United States of America v. State of California et al

Filing 214

ORDER signed by District Judge John A. Mendez on 10/18/2018 GRANTING 207 Motion to Stay Case; the parties shall file a joint status statement no later than ten days after the appeal to the Ninth Circuit becomes final; the statement shall include specific proposals as to how the parties wish to proceed with the case at bar in light of the Ninth Circuits order. [USCA #18-16496] (Reader, L)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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United States of America,

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No.

2:18-cv-00490-JAM-KJN

Plaintiff,
v.
State of California, et al.,

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ORDER GRANTING THE UNITED STATES
OF AMERICA’S MOTION TO STAY
PROCEEDINGS PENDING APPEAL

Defendants.

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I.

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PROCEDURAL BACKGROUND

In October, 2017, the State of California (“Defendant” or

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“California”) passed Assembly Bill 103 (“A.B. 103”), Assembly

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Bill 450 (“A.B. 450”), and Senate Bill 54 (“S.B. 54)).

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at ¶ 27.

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or “United States”) moved to preliminarily enjoin several of the

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newly-enacted provisions.

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and denied in part Plaintiff’s motion for a preliminary

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injunction.

Compl.

Soon after, the United States of America (“Plaintiff”

ECF No. 2.

The Court granted in part

Preliminary Injunction Order (“PIO”), ECF No. 193.
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The Court also granted in part and denied in part Defendant’s

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motion to dismiss.

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197.

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Motion to Dismiss Order (“MDO”), ECF No.

The United States appealed both orders, and now requests

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that the proceedings before this Court be stayed until the Ninth

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Circuit hands down its decision.

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Plaintiff’s motion contends that a stay would promote judicial

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efficiency, simplify important pretrial issues, prevent

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inconsistent decisions, and eliminate potential hardship that

Mot. for Stay, ECF No. 207.

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the it might otherwise face.

Id. at 2-4.

This Court agrees.

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For the reasons discussed below, Plaintiff’s motion is granted.

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II.

OPINION

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A.

Legal Standard

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“A district court has broad discretion to stay proceedings

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as an incident to its power to control its own docket.”

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v. Jones, 520 U.S. 681, 706 (1997).

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several factors when deciding whether to exercise that

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discretion to issue a stay: 1) the “possible damage which might

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result from granting a stay,” 2) the “hardship or inequity which

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a party might suffer in being required to go forward,” and

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3) the “orderly course of justice measured in terms of the

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simplifying or complicating of issues, proof, and questions of

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law which could be expected to result from a stay.”

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v. Hall, 300 F.2d 265, 268 (9th Cir. 1962).

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Clinton

The Court must consider

CMAX, Inc.

The proponent of a stay bears the burden of showing that

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these factors, on balance, warrant a stay.

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708.

Clinton, 520 U.S. at

The moving party “must make out a clear case of hardship
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or inequity in being required to go forward, if there is even a

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fair possibility that the stay . . . will work damage to

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some[one] else.”

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(1936).

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B.

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Analysis
1.

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Landis v. N. Am. Co., 299 U.S. 248, 255

Denying a Stay Would Result in Hardship or
Inequity to the United States

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The Court finds that the United States will face

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unnecessary hardship or inequity if a stay is denied.

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California “propose[s] extensive discovery, over the course of

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over seven months” on the provisions of AB 450 that have been

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enjoined and remain at issue before this Court.

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also Joint Status Report at 3, ECF No. 205.

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explained, this case “presents unique and novel constitutional

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issues.”

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uncertainty as to whether this Court’s orders will be affirmed

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imposes a hardship upon the United States—particularly when the

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Court of Appeals will soon clarify the legal landscape.

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the Ninth Circuit’s decision may, as the United States argues,

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cause the issues now before this Court to “be subject to

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modification or rendered moot.”

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Order at 3.

Mot. at 3.

See

As previously

Proceeding with discovery amidst

Indeed,

Mot. at 3.

California maintains that the Ninth Circuit’s ruling “will

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have no bearing on any potential discovery” because the appeal

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“includes two entirely different statutes.”

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argument fails to acknowledge that each of the claims—though

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perhaps factually distinct—involve the same constitutional

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issues and principles of law.

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measurably alter the posture of this case.

Opp’n at 6.

This

The Ninth Circuit’s ruling may

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Allowing this action

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to move forward while that possibility looms in the background

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risks unnecessary expense and hardship to both parties as they

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may end up conducting discovery that ultimately falls outside

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the scope of this litigation.

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2.

Granting a Stay Would Not Harm California

As the United States argues, California will not be harmed

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if a stay is granted.

Mot. 3-4.

First, S.B. 54, A.B. 103, and

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part of A.B. 450 will remain in force while the proceedings are

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stayed.

California argues that it is “already suffering

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irreparable harm” as a result of this Court’s injunction on some

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of A.B. 450’s provisions, and that this ongoing harm warrants

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denying the stay.

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interest in “enforce[ing] portions of a duly enacted statute” is

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undermined both by the state’s failure to appeal the preliminary

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injunction, and the lengthy timeline it proposes for proceeding

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to trial.

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(1st Cir. 2001); Samayoa by Samayoa v. Chicago Bd. Of Educ., 783

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F.2d 102, 104 (7th Cir. 1986); Cuomo v. Barr, 7 F.3d 17, 19 (2d

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Cir. 1993); United States v. Washington, No. C70-9213RSM, 2013

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WL 6328825, *8 (W.D. Wash. Dec. 5, 2013).

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Report at 3, ECF No. 205.

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Opp’n at 4.

But California’s claimed

See Anderson v. City of Boston, 244 F.3d 236, 239

See also Joint Status

This Court is not persuaded by California’s claim that the

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stay will be so “indefinite” that it will threaten the State’s

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“ability to defend itself and test the United States’

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allegations.”

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reason why the United States’ inability to provide a specific

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end date for its appeal will necessarily result in the type of

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delay seen in Dependable Highway Express, Inc. v. Navigators

See Opp’n at 4.

California has not given any

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Ins. Co., 498 F. 3d 1059 (9th Cir. 2007).

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continued for two years while litigants awaited the results of

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an overseas arbitration.

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States notes, there is “good reason to believe that the Ninth

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Circuit appeal process would be brief,” because the Ninth

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Circuit rules require preliminary-injunction appeals to “receive

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hearing or submission priority.”

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Circuit Rule 34-3.

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Id. at 1067.

There, the stay

Indeed, as the United

Reply at 2.

See also Ninth

Finally, the Court is also not persuaded by California’s

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claim that putting discovery on hold “prevents [the state] from

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presenting a defense.”

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the Court’s comment that “a more complete evidentiary record

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could impact the Court’s analysis.”

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The Court explained that “[n]either party provided the Court

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with much information on how the verification system currently

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works in practice and how the new law does or does not change

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those practices.”

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essential to this analysis as developing the facts.

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California fails to explain how issuing a brief stay to resolve

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the legal issues would render any of its needed evidence stale.

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3.

Id.

Opp’n at 4.

This argument is rooted in

Id.

See also PIO at 29-30.

But clarifying the law is just as
And

Granting a Stay Promotes the “Orderly Course of
Justice”

Finally, denying a stay not only threatens hardship to the

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United States, it threatens the “orderly course of justice.”

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See CMAX, Inc., 300 F.2d at 268.

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the Ninth Circuit “could definitively resolve some of the legal

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issues in this case.”

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some of the United States’ claims, found that several of the

As the United States contends,

Mot. at 2.

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This Court, in dismissing

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challenged statutory provisions were constitutional as a matter

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of law.

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to determine whether that decision was correct.

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challenges will similarly rise or fall on this determination.

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The “orderly course of justice” is not served by continuing down

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the path of litigation without knowing whether the case is on

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the right track.

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See MDO at 3-6.

The Ninth Circuit is now in a position
The remaining

The Court disagrees with California’s framing of this
factor.

See Opp’n at 7-8.

Awaiting a Supreme Court decision

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that will neatly dispose of an entire case—as this Court did in

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Sims v. AT&T Mobility Servs. LLC, No. 2:12-cv-02702-JAM-AC, 2013

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WL 753496 (E.D. Cal. Feb. 27, 2013)—is certainly one way to

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promote the orderly course of justice.

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way.

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different statutory provisions is not determinative.

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Opp’n at 8.

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between the proceedings that waiting for one to be resolved

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would work to simplify issues in the other or preserve judicial

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resources.

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Colonial First Lending Grp., Inc., No. 2:14-cv-001482 JAM A,

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2015 WL 1137344, at *2 (E.D. Cal. Mar. 12, 2015) (finding “no

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reason for just delay” of plaintiff’s appeal because proceeding

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to trial would have risked duplicitous proceedings).

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But it is not the only

Similarly, the fact that Plaintiff’s appeal involves
Contra

The question is whether there is sufficient overlap

CMAX, Inc., 300 F.2d at 268.

Cf. McMenemy v.

Here, there is sufficient overlap and a stay will avoid

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possible inconsistent decisions.

As Plaintiff points out,

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“without a stay there is a substantial risk of duplication of

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proceedings and waste of judicial resources [if] the Court makes

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determinations on a narrow portion of law before knowing whether
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the other provisions of that and other laws will also be before

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it.”

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judicial efficiency.

Mot. At 2.

Therefore, a stay is warranted to preserve

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III.

ORDER

For the reasons set forth above, the Court GRANTS

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Plaintiff’s Motion to Stay.

The parties shall file a joint

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status statement no later than ten days after the appeal to the

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Ninth Circuit becomes final. The statement shall include

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specific proposals as to how the parties wish to proceed with

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the case at bar in light of the Ninth Circuit’s order.

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IT IS SO ORDERED.
Dated: October 18, 2018

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