1 2 3 4 5 6 7 10 11 MICHAEL TESTONE, COLLIN Case No.: 19-CV-169 JLS (BGS) SHANKS, and LAMARTINE PIERRE, 12 on behalf of themselves, all others ORDER GRANTING DEFENDANT’S 13 similarly situated, and the general public, EX PARTE APPLICATION TO STAY CASE UNTIL DEFENDANT’S 14 Plaintiffs, MOTION TO DISQUALIFY HAS 15 v. BEEN DECIDED (ECF No. 52) 17 Defendant. 18 19 Presently before the Court is Defendant Barlean’s Organic Oils, LLC’s Ex Parte 20 Application to Stay Case Until Defendant’s Motion to Disqualify Has Been Decided (“Ex 21 Parte App.,” ECF No. 52), as well as Plaintiffs Michael Testone, Collin Shanks, and 22 Lamartine Pierre’s Opposition to (“Opp’n,” ECF No. 53) and Defendant’s Reply in 23 Support of (“Reply,” ECF No. 54) the Ex Parte Application. Having carefully reviewed 24 the Parties’ arguments and evidence and the relevant law, the Court GRANTS Defendant’s 25 Ex Parte Application. 27 “[T]he power to stay proceedings is incidental to the power inherent in every court 28 to control the disposition of the cases on its docket with economy of time and effort for 1 itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). This 2 power to stay proceedings includes the discretion to grant stays “pending resolution of 3 independent proceedings which bear upon the case.” Leyva v. Certified Grocers of Cal., 4 Ltd., 593 F.2d 857, 863 (9th Cir. 1979). Moreover, “[t]his rule applies whether the separate 5 proceedings are judicial, administrative, or arbitral in character, and does not require that 6 the issues in such proceedings are necessarily controlling of the action before the court.” 7 Id. at 863–64 (citations omitted). 8 The inherent power of district courts to grant stays “calls for the exercise of sound 9 discretion,” by which a court must weigh the competing interests of the parties that would 10 be affected by a grant or denial of a stay. CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 11 1962). The Ninth Circuit has identified three competing interests that warrant the closest 12 examination in this analysis: (1) the hardship or inequity upon the non-moving party that 13 would result from granting the stay, (2) the hardship or inequity upon the moving party in 14 being required to go forward after denial of the stay, and (3) the orderly course of justice 15 measured in terms of the simplifying or complicating of issues, proof, and questions of law 16 that could be expected to result from a stay. Id.; see also Lockyer v. Mirant Corp., 398 17 F.3d 1098, 1110 (9th Cir. 2005). 18 The Court must balance the “possible damage [to the Plaintiffs] which may result 19 from the granting of a stay,” with “the hardship or inequity which [Defendant] may suffer 20 in being required to go forward.” CMAX, 300 F.2d at 268. Additionally, “[t]he party 21 requesting a stay bears the burden of showing that the circumstances justify an exercise of 22 that discretion.” Nken v. Holder, 556 U.S. 418, 433–34 (2009) (citing Clinton v. Jones, 23 520 U.S. 681, 708 (1997); Landis, 299 U.S. at 255). If there is “even a fair possibility that 24 the stay for which [Defendant] prays will work damage to someone else,” then Defendant 25 must show “a clear case of hardship or inequity in being required to go forward.” Landis, 26 299 U.S. at 255. 27 / / / 28 / / / 2 Defendant’s Motion: 1. to Disqualify Named Plaintiffs and Class Representatives; 3 2. to Disqualify Plaintiffs’ Attorneys as Class Counsel; and 3. for Stay of Action Pending 4 Determination by Court (“Disqualification Mot.,” ECF Nos. 50–51) is set to be heard on 5 July 9, 2020. In the meantime, “[t]he scheduling order currently in place in this matter 6 [ECF 43] requires that Barlean’s produce witness(es) for 30(b)(6) depositions by June 16, 7 2020,” while “[t]he current discovery cutoff is June 24, 2020, and the deadline for filing 8 the motion for class certification is July 24, 2020.” Ex Parte App. at 2. Urging that “[i]t 9 is far more efficient for both the Court and the parties to have the remainder of the 10 discovery and the class certification process stayed until the Court determines whether this 11 case should proceed with the current plaintiffs and the current plaintiffs’ counsel,” id. at 8, 12 “Barlean’s respectfully requests that the Court enter its Order staying Barlean’s 30(b)(b) 13 deposition, the discovery cutoff date, and the date for filing the motion for class 14 certification.” Id. 15 Plaintiffs oppose, urging that Defendant has failed to demonstrate that it is entitled 16 to relief on an ex parte basis and that Defendant applies the wrong legal standard for the 17 requested stay. See generally Opp’n. Specifically, Plaintiffs note that, “while Barlean’s 18 may like to stay the case pending resolution of its motion to disqualify, none of these 19 complaints constitute irreparable prejudice to Barlean’s.” See id. at 2 (emphasis in 20 original). Further, “Barlean’s argument that the voluminous number of documents make 21 it prejudicial to proceed with the 30(b)(6) deposition is meritless” because “Barlean’s 22 counsel knew since at least April 20, 2020 that the documents were voluminous” and “the 23 ongoing pandemic, which precludes in-person depositions for the foreseeable future, does 24 not render preparing a witness remotely prejudicial.” See id. at 3 (citing Grano v. Sodexo 25 Mgmt., Nos. 18cv1818-GPC(BLM) et al., 2020 WL 1975057, at *3 (S.D. Cal. Apr. 24, 26 2020)). Plaintiffs also argue that Defendant fails to meet its burden of demonstrating that 27 a stay is necessary because it applies the standard for a stay of discovery pending resolution 28 of a dispositive motion rather than the proper standard in Landis. See Opp’n at 4–5. 1 Defendant replies that it has established entitlement to ex parte relief because 2 counsel has complied with Civil Local Rule 83.3(g)(2), see Reply at 1–2, and, “[i]f 3 Defendant were required to bring this application for a stay on a regularly noticed basis, it 4 would not have been able to have the application heard until at least June 23, 2020 (Local 5 Rule 7.1 (e)(1), requiring 28 days)[, b]y [which] time, the 30(b)(6) deposition deadline 6 would have passed, and only 2 days would remain before the discovery cutoff.” Id. at 2. 7 “In addition, both parties would be well into their preparation for the class certification 8 process.” Id. Second, “Defendant’s counsel is forced with the choice of either travelling 9 during the Covid-19 period, in order to properly prepare Defendant’s witnesses, or to put 10 herself first, and do a necessarily inadequate job of preparing the witnesses via 11 teleconference or telephone.” Id. at 3. “Third, . . . [i]f the class certification process is not 12 stayed pending the Court’s decision on the Motion to Disqualify, those same arguments 13 [regarding the adequacy of Plaintiffs and their counsel] will have to be made, and 14 considered by the Court, a second time[, which] . . . is not protective of the Court’s time 15 and resources.” Id. at 4. “Finally, Defendant should be able to oppose the class 16 certification motion based on the identity of the plaintiffs who will actually represent the 17 putative classes.” Id. As for the legal standard, “it is well recognized that a court may, in 18 its discretion, stay civil proceedings when the interests of justice so require.” Id. at 5 (citing 19 Keating v. Office of Thrift Supervision (9th Cir. 1995) 45 F.3d 322, 324.
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1 2 3 4 5 6 7 10 11 MICHAEL TESTONE, COLLIN Case No.: 19-CV-169 JLS (BGS) SHANKS, and LAMARTINE PIERRE, 12 on behalf of themselves, all others ORDER GRANTING DEFENDANT’S 13 similarly situated, and the general public, EX PARTE APPLICATION TO STAY CASE UNTIL DEFENDANT’S 14 Plaintiffs, MOTION TO DISQUALIFY HAS 15 v. BEEN DECIDED (ECF No. 52) 17 Defendant. 18 19 Presently before the Court is Defendant Barlean’s Organic Oils, LLC’s Ex Parte 20 Application to Stay Case Until Defendant’s Motion to Disqualify Has Been Decided (“Ex 21 Parte App.,” ECF No. 52), as well as Plaintiffs Michael Testone, Collin Shanks, and 22 Lamartine Pierre’s Opposition to (“Opp’n,” ECF No. 53) and Defendant’s Reply in 23 Support of (“Reply,” ECF No. 54) the Ex Parte Application. Having carefully reviewed 24 the Parties’ arguments and evidence and the relevant law, the Court GRANTS Defendant’s 25 Ex Parte Application. 27 “[T]he power to stay proceedings is incidental to the power inherent in every court 28 to control the disposition of the cases on its docket with economy of time and effort for 1 itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). This 2 power to stay proceedings includes the discretion to grant stays “pending resolution of 3 independent proceedings which bear upon the case.” Leyva v. Certified Grocers of Cal., 4 Ltd., 593 F.2d 857, 863 (9th Cir. 1979). Moreover, “[t]his rule applies whether the separate 5 proceedings are judicial, administrative, or arbitral in character, and does not require that 6 the issues in such proceedings are necessarily controlling of the action before the court.” 7 Id. at 863–64 (citations omitted). 8 The inherent power of district courts to grant stays “calls for the exercise of sound 9 discretion,” by which a court must weigh the competing interests of the parties that would 10 be affected by a grant or denial of a stay. CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 11 1962). The Ninth Circuit has identified three competing interests that warrant the closest 12 examination in this analysis: (1) the hardship or inequity upon the non-moving party that 13 would result from granting the stay, (2) the hardship or inequity upon the moving party in 14 being required to go forward after denial of the stay, and (3) the orderly course of justice 15 measured in terms of the simplifying or complicating of issues, proof, and questions of law 16 that could be expected to result from a stay. Id.; see also Lockyer v. Mirant Corp., 398 17 F.3d 1098, 1110 (9th Cir. 2005). 18 The Court must balance the “possible damage [to the Plaintiffs] which may result 19 from the granting of a stay,” with “the hardship or inequity which [Defendant] may suffer 20 in being required to go forward.” CMAX, 300 F.2d at 268. Additionally, “[t]he party 21 requesting a stay bears the burden of showing that the circumstances justify an exercise of 22 that discretion.” Nken v. Holder, 556 U.S. 418, 433–34 (2009) (citing Clinton v. Jones, 23 520 U.S. 681, 708 (1997); Landis, 299 U.S. at 255). If there is “even a fair possibility that 24 the stay for which [Defendant] prays will work damage to someone else,” then Defendant 25 must show “a clear case of hardship or inequity in being required to go forward.” Landis, 26 299 U.S. at 255. 27 / / / 28 / / / 2 Defendant’s Motion: 1. to Disqualify Named Plaintiffs and Class Representatives; 3 2. to Disqualify Plaintiffs’ Attorneys as Class Counsel; and 3. for Stay of Action Pending 4 Determination by Court (“Disqualification Mot.,” ECF Nos. 50–51) is set to be heard on 5 July 9, 2020. In the meantime, “[t]he scheduling order currently in place in this matter 6 [ECF 43] requires that Barlean’s produce witness(es) for 30(b)(6) depositions by June 16, 7 2020,” while “[t]he current discovery cutoff is June 24, 2020, and the deadline for filing 8 the motion for class certification is July 24, 2020.” Ex Parte App. at 2. Urging that “[i]t 9 is far more efficient for both the Court and the parties to have the remainder of the 10 discovery and the class certification process stayed until the Court determines whether this 11 case should proceed with the current plaintiffs and the current plaintiffs’ counsel,” id. at 8, 12 “Barlean’s respectfully requests that the Court enter its Order staying Barlean’s 30(b)(b) 13 deposition, the discovery cutoff date, and the date for filing the motion for class 14 certification.” Id. 15 Plaintiffs oppose, urging that Defendant has failed to demonstrate that it is entitled 16 to relief on an ex parte basis and that Defendant applies the wrong legal standard for the 17 requested stay. See generally Opp’n. Specifically, Plaintiffs note that, “while Barlean’s 18 may like to stay the case pending resolution of its motion to disqualify, none of these 19 complaints constitute irreparable prejudice to Barlean’s.” See id. at 2 (emphasis in 20 original). Further, “Barlean’s argument that the voluminous number of documents make 21 it prejudicial to proceed with the 30(b)(6) deposition is meritless” because “Barlean’s 22 counsel knew since at least April 20, 2020 that the documents were voluminous” and “the 23 ongoing pandemic, which precludes in-person depositions for the foreseeable future, does 24 not render preparing a witness remotely prejudicial.” See id. at 3 (citing Grano v. Sodexo 25 Mgmt., Nos. 18cv1818-GPC(BLM) et al., 2020 WL 1975057, at *3 (S.D. Cal. Apr. 24, 26 2020)). Plaintiffs also argue that Defendant fails to meet its burden of demonstrating that 27 a stay is necessary because it applies the standard for a stay of discovery pending resolution 28 of a dispositive motion rather than the proper standard in Landis. See Opp’n at 4–5. 1 Defendant replies that it has established entitlement to ex parte relief because 2 counsel has complied with Civil Local Rule 83.3(g)(2), see Reply at 1–2, and, “[i]f 3 Defendant were required to bring this application for a stay on a regularly noticed basis, it 4 would not have been able to have the application heard until at least June 23, 2020 (Local 5 Rule 7.1 (e)(1), requiring 28 days)[, b]y [which] time, the 30(b)(6) deposition deadline 6 would have passed, and only 2 days would remain before the discovery cutoff.” Id. at 2. 7 “In addition, both parties would be well into their preparation for the class certification 8 process.” Id. Second, “Defendant’s counsel is forced with the choice of either travelling 9 during the Covid-19 period, in order to properly prepare Defendant’s witnesses, or to put 10 herself first, and do a necessarily inadequate job of preparing the witnesses via 11 teleconference or telephone.” Id. at 3. “Third, . . . [i]f the class certification process is not 12 stayed pending the Court’s decision on the Motion to Disqualify, those same arguments 13 [regarding the adequacy of Plaintiffs and their counsel] will have to be made, and 14 considered by the Court, a second time[, which] . . . is not protective of the Court’s time 15 and resources.” Id. at 4. “Finally, Defendant should be able to oppose the class 16 certification motion based on the identity of the plaintiffs who will actually represent the 17 putative classes.” Id. As for the legal standard, “it is well recognized that a court may, in 18 its discretion, stay civil proceedings when the interests of justice so require.” Id. at 5 (citing 19 Keating v. Office of Thrift Supervision (9th Cir. 1995) 45 F.3d 322, 324. 20 As an initial matter, the Court concludes that Defendant adequately has 21 demonstrated entitlement to ex parte relief, even though compliance with the Local Rules 22 is a prerequisite, not a substitution, for the additional requirements for ex parte relief 23 articulated in the case law. Here, Defendant’s counsel first discovered the grounds for the 24 Disqualification Motion on May 8, 2020, see ECF No. 50-2 ¶ 37, and expeditiously filed 25 the initial request for a stay on May 18, 2020, see ECF No. 50, which the Court set to be 26 heard on July 9, 2020. Given the pendency of discovery and class certification deadlines 27 that may need to be needlessly reduplicated by the Disqualification Motion, Defendant 28 reiterated her request on an ex parte basis on May 26, 2020. See ECF No. 52. In short, 1 Defendant adequately has addressed “why the regular noticed motion procedures must be 2 bypassed.” See Opp’n at 2 (quoting Raiser v. Casserly, No. 18cv1836 JLS (AHG), 2020 3 U.S. Dist. LEXIS 18201, at *2 (S.D. Cal. Feb. 3, 2020)). 4 As for the merits of Defendant’s requested stay, the Court agrees that the interests 5 of the Parties and the orderly course of justice favor a brief stay pending resolution of 6 Defendant’s pending Disqualification Motion. While there is no “per se rule that a 7 pending motion for disqualification warrants a general stay of all proceedings,” see 8 Allstate Ins. Co. v. Belsky, No. 215CV02265MMDCWH, 2017 WL 9434415, at *1 (D. 9 Nev. June 22, 2017), here “[s]taying discovery will avoid the possibility that the parties 10 will unnecessarily expend time and resources conducting discovery.” See IPVX Patent 11 Holdings, Inc. v. 8X8, Inc., No. C 13-01707 SBA, 2013 WL 6000590, at *2 (N.D. Cal. 12 Nov. 12, 2013). Further, “th[e disqualification] issue needs to be resolved because it bears 13 upon whether [potentially conflicted] counsel can represent [potentially conflicted named 14 plaintiffs] at any future” point in these proceedings. See Am. GNC Corp. v. LG Elecs. Inc., 15 No. 17-CV-01090-BAS-BLM, 2018 WL 1250876, at *4 (S.D. Cal. Mar. 12, 2018). 16 Finally, “[t]he court is not aware of any prejudice that would result to [Plaintiff]s from 17 granting [Defendant’s] requested stay, which is not likely to last longer than” a couple 18 months. See Nat’l Grange of Order of Patrons of Husbandry v. Guild, No. CV 2:16-201 19 WBS DB, 2017 WL 1397242, at *1 (E.D. Cal. Apr. 4, 2017). Because the potential 20 hardship to Defendant absent a brief stay exceeds that to Plaintiffs caused by the requested 21 stay and because a brief stay would better serve the orderly course of justice by minimizing 22 the risk of needless duplication and expense for both the Parties and the Court, the Court 23 concludes that Defendant has carried its burden of demonstrating that the circumstances 24 justify an exercise of the Court’s discretion to stay this action. 25 / / / 26 / / / 27 / / / 28 / / / 2 For the foregoing reasons, the Court GRANTS Defendant’s Ex Parte Application. 3 || Accordingly, the Court STAYS this action as to all matters except Defendant’s pending 4 || Disqualification Motion. The stay SHALL BE LIFTED upon the docketing of an Order 5 the Disqualification Motion. 7 g ||Dated: May 29, 2020 (een 9 on. Janis L. Sammartino United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28