Hermanson v. Lenovo Group Limited

Opinion

MARK HERMANSON, et al., Case No. 23-cv-05890-JSW

Plaintiffs, ORDER GRANTING MOTION TO STAY v. Re: Dkt. No. 62 LENOVO GROUP LIMITED, et al., Defendants.

Now before the Court for consideration is the motion to dismiss or to stay filed by Defendant Lenovo (United States), Inc. (“Lenovo”). The Court has considered the parties’ papers, relevant legal authority, and the record in this case, and finds the motion suitable for disposition without oral argument. See N.D. Civ. L.R. 7-1(b). The Court VACATES the hearing set for November 1, 2024, and GRANTS Lenovo’s motion. The Court will not repeat the background of this or the related litigation, which is set forth in its previous Order granting, in part, and denying, in part, Lenovo’s first motion to stay. After the Court issued that Order, the Plaintiffs in the related Axelrod case sought – and obtained - discovery on “Est Value” on the basis that it was relevant to show Lenovo’s deceptive advertising practices continued. According to Lenovo, Plaintiff Chen has not pursued discovery specific to his claims here. Chen and the Axelrod Plaintiffs have attempted to coordinate discovery. The Axelrod Plaintiffs also filed their motion for class certification, which Lenovo has opposed. Lenovo again argues that this case should be stayed pending resolution of Axelrod. “After weighing the equities of the case, [a] district court may exercise its discretion to dismiss a duplicative later-filed action, to stay that action pending resolution of the previously filed action, to enjoin the parties from proceeding with it, or to consolidate both actions.” Adams v. Cal. Dep’t of Health Servs., 487 F.3d 684, 688 (9th Cir. 2007). Similarly, under the first-to-file rule, a district court has the discretion “transfer, stay, or dismiss an action if a similar complaint has previously been filed in another federal court.” Alltrade, Inc. v. Uniweld Prods., 946 F.2d 622, 623 (9th Cir. 1991). The Court considers the nature of the putative classes when considering whether to stay one class action in favor of another. See, e.g., Iglesias v. Arizona Beverages USA, LLC, No. 22- cv-09108-JSW, 2023 WL 6795416, at *4 (N.D. Cal. Oct. 13, 2023) (court considers putative classes). To determine whether one case is “duplicative” of another case, courts use the four- factor “transaction test developed in the context of claim preclusion.” Adams, 487 F.3d at 689. Lenovo continues to focus on whether this case and Axelrod “arise out of the same transactional nucleus of facts.” Id. (quoting Costantini v. Transworld Airlines, 681 F.2d 1199, 1201-02 (9th Cir. 1982).) Claims arise out of the “same transactional nucleus” when they “are related to the same set of facts and … could conveniently be tried together.” W. Sys., Inc. v. Ulloa, 958 F.2d 864, 871 (9th Cir.1992). Under the first to file rule, “[t]o determine whether two suits involve substantially similar issues, a court must look at whether there is ‘substantial overlap’ between the two suits.” Kohn Law Grp., Inc. v. Auto Parts Mfg. Miss., Inc., 797 F.3d 1237, 1241 (9th Cir. 2015). As the Court previously concluded, the plaintiffs in Axelrod and Chen challenge the allegedly misleading manner, in which Lenovo advertises the prices of products on its website. Some of the claims do differ, and Chen purchased his product on August 26, 2023, which weighs against staying claims for damages. However, the Court has already stayed Hermanson and Lin’s claims, and Chen has not persuaded the Court that his proposed injunctive release class does not significantly overlap with the injunctive relief requested in Axelrod. The Court has considered the subsequent developments in both cases and, in the exercise of its discretion, concludes that the equities weigh in favor of staying Chen’s claims pending a ruling on the Axelrod Plaintiffs’ 1 lifted.

3 Dated: October 15, 2024 fo /

i JEFFREY ,S./WHIT 5 United Syftet Distri“t Judge 6 □□ 8 9 10 11 12

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