Gitlitz v. Bitrate Productions

• Court: District Court, D. Nevada
• Decided: September 26, 2025
• Docket: 2:24-cv-01081
• Status: Unknown

Opinion

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 Case No.: 2:24-cv-01081-JAD-DJA Tatum Gitlitz, 4 Plaintiff Order Granting Motions to Lift Stay and 5 v. Withdraw as Counsel 6 Bitrate Productions, [ECF Nos. 18, 19] 7 Defendant 8 Tatum Gitlitz sues her former employer, Bitrate Productions, alleging that the company 9 demoted her and cut her pay because she became pregnant. Because Gitlitz’s employment 10 agreement contained a valid arbitration clause, I granted Bitrate’s motion to compel arbitration 11 and stayed this case pending the completion of that process.1 Gitlitz now moves to lift that stay, 12 arguing that Bitrate has failed to participate in arbitration or pay required fees, causing the 13 arbitrator to cancel the proceedings entirely. Bitrate’s counsel also moves to withdraw, averring 14 that Bitrate discharged their services in June. Bitrate does not respond to either motion. 15 Because Bitrate’s conduct amounts to a default in the arbitration proceeding, it is no 16 longer entitled to a stay under § 3 of the Federal Arbitration Act. So I lift the stay and order this 17 case back on the litigation track. I also grant Bitrate’s counsel’s motion to withdraw and, 18 because corporations cannot proceed without counsel in federal court, Bitrate must retain new 19 counsel and file a notice of appearance by October 27, 2025. If Bitrate fails to do so, Gitlitz may 20 seek the entry of default against it. 21 22 23 1 ECF No. 16. 1 Discussion 2 Section 3 of the Federal Arbitration Act mandates that, if a party shows that the case 3 currently pending in federal court should be arbitrated under a written agreement between the 4 parties, the court must “stay the trial of the action until such arbitration has been had in 5 accordance with the terms of the agreement, providing [that] the applicant for the stay is not in

6 default in proceeding with such arbitration.”2 The Ninth Circuit has held that, in the event of 7 such a default after the court has stayed litigation and sent the case to arbitration, the court need 8 not compel the parties to return to arbitration.3 Instead, “[i]f a party defaults after an initial stay 9 and reference to arbitration, that permits a district court to vacate the § 3 stay.”4 The question of 10 arbitration default is one that the district court can decide.5 Courts generally conclude that the 11 failure to pay arbitration fees constitutes a material breach of the parties’ arbitration agreement 12 and is a substantial indication of default.6 13 I find that Bitrate has defaulted in the arbitration proceedings. Gitlitz has produced 14 evidence showing that Bitrate has failed to fulfill its outstanding payment obligations and

15 16 17 2 9 U.S.C. § 3. 18 3 Sink v. Aden Enters., Inc., 352 F.3d 1197, 1200 (9th Cir. 2003). 19 4 Id. at 1201. 5 See id. (affirming the district court’s decision lifting stay, noting that the “district court did not 20 err in finding [the opposing party] to be in default of arbitration”); Pre-Paid Legal Servs., Inc. v. Cahill, 785 F.3d 1287, 1296 (10th Cir. 2015) (finding that district courts have “the power to 21 decide whether a default has occurred under § 3” and citing Sink in support). 6 See, e.g., Sink, 352 F.3d at 1201 (noting that the “failure to pay required costs of arbitration was 22 a material breach of [the party’s] obligations in connection with the arbitration”); Agerkop v. Sisyphian LLC, 2021 WL 1940456, at *6 (C.D. Cal. Apr. 13, 2021); Pre-Paid Legal Servs., 786 23 F.3d at 1294; Caban v. Smartpay Leasing, LLC, 2018 WL 11247851, at *4 (M.D. Fla. June 28, 2018). 1 discharged its counsel.7 Because of those developments, the arbitrator cancelled the proceedings 2 and informed Gitlitz that “the matter will remain inactive” unless Bitrate pays the fee and retains 3 new counsel.8 Under these circumstances, arbitration cannot move forward without Bitrate’s 4 compliance, and there is no indication that Bitrate intends to comply. Indeed, it has failed to 5 oppose this motion, which alone constitutes consent to granting it under this district’s local

6 rules.9 So, because Bitrate has defaulted in the arbitration and thus cannot continue to insist on 7 that forum, I grant Gitlitz’s motion to lift the stay. 8 With good cause appearing, I also grant Bitrate’s counsel’s motion to withdraw. But 9 because corporations like Bitrate “must be represented by counsel,”10 Bitrate must retain new 10 counsel if it intends to defend against this lawsuit. I thus order Bitrate to retain counsel, and for 11 that counsel to file a notice of appearance by Monday, October 27, 2025. If Bitrate fails to 12 comply with this order, Gitlitz may seek an entry of default against it. 13 Conclusion 14 IT IS THEREFORE ORDERED that Tatum Gitlitz’s motion to lift the stay pending

15 arbitration [ECF No. 18] is GRANTED. The Clerk of Court is directed to 16 ADMINISTRATIVELY REOPEN this case and LIFT THE STAY. 17 18 19

20 7 ECF No. 18-1 at 1; see also ECF No. 10-1 at 6 (the parties’ arbitration clause, stating that the “costs of arbitration” will “be borne equally by both parties”). 21 8 Id. 22 9 L.R. 7-2(d). 10 Readling Int’l, Inc. v. Malulani Grp., Ltd., 814 F.3d 1046, 1053 (9th Cir. 2016); see also 23 United States v. High Country Broad. Co., Inc., 3 F.3d 1244, 1245 (9th Cir. 1993) (“A corporation may appear in federal court only through licensed counsel.”). 1 IT IS FURTHER ORDERED that Dickinson Wright, PLLC’s motion to withdraw as 2|| counsel [ECF No. 19] is GRANTED. Bitrate must retain new counsel, and that new counsel must file a notice of appearance, by Monday, October 27, 2025. 4 IT IS FURTHER ORDERED that this case is REFERRED to the magistrate judge to issue any orders necessary to return this case to the litigation track. 6 IT IS FURTHER ORDERED that the Clerk of Court is directed to MAIL this order to 7|| Bitrate’s last known addresses: 8 Bitrate Productions 6745 S. Surrey St. 9 Las Vegas, NV 89119 10 Bitrate Productions Corporation Service Company 11 112 North Curry Street Carson City, NV 89703 12

14 U.S. District Judge Terni A. Dorsey September 26, 2025 15 16 17 18 19 20 21 22 23