.), entered on or about May 28, 2025, which denied the appealing defendant's request to continue a stay of discovery previously imposed in this action, pending resolution of motions to dismiss in a related securities class action in the United States District Court, Southern District of New York, entitled Jiang v. Chirico, et al., No. 23–cv–01258, unanimously modified, on the law, to the extent of continuing the stay of discovery imposed on or about January 10, 2025, pending the federal court's determination of a motion to stay discovery in this action while the federal court considers motions to dismiss in the federal action, and otherwise affirmed, without costs.

The court presiding over the federal action should first address whether discovery in this action should be stayed pursuant to the Securities Litigation Uniform Standards Act of 1998 (15 USC § 78u–4[b][3][D]) or on another basis.  We defer to the federal court, and abstain from otherwise addressing defendant's substantive challenges to the motion court's discretionary decision not to continue the stay of discovery subsequent to its decision on defendant's motion to dismiss, including whether the state and federal actions share a substantial identity and whether allowing discovery in this action prior to a resolution of the motions to dismiss in the federal action would cause undue prejudice to the plaintiffs in that action.