Sanchez v. Green Messengers, Inc.

• Court: District Court, N.D. California
• Decided: March 31, 2023
• Docket: 5:20-cv-06538
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 HANS SANCHEZ, Case No. 5:20-cv-06538-EJD

9 Plaintiff, ORDER GRANTING MOTION TO STAY 10 v.

11 GREEN MESSENGERS, INC., et al., Re: ECF No. 56 Defendants. 12

13 Plaintiff Hans Sanchez brings this putative class action against Defendants Green 14 Messengers, Inc. (“Green Messengers”) and Amazon.com Services, LLC (“Amazon”), alleging 15 various wage and hour violations under the California Labor Code and California Business and 16 Professions Code. Third Am. Compl. (“TAC”), ECF No. 47. Now before the Court is Amazon’s 17 motion to stay pending the resolution of state administrative proceedings before the California 18 Labor Commissioner. Mot. to Stay (“Mot.”), ECF No. 56. The Court finds this motion suitable 19 for decision without oral argument. See Civil L.R. 7-1(b). Having considered the parties’ 20 submissions and the record in this matter, the Court GRANTS the motion to stay. 21 I. BACKGROUND 22 A. Factual Background 23 Plaintiff is a former delivery driver employed by Green Messengers, a company which 24 contracted with Amazon to provide delivery services. TAC ¶ 9, 39. During Plaintiff’s time as a 25 delivery driver, Amazon allegedly planned and scheduled routes, controlled the hours worked by 26 drivers, determined wages, and had the power to remove drivers from their jobs. Id. ¶¶ 9, 11, 15- 27 16. According to Plaintiff, he and other putative class members were denied legally mandated 1 expenses, and were not provided with accurate wage statements. Id. ¶¶ 40-65. 2 B. Procedural Background 3 Plaintiff initially filed suit in Santa Clara Superior Court, and his case was removed to this 4 Court on September 17, 2020. Notice of Removal, ECF No. 1. He twice amended his complaint, 5 after which the Court granted Amazon’s motion to dismiss with leave to amend. First Am. 6 Compl., ECF No. 19; Second Am. Compl., ECF No. 26; Order Granting Mot. to Dismiss, ECF 7 No. 45. Plaintiff then filed the operative complaint on November 29, 2021, and Amazon answered 8 on January 12, 2022. TAC; Answer, ECF No. 51. 9 Concurrent with this action, the California Labor Commissioner conducted a parallel 10 investigation. Request for Judicial Notice (“RJN”), ECF No. 57, Ex. E.1 On January 19, 2021, the 11 Labor Commissioner issued Wage Citations against Defendants for violations that were in large 12 part similar to Plaintiff’s claims in this suit. RJN, Exs. C-D. Defendants appealed, and those 13 appeals are currently pending before the Labor Commissioner’s Office. RJN, Ex. E; Mot. at 4; 14 Opp’n to Mot. (“Opp’n”), ECF No. 64, at 8. 15 II. DISCUSSION 16 A. Choice of Landis or Colorado River 17 The parties dispute the proper standard for a stay in these circumstances. Amazon 18 contends that the Court may stay this action under Landis v. North American. Co., 299 U.S. 248 19 (1936). Mot. at 9-14. The authority for a stay under Landis arises from a court’s inherent power 20 “to control the disposition of the causes on its docket with economy of time and effort for itself, 21 for counsel, and for litigants.” 299 U.S. at 254; see also Leyva v. Certified Grocers of Cal., Ltd., 22 593 F.2d 857, 863 (9th Cir. 1979) (“A trial court may, with propriety, find it is efficient for its 23

24 1 Amazon requests judicial notice of Exhibits A through E, which consist of correspondence between Plaintiff and the California Labor & Workforce Development Agency (Exhibits A and 25 B), the Wage Citations against Defendants (Exhibits C and D), and a press release by the Labor Commissioner regarding those Wage Citations (Exhibit E). RJN, Exs. A-E. The Court GRANTS 26 Amazon’s request as to Exhibits C through E. See Minor v. FedEx Office & Print Servs., Inc., 78 F. Supp. 3d 1021, 1027-28 (N.D. Cal. 2015) (taking notice of records of state agencies); In re Am. 27 Apparel, Inc. S’holder Litig., 855 F. Supp. 2d 1043, 1062 (C.D. Cal. 2012) (taking notice of press releases). The Court DENIES AS MOOT Amazon’s request as to Exhibits A and B because the 1 own docket and the fairest course for the parties to enter a stay of an action before it, pending 2 resolution of independent proceedings which bear upon the case.”). Plaintiff disagrees, arguing 3 that the Court must apply the more restrictive abstention standard under Colorado River Water 4 Conservation District v. United States, 424 U.S. 800 (1976). Opp’n at 1. In his view, Colorado 5 River applies exclusively when a party seeks to stay a federal action in favor of concurrent state 6 proceedings, and Landis applies when a party seeks to stay a federal action in favor of another 7 federal action. Id. 8 The law on this issue is unsettled in the Ninth Circuit, and district courts have diverged in 9 their approaches. See AmGuard Ins. Co. v. Optima Funeral Home, Inc., No. CV 22-4179-MWF 10 (JCx), 2022 WL 18142556, at *3-4 (C.D. Cal. Nov. 29, 2022) (observing the lack of binding 11 Supreme Court or Ninth Circuit precedent and collecting cases); Noble v. JP Morgan Chase Bank, 12 Nat'l Ass'n, No. 22-cv-02879-LB, 2022 WL 4229311, at *6-7 (N.D. Cal. Sept. 13, 2022) (same). 13 Courts holding that Landis may apply in cases involving concurrent federal-state 14 proceedings generally focus on the extent to which granting a stay would operate to abdicate the 15 federal court’s jurisdiction. For example, in Pacific Structures, Inc. v. Greenwich Insurance Co., a 16 court in this district granted a stay under Landis after previously denying the stay under Colorado 17 River. No. 21-cv-04438-HSG, 2022 WL 2673087 (N.D. Cal. June 15, 2022). Although it 18 originally held that Colorado River applied when evaluating a stay in favor of state proceedings, 19 the court reached a different conclusion with the benefit of additional briefing. Id. at *1. 20 Examining the rationales behind Colorado River and Landis, the court explained that Colorado 21 River contemplates that a federal court will have nothing left to do following a stay, while Landis 22 only contemplates postponing a case so that other proceedings can resolve narrow factual or legal 23 issues. Id. On this basis, Pacific Structures applied the Landis test because the party seeking the 24 stay expected state proceedings to narrow issues before the federal court, not to fully resolve all 25 claims. Id. at *2; see also, e.g., AmGuard, 2022 WL 18142556, at *5 (“[T]he Court concludes that 26 Landis is applicable here because the claims and parties differ from those in the Underlying 27 Action and a stay would not amount to a surrender of jurisdiction.”); United Specialty Ins. Co. v. 1 2018) (denying a motion to dismiss in favor of state proceedings under Colorado River but then 2 granting a stay under Landis); Klein v. Cook, No. 5:14-cv-03634-EJD, 2015 WL 2454056, at *2-3 3 (N.D. Cal. May 22, 2015) (applying Landis rather than Colorado River to stay federal proceedings 4 in favor of a suit in state court). But see, e.g., Fisk Elec. Co. v. Obayashi Corp., No. 18-cv-07671- 5 EMC, 2021 WL 197671, at *2 (N.D. Cal. Jan. 20, 2021) (“When the parallel case is a state court 6 action, as here, a stay may be granted pursuant to the Colorado River doctrine only.”); AIIRAM 7 LLC v. KB Home, No. 19-CV-00269-LHK, 2019 WL 3779185, at *6 (N.D. Cal. Aug. 12, 2019) 8 (holding that Landis and Colorado River are not alternatives and that Colorado River applies in 9 situations involving concurrent federal and state jurisdiction). 10 The Ninth Circuit, too, has suggested that district courts may issue stays in favor of state 11 proceedings through Landis, albeit in a nonbinding memorandum decision. See Patel v. City of 12 Los Angeles, 594 F. App’x 415 (9th Cir. 2015). In Patel, the Ninth Circuit held that the district 13 court erred by abstaining in favor of state proceedings, but it then indicated that the district court 14 could still exercise its “broad discretion to stay proceedings as an incident to its power to control 15 its own docket,” id. at 416 (quoting Clinton v. Jones, 520 U.S. 681, 706-07 (1997)), explicitly 16 citing Landis for the proposition that “such a stay may be entered until Patel’s mandamus petition 17 has been resolved in state court.” Id. Several courts have cited to Patel in concluding that they 18 may apply Landis to stay federal proceedings while state proceedings are pending. See, e.g., 19 Noble, 2022 WL 4229311, at *7; Icon at Panorama, LLC v. Sw. Reg'l Council of Carpenters, No. 20 CV 19-00181 CBM(MRWx), 2020 WL 5751228, at *1-2 (C.D. Cal. Mar. 12, 2020). 21 This position also finds support in the reasoning of Colorado River and its progeny. In 22 Colorado River, the Supreme Court reviewed the dismissal of a federal water rights action in favor 23 of state proceedings. 424 U.S. at 806. It drew a distinction between situations involving federal- 24 federal concurrent jurisdiction and those involving federal-state concurrent jurisdiction. Id. at 817. 25 As to the former, the Supreme Court explained that “the general principle is to avoid duplicative 26 litigation.” Id. By contrast, the general principle for the latter is that “the pendency of an action in 27 the state court is no bar to proceedings concerning the same matter in the Federal court.” Id. 1 did not stem from the idea that concurrent state proceedings deserved less deference than 2 concurrent federal proceedings. Instead, the Supreme Court made clear that the justification for 3 that difference was “the virtually unflagging obligation of the federal courts to exercise the 4 jurisdiction given them.” Id. Consequently, when a stay would not serve to divest a federal court 5 of its jurisdiction, the reasons counseling in favor of applying Colorado River’s demanding 6 requirements do not exist. 7 The Supreme Court’s later decision in Moses H. Cone Memorial Hospital v. Mercury 8 Construction Corp., 460 U.S. 1 (1983), further reinforces this conclusion. Moses H. Cone 9 involved the district court’s decision to stay efforts in federal court to compel arbitration while 10 parallel efforts seeking to prevent arbitration played out in state court. Id. at 7. The Supreme 11 Court held that the Colorado River standard could apply to stays in addition to dismissals, but it 12 noted that a stay under Colorado River presumes “that the parallel state-court litigation will be an 13 adequate vehicle for the complete and prompt resolution of the issues between the parties.” Id. at 14 27-28. That is, when a stay functions as “a refusal to exercise federal jurisdiction,” the Colorado 15 River test is required. Id. at 28. 16 Finally, in Will v. Calvert Fire Insurance Co., decided between Colorado River and Moses 17 H. Cone, a plurality of the Supreme Court emphasized that “a district court’s decision to defer 18 proceedings because of concurrent state litigation is generally committed to the discretion of that 19 court.” 437 U.S. 655, 665 (1978) (plurality opinion). This was the case because a district court, 20 when “confronted both with competing demands on [its] time for matters properly within [its] 21 jurisdiction and with inevitable scheduling difficulties because of the unavailability of lawyers, 22 parties, and witnesses, is [] entrusted with a wide latitude in setting [its] own calendar.” Id. Such 23 reasoning sounds in a court’s inherent power to control its docket under Landis and therefore 24 indicates that applying Landis in the face of parallel state proceedings may be appropriate in some 25 instances. 26 The import of the three Supreme Court cases above is that the purpose of Colorado River’s 27 strict test is to safeguard the exercise of federal jurisdiction, and in the absence of concerns that a 1 power to control its docket and calendar. Plaintiff’s authorities to the contrary do not mandate a 2 different conclusion. None of Plaintiff’s Ninth Circuit citations involved consideration of whether 3 Landis was available to stay a federal action in favor of concurrent state proceedings. That the 4 Ninth Circuit applied Colorado River shows only that the doctrine can apply in such situations, 5 not that it must, and it does not show that Landis is categorically inapplicable whenever concurrent 6 state proceedings are involved. The rest of Plaintiff’s authorities are not binding on this Court. 7 And in fact, two of them support this Court’s conclusion. In Cottrell v. Duke, the Eighth Circuit 8 observed that “a district court retains its inherent power to control its docket when facing 9 concurrent state and federal litigation.” 737 F.3d 1238, 1249 (8th Cir. 2013). It held that a district 10 court is prevented from applying Landis only when “the effect of [a stay] is to accomplish the 11 same result contemplated by Colorado River,” i.e., when a stay “effectively dismisse[s] the federal 12 proceeding in favor of a concurrent state dispute.” Id. Likewise, Stoltz v. Fry Foods, Inc. 13 explained that Landis stays involve postponement of federal proceedings and “serve[] only to 14 narrow the factual or legal issues” while Colorado River stays “represent a complete abdication” 15 of the federal court’s jurisdiction. 60 F. Supp. 3d 1132, 1136-37 (D. Idaho 2014). The Stoltz 16 court proceeded to apply Colorado River because “[r]unning throughout [the plaintiff’s] argument 17 is the assumption that there will be nothing more for this Court to do once a stay is entered.” Id. at 18 1137. Both cases align exactly with this Court’s determination that Landis can apply if a stay 19 would not be dispositive of the entire case.2 20 In conclusion, the Court finds that while Colorado River generally applies to stays pending 21 state proceedings, in situations where the state proceedings would not fully resolve all issues 22 before the federal court, Landis may also apply. That is the case here, where Plaintiff raises an 23 expense reimbursement claim that is not present in the concurrent state proceedings before the 24 Labor Commissioner. Compare RJN, Exs. C-D, with TAC ¶ 1. Accordingly, the Court shall 25 analyze Amazon’s motion under Landis. 26

27 2 Plaintiff makes a final argument that allowing Landis to apply would undermine Colorado River by rendering one of its factors redundant. Opp’n at 6. As the Court has already explained, 1 B. Application of Landis 2 Under Landis, a court deciding whether to stay proceedings weighs three competing 3 interests: (1) “the possible damage which may result from the granting of a stay”; (2) “the hardship 4 or inequity which a party may suffer in being required to go forward”; and (3) “the orderly course 5 of justice measured in terms of the simplifying or complicating of issues, proof, and questions of 6 law which could be expected to result from a stay.” Lockyer v. Mirant Corp., 398 F.3d 1098, 7 1110 (9th Cir. 2005) (quoting CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962)). 8 First, the Court finds that Plaintiff would suffer little, if any, damage from a stay. There is 9 no allegation of ongoing violations, and Plaintiff is not seeking injunctive relief. See Lockyer, 398 10 F.3d at 1110 (delay in monetary compensation when a plaintiff sought no injunctive relief does 11 not weigh heavily against a stay). Moreover, the state proceedings themselves involve alleged 12 violations that overlap with the claims here, and a decision upholding the Wage Citations against 13 Defendants would require them to compensate the putative class, including Plaintiff. See RJN, 14 Exs. C-D. Plaintiff’s primary arguments for why he will be damaged are that he may not recover 15 anything from the state proceedings or may be able to recover more in this action, that evidence 16 may be lost, and that any delay would be too long to justify a stay. Opp’n at 19-20. But the risk 17 that Plaintiff may not prevail is present in this action as well as in the state proceedings, and as 18 discussed above, any delay in further recovery that he might receive does not weigh heavily in this 19 analysis. Nor is there any indication that evidence is at risk except for Plaintiff’s say-so. As for 20 Plaintiff’s concerns about the potential length of a stay, he is correct that “[a] stay should not be 21 granted unless it appears likely the other proceedings will be concluded within a reasonable time 22 in relation to the urgency of the claims presented to the court.” Leyva, 593 F.2d at 864. In this 23 case, the Court does not find that a stay until the Labor Commissioner issues a decision would be 24 unreasonably long. See Landis, 299 U.S. at 256-57 (staying an action until a decision by the court 25 in a parallel action was appropriate). If proceedings before the Labor Commissioner become 26 protracted beyond reason, Plaintiff may move to lift the stay at that point. Accordingly, the first 27 Landis factor weighs in favor of a stay. 1 burden of simultaneous litigation is not something that factors strongly in the stay analysis, Klein, 2 || 2015 WL 2454056, at *4, Amazon’s arguments about the prospect of inconsistent results and 3 || piecemeal litigation over the same issues are persuasive. Cal. Dep't of Water Res. v. Powerex 4 Corp., 653 F. Supp. 2d 1057, 1065 (E.D. Cal. 2009). The fact that some claims before this Court 5 may not present any risk of conflicting rulings does not obviate the need for a stay because many 6 || of the claims do overlap between this case and the state proceedings. See Mot. at 8. Thus, the 7 second Landis factor also weighs in favor of a stay. 8 Third, the Court finds that the orderly course of justice weighs in favor of a stay because 9 || the state proceedings will likely simplify many of the issues before the Court due to the 10 || overlapping nature of the claims. The avoidance of potentially inconsistent rulings also “promotes 11 || judicial efficiency and supports a stay.” Pac. Structures, 2022 WL 2673087, at *2. Therefore, the 12 || third Landis factor weighs in favor of a stay as well. 5 13 The Court finds in its discretion that a stay of this action pending resolution of the 14 || proceedings before the Labor Commissioner best serves the efficient use of judicial and party 3 15 || resources.? 16 || I. CONCLUSION 3 17 The Court GRANTS Amazon’s motion to stay. The parties shall file a joint status report 18 || regarding the status of the proceedings before the Labor Commissioner one year from the date of 19 this Order. Thereafter, the parties shall file joint status reports every six months. Following the 20 || filing of each status report, the Court will consider whether the stay should be lifted. The parties 21 shall file a status report notifying the Court within five (5) days of the resolution of the 22 || proceedings before the Labor Commissioner. 23 IT IS SO ORDERED. 24 Dated: March 31, 2023 25 ee. EDWARD J. DAVILA 26 United States District Judge 27 |} ——— 28 3 Because the Court grants Amazon’s motion under Landis, it does not address Amazon’s argument that California Labor Code Section 2699(h) is an alternate basis for staying this action. Case No: 5:20-cv-06538-FID