Gold Coast Search Partners LLC v. Career Partners, Inc.

• Court: District Court, N.D. California
• Decided: September 11, 2019
• Docket: 3:19-cv-03059
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 GOLD COAST SEARCH PARTNERS Case No. 19-cv-03059-EMC LLC, et al., 8 Plaintiffs, ORDER DENYING PLAINTIFFS’ 9 MOTION FOR PRELIMINARY v. INJUNCTION, AND DENYING IN 10 PART AND GRANTING IN PART CAREER PARTNERS, INC., et al., DEFENDANTS’ MOTION TO DISMISS 11 Defendants. Docket Nos. 9, 30 12 13 14 Plaintiffs Gold Coast Search Partners LLC (“Gold Coast”), Anna Brady, and Janelle 15 Matthews (collectively, “Plaintiffs”) filed suit seeking declaratory and injunctive relief. Brady and 16 Matthews signed non-compete and non-solicitation covenants in a pre-employment agreement 17 (“Employment Agreement”) when they were former employees of Defendants Career Partners, 18 Inc. (“CPI”) and Brian O’Callaghan (collectively, “Defendants”). Plaintiffs’ complaint seeks a 19 declaratory judgment holding these covenants invalid. Plaintiffs also seek to enjoin Defendants 20 from enforcing the Employment Agreement in an earlier-filed action before a New York state 21 court. 22 Pending before the Court are two motions: Plaintiffs’ preliminary injunction motion (“PI 23 Mot.”) and Defendants’ motion to dismiss (“MTD”). The Court heard both motions in a 24 consolidated hearing. 25 Pursuant to the reasons discussed below, Plaintiffs’ preliminary injunction motion is 26 DENIED because (1) the requested relief would enjoin parallel state proceedings, which violates 27 the Anti-Injunction Act, and (2) the requested relief seeks a prior restraint on speech. Defendants’ 1 remainder of Defendants’ motion to dismiss is DENIED as moot; the denial is without prejudice, 2 should Defendants wish to refile if the stay is lifted. 3 I. BACKGROUND FACTS 4 CPI is a New York corporation engaged in the business of talent recruitment for 5 investment firms. Compl. ¶ 8. CPI’s main office is in New York City. MTD at 3. It is in the 6 business of recruiting pre- and post-MBA candidates with CPI’s investment-firm clients. Id. 7 Brady and Matthews began working as recruiters for CPI in its San Francisco, California office in 8 September 2009 and March 2010, respectively. Compl. ¶ 15. Both separated from CPI in January 9 2019 to start their own company—Gold Coast, a professional recruiting firm for private equity 10 firms and hedge funds. Id. ¶¶ 4, 15; PI Mot. at 6. When Brady and Matthews joined CPI, they 11 signed the Employment Agreement containing the at-issue restrictive covenants. Compl. ¶ 4. 12 The Employment Agreement’s non-compete covenant reads as follows:

13 THIRD: Covenant Not to Compete

14 Candidate agrees that to the extent the Candidate is employed in the New York office, the Candidate agrees not to compete, directly or 15 indirectly, either as principal, manager, agent, consultant, officer, stockholder, partner, investor, lender or employee or in any other 16 capacity, carry on, be engaged in or have any financial interest in, any business or Person which is in competition with the business of 17 CPI within a 250 mile radius of CPI’s principal place of business. In view of the services which Candidate will perform and has 18 performed for-‘ [sic] CPI, which are special, unique, extraordinary and intellectual in character and will place Candidate in a position of 19 confidence and trust with the Customers and other employees of CPI and will provide her with access to Confidential Information of CPI, 20 Candidate expressly acknowledges that the restrictive covenants set forth in this Agreement are necessary in order to protect and 21 maintain the proprietary interests and other legitimate business interests of CPI. Candidate agrees and hereby acknowledges that (i) 22 such provisions do not impose a greater restraint than is necessary to protect the goodwill or other business interests of CPI, (ii) such 23 provisions contain reasonable limitations as to time and scope of activity to be restrained, (iii) such provisions are not harmful to the 24 general public, and (iv) such provisions a.re [sic] not unduly burdensome to Candidate, and the consideration of employment is 25 sufficient to compensate Candidate for the restrictions confined in such provisions. In consideration thereof and in light of Candidate's 26 education, skills and abilities, Candidate agrees that she will not assert in any forum that such provisions prevent Candidate from 27 earning a living or otherwise are void or unenforceable or should be the extent that this provision is inconsistent with California law, it 1 shall not apply. 2 Compl. ¶ 18 (emphasis added). The Employment Agreement also includes the following non- 3 solicitation clause:

4 “FOURTH: Non-Solicitation of CPI Customer & Employees

5 A. CPI Customers—Candidate agrees that he/she shall not, on their own behalf or on behalf of any business or Person other than CPI, 6 directly or indirectly, solicit, call on or contact any Customer, as defined under Article FIRST, for any business purpose or otherwise 7 as contemplated by this Agreement during the term of this Agreement without written permission from CPI. Candidate also 8 agrees that he or she will not provide services to any CPI Customer or accept employment with any CPI Customer without the consent 9 of CPI, which consent will not be unreasonably withheld. B. CPI Employees—Candidate agrees that he/she shall not, on their 10 own behalf or on behalf of any business or Person other than CPI, directly or indirectly, solicit or offer employment to, or hire, any 11 individual who has been employed by CPI at any time during the term of this Agreement without written permission from CPI.” 12 13 Compl. ¶ 19. The Employment Agreement defines “Customers” broadly to include past and 14 present clients of CPI, which further includes the clients’ agents and employees. Id. at ¶ 20. The 15 Employment Agreement contains a New York choice-of-law provision. Id. ¶ 26. Brady and 16 Matthews remained as California residents throughout their employment with CPI. PI Mot. at 3. 17 On occasions during their employment with CPI, Brady and Matthews traveled to and performed 18 services in New York. 19 After Plaintiffs began operating as Gold Coast, Defendants’ counsel sent Plaintiffs 20 correspondence requesting confirmation that Brady and Matthews would comply with the 21 Employment Agreement. Id. at 4. Defendants received no response. Id. Around the same time, 22 Plaintiffs opened an office in New York City (less than one mile away from CPI). Id. at 5. 23 Defendants allege Plaintiffs caused at least one CPI customer to engage Gold Coast rather than 24 CPI. MTD at 4. 25 Thereafter, Defendants filed suit in New York Supreme Court (the “New York Action”) to 26 enforce the restrictive covenants of the Employment Agreement, among other things. See 27 Plaintiffs’ Request for Judicial Notice (“RJN”), Ex. 1, at 14–22 (Defendants’ complaint in New 1 tortious interference with contract).1 Plaintiffs contend that the Employment Agreement’s 2 restrictions are unlawful and unenforceable in California. If enforced, these restrictions would 3 “destroy Gold Coast and would render Ms. Brady and Ms. Matthews unable to conduct their 4 business and work in their chose profession to earn a living.” Compl. ¶ 30. Plaintiffs also allege 5 that Defendants have disparaged and slandered Gold Coast. Id. 6 On May 24, 2019, Defendants herein propounded 300 document requests in the New York 7 Action, which requested information related to Plaintiffs’ interactions with CPI’s clients, among 8 other things. PI Mot. at 7. On June 14, 2019, Plaintiffs herein (defendants in the New York 9 Action) filed a motion to dismiss in the New York Action on forum non conveniens grounds, as 10 well as on the merits. MTD at 4, fn 3. Plaintiffs have not contested personal jurisdiction in New 11 York. 12 On July 31, 2019, the parties met for a preliminary conference in the New York Action. 13 At this conference, the New York Supreme Court stayed the case pending the disposition of the 14 motions before this Court. The parties also set November 7, 2019, as the hearing date before the 15 New York Supreme Court for the pending motion to dismiss. 16 II. PROCEDURAL BACKGROUND 17 Defendants’ New York Action commenced on April 25, 2019.2 Plaintiffs filed this action 18 on June 3, 2019. Docket No. 1. On July 13, 2019, Plaintiffs filed their motion for preliminary 19 injunction. Docket No. 22. Defendants filed their opposition to Plaintiffs’ motion while 20 concurrently filing their motion to dismiss. Docket Nos. 27, 30. 21 22

23 1 Plaintiffs and Defendants request that the Court take judicial notice of the filings in the New York Action. The Court GRANTS the requests for judicial notice. The Court may take judicial 24 notice of the state court pleadings. See e.g., United States ex rel. Robinson Rancheria Citizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992) (stating that “we may take notice of 25 proceedings in other courts, both within and without the federal judicial system, if those proceedings have a direct relation to matters at issue”); see also United States v. Wilson, 631 F.2d 26 118 (9th Cir. 1980) (stating that a court may take judicial notice of court records in another case).

27 2 Defendants’ New York Action is entitled Career Partners, Inc. v. Anna Brady, Janelle Bains 1 III. LEGAL STANDARD 2 A party seeking a preliminary injunction must meet one of two variants of the same 3 standard. Under the original Winter standard, a party must show “that he is likely to succeed on 4 the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the 5 balance of equities tips in his favor, and that an injunction is in the public interest.” Winter v. 6 NRDC, Inc., 555 U.S. 7, 20 (2008). Under the “sliding scale” variant of the Winter standard, “if a 7 plaintiff can only show that there are ‘serious questions going to the merits’—a lesser showing 8 than likelihood of success on the merits—then a preliminary injunction may still issue if the 9 ‘balance of hardships tips sharply in the plaintiff’s favor,’ and the other two Winter factors are 10 satisfied.” All. for the Wild Rockies v. Pena, 865 F.3d 1211, 1217 (9th Cir. 2017) (quoting Shell 11 Offshore, Inc. v. Greenpeace, Inc.,709 F.3d 1281,1291 (9th Cir. 2013)). 12 IV. DISCUSSION 13 A. Preliminary Injunction Motion 14 Plaintiffs seek to enjoin Defendants from the following four acts, as pled in their motion:

15 (1) engaging in any conduct to interfere with Plaintiffs’ business, including threats of legal action pursuant to the void and 16 unenforceable Restrictive Covenant Provisions; (2) falsely stating or claiming that Plaintiffs are prohibited from conducting their 17 business or that they are violating any agreement with CPI; (3) falsely stating or implying that Plaintiffs are bound by the 18 Restrictive Covenant Provisions; and (4) prosecuting their frivolous claims against Plaintiffs in New York. 19 20 PI Mot. at 3. Defendants argue that the Anti-Injunction Act (“AIA”) prohibits the Court from 21 enjoining the New York Action, and that the requested preliminary injunction is also an improper 22 restraint on speech. 23 1. Anti-Injunction Act (28 U.S.C. § 2283) 24 The AIA prevents federal courts from granting “an injunction to stay proceedings in a State 25 court except as expressly authorized by Act of Congress, or where necessary in aid of its 26 jurisdiction, or to protect or effectuate its judgments.” 28 U.S.C. § 2283. “Any doubts as to the 27 propriety of a federal injunction against state court proceedings should be resolved in favor of 1 The breadth of the Act's prohibition is broad.” Atlantic Coast Line R.R. Co. v. Bhd. of Locomotive 2 Eng'rs, 398 U.S. 281, 286–87 (1970). The threshold question is whether the injunction seeks to 3 stay a state court proceeding. If so, the next question is whether an exception applies. The three 4 exceptions to the AIA are for injunctions that: (1) Congress has expressly authorized; (2) are 5 necessary in aid of the federal court's jurisdiction; or (3) are necessary to protect or effectuate the 6 federal court's judgments. Bennett v. Medtronic, Inc., 285 F.3d 801, 805 (9th Cir. 2002), as 7 amended on denial of reh'g (May 15, 2002). These exceptions are narrowly construed. Atlantic 8 Coast., 398 U.S. at 287. 9 Defendants assert that the preliminary injunction motion, as written, would prevent 10 Defendants from pursuing a parallel state court action because—pursuant to items (1) and (4) in 11 Plaintiffs’ requested injunctive relief—it seeks to prevent them from “[e]ngaging in any conduct to 12 interfere with Plaintiffs’ business, including threats of legal action” and “[p]rosecuting their claims 13 against Plaintiffs in New York.” Despite this, Plaintiffs argue that they are not requesting an order 14 enjoining the New York Action, but, instead, seek an order enjoining the Defendants from 15 enforcing the Employment Agreement against Plaintiffs. 16 However, Plaintiffs’ distinction is without a difference. Enjoining Defendants from 17 enforcing the Employment Agreement in New York, as Plaintiffs request, would have the effect of 18 enjoining a parallel state court action—which the AIA prohibits. Bennett, 285 F.3d at 805. 19 (“Ordering the parties not to proceed is tantamount to enjoining the proceedings.”) Thus, 20 Plaintiffs’ request for preliminary injunction seeks to enjoin a parallel state court proceeding and 21 falls within the ambit of the AIA. 22 The next inquiry is whether an exception applies. The Ninth Circuit’s decision in Bennett 23 is instructive of the AIA’s application here. In Bennett, the Ninth Circuit reversed the lower 24 court’s grant of injunctive relief, which enjoined a parallel state court action in Tennessee.3 There, 25 as here, was a parallel state court action wherein the state-court plaintiffs were attempting to 26 enforce a non-compete and non-solicitation agreement. Id. at 803. The Ninth Circuit found no 27 1 exception applied to the AIA. Id. at 805–06. In so doing, the court found no congressional 2 authorization and no federal judgments were at issue. Id. at 806. The only question then was 3 whether an injunction was necessary “in aid of the federal court’s jurisdiction[.]” Id. The threat 4 posed by a parallel state court proceeding is most prominently “in aid of jurisdiction” when it is 5 for in rem actions or an in personam action that is similar to an in rem action. Id. at 807 (citing 6 Alpine Land & Reservoir, 174 F.3d 1007, 1013–14 (9th Cir. 1999) [water rights sufficiently 7 similar to in rem actions]). The Bennett court held that the injunction was not “necessary” in the 8 aid of federal jurisdiction for the employees’ personal rights because to hold otherwise would 9 eliminate parallel or related federal and state proceedings. Id. at 807. 10 At the hearing, counsel for Plaintiffs were unable to address how or why the AIA does not 11 apply. Because the rights Plaintiffs are seeking to enforce are in personam (i.e., a judgment can be 12 enforceable against them wherever they are), their request for a preliminary injunction to enjoin 13 the New York Action violates the AIA, and no exception applies. See Bennett, 285 F.3d at 805 14 (“injunctions are permitted where an in personam action bears substantial similarity to an in rem 15 action.”). Accordingly, the requested relief in Plaintiffs’ preliminary injunction motion that would 16 effectively enjoin the New York Action is DENIED. In so holding, the Court does not make any 17 findings under Winter. 18 2. Prior Restraint on Speech 19 The remaining requested relief is problematic for a different reason. Plaintiffs also seek to 20 enjoin Defendants from (1) stating or claiming that Plaintiffs are prohibited from conducting their 21 business or that they are violating any agreement with Defendants; and (2) stating or implying that 22 Plaintiffs are bound by the Employment Agreement. Defendants contend this request is an 23 improper prior restraint on speech. 24 Plaintiffs allege the speech is directed towards recruiting candidates—i.e., clients targeted 25 by both Gold Coast and CPI. Because Plaintiffs seek to enjoin Defendants’ speech before it 26 occurs, the requested preliminary injunction functions as a prior restraint. See Allen v. Ghoulish 27 Gallery, 2007 WL 1555739 *2 (S.D. Cal. May 23, 2007) (citing Smith v. Daily Mail Publishing 1 prior restraint on speech.”). Prior restraints are presumptively unconstitutional. See Organization 2 for a Better Austin v. Keefe, 402 U.S. 415, 419 (1971) (“Any prior restraint on expression comes 3 to this Court with a 'heavy presumption' against its constitutional validity.”) (citations omitted). 4 Though the Supreme Court has never held that prior restraints are always unconstitutional as a 5 matter of law, see Bantam Books, Inc. v. Sullivan, 372 U.S. 58, 71 (1963), only in “exceptional 6 cases” may courts permit this “extraordinary remed[y].” CBS Inc. v. Davis, 510 U.S. 1315, 1317 7 (1994) (citing Nebraska Press Ass'n v. Stuart, 427 U.S. 539, 562 (1975)). Plaintiff has not 8 established a sufficiently compelling justification for the prior restraint on speech sought herein. 9 Since even potential danger to national security has been held insufficient to override prior 10 restraint, Defendants’ disparaging comments to potential Gold Coast clients likely do not pass 11 muster. While the Court recognizes and is sympathetic to the unique nature of Plaintiffs’ business 12 profession, which could be threatened by the alleged slander, the Court has an obligation to 13 delicately balance such interests with the constitutional right to free speech. See Nebraska Press 14 Ass'n v. Stuart, 427 U.S. 539, 570 (1976) (“the guarantees of freedom of expression are not an 15 absolute prohibition under all circumstances, but the barriers to prior restraint remain high and the 16 presumption against its use continues intact.”). 17 To be sure, commercial speech receives less protection under the First Amendment than 18 non-commercial speech. Allen, WL 1555739, at *3 (citing U.S. v. Edge Broadcasting Co., 509 19 U.S. 418, 426 (1993). But even commercial speech enjoys protection against prior restraints. See, 20 e.g., New.Net, Inc. v. Lavasoft, 356 F. Supp. 2d 1071, 1088 (C.D. Cal. 2003) (preliminary 21 injunction is not available for enjoining libelous statements, even for commercial speech and even 22 where the false statements would likely cause injury to business or property.). 23 It is true that the “First Amendment offers no protection for false or deceptive commercial 24 speech.” Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n, 447 U.S. 557, 563 (1980). 25 However, truthful commercial speech does enjoy meaningful First Amendment protection. 26 Ohralik v. Ohio State Bar Ass'n, 436 U.S. 447, 456 (1978); Bd. of Trustees of State Univ. of New 27 York v. Fox, 492 U.S. 469, 478 (1989). A preliminary injunction is not ideal for resolving the 1 pending in another court. 2 Here, there are additional reasons that counsel against this Court issuing the injunction 3 against speech sought by Plaintiffs. The content that Plaintiffs seek to censor concerns a publicly- 4 filed lawsuit, the details of which are already made available to the public. An injunction from 5 this Court would ostensibly function as a gag order issued by another court. The New York 6 Supreme Court is better situated to address whether a prior restraint on speech is appropriate 7 because it is intertwined with the litigation, which will require analyzing the truth of the speech 8 Plaintiffs seek to restrain through their pending motion to dismiss. Accordingly, the remainder of 9 their preliminary injunction motion is DENIED. 10 B. Motion to Dismiss 11 Defendants’ motion makes five requests. According to Defendants, the Court (1) should 12 dismiss or stay this action under the Colorado River; (2) stay this action pursuant to its inherent 13 powers under Landis; (3) dismiss the claim for injunctive relief; (4) dismiss the claim for 14 declaratory relief; and/or (5) dismiss Defendant O’Callaghan entirely. As stated at the outset of 15 this order, the Court will stay this action, thereby rendering the remainder of Defendants’ motion 16 moot. 17 Under Colorado River, a district court may decline to “exercise federal jurisdiction, in 18 deference to pending, parallel state proceedings” when such a decision is justified by 19 considerations “of wise judicial administration, giving regard to conservation of judicial resources 20 and comprehensive disposition of litigation.” Montanore Minerals Corp. v. Bakie, 867 F.3d 1160, 21 1165–66 (9th Cir. 2017). In exceptional circumstances, a federal court may decline to exercise 22 federal jurisdiction where “the order to the parties to repair to the state court would clearly serve 23 an important countervailing interest.” Id. at 813. 24 The Ninth Circuit has articulated a balancing test that considers the following eight factors:

25 (1) which court first assumed jurisdiction over any property at stake; (2) the inconvenience of the federal forum; (3) the desire to avoid 26 piecemeal litigation; (4) the order in which the forums obtained jurisdiction; (5) whether federal law or state law provides the rule of 27 decision on the merits; (6) whether the state court proceedings can will resolve all issues before the federal court. 1 2 R.R. St. & Co. Inc. v. Transp. Ins. Co., 656 F.3d 966, 978 (9th Cir. 2011). However, these factors 3 should not be evaluated as a “mechanical checklist” and “[a]ny doubt as to whether a factor exists 4 should be resolved against a stay or dismissal.” Seneca Ins. Co., Inc. v. Strange Land, Inc., 862 5 F.3d 835, 842 (9th Cir. 2017). 6 Defendants argue that the balance of factors under Colorado River weigh in favor of 7 staying the instant action. Plaintiffs contend that abstention under Colorado River is only 8 appropriate under exceptional circumstances, which are not present here. But Plaintiffs also 9 acknowledge that a stay (instead of a dismissal) would ensure that the federal forum will remain 10 open if the state forum proves to be inadequate. The following factors favor a stay. 11 1. Jurisdiction Over Property at Stake and Federal or State Law Deciding the Merits 12 The parties are in accord that no property is at stake. The parties also agree that federal 13 law does not provide the rule of decision on the merits because state law governs whether the 14 Employment Agreement is enforceable. These factors are either neutral or weigh in favor of a 15 stay in this Court. Cf. R.R. St. & Co. Inc., 656 F.3d at 980. 16 2. Convenience of Federal Forum 17 Defendants concede that the Court is not an inconvenient form (nor is it the more 18 convenient or only forum), so the factor is neutral. Plaintiffs argue that, under California law, it is 19 the forum in which this lawsuit must be adjudicated because of California Labor Code section 20 925, which prohibits an employer from requiring its employees to sign a forum-selection or 21 choice-of-law clause as a condition of employment. See Cal. Labor Code § 925(a)(1)–(2). 22 Defendants dispute that Section 925 applies. Section 925 applies only to contracts entered, 23 modified, or extended on or after January 1, 2017. Cal. Lab. Code § 925(f). Plaintiffs signed their 24 contracts in 2010 but argue that there were modifications to their bonus structure after 2017. 25 During the hearing, however, Plaintiffs’ counsel were unable to persuade the Court as to why the 26 New York Supreme Court cannot or should not resolve this issue. 27 3. Avoiding Piecemeal Litigation 1 discovery, since both actions involve the enforceability of the Employment Agreement and 2 discovery taken in one action certainly will be relevant to the other. It is indisputable that there is 3 a threat of piecemeal litigation here—both actions require interpretation of the Employment 4 Agreement and the litigation of the gateway issues of whether to apply California or New York 5 law. The threat of piecemeal litigation is therefore significant enough to warrant weighing this 6 factor in favor of a stay. 7 4. Priority of Proceedings 8 The Ninth Circuit considers two factors: (1) the filing dates and (2) the progress of both 9 cases. R.R. St. & Co. Inc., 656 F.3d at 980. The New York Action commenced first; but the 10 parties dispute how far it has progressed to date. To Defendants, the New York Action is further 11 along because Plaintiffs fully briefed their motion to dismiss and responded (by objection) to their 12 discovery requests. Plaintiffs concede that discovery in the New York Action is ongoing and that 13 their motion to dismiss is fully briefed and set for hearing. The parties met on July 31, 2019 for a 14 preliminary conference, under New York Uniform Civil Rules, and set the motion for oral 15 argument on November 7, 2019. The progression of the New York Action favors a stay. 16 5. Prevent Forum Shopping 17 Here, each party accuses the other of forum shopping. The Ninth Circuit has affirmed a 18 stay under the Colorado River doctrine “when it was readily apparent that the federal plaintiff was 19 engaged in forum shopping.” R.R. St. & Co. Inc., 656 F.3d at 981. Neither of the parties here 20 appear guilty of bad faith forum shopping. Both filed lawsuits in the forum in which they believed 21 was more opportunistic. The Ninth Circuit has not classified these actions as forum shopping. 22 See R.R. St. & Co. Inc., 656 F.3d at 981. This is a neutral factor. 23 6. Adequacy of State Court 24 Under Colorado River, this factor requires the Court to consider “whether the state court 25 proceedings can adequately protect the rights of the federal litigants[.]” Seneca Ins. Co., Inc., 862 26 F.3d at 845. This factor “pertains to whether there is an impediment to the state court protecting 27 the litigants’ federal rights . . . .” Id. Defendants make a strong showing that a New York court 1 persuaded that the New York Supreme Court is inadequately equipped to interpret and/or apply 2 California law. 3 7. State Court’s Ability to Resolve All Issues Before the Federal Court 4 As with the adequacy of the state court, Defendants convincingly show that the New York 5 Action can resolve all the issues before this Court. The case at bar and the New York Action are 6 substantially similar and parallel: both involve the same dispute over the Employment 7 Agreement, and both will require an analysis of New York or California law. As such, despite the 8 Colorado River doctrine’s high bar, most factors here weigh in favor of a stay (with the remaining 9 factors weighing neutrally). This matter is not one in which federal law plays a role, and 10 whichever court litigates this case will inevitably look to choice-of-law and contract law, both of 11 which are state law determinations. 12 During the hearing, the parties informed the Court that the oral argument on Plaintiffs’ 13 (plaintiffs herein; defendants therein) motion to dismiss in the New York Action is set for hearing 14 on November 7, 2019, despite neither party seeking an earlier date. Yet, Plaintiffs came to the 15 hearing with a high level of urgency and requested an injunction at least as to the duration of the 16 “peak recruiting season,” which began as early as the filing of this action and is expected to 17 continue until mid- to late-September.4 Plaintiffs represented that they have not presented the 18 same exigency to the New York Supreme Court, and defense counsel relatedly represented that 19 they would not oppose an expedited hearing in New York on this basis. 20 Accordingly, a stay is appropriate because of the foregoing factors so providing and 21 because the very issues before the Court now are teed up for resolution in the New York Supreme 22 Court on November 7, 2019—if not earlier. Defendants’ request for a stay of this proceeding is 23 therefore GRANTED. The remaining requests in Defendants’ motion are DENIED without 24 prejudice. Defendants may refile their motion to dismiss if this stay is lifted.5 25 4 Plaintiffs also proposed an expedited summary judgment motion. But the Court declined to 26 entertain such a proposal, as the urgency (i.e., the peak recruiting season) that gives rise to the need for an accelerated motion would have expired by the time the parties submit their briefs. 27 1 The parties are ordered to report for a status conference specially set for November 27, 2 || 2019, at 9:30 am. Both parties are permitted to appear telephonically. 3 This order disposes of Docket Nos. 9 and 30. 4 5 IT IS SO ORDERED. 6 7 Dated: September 11, 2019 8 : ED . CHEN 10 United States District Judge 11 12

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Z 18 19 20 21 22 23 24 25 26 27 28 further motions for injunctive relief. Relief can be sought from the New York court.