Kuang et al v. United States Department of Defense et al
Filing
112
ORDER GRANTING MOTION TO STAY PROCEEDINGS PENDING APPEAL by Judge Jon S. Tigar; granting 104 Motion to Stay. (wsnS, COURT STAFF) (Filed on 4/15/2019)
1
2
3
4
UNITED STATES DISTRICT COURT
5
NORTHERN DISTRICT OF CALIFORNIA
6
JIAHAO KUANG, et al.,
7
Plaintiffs,
8
v.
9
10
UNITED STATES DEPARTMENT OF
DEFENSE, et al.,
11
United States District Court
Northern District of California
Case No. 18-cv-03698-JST
ORDER GRANTING MOTION TO
STAY PROCEEDINGS PENDING
APPEAL
Defendants.
Re: ECF No. 104
12
13
Before the Court is Defendants’ (collectively, “Department of Defense” or “DoD”) motion
14
to stay proceedings pending their interlocutory appeal of the Court’s preliminary injunction. ECF
15
No. 104. The Court will grant the motion.
16
I.
BACKGROUND
17
This case concerns Plaintiffs’ challenge to a DoD policy regarding the background
18
investigation that DoD conducts for all enlisted recruits as part of their entry into military service.
19
ECF No. 68 at 5-7. In an October 13, 2017 memo (“October 13 Memo”), DoD announced that
20
lawful permanent residents (“LPRs”) would be not be able to access into basic training or active
21
service until their full background investigations had been completed. Id. at 8. Under the new
22
policy, U.S. citizens – unlike LPRs – remain able to access after an initial screening. Id. at 7-8.
23
On November 16, 2018, the Court issued an order granting Plaintiffs’ unopposed motion
24
for class certification, denying DoD’s motion to dismiss, and granting Plaintiffs’ motion for a
25
preliminary injunction based on their 5 U.S.C. § 706(2) claim under the Administrative Procedure
26
Act (“APA”). ECF No. 68.
27
28
On December 14, 2018, DoD appealed the injunction to the Ninth Circuit, ECF No. 73,
and filed a motion with this Court for a stay pending appeal, ECF No. 74. Before the Court ruled
1
on that motion, DoD filed a materially similar motion with the Ninth Circuit. See Kuang, No. 18-
2
17381 (9th Cir.), ECF No. 9. Given the pendency of a similar motion before a higher court, this
3
Court then issued an order holding DoD’s motion in abeyance pending the Ninth Circuit’s ruling.
4
No. 18-cv-03698-JST (N.D. Cal.), ECF No. 91.1
5
While the parties were briefing the stay motion before the Ninth Circuit, the parties raised
6
a discovery dispute to this Court. ECF Nos. 87, 92, 93. On January 23, 2019, the Court issued an
7
order denying Plaintiffs’ request for extra-record discovery on their constitutional claims but
8
granting such discovery on equitable factors relevant to potential relief. ECF No. 94.
On February 1, 2019, a divided Ninth Circuit panel denied DoD’s motion to stay the
9
injunction pending appeal. Kuang, No. 18-17381 (9th Cir.), ECF No. 21. This Court then
11
United States District Court
Northern District of California
10
reinstated briefing on DoD’s original stay motion and denied it on February 20, 2019. ECF No.
12
103. The Court did, however, grant DoD’s alternative request and clarified the scope of its
13
injunction. Id. at 4.
Twenty days later, DoD filed this motion. ECF No. 104. Having failed to obtain a stay of
14
15
the preliminary injunction, DoD now seeks to stay further district court proceedings until “the
16
Ninth Circuit and, if necessary, the Supreme Court,” resolve DoD’s interlocutory appeal. Id. at 2.
17
Plaintiffs oppose. ECF No. 109.
Under the parties’ stipulated case management schedule, discovery will close in September
18
19
2019, followed by dispositive cross-motions for summary judgment, with briefing concluding in
20
December 2019. ECF Nos. 96, 101. Meanwhile, the Ninth Circuit has set oral argument on
21
DoD’s interlocutory appeal for June 14, 2019. Kuang, No. 18-17381 (9th Cir.), ECF No. 36.
22
II.
LEGAL STANDARD
The parties dispute the legal standard that governs DoD’s motion. DoD contends that the
23
24
Court should apply a three-factor test derived from Landis v. North American Co., 299 U.S. 248
25
(1936). ECF No. 104 at 3-4. Under this test, courts examine (1) “the possible damage which may
26
result from the granting of a stay”; (2) “the hardship or inequity which a party may suffer [if the
27
28
1
All further ECF citations are to this Court’s docket unless otherwise indicated.
2
1
case is allowed] to go forward”; and (3) “the orderly course of justice measured in terms of the
2
simplifying or complicating of issues, proof, and questions of law which could be expected to
3
result from a stay.” Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9th Cir. 2005) (quoting
4
CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962)).
5
Plaintiffs, on the other hand, argue that the Court must decide this motion based on the
6
same four-factor test that governs a request to stay an injunction pending appeal. ECF No. 109 at
7
7. That test requires a court to consider four factors: “(1) whether the stay applicant has made a
8
strong showing that he is likely to succeed on the merits; (2) whether the applicant will be
9
irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other
parties interested in the proceeding; and (4) where the public interest lies.” Nken v. Holder, 556
11
United States District Court
Northern District of California
10
U.S. 418, 434 (2009). Under Ninth Circuit precedent, the movant “must show that irreparable
12
harm is probable and either: (a) a strong likelihood of success on the merits and that the public
13
interest does not weigh heavily against a stay; or (b) a substantial case on the merits and that the
14
balance of hardships tips sharply in the [movant’s] favor.” Leiva-Perez v. Holder, 640 F.3d 962,
15
970 (9th Cir. 2011) (per curiam). For simplicity, the Court will refer to these different sets of
16
factors as the Landis test or the Nken test.
17
It appears that the Ninth Circuit has not addressed which test applies here. Indeed, district
18
courts in this circuit have catalogued a divide “regarding the appropriate standard by which a
19
district court is to exercise its discretion in whether to grant a stay pending an interlocutory
20
appeal.” United States ex rel. Atlas Copco Compressors LLC v. Rwt LLC, No. CV 16-00215
21
ACK-KJM, 2017 WL 2986586, at *11 n.11 (D. Haw. July 13, 2017); see also Finder v. Leprino
22
Foods Co., No. 113CV02059AWIBAM, 2017 WL 1355104, at *2-3 (E.D. Cal. Jan. 20, 2017)
23
(reviewing different lines of authority).
24
Consistent with one line of authority, Plaintiffs contend that the Landis test applies only
25
“when a court is asked to stay one case pending the resolution of proceedings in a different case.”
26
ECF No. 109 at 8 n.3. Plaintiffs correctly observe that Landis itself involved “the power of a court
27
to stay proceedings in one suit until the decision of another,” 299 U.S. at 249, and that the Ninth
28
Circuit refined its test in cases likewise considering whether the Court should enter a stay
3
1
“pending resolution of independent proceedings which bear upon the case.” Leyva v. Certified
2
Grocers of Cal., Ltd., 593 F.2d 857, 863 (9th Cir. 1979).2 Though Plaintiffs cite no authority
3
expressly adopting their view, there are district court cases (including from this Court) that have
4
applied the Nken test to determine whether to grant a stay of proceedings pending interlocutory
5
appeal. See, e.g., United States v. Acad. Mortg. Corp., No. 16-CV-02120-EMC, 2018 WL
6
4794231, at *1-2 (N.D. Cal. Oct. 3, 2018); Pena v. Taylor Farms Pac., Inc., No. 2:13-CV-01282-
7
KJM-AC, 2015 WL 5103157, at *2 (E.D. Cal. Aug. 31, 2015); United States v. Real Prop. &
8
Improvements Located at 2366 San Pablo Ave., No. 13-CV-02027-JST, 2015 WL 525711, at *1
9
(N.D. Cal. Feb. 6, 2015). Critically, however, none of these decisions discussed the Landis test or
10
offered a reasoned analysis as to why the Nken test applied.
Further, a review of the case law suggests that district courts that have directly confronted
United States District Court
Northern District of California
11
12
the question have overwhelmingly concluded that the Landis test or something similar governs.
13
Those courts have reasoned that the Nken test “is applicable when there is a request to stay a
14
district court’s judgment or order pending an appeal of the same case,” while Landis applies to the
15
decision to stay proceedings, regardless whether the stay is based on a direct appeal or an
16
independent case. 23andMe, Inc. v. Ancestry.com DNA, LLC, No. 18-CV-02791-EMC, 2018 WL
17
5793473, at *3 (N.D. Cal. Nov. 2, 2018) (emphasis added); see also, e.g., Freeman Expositions,
18
Inc. v. Glob. Experience Specialists, Inc., No. SACV1700364CJCJDEX, 2017 WL 6940557, at *1
19
n.3 (C.D. Cal. June 27, 2017); Unitek Solvent Servs., Inc. v. Chrysler Grp. LLC, No. 12-00704
20
DKW-RLP, 2014 WL 12576648, at *1-2 (D. Haw. Jan. 14, 2014); Doe 1 v. AOL LLC, 719 F.
21
Supp. 2d 1102, 1107 n.1 (N.D. Cal. 2010); Asis Internet Servs. v. Active Response Grp., No. C07
22
6211 TEH, 2008 WL 4279695, at *4 n.1 (N.D. Cal. Sept. 16, 2008) (explaining that the Nken test
23
24
25
26
27
28
Consistent with this statement, the Ninth Circuit has applied the Landis test to “separate
proceedings [that] are judicial, administrative, or arbitral in character.” Leyva, 593 F.2d at 863-64
(stay pending arbitration of claims); see also Lockyer, 398 F.3d at 1100 (stay pending resolution of
defendants’ bankruptcy petitions in an another court); Mediterranean Enters., Inc. v. Ssangyong
Corp., 708 F.2d 1458, 1465 (9th Cir. 1983) (stay pending arbitration); CMAX, 300 F.2d at 266
(stay pending administrative enforcement proceeding against plaintiff).
4
2
1
“govern[s] a district court’s judgment or other order pending appeal, not a stay of ongoing
2
proceedings”).3
3
The Court agrees with these courts that the relevant considerations here are more akin to
4
those the Landis test is designed to address. As the 23andMe court noted, “[a]lthough Landis is
5
generally applied where there is a request to stay proceedings pending a decision in a different
6
case (this was true in Landis itself), Landis broadly states that ‘the power to stay proceedings is
7
incidental to the power inherent in every court to control the disposition of the causes on its docket
8
with economy of time and effort for itself, for counsel, and for litigants.’” 2018 WL 5793473, at
9
*3 (quoting Landis, 299 U.S. at 254). These same concerns exist where, as here, a court
“considers whether it should proceed forward on discovery . . . and pre-trial litigation in [an]
11
United States District Court
Northern District of California
10
action in light of the potential that the appellate court will determine that a large portion of the
12
action should be dismissed, rendering much of the work to be completed meaningless.” Finder,
13
2017 WL 1355104, at *2.
By contrast, different concerns predominate when a court decides whether to stay an
14
15
injunction or other order. There, the overarching question is not whether going forward with the
16
litigation will be inefficient for the parties and the court, but rather if equity demands that the court
17
“preserve the pre-judicial-relief status quo pending the appellate court’s determination of the
18
correctness of that relief.” Id. (citing Nken, 556 U.S. at 434). In most cases, the choice between
19
relief and no relief is starker than the choice between litigating or not litigating. Accordingly, the
20
types and degree of harm necessary to support a stay may differ. Id. at *3. Moreover, because the
21
22
23
24
25
26
27
28
In declining to apply Nken, some courts have instead adopted “a variation on the Landis factors”
drawn from stays pending interlocutory appeals certified under 28 U.S.C. § 1292(b): “whether (1)
resolution by the Ninth Circuit of the issue addressed in the appealed order could materially affect
this case and advance the ultimate termination of litigation and (2) whether a stay will promote
economy of time and effort for the Court and the parties.” Finder, 2017 WL 1355104, at *2
(quoting Am. Hotel & Lodging Ass'n v. City of Los Angeles, No. CV 14-09603-AB (SSX), 2015
WL 10791930, at *3 (C.D. Cal. Nov. 5, 2015)); see also Consumer Cellular, Inc. v.
ConsumerAffairs.com, No. 3:15-CV-1908-PK, 2016 WL 7238919, at *4 (D. Or. Sept. 26, 2016)
(“[T]he appropriate factors to be considered in the exercise of the court’s discretion whether or not
to grant the stay requested here are those of the Am. Hotel/Section 1292 test considered together
with those of the Landis/CMAX test.”).
5
3
1
impacts of an injunction – or the conduct that will occur in its absence – may ripple far beyond the
2
parties and the court, a broader consideration of the public interest is necessary.
3
For those reasons, the Court applies the Landis factors to DoD’s motion.
4
III.
ANALYSIS
5
A.
Balancing Hardships
6
Under the first two Landis factors, “the Court must balance the hardships of the parties if
7
the action is stayed or if the litigation proceeds.” Manriquez v. DeVos, No. 17-CV-07210-SK,
8
2018 WL 5316174, at *2 (N.D. Cal. Aug. 30, 2018). And “‘if there is even a fair possibility that
9
the stay . . . will work damage to someone else,’ the party seeking the stay ‘must make out a clear
10
case of hardship or inequity.’” Id. (alteration in original) (quoting Landis, 299 U.S. at 255).
Here, the Court’s preliminary injunction will remain in place for the duration of the stay.
United States District Court
Northern District of California
11
12
This weighs against a finding of harm to Plaintiffs. See E. Bay Sanctuary Covenant v. Trump, No.
13
18-CV-06810-JST, 2019 WL 1048238, at *2 (N.D. Cal. Mar. 5, 2019) (“While a delay in the
14
ability to ‘seek[ ] injunctive relief against ongoing and future harm’ militates against a stay,
15
Plaintiffs have already secured such relief, albeit in preliminary form.” (quoting Lockyer, 398 F.3d
16
at 1112)). Although Plaintiffs argue that a stay will delay their ability to obtain permanent
17
injunctive relief, they do not identify any specific harm that will occur while the preliminary
18
injunction is in place. Cf. Bernstein v. Virgin Am., Inc., No. 15-CV-02277-JST, 2018 WL
19
3349183, at *4 (N.D. Cal. July 9, 2018) (“Here, Plaintiffs will suffer damage because ‘the passage
20
of time will make it more difficult to reach class members and will increase the likelihood that
21
relevant evidence will dissipate.’” (quoting Cabiness v. Educ. Fin. Sols., LLC, No. 16-CV-01109-
22
JST, 2017 WL 167678, at *3 (N.D. Cal. Jan. 17, 2017)).4
The Court acknowledges Plaintiffs’ concern that a stay might be lengthy in duration. ECF
23
24
No. 109 at 13-14. While DoD notes that the Ninth Circuit has already scheduled oral argument for
25
June 14, 2019, the Ninth Circuit’s procedures for preliminary injunction appeals do not require the
26
27
28
Plaintiffs assert, without evidentiary support, that DoD has not complied with the Court’s
injunction in some instances. ECF No. 109 at 11. Obtaining a permanent injunction, rather than a
preliminary one, would not change DoD’s obligations to follow the Court’s orders. If DoD has in
fact failed to comply or does so in the future, Plaintiffs should seek appropriate relief.
6
4
1
court to rule by any particular time. See Ninth Circuit Rules 3-3, 34-3. Moreover, the issues
2
presented and the course of this litigation thus far suggest a reasonable probability that even once
3
the Ninth Circuit issues a decision, “one or more parties may file a petition for rehearing en banc,
4
a petition for certiorari at the Supreme Court, or both.” Bernstein, 2018 WL 3349183, at *3.
5
At the same time, some amount of delay is inherent in a stay, and a stay’s precise duration
6
will generally be uncertain when based on proceedings before an independent adjudicative body.
7
Importantly, the potential length of a stay here is mitigated by the lack of identified prejudice to
8
Plaintiffs. Under these circumstances, the Court finds it “likely the [appellate] proceedings will be
9
concluded within a reasonable time in relation to the urgency of the claims presented to th[is]
10
United States District Court
Northern District of California
11
[C]ourt.” Leyva, 593 F.2d at 864.
Turning to the second factor, even if DoD “must make out a clear case of hardship or
12
inequity,” Landis, 299 U.S. at 255, it has done so. It is true that, as a general matter, “being
13
required to defend a suit, without more,” does not suffice. Lockyer, 398 F.3d at 1112. Logically,
14
this includes the ordinary burdens of discovery.
15
“However, neither this lawsuit, nor the discovery Plaintiffs seek is typical.” Washington v.
16
Trump, No. C17-0141JLR, 2017 WL 2172020, at *4 (W.D. Wash. May 17, 2017). Plaintiffs are
17
pursuing discovery into documents connected to sensitive elements of military background
18
investigations, including draft proposed policies, the process for mitigating derogatory information
19
revealed during investigations, and specific security incidents involving military personnel. ECF
20
No. 105-1 at 11-13, 15; ECF No. 105-2 at 8. The parties allude to imminent discovery disputes
21
regarding these and other materials. ECF No. 109 at 6-7. Plaintiffs have also indicated that they
22
intend to depose various DoD officials. See ECF No. 101 at 1 (denying DoD’s opposed request to
23
limit the number of depositions).
24
The Court expresses no view as to whether Plaintiffs are entitled to these specific materials
25
if or when this action proceeds. But these requests undoubtedly implicate sensitive areas of
26
military policy in which courts must tread more carefully than in other contexts. Although the
27
Court previously held that the Mindes doctrine did not bar review altogether, see Kuang v. United
28
States Dep’t of Def., 340 F. Supp. 3d 873, 896-99 (N.D. Cal. 2018), the doctrine’s underlying
7
1
precepts still inform the Court’s decision here. For example, in finding a servicemember’s
2
intentional race discrimination claim unreviewable under Mindes, the Ninth Circuit cautioned that
3
“[t]he officers who participated in reviewing appellant’s performance would have to be examined
4
to determine the grounds and motives for their ratings.” Gonzalez v. Dep’t of Army, 718 F.2d 926,
5
930 (9th Cir. 1983). The court explained that it “would not shrink from such an assessment in a
6
civilian setting,” but that the “very sensitive area of military expertise and discretion” compelled
7
greater restraint. Id.
As explained in greater detail below, it is possible that a higher court will conclude that the
8
October 13 Memo is unreviewable, in which case Plaintiffs will not be entitled to any discovery
10
into these areas of military background investigations and national security determinations. The
11
United States District Court
Northern District of California
9
Court agrees with the Washington court that, particularly where discovery disputes are anticipated,
12
prudence favors allowing “the Ninth Circuit [to] address[] issues that may inform the
13
appropriateness, scope, and necessity of that discovery” before wading into these difficult
14
questions. Id. at *4. To be clear, the Court does not suggest that this result is always compelled
15
when discovery involves military or other executive officials. But under these specific
16
circumstances, DoD has sufficiently demonstrated that it will suffer hardship in being required to
17
go forward with discovery.
18
Accordingly, the balance of the first two Landis factors supports a stay.
19
B.
20
The final Landis factor requires the Court to consider “the simplifying or complicating of
21
issues, proof, and questions of law which could be expected to result from a stay.” Lockyer, 398
22
F.3d at 1110. “[C]onsiderations of judicial economy are highly relevant” to this evaluation.
23
Gustavson v. Mars, Inc., No. 13-CV-04537-LHK, 2014 WL 6986421, at *3 (N.D. Cal. Dec. 10,
24
2014).
25
Orderly Course of Justice
As a threshold matter, because this stay does not involve a separate proceeding, there is no
26
question that there is a sufficient “degree of overlap” so that a stay will serve judicial economy.
27
Bernstein, 2018 WL 3349183, at *2. In addition, DoD’s interlocutory appeal may impact the
28
entire case, not just some of the claims. Cf. Manriquez, 2018 WL 5316174, at *3 (“Here, the
8
1
resolution of the issue on appeal will not address all of the claims alleged by Plaintiffs, but
2
resolution on appeal has the potential to narrow the claims before the Court.”).
3
DoD asserts that its interlocutory appeal contains issues that may dispose of the case or
4
significantly reshape the merits. ECF No. 104 at 4. The Court agrees. In particular, the Ninth
5
Circuit may decide that either the Mindes doctrine or the APA, 5 U.S.C. § 701(a)(2), bar review.
6
It may also determine that one or more of DoD’s extra-record declarations should be considered in
7
evaluating Plaintiffs’ APA and constitutional claims.
8
9
Plaintiffs’ only argument on this factor is that judicial economy will not be served because
DoD’s appeal is unlikely to succeed, given that the Ninth Circuit has already declined to stay the
Court’s injunction pending appeal. ECF No. 109 at 15. Accordingly, Plaintiffs suggest, the Ninth
11
United States District Court
Northern District of California
10
Circuit’s ultimate ruling will not simplify the issues because it will most likely leave the landscape
12
of this litigation untouched.
13
The likelihood of success on the merits is not an independent factor under Landis, and
14
therefore does not carry the same weight in this context. See Bascom Research LLC v. Facebook,
15
Inc., No. C 12-6293 SI, 2014 WL 12795380, at *2 (N.D. Cal. Jan. 13, 2014) (rejecting arguments
16
based on “irreparable harm or likelihood of success on the merits” where “plaintiff relies on cases
17
addressing the legal standard applicable for preliminary injunctions or stays of judgments pending
18
appeal, not stays of district court proceedings when in the interest of judicial efficiency”); Asis
19
Internet Servs., 2008 WL 4279695, at *4 (“The Plaintiffs’ extensive discussion, therefore, of the
20
likelihood of success on the merits (and Defendant’s response thereto) are irrelevant to the stay
21
issue [under Landis] here.”). Moreover, an appellate ruling that leaves in place a preliminary
22
injunction may nonetheless resolve intermediate issues in a manner that simplifies further
23
proceedings. Plaintiffs also vastly overstate the inferences that can be drawn from the motion
24
panel’s order, which gave no reasons for denying the stay. See Kuang, No. 18-17381 (9th Cir.),
25
ECF No. 21 at 1. Plaintiffs’ argument is therefore unpersuasive.
26
Finally, the Court addresses the Ninth Circuit’s repeated admonition “not to delay trial
27
preparation to await an interim ruling on a preliminary injunction.” California v. Azar, 911 F.3d
28
558, 583 (9th Cir. 2018). Such stays are often of doubtful utility because, due to the Ninth
9
1
Circuit’s “limited scope of review and the paucity of the factual record on a preliminary injunction
2
application, [its] disposition ‘may provide little guidance as to the appropriate disposition on the
3
merits’ and will often ‘result in unnecessary delay to the parties and inefficient use of judicial
4
resources.’” Glob. Horizons, Inc. v. U.S. Dep’t of Labor, 510 F.3d 1054, 1058-59 (9th Cir. 2007)
5
(quoting Sports Form, Inc. v. United Press Int’l, Inc., 686 F.2d 750, 753 (9th Cir. 1982)). As the
6
Court recently explained, however, those concerns “carry less force” where the critical issues are
7
purely legal and the full administrative record is on appeal. E. Bay Sanctuary Covenant, 2019 WL
8
1048238, at *2.
9
As to the first point, the merits of Plaintiffs’ claims turn on the factual adequacy of DoD’s
justifications for discriminating between LPRs and U.S. citizens. But, as described above, there
11
United States District Court
Northern District of California
10
are threshold issues about reviewability under Mindes and whether the October 13 Memo is a
12
decision “committed to agency discretion by law,” 5 U.S.C. § 701(a)(2), that are largely
13
independent of the factual record. As to the second, the parties have “expressed an[] intent to
14
supplement the record going forward,” unlike in East Bay Sanctuary Covenant. 2019 WL
15
1048238, at *3. Given that the scope of the record is at issue on appeal, however, it would be just
16
as inefficient to proceed without the benefit of the Ninth Circuit’s guidance on this point.
17
Accordingly, the Court concludes that this factor also weighs in favor of a stay.
CONCLUSION
18
19
For the foregoing reasons, the Court GRANTS DoD’s motion to stay these proceedings.
20
IT IS SO ORDERED.
21
22
23
Dated: April 15, 2019
______________________________________
JON S. TIGAR
United States District Judge
24
25
26
27
28
10
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?