Valero Refining Company California v. Pacific Gas & Electric Company

Filing 51

ORDER signed by District Judge Troy L. Nunley on 1/28/19 DENYING 46 Application for Temporary Stay. (Mena-Sanchez, L)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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VALERO REFINING COMPANY—
CALIFORNIA, a Delaware corporation,
Plaintiff,

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No. 2:17-cv-01350-TLN-EFB

ORDER
v.
PACIFIC GAS AND ELECTRIC
COMPANY, a California corporation,
Defendant.

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On January 18, 2019, Defendant Pacific Gas and Electric Company (“Defendant” or

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“PG&E”) filed an Application for Temporary Stay. (ECF No. 46.) On January 21, 2019,

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Plaintiff Valero Refining Company (“Plaintiff”) filed an Opposition thereto. (ECF No. 47.) The

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Court has reviewed the parties’ briefs, and for the reasons provided below, Defendant’s

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Application is DENIED.

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Defendant seeks a temporary stay in this matter pending its anticipated Chapter 11

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bankruptcy filing. Indeed, PG&E has announced its intent to file for Chapter 11 protection “on or

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about January 29, 2019.” (Pl.’s App., ECF No. 46, at 2.) Under 11 U.S.C. § 362, once PG&E

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files for such protection, all litigation against PG&E will automatically be stayed, including the

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present action. Defendant seeks a temporary stay in this matter—to last thirty (30) days or until it

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files for bankruptcy—in order to “preserve [its] assets” pending that automatic stay. (Id.)
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Defendant indicates—and Plaintiff agrees—that the parties are in the middle of briefing on

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Defendant’s Motion for Summary Judgment, and that depositions of two of PG&E’s experts are

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scheduled for the end of January. Defendant seeks to temporarily stay the action so it does not

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expend resources on these matters in the interim.
The Court has broad discretion in deciding whether to issue a stay. “[T]he power to stay

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proceedings is incidental to the power inherent in every court to control the disposition of the

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causes on its docket . . . . [This] calls for the exercise of judgment, which must weigh competing

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interests and maintain an even balance.”1 Landis v. N. Am. Co., 299 U.S. 248, 254-55 (1936).

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Exercising that discretion, the Court is not convinced that a stay is necessary or proper in this

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case.

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First, PG&E filed its motion for summary judgment (ECF No. 44) before even requesting

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this stay. The vast majority of resources it would need to dedicate to that filing have therefore

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already been expended, and any “assets” it might use to review Plaintiff’s opposition and prepare

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an optional reply are minimal. The same is true of defending the upcoming depositions.

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Defendant’s interest in preserving the limited resources it will take to defend two depositions

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does not outweigh Plaintiff’s interest in pursuing litigation unless and until the automatic stay

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takes effect. Indeed, PG&E may still opt not to file for Chapter 11 bankruptcy, in which case

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Plaintiff would be stuck with an unjustified thirty-day stay.
Additionally, Plaintiff’s arguments that a stay imposed by this Court would act as a

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premature protection to a debtor and set a dangerous precedent are well taken. (See ECF No. 47

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at 3-4.) This Court is not a bankruptcy court, and Defendant is not entitled to a premature stay of

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proceedings unless and until it actually files for the protections afforded under Chapter 11.

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The Court rejects Plaintiff’s position that the requested stay is governed by a preliminary injunction
standard. (See ECF No. 47 at 3.) Solidus Networks, Inc. v. Excel Innovations, Inc. (In re Excel Innovations, Inc.),
502 F.3d 1086, 1094 (9th Cir. 2007) applied a preliminary injunction standard where a Chapter 11 debtor sought to
stay a proceeding in which the debtor was not a party. Here, the Plaintiff—who happens to be a potential debtor—is
seeking to stay a proceeding in which it is a party.

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For the reasons provided above, Defendant’s Application for Temporary Stay (ECF No.
46) is DENIED.
IT IS SO ORDERED.
Dated: January 28, 2019

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Troy L. Nunley
United States District Judge

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