1 2 3 4 5 UNITED STATES DISTRICT COURT 6 EASTERN DISTRICT OF CALIFORNIA 7 8 NICOLE ANDERSON, Case No. 1:24-cv-00535-KES-CDB
9 Plaintiff, ORDER GRANTING DEFENDANT’S MOTION TO STAY CASE PENDING 10 v. RULING ON MOTION TO COMPEL ARBITRATION 11 OPTUM SERVICES, INC., (Doc. 11) 12 Defendant. 13 14 Pending before the Court is the motion of Defendant Optum Services, Inc. (“Defendant”), 15 to stay this case (Doc. 11) pending resolution of a separate motion to compel arbitration (Doc. 16 10). Defendant filed its motion to stay on September 25, 2024. (Doc. 11). Plaintiff did not file 17 an opposition or statement of non-opposition. See (Doc. 13). For the reasons set forth below, the 18 Court shall stay proceedings in this action until the Court rules on Defendant’s motion to compel 19 arbitration. 20 I. Background 21 On March 20, 2024, Plaintiff initiated this action with the filing of a complaint in Los 22 Angeles County Superior Court, alleging 11 causes of action related to her former employment by 23 Defendant. See (Doc. 1-2). Defendant removed the action to this Court on May 6, 2024. (Doc. 24 1). On September 25, 2024, Defendant filed the currently pending motion to compel arbitration. 25 (Doc. 10). That same day, Defendant filed its motion to stay the case pending ruling on the 26 motion to compel arbitration. (Doc. 11). 27 II. Standard of Law “[T]he power to stay proceedings is incidental to the power inherent in every court to 1 control the disposition of the causes on its docket with economy of time and effort for itself, for 2 counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936); Lockyer v. Mirant 3 Corp, 398 F.3d 1098, 1109 (9th Cir. 2005). In granting and lifting stays, a court must weigh “the 4 length of the stay against the strength of the justification given for it.” Yong v. I.N.S., 208 F.3d 5 1116, 1119 (9th Cir. 2000). “If a stay is especially long or its term is indefinite, [courts] require a 6 greater showing to justify it.” Id. 7 In considering whether to grant a stay, this Court must weigh several factors, including 8 “[1] the possible damage which may result from the granting of a stay, [2] the hardship or 9 inequity which a party may suffer in being required to go forward, and [3] the orderly course of 10 justice measured in terms of the simplifying or complicating of issues, proof, and questions of law 11 which could be expected to result from a stay.” CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 12 1962) (citing Landis, 299 U.S. at 254–55). A stay may be warranted in deference to ongoing, 13 parallel proceedings “regardless of whether the separate proceedings are ‘judicial, administrative, 14 or arbitral in character, and does not require that the issues in such proceedings are necessarily 15 controlling of the action before the court.’” Scottsdale Indemnity Co. v. Yamada, No. 1:18-cv- 16 00801-DAD-EPG, 2019 WL 7601833, at *3 (E.D. Cal. Jan. 10, 2019) (quoting Leyva v. Certified 17 Grocers of Cal., Ltd., 593 F.2d 857, 864 (9th Cir. 1979)). “[I]f there is even a fair possibility that 18 the . . . stay will work damage to someone else, the party seeking the stay must make out a clear 19 case of hardship or inequity.” Lockyer, 398 F.3d at 1112. 20 III. Discussion 21 1. The Possible Damage That May Result from Granting a Stay 22 Defendant argues that Plaintiff will not suffer harm if a stay is granted pending the district 23 court’s ruling on its motion to compel arbitration, even if the motion to compel arbitration is 24 denied, since the stay is temporary. (Doc. 11 at 6-7). 25 “[A] plaintiff may be able to show prejudice by citing particular witnesses or documents 26 that may be adversely affected by a stay.” Eberle v. Smith, No. 07-CV-0120 W(WMC), 2008 WL 27 238450, at *3 (S.D. Cal. Jan. 29, 2008) (imposing stay where Plaintiff did not show with any 1 appeal); see Echevarria v. Aerotek, Inc., No. 16-cv-04041-BLF, 2019 WL 3207812, at *4 (N.D. 2 Cal. July 16, 2019) (granting stay after three years of litigation where plaintiff did not identify 3 any particular witnesses or documents that may be adversely impacted); Murphy v. DirecTV, Inc., 4 No. 2:07-cv-06465-FMC-VBKx, 2008 WL 8608808, at *3 (C.D. Cal. July 1, 2008) (discounting 5 alleged prejudice of risk of lost evidence as speculative). 6 Plaintiff failed to oppose Defendant’s motion and, therefore, has identified no resulting 7 harm that may result from a stay. Accordingly, the Court finds that Plaintiff has not demonstrated 8 sufficient prejudice to warrant denial of a stay. Cf. Miles v. Tug, No. 2:18-cv-02860-DAD-AC, 9 2022 WL 16739566, at *3 (E.D. Cal. Nov. 7, 2022) (“the issuance of the stay will not 10 substantially injure plaintiff, and plaintiff’s arguments to the contrary – delay and fading memory 11 of key witnesses – are not availing.”) 12 2. The Hardship or Inequity That a Party May Suffer from Being Required to 13 Move Forward 14 Defendant claims that it would suffer irreversible prejudice absent a stay in this action 15 given that the claims that otherwise are subject to discovery may be compelled to arbitration. 16 (Doc. 11 at 6). 17 “Generally, monetary expenses incurred in litigation are not considered irreparable harm. 18 However, arbitration is unique in this aspect.” Zaborowski v. MHN Gov’t Servs., Inc., No. C 12- 19 05109 SI, 2013 WL 1832638, at *2 (N.D. Cal. May 1, 2013). Potentially arbitrable cases present 20 a unique circumstance because “if a party ‘must undergo the expense and delay of a trial before 21 being able to appeal an order denying a motion to compel arbitration, the advantages of 22 arbitration – speed and economy – are lost forever,’ a loss the Ninth Circuit describes as ‘serious, 23 perhaps, irreparable.’” Winig v. Cingular Wireless LLC, No. C-06-4297-MMC, 2006 WL 24 3201047, at *2 (N.D. Cal. Nov. 6, 2006) (quoting Alascom, Inc. v. ITT North Electric Co., 727 25 F.2d 1419, 1422 (9th Cir. 1984)); Miles, 2022 WL 16739566, at *2. Although the district court 26 retains discretion in a case such as this to grant or deny a stay following its consideration of the 27 Landis factors, in addressing automatic stay provisions of the Federal Arbitration Act pending 1 context. See Coinbase, Inc. v. Bielski, 599 U.S. 736, 743 (2023): 2 If the district court could move forward with pre-trial and trial proceedings while the appeal on arbitrability was ongoing, then 3 many of the asserted benefits of arbitration (efficiency, less expense, less intrusive discovery, and the like) would be irretrievably lost – 4 even if the court of appeals later concluded that the case actually belonged in arbitration all along. 5 6 Id. 7 In the context of stays pending resolution of a motion to compel arbitration, courts find 8 that the prejudice of delay “is outweighed by the potential prejudice that would result from further 9 litigation of claims which may ultimately be subject to arbitration.” In re Apple iPhone 3G 10 Prods. Liab. Litig., No. C 09-02045 JW, 2010 WL 9517400, at *2 (N.D. Cal. Dec. 9, 2010); Roe 11 v. SFBSC Management, LLC, No. 14-cv-03616-LB, 2015 WL 1798926, at *4 (N.D. Cal. Apr. 17, 12 2015) (acknowledging harm from the loss of witnesses, evidence or potential claimants but noting 13 such harm is possible in all cases and not a sufficiently substantial harm to warrant denial of stay 14 without evidence of unusual and particular risk).
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1 2 3 4 5 UNITED STATES DISTRICT COURT 6 EASTERN DISTRICT OF CALIFORNIA 7 8 NICOLE ANDERSON, Case No. 1:24-cv-00535-KES-CDB
9 Plaintiff, ORDER GRANTING DEFENDANT’S MOTION TO STAY CASE PENDING 10 v. RULING ON MOTION TO COMPEL ARBITRATION 11 OPTUM SERVICES, INC., (Doc. 11) 12 Defendant. 13 14 Pending before the Court is the motion of Defendant Optum Services, Inc. (“Defendant”), 15 to stay this case (Doc. 11) pending resolution of a separate motion to compel arbitration (Doc. 16 10). Defendant filed its motion to stay on September 25, 2024. (Doc. 11). Plaintiff did not file 17 an opposition or statement of non-opposition. See (Doc. 13). For the reasons set forth below, the 18 Court shall stay proceedings in this action until the Court rules on Defendant’s motion to compel 19 arbitration. 20 I. Background 21 On March 20, 2024, Plaintiff initiated this action with the filing of a complaint in Los 22 Angeles County Superior Court, alleging 11 causes of action related to her former employment by 23 Defendant. See (Doc. 1-2). Defendant removed the action to this Court on May 6, 2024. (Doc. 24 1). On September 25, 2024, Defendant filed the currently pending motion to compel arbitration. 25 (Doc. 10). That same day, Defendant filed its motion to stay the case pending ruling on the 26 motion to compel arbitration. (Doc. 11). 27 II. Standard of Law “[T]he power to stay proceedings is incidental to the power inherent in every court to 1 control the disposition of the causes on its docket with economy of time and effort for itself, for 2 counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936); Lockyer v. Mirant 3 Corp, 398 F.3d 1098, 1109 (9th Cir. 2005). In granting and lifting stays, a court must weigh “the 4 length of the stay against the strength of the justification given for it.” Yong v. I.N.S., 208 F.3d 5 1116, 1119 (9th Cir. 2000). “If a stay is especially long or its term is indefinite, [courts] require a 6 greater showing to justify it.” Id. 7 In considering whether to grant a stay, this Court must weigh several factors, including 8 “[1] the possible damage which may result from the granting of a stay, [2] the hardship or 9 inequity which a party may suffer in being required to go forward, and [3] the orderly course of 10 justice measured in terms of the simplifying or complicating of issues, proof, and questions of law 11 which could be expected to result from a stay.” CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 12 1962) (citing Landis, 299 U.S. at 254–55). A stay may be warranted in deference to ongoing, 13 parallel proceedings “regardless of whether the separate proceedings are ‘judicial, administrative, 14 or arbitral in character, and does not require that the issues in such proceedings are necessarily 15 controlling of the action before the court.’” Scottsdale Indemnity Co. v. Yamada, No. 1:18-cv- 16 00801-DAD-EPG, 2019 WL 7601833, at *3 (E.D. Cal. Jan. 10, 2019) (quoting Leyva v. Certified 17 Grocers of Cal., Ltd., 593 F.2d 857, 864 (9th Cir. 1979)). “[I]f there is even a fair possibility that 18 the . . . stay will work damage to someone else, the party seeking the stay must make out a clear 19 case of hardship or inequity.” Lockyer, 398 F.3d at 1112. 20 III. Discussion 21 1. The Possible Damage That May Result from Granting a Stay 22 Defendant argues that Plaintiff will not suffer harm if a stay is granted pending the district 23 court’s ruling on its motion to compel arbitration, even if the motion to compel arbitration is 24 denied, since the stay is temporary. (Doc. 11 at 6-7). 25 “[A] plaintiff may be able to show prejudice by citing particular witnesses or documents 26 that may be adversely affected by a stay.” Eberle v. Smith, No. 07-CV-0120 W(WMC), 2008 WL 27 238450, at *3 (S.D. Cal. Jan. 29, 2008) (imposing stay where Plaintiff did not show with any 1 appeal); see Echevarria v. Aerotek, Inc., No. 16-cv-04041-BLF, 2019 WL 3207812, at *4 (N.D. 2 Cal. July 16, 2019) (granting stay after three years of litigation where plaintiff did not identify 3 any particular witnesses or documents that may be adversely impacted); Murphy v. DirecTV, Inc., 4 No. 2:07-cv-06465-FMC-VBKx, 2008 WL 8608808, at *3 (C.D. Cal. July 1, 2008) (discounting 5 alleged prejudice of risk of lost evidence as speculative). 6 Plaintiff failed to oppose Defendant’s motion and, therefore, has identified no resulting 7 harm that may result from a stay. Accordingly, the Court finds that Plaintiff has not demonstrated 8 sufficient prejudice to warrant denial of a stay. Cf. Miles v. Tug, No. 2:18-cv-02860-DAD-AC, 9 2022 WL 16739566, at *3 (E.D. Cal. Nov. 7, 2022) (“the issuance of the stay will not 10 substantially injure plaintiff, and plaintiff’s arguments to the contrary – delay and fading memory 11 of key witnesses – are not availing.”) 12 2. The Hardship or Inequity That a Party May Suffer from Being Required to 13 Move Forward 14 Defendant claims that it would suffer irreversible prejudice absent a stay in this action 15 given that the claims that otherwise are subject to discovery may be compelled to arbitration. 16 (Doc. 11 at 6). 17 “Generally, monetary expenses incurred in litigation are not considered irreparable harm. 18 However, arbitration is unique in this aspect.” Zaborowski v. MHN Gov’t Servs., Inc., No. C 12- 19 05109 SI, 2013 WL 1832638, at *2 (N.D. Cal. May 1, 2013). Potentially arbitrable cases present 20 a unique circumstance because “if a party ‘must undergo the expense and delay of a trial before 21 being able to appeal an order denying a motion to compel arbitration, the advantages of 22 arbitration – speed and economy – are lost forever,’ a loss the Ninth Circuit describes as ‘serious, 23 perhaps, irreparable.’” Winig v. Cingular Wireless LLC, No. C-06-4297-MMC, 2006 WL 24 3201047, at *2 (N.D. Cal. Nov. 6, 2006) (quoting Alascom, Inc. v. ITT North Electric Co., 727 25 F.2d 1419, 1422 (9th Cir. 1984)); Miles, 2022 WL 16739566, at *2. Although the district court 26 retains discretion in a case such as this to grant or deny a stay following its consideration of the 27 Landis factors, in addressing automatic stay provisions of the Federal Arbitration Act pending 1 context. See Coinbase, Inc. v. Bielski, 599 U.S. 736, 743 (2023): 2 If the district court could move forward with pre-trial and trial proceedings while the appeal on arbitrability was ongoing, then 3 many of the asserted benefits of arbitration (efficiency, less expense, less intrusive discovery, and the like) would be irretrievably lost – 4 even if the court of appeals later concluded that the case actually belonged in arbitration all along. 5 6 Id. 7 In the context of stays pending resolution of a motion to compel arbitration, courts find 8 that the prejudice of delay “is outweighed by the potential prejudice that would result from further 9 litigation of claims which may ultimately be subject to arbitration.” In re Apple iPhone 3G 10 Prods. Liab. Litig., No. C 09-02045 JW, 2010 WL 9517400, at *2 (N.D. Cal. Dec. 9, 2010); Roe 11 v. SFBSC Management, LLC, No. 14-cv-03616-LB, 2015 WL 1798926, at *4 (N.D. Cal. Apr. 17, 12 2015) (acknowledging harm from the loss of witnesses, evidence or potential claimants but noting 13 such harm is possible in all cases and not a sufficiently substantial harm to warrant denial of stay 14 without evidence of unusual and particular risk). 15 Given Plaintiff’s lack of opposition to a stay, the Court is unable to meaningfully weigh 16 whether the harm Defendant may experience by proceeding with the action while the motion to 17 compel arbitration remains pending is outweighed by any (unstated) prejudice to Plaintiff. See 18 Miles, 2022 WL 16739566, at *3 (noting a court should not be put in a position “to guess at the 19 limitations that would be available if this matter were compelled to arbitration or whether the 20 court should allow broad discovery”) (quoting Mundi, 2007 WL 23885069, at *6. Accordingly, 21 the Court finds the relative hardships of conducting (or forgoing from undertaking) discovery 22 favors staying the case. 23 3. The Orderly Course of Justice 24 In cases where the FAA is implicated, public policy and the orderly course of justice favor 25 staying a civil action that may implicate compelled arbitration. Zaborowsky, 2013 WL 1832638, 26 at *3; Miles, 2022 WL 16739566, at *3. 27 Where (as here) there is a tangible concern about the potential for unnecessary 1 | is whether those resources are being used intelligently. Roe, 2015 WL 1798926, at *4 (“Prompt 2 | remedies are always preferred. But promptness is not the only goal and, like most ends, must 3 | bend to accommodate other concerns. The main concern here is the potential waste of the 4 | litigants’ and the court’s resources.”). 5 Based on its review of the pleadings, motion papers and a consideration of the competing 6 || equites articulated above, the Court finds that the orderly course of justice is best served by 7 | granting a stay. See Stiener v. Apple Computer, Inc., No. C 07-4486 SBA, 2007 WL 4219388, at 8 || *1 (N.D. Cal. Nov. 29, 2007); Galaxia Electronics Co., Ltd. v. Luxmax, U.S.A., No. LA CV 16- 9 | 05144 JAK(GJSx), 2017 WL 11566394, at *2 (C.D. Cal. Dec. 28, 2017). 10 | IV. Conclusion 11 For the reasons set forth above, 12 } 1. Defendant’s motions to stay (Doc. 11) is GRANTED; 13 } 2. This case is STAYED pending the Court’s ruling on Defendant’s motion to compel 14 | arbitration. (Doc. 10); and 15 | 3. Within 14 days of entry of the Court’s ruling on Defendant’s motion to compel arbitration, 16 | the parties shall file a joint report setting forth their respective positions regarding continued 17 | prosecution and possible scheduling of the case (and the filing of an amended joint scheduling 18 | report). 19 | IT IS SO ORDERED. Dated: _ October 28, 2024 | br Pr 21 UNITED STATES MAGISTRATE JUDGE 22 23 24 25 26 27 28