KAVA Holdings, LLC v. Mori Pam Rubin et al

Filing 67

MINUTE ORDER IN CHAMBERS by Magistrate Judge Gail J. Standish denying Plaintiffs' Motion for Expedited Discovery 33 and denying Defendant's Motion for Stay of Discovery 37 . (See order for detail) (ec)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

2:16-cv-06955-PSG (GJSx)

Title

Kava Holdings, LLC, et al. v. Mori Pam Rubin, in her capacity as Regional
Director of Region 31 or the NLRB

Present:

Date

November 10, 2016

Hon. Gail J. Standish, United States Magistrate Judge
E. Carson

N/A

Deputy Clerk

Court Reporter / Recorder

Attorneys Present for Plaintiffs:

Attorneys Present for Defendant:

None present

None present

Proceedings:

(IN CHAMBERS) Order DENYING Plaintiffs’ Motion for
Expedited Discovery [Dkt. 33] and DENYING Defendant’s
Motion for Stay of Discovery [Dkt. 37]

This matter is before the Court on Plaintiffs’ Motion for Expedited Discovery and
Defendant’s Cross-Motion to Stay Discovery. By ex parte applications, both parties
requested expedited briefing and consideration of their motions, because Plaintiffs’
motion for a preliminary injunction, and now Defendant’s motion to dismiss, are pending
before the District Judge and set for hearing on November 21, 2016. The Court granted
the ex parte applications, and both motions were fully briefed on October 24, 2016. The
Court held a hearing on October 27, 2016. After argument, the Court ordered the parties
to submit additional authority addressing two issues identified by the Court at the
hearing, which the parties did on November 1, 2016. The Court having considered the
briefing and arguments of counsel at the hearing, hereby DENIES both motions for the
reasons that follow.
1. Background
On July 29, 2016, the NLRB issued an unfair labor practices complaint against Plaintiff
Kava Holdings, LLC, dba The Hotel Bel Air. The NLRB accuses the Hotel of anti-union
animus in its hiring of employees when it re-opened, after two years of renovations, in
October 2011. The original charge that led to the July 2016 complaint was filed by a
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

2:16-cv-06955-PSG (GJSx)

Date

November 10, 2016

Title

Kava Holdings, LLC, et al. v. Mori Pam Rubin, in her capacity as Regional
Director of Region 31 or the NLRB

union on February 15, 2012. Plaintiffs’ Complaint here in the District Court [Dkt. 1]
contends that the NLRB’s four-and-a-half year delay in filing the underlying
administrative complaint is unreasonable and has irreparably prejudiced Plaintiffs’ ability
to defend itself. Plaintiffs assert causes of action for statutory and common law
mandamus, violation of administrative due process (citing 5 U.S.C. § 706(1)), and laches.
2. Plaintiff’s Motion for Expedited Discovery
Plaintiffs seek to depose Defendant Rubin in her capacity as Regional Director (or,
alternatively, to depose an appropriate 30(b)(6) deponent) prior to the November 21st
hearing on their motion for preliminary injunction. Plaintiffs seek discovery regarding
the reasons for the NLRB’s delay in filing the administrative complaint, as well as
identification of other witnesses with such knowledge and any documents the Board may
use to support any contention that the delay was reasonable. [Dkt. 33, Exh. A at 2.]
Plaintiffs contend that good cause exists for the requested expedited discovery because
(1) it is narrowly tailored, seeking evidence Plaintiffs contend is required for full
consideration by the District Judge of Plaintiffs’ motion for preliminary injunction; (2)
Plaintiffs will be irreparably harmed if they lose the preliminary injunction motion and
have to defend the underlying administrative action; and (3) the burden on the NLRB
would be minimal. [Id. at 4-7.]
The NLRB opposes Plaintiffs’ motion on two bases. First, Defendant argues that
the Court lacks jurisdiction over this case, and given that Defendant has filed a motion to
dismiss (set for hearing the same day as Plaintiffs’ preliminary injunction motion), the
Court should deny any motion for discovery. The NLRB’s cross-motion to stay all
discovery is premised on this same theory. Second, Defendant contends that the
discovery Plaintiffs seek is protected by both the deliberative process and work product
privileges. [Dkt. 37, Exh. B at 2, 5.] The Court will not consider the latter argument in
the context of this motion, as the application of both privileges is very fact-specific –
made on a case-by-case basis when considering specific communications or work product

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

2:16-cv-06955-PSG (GJSx)

Date

November 10, 2016

Title

Kava Holdings, LLC, et al. v. Mori Pam Rubin, in her capacity as Regional
Director of Region 31 or the NLRB

– so it is not ripe at this time. In fact, the Court considers it highly unlikely that all
testimony that an NLRB representative could give on this topic would be privileged.
The parties do not dispute that, with one narrow exception, district courts do not
have jurisdiction to review or enjoin NLRB proceedings, which are appealed directly to
the circuit courts after final decision by the administrative body. See 29 U.S.C. § 160(e)
and (f); Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 48, 51 (1938); Americo v.
NLRB, 458 F.3d 883, 884, 888 (9th Cir. 2006). A district court may involve itself in the
proceedings, however, if the agency has taken action “in excess of its delegated powers.”
Leedom v. Kyne, 358 U.S. 184, 188 (1958). The parties dispute whether the NLRB’s
delay – in Plaintiff’s view, an unconstitutional denial of due process – renders the
NLRB’s filing of the administrative complaint an action in excess of its powers.
According to Plaintiff, the Leedom exception applies here because the NLRB has
“exceeded the powers delegated to it by Congress” [Dkt. 41 at 8] and “meaningful
judicial review is unavailable” (Id., quoting Americo, 458 F.3d at 889-890). Plaintiffs
contend that it would be futile to ask the NLRB, during the administrative proceedings, to
consider whether it had, in bad faith, violated Plaintiffs’ due process rights. Thus,
according to Plaintiff, there could not be any meaningful review of a final order from the
NLRB, so the Leedom exception applies.
In light of the parties’ arguments, at the hearing, the Court asked the parties to
address two questions not addressed in their papers: (1) whether the Court of Appeals
could, in fact, address the issue of laches on appeal if, arguendo, the NLRB did not
address it during the administrative proceedings and (2) what Plaintiffs expected to
discover and its relevance to the ultimate determination of whether laches applied. As
ordered by the Court, the parties provided citations to supplemental authority, which the
Court has reviewed.

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

2:16-cv-06955-PSG (GJSx)

Date

November 10, 2016

Title

Kava Holdings, LLC, et al. v. Mori Pam Rubin, in her capacity as Regional
Director of Region 31 or the NLRB

Ultimately, whether or not the Court has jurisdiction over this case is a matter for
the District Judge to decide. But for purposes of this discovery motion,1 the Court finds
Defendant’s arguments on this issue more persuasive than those of Plaintiffs. First, even
assuming for purposes of argument that the Ninth Circuit’s decision in Americo2 is not
completely dispositive of the issue, it appears that Courts of Appeal can (and have)
addressed the issue of laches in NLRB cases. (NLRB v. Searle Auto Glass, Inc., 762 F.2d
769, 772 (9th Cir. 1985) (an action by NLRB to enforce an order that was nearly two
years old, court considered defense of laches); NLRB v. Int’l Brotherhood of Elec.
Workers, Local 98, 251 Fed. Appx. 101, 103 (3rd Cir. 2007) (court considered and
rejected defense of laches). Although the Court recognizes that these cases are not
directly on point, involving post-administrative judgment actions by the NLRB rather
than appeals by the defendant in an administrative proceeding, they nevertheless
demonstrate the plenary review available. The Court thus sees no reason why the Ninth
Circuit could not either review a final decision of the Board on the issue, or, if the Board
refused Plaintiffs’ request for discovery and a hearing on the issue, remand the case for
further development of the record if appropriate. Impact Industries, Inc. v. NLRB, 847
F.2d 379 (7th Cir. 1988) (remand appropriate where NLRB refused to consider evidence
defendant in the administrative proceeding attempted to present); NLRB v. Burns, 207
F.2d 434 (8th Cir. 1953) (“Because of lack of due process in the proceedings before the
Board [based on improper exclusion of evidence], the question of sufficiency of the
evidence” was not addressed by the circuit court, which granted authority for the Board
to reopen the case for additional evidence if so advised). Thus, the Court deems it
unlikely that the narrow Leedom exception applies here.

1

Note that the Court has only considered the authority cited by the parties in the confines of this motion,
and has not reviewed any additional authority or argument presented to the District Judge in the briefing
filed to date related to the pending motion to dismiss for lack of jurisdiction. Of course, nothing in this
Court’s decision is binding on the District Judge in any event.

2

See Americo, 451 F.3d at 890-91(finding the exception “inapplicable to Section 10 unfair labor
practices hearings”).

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

2:16-cv-06955-PSG (GJSx)

Date

November 10, 2016

Title

Kava Holdings, LLC, et al. v. Mori Pam Rubin, in her capacity as Regional
Director of Region 31 or the NLRB

Second, Plaintiffs have not provided the Court with any reason – anything beyond
pure speculation – to believe that evidence of bad faith in connection with the NLRB’s
delay in bringing the administrative complaint exists. To the contrary, Defendant has
proffered a good faith reason for the delay, i.e., that the NLRB was awaiting the outcome
of a related proceeding that only concluded shortly before the recent filing. [Dkt. 37,
Exh. B at 5-6.] Moreover, Defendant avers that it informed Plaintiffs back in 2013 that it
would be awaiting the conclusion of the other proceeding [Id. (citing Dkt. 1 at ¶ 94)], and
Plaintiffs have not provided evidence or argument to the contrary. Thus, other than the
length of the delay itself, Plaintiffs have proffered nothing indicative of bad faith. The
Court will not order expedited discovery on speculation alone. United States v. Litton
Indus., Inc. 462 F.2d 14, 18 (9th Cir. 1972) (finding where alleged government bias was
speculative, plaintiff was not entitled to discovery); Carlsson v. U.S. Citizenship &
Immigration Servs., 2015 WL 1467174 at *9 (C.D. Cal. Mar. 23 2015) (requiring
plaintiff to make significant showing that it will find evidence of bad faith before
obtaining discovery into agency decision-making).
Plaintiffs state that it would be a “disaster” if its instant motion was denied and the
District Judge thereafter denied their motion for preliminary injunction for lack of
evidence sufficient to show likelihood of success on the merits. If the District Judge
denies the NLRB’s motion to dismiss and finds that evidence of bad faith is critical to his
decision on the preliminary injunction motion, he may choose, of course, to order
discovery at that time. At this juncture, however, this Court does not find that Plaintiffs
have met their burden to get the expedited relief they seek.
3. Defendant’s Cross-Motion for Stay of Discovery
Defendant’s motion for a stay of discovery pending the District Court’s decision
on the pending motion to dismiss is not “ripe” at this time. Discovery is not yet
authorized under the Federal Rules. Furthermore, a stay of all discovery would
necessarily impact any schedule Judge Gutierrez chooses to set. Without a specific

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

2:16-cv-06955-PSG (GJSx)

Date

November 10, 2016

Title

Kava Holdings, LLC, et al. v. Mori Pam Rubin, in her capacity as Regional
Director of Region 31 or the NLRB

referral from Judge Gutierrez, this Court cannot set deadlines or otherwise impact the
District Court’s scheduling order.
Judge Gutierrez has not yet issued an order setting a Rule 16 conference, but the
parties are scheduled to appear before him in less than two weeks on the pending
motions. The parties will thus appear before Judge Gutierrez before discovery begins.
Judge Gutierrez may decide to address Defendant’s request for a stay or refer it to this
Court at that time.
THEREFORE, for the reasons set forth above,
1. Plaintiffs’ Motion for Expedited discovery is DENIED.
2. Defendant’s Motion for a Stay of Discovery is DENIED.
IT IS SO ORDERED.

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