Rappaport v. Federal Savings Bank et al
ORDER: IT IS ORDERED that Defendants' motion to stay (Doc. 49 ) is denied without prejudice. (See attached Order for additional details). Signed by Judge Dominic W Lanza on 10/11/19. (JAMA) Modified on 10/11/2019 - added WO (JAMA).
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
Jason E Rappaport,
Federal Savings Bank, et al.,
In May 2018, Plaintiff filed this lawsuit against the Federal Savings Bank (“FSB”)
and Stephen Calk (collectively, “Defendants”). (Doc. 1.) In response, Defendants moved
“for entry of an order staying proceedings in this case” because most of Plaintiff’s claims
against FSB are governed by an arbitration agreement. (Doc. 12.) In July 2018, the Court
issued an order granting the motion, staying the case, and ordering the parties to file status
reports “every ninety (90) days . . . until the stay is lifted.” (Doc. 37 at 10.)
Now pending before the Court is another motion to stay by Defendants. (Doc. 49.)
In a nutshell, this motion asserts that Calk was recently indicted on criminal charges, those
charges overlap in certain ways with the facts underlying this case, and it would be unfairly
prejudicial to require Calk to engage in civil discovery while the criminal proceedings are
ongoing. (Id.) Thus, Defendants ask for an order “staying this case pending the outcome
of the Criminal Proceeding.” (Id. at 6-7.) Plaintiff opposes the stay request on the ground
that the Court, having already stayed this case once, lacks jurisdiction to issue another stay.
As a threshold matter, the Court disagrees with Plaintiff’s assertion that it lacks
jurisdiction over Defendants’ motion. The premise underlying Plaintiff’s jurisdictional
argument is that, if the Court were to grant Defendants’ motion, the Court would somehow
be interfering with the pending arbitration. (Doc. 50 at 3 [“Defendants, having requested
and obtained a stay, cannot come running to this Court for interim rulings. JAMS has not
completed the arbitration, and thus, jurisdiction to stay the arbitration remains solely with
JAMS.”].) This is inaccurate. Defendants are only requesting a stay of this case. They
are not asking for the Court to require the arbitrator to do anything.
Nevertheless, on the merits, the stay request will be denied. Regardless of the reason
a stay is sought, the requesting party must show “a clear case of hardship or inequity” if
there is a possibility the stay might harm another party. Dependable Highway Exp., Inc. v.
Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir. 2007) (quoting Landis v. North
American Co., 299 U.S. 248, 255 (1936)). This case has been stayed since July 2018 and
will remained stayed until the arbitration is complete. It is difficult to see how denying a
second stay when a stay is already in place would result in hardship.
Accordingly, IT IS ORDERED that Defendants’ motion to stay (Doc. 49) is denied
without prejudice. If there comes a point in the future where the arbitration has been
completed, yet the criminal proceedings remain unresolved, Defendants may file another
stay request at that time.
Dated this 11th day of October, 2019.
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