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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1 2 3 4 5 6 7 8 9 10 11 UNITED STATES DISTRICT COURT 12 EASTERN DISTRICT OF CALIFORNIA 13 14 United States of America, 15 16 17 No. 2:18-cv-00490-JAM-KJN Plaintiff, v. State of California, et al., 18 ORDER GRANTING THE UNITED STATES OF AMERICA’S MOTION TO STAY PROCEEDINGS PENDING APPEAL Defendants. 19 I. 20 21 PROCEDURAL BACKGROUND In October, 2017, the State of California (“Defendant” or 22 “California”) passed Assembly Bill 103 (“A.B. 103”), Assembly 23 Bill 450 (“A.B. 450”), and Senate Bill 54 (“S.B. 54)). 24 at ¶ 27. 25 or “United States”) moved to preliminarily enjoin several of the 26 newly-enacted provisions. 27 and denied in part Plaintiff’s motion for a preliminary 28 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. 1 1 The Court also granted in part and denied in part Defendant’s 2 motion to dismiss. 3 197. 4 Motion to Dismiss Order (“MDO”), ECF No. The United States appealed both orders, and now requests 5 that the proceedings before this Court be stayed until the Ninth 6 Circuit hands down its decision. 7 Plaintiff’s motion contends that a stay would promote judicial 8 efficiency, simplify important pretrial issues, prevent 9 inconsistent decisions, and eliminate potential hardship that Mot. for Stay, ECF No. 207. 10 the it might otherwise face. Id. at 2-4. This Court agrees. 11 For the reasons discussed below, Plaintiff’s motion is granted. 12 13 II. OPINION 14 A. Legal Standard 15 “A district court has broad discretion to stay proceedings 16 as an incident to its power to control its own docket.” 17 v. Jones, 520 U.S. 681, 706 (1997). 18 several factors when deciding whether to exercise that 19 discretion to issue a stay: 1) the “possible damage which might 20 result from granting a stay,” 2) the “hardship or inequity which 21 a party might suffer in being required to go forward,” and 22 3) the “orderly course of justice measured in terms of the 23 simplifying or complicating of issues, proof, and questions of 24 law which could be expected to result from a stay.” 25 v. Hall, 300 F.2d 265, 268 (9th Cir. 1962). 26 Clinton The Court must consider CMAX, Inc. The proponent of a stay bears the burden of showing that 27 these factors, on balance, warrant a stay. 28 708. Clinton, 520 U.S. at The moving party “must make out a clear case of hardship 2 1 or inequity in being required to go forward, if there is even a 2 fair possibility that the stay . . . will work damage to 3 some[one] else.” 4 (1936). 5 B. 6 Analysis 1. 7 Landis v. N. Am. Co., 299 U.S. 248, 255 Denying a Stay Would Result in Hardship or Inequity to the United States 8 The Court finds that the United States will face 9 unnecessary hardship or inequity if a stay is denied. 10 California “propose[s] extensive discovery, over the course of 11 over seven months” on the provisions of AB 450 that have been 12 enjoined and remain at issue before this Court. 13 also Joint Status Report at 3, ECF No. 205. 14 explained, this case “presents unique and novel constitutional 15 issues.” 16 uncertainty as to whether this Court’s orders will be affirmed 17 imposes a hardship upon the United States—particularly when the 18 Court of Appeals will soon clarify the legal landscape. 19 the Ninth Circuit’s decision may, as the United States argues, 20 cause the issues now before this Court to “be subject to 21 modification or rendered moot.” 22 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 23 have no bearing on any potential discovery” because the appeal 24 “includes two entirely different statutes.” 25 argument fails to acknowledge that each of the claims—though 26 perhaps factually distinct—involve the same constitutional 27 issues and principles of law. 28 measurably alter the posture of this case. Opp’n at 6. This The Ninth Circuit’s ruling may 3 Allowing this action 1 to move forward while that possibility looms in the background 2 risks unnecessary expense and hardship to both parties as they 3 may end up conducting discovery that ultimately falls outside 4 the scope of this litigation. 5 6 2. Granting a Stay Would Not Harm California As the United States argues, California will not be harmed 7 if a stay is granted. Mot. 3-4. First, S.B. 54, A.B. 103, and 8 part of A.B. 450 will remain in force while the proceedings are 9 stayed. California argues that it is “already suffering 10 irreparable harm” as a result of this Court’s injunction on some 11 of A.B. 450’s provisions, and that this ongoing harm warrants 12 denying the stay. 13 interest in “enforce[ing] portions of a duly enacted statute” is 14 undermined both by the state’s failure to appeal the preliminary 15 injunction, and the lengthy timeline it proposes for proceeding 16 to trial. 17 (1st Cir. 2001); Samayoa by Samayoa v. Chicago Bd. Of Educ., 783 18 F.2d 102, 104 (7th Cir. 1986); Cuomo v. Barr, 7 F.3d 17, 19 (2d 19 Cir. 1993); United States v. Washington, No. C70-9213RSM, 2013 20 WL 6328825, *8 (W.D. Wash. Dec. 5, 2013). 21 Report at 3, ECF No. 205. 22 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 23 stay will be so “indefinite” that it will threaten the State’s 24 “ability to defend itself and test the United States’ 25 allegations.” 26 reason why the United States’ inability to provide a specific 27 end date for its appeal will necessarily result in the type of 28 delay seen in Dependable Highway Express, Inc. v. Navigators See Opp’n at 4. California has not given any 4 1 Ins. Co., 498 F. 3d 1059 (9th Cir. 2007). 2 continued for two years while litigants awaited the results of 3 an overseas arbitration. 4 States notes, there is “good reason to believe that the Ninth 5 Circuit appeal process would be brief,” because the Ninth 6 Circuit rules require preliminary-injunction appeals to “receive 7 hearing or submission priority.” 8 Circuit Rule 34-3. 9 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 10 claim that putting discovery on hold “prevents [the state] from 11 presenting a defense.” 12 the Court’s comment that “a more complete evidentiary record 13 could impact the Court’s analysis.” 14 The Court explained that “[n]either party provided the Court 15 with much information on how the verification system currently 16 works in practice and how the new law does or does not change 17 those practices.” 18 essential to this analysis as developing the facts. 19 California fails to explain how issuing a brief stay to resolve 20 the legal issues would render any of its needed evidence stale. 21 22 23 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 24 United States, it threatens the “orderly course of justice.” 25 See CMAX, Inc., 300 F.2d at 268. 26 the Ninth Circuit “could definitively resolve some of the legal 27 issues in this case.” 28 some of the United States’ claims, found that several of the As the United States contends, Mot. at 2. 5 This Court, in dismissing 1 challenged statutory provisions were constitutional as a matter 2 of law. 3 to determine whether that decision was correct. 4 challenges will similarly rise or fall on this determination. 5 The “orderly course of justice” is not served by continuing down 6 the path of litigation without knowing whether the case is on 7 the right track. 8 9 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 10 that will neatly dispose of an entire case—as this Court did in 11 Sims v. AT&T Mobility Servs. LLC, No. 2:12-cv-02702-JAM-AC, 2013 12 WL 753496 (E.D. Cal. Feb. 27, 2013)—is certainly one way to 13 promote the orderly course of justice. 14 way. 15 different statutory provisions is not determinative. 16 Opp’n at 8. 17 between the proceedings that waiting for one to be resolved 18 would work to simplify issues in the other or preserve judicial 19 resources. 20 Colonial First Lending Grp., Inc., No. 2:14-cv-001482 JAM A, 21 2015 WL 1137344, at *2 (E.D. Cal. Mar. 12, 2015) (finding “no 22 reason for just delay” of plaintiff’s appeal because proceeding 23 to trial would have risked duplicitous proceedings). 24 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 25 possible inconsistent decisions. As Plaintiff points out, 26 “without a stay there is a substantial risk of duplication of 27 proceedings and waste of judicial resources [if] the Court makes 28 determinations on a narrow portion of law before knowing whether 6 1 the other provisions of that and other laws will also be before 2 it.” 3 judicial efficiency. Mot. At 2. Therefore, a stay is warranted to preserve 4 5 6 III. ORDER For the reasons set forth above, the Court GRANTS 7 Plaintiff’s Motion to Stay. The parties shall file a joint 8 status statement no later than ten days after the appeal to the 9 Ninth Circuit becomes final. The statement shall include 10 specific proposals as to how the parties wish to proceed with 11 the case at bar in light of the Ninth Circuit’s order. 12 13 IT IS SO ORDERED. Dated: October 18, 2018 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7

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