McNamara v. Stealth Power, LLC

Opinion

1 UNITED STATES DISTRICT COURT

2 DISTRICT OF NEVADA

3 THOMAS W. MCNAMARA, as Court- ) 4 Appointed Monitor for AMG Capital ) Management LLC, et al., ) Case No.: 2:18-cv-01813-GMN-NJK 5 ) Plaintiffs, ) ORDER 6 vs. ) 7 ) STEALTH POWER, LLC, ) 8 ) Defendant. ) 9 10 Before the Court is the parties’ Joint Status Report, (ECF No. 57), which addresses 11 whether the Court should stay the case in light of the United States Supreme Court’s grant of 12 certiorari in AMG Cap. Mgmt., LLC v. Fed. Trade Comm’n, No. 19-508 (the “FTC Case”). 13 The Monitor opposes a stay, while Defendant argues that the Court should stay the case. (See 14 generally JSR, ECF No. 57). For the reasons discussed below, the Court STAYS the case 15 pending resolution of the FTC Case. 16 District courts have broad power to stay proceedings pursuant to their inherent power to 17 manage their dockets. See Landis v. N. Am. Co., 299 U.S. 248, 254–55 (1936); Bechtel Corp. v. 18 Laborers’ Int’l Union, 544 F.2d 1207, 1215 (3d Cir. 1976); see, e.g., Collins v. Collins, No. 19 3:16-cv-00111-MMD-WGC, 2019 U.S. Dist. LEXIS 209881, at *1 (D. Nev. Dec. 5, 2019). In 20 deciding whether to issue a stay, the court should consider “the possible damage which may 21 result from the granting of a stay, the hardship or inequity which a party may suffer in being 22 required to go forward, and the orderly course of justice measured in terms of the simplifying 23 or complicating of issues, proof, and questions of law which could be expected to result from a 24 stay.” Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9th Cir. 2005) (quoting CMAX, Inc. v. 25 Hall, 300 F.2d 265, 268 (9th Cir. 1962). The court should also consider the judicial resources 1 that may be saved by staying the action. See, e.g., Pate v. Depuy Orthopaedics, Inc., No. 2:12- 2 cv-01168-MMD-CWH, 2012 U.S. Dist. LEXIS 114333, 2012 WL 3532780, at *2 (D. Nev. 3 Aug. 14, 2012). 4 After considering the applicable factors and the potential impact of the United States 5 Supreme Court’s decision in the FTC Case on this matter, the Court finds that the case should 6 be stayed. The Monitor argues that a stay should not be granted because this is a collection 7 action as opposed to a “clawback” case against an entity in a monitorship or receivership by a 8 monitor or receiver. (JSR 1:16–24). However, the central issue in the grant of certiorari in the 9 FTC Case is the FTC’s power to recover monetary relief, generally—not just monetary relief 10 against unlawful transfers from monitorship entities to third parties—resolution of which could 11 affect the Monitor’s scope of authority even if the Supreme Court affirms this Court’s decision 12 in 2:12-cv-00536-GMN-VCF. Waiting for the Supreme Court before continuing with this case 13 thus prevents rulings on the merits that might later be undermined. Such rulings could also 14 cause prejudice to Defendant by improperly ordering a money judgment that is later reversed. 15 The Monitor also argues that a stay would prejudice his ability to recover a judgment 16 because Defendant has threatened to declare bankruptcy in the event of a judgment. (JSR 2:18– 17 3:19). Not only has Defendant denied threatening bankruptcy, (Id. 5:9–19), but the Court is 18 unpersuaded that a delayed judgment would affect Defendant’s solvency. The Monitor has not 19 argued that Defendant’s financial position during a stay is expected to weaken; instead, he 20 argues that a judgment itself would potentially lead Defendant to declare bankruptcy. (Id. 2:18– 21 3:19). A stay would not change the potential effect of a prospective monetary judgment. If the 22 Monitor can show otherwise, he may move to lift the stay. Thus, the circumstances of

23 certiorari in the FTC Case make a stay appropriate. 24 // 25 // 1 Accordingly, 2 IT IS HEREBY ORDERED that the Court STAYS this case pending the United States 3 Supreme Court’s decision in AMG Capital Management, LLC v. Federal Trade Commission, 4 No. 19-508. The Monitor and Defendant shall jointly file a status report every three months 5 beginning on November 2, 2020, addressing the status of AMG Capital Management, LLC v. 6 Federal Trade Commission, No. 19-508. Upon the United States Supreme Court’s decision, 7 the parties shall jointly petition the Court to lift the stay. 8 IT IS FURTHER ORDERED that dispositive motions currently pending before the 9 Court in this matter need not be refiled, and the Court will address them once the stay is lifted. 10 IT IS FURTHER ORDERED that Defendant’s Motion for Sanctions, (ECF No. 34), is 11 DENIED without prejudice. Defendant may refile the Motion after the Court lifts the stay. 12 IT IS FURTHER ORDERED that the Monitor can petition the Court for relief from 13 the stay if there is evidentiary support showing conduct by Defendant that may harm the 14 Monitor’s ability to recover a judgment in this matter. 15 DATED this __3___ day of September, 2020. 16 17 18 ___________________________________ Gloria M. Navarro, District Judge 19 UNITED STATES DISTRICT COURT 20 21 22 23 24 25