Karl v. Zimmer Biomet Holdings, Inc. et al

Filing 42

ORDER RE 33 MOTION TO STAY AND VACATING HEARING. Signed by Judge William Alsup. (whalc2, COURT STAFF) (Filed on 1/8/2019)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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United States District Court
For the Northern District of California

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JAMES KARL, individually and on behalf of all
others similarly situated,

No. C 18-04176 WHA

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Plaintiff,
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v.
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ZIMMER BIOMET HOLDINGS, INC., a
Delaware corporation; ZIMMER US, INC., a
Delaware corporation; BIOMET U.S.
RECONSTRUCTION, LLC, an Indiana limited
liability company; BIOMET BIOLOGICS, LLC,
an Indiana limited liability company; and
BIOMET, INC., an Indiana corporation,

ORDER RE MOTION
TO STAY AND VACATING
HEARING

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Defendants.
/

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In this putative employment class action, defendants move to stay pending resolution of
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its petition for writ of mandamus. For the reasons herein, defendants’ motion is GRANTED IN
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PART and DENIED IN PART.

Pursuant to Civil Local Rule 7-1(b), this order finds defendants’

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motion suitable for submission without oral argument and hereby VACATES the hearing
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scheduled for January 10.
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In August 2015, plaintiff James Karl signed a sales associate agreement with defendants
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Zimmer US, Inc., Biomet U.S. Reconstruction, LLC, and Biomet Biologics, LLC and thereafter
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began working for defendants as a sales representative in California. The agreement classified
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plaintiff and other California-based sales representatives as independent contractors and included
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a forum-selection clause identifying Indiana as the exclusive forum (Dkt. Nos. 1 at 1; 14-2).

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Plaintiff alleges that defendants misclassified him and other sales representatives as

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independent contractors rather than employees. As such, he raises claims for relief for violations

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of the FLSA, Industrial Welfare Commission Wage Order 4-2001, the California Labor Code for

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unpaid wages and overtime premiums, and related California Labor Code claims, including:

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meal and rest period violations, failure to provide itemized wage statements, failure to reimburse

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business expenses, and related civil and statutory penalties.

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An order dated November 6, 2018, denied defendants’ motion to transfer the instant

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action to the Northern District of Indiana pursuant to the forum-selection clause found in the

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sales associate agreement based on California Labor Code Section 925, which makes

United States District Court
For the Northern District of California

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forum-selection clauses voidable per public policy (Dkt. No. 27 at 2–11). That order also denied

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defendants’ motion to dismiss and strike (id. at 12–21).

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On November 29, 2018, defendants filed a petition for writ of mandamus with our court

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of appeals in connection with the order denying defendants’ motion to transfer (Dkt. No. 35).

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Defendants now move to stay proceedings pending resolution by our court of appeals of the writ

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petition (Dkt. No. 33). Plaintiff opposes (Dkt. No. 37).

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Whether to issue a stay is within the district court’s discretion. Our court of appeals

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considers four factors in determining if a stay pending appeal of the denial of a motion to transfer

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is warranted: (1) whether the stay applicant has made a strong showing that he is likely to

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succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3)

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whether issuance of the stay will substantially injure the other parties interested in the

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proceeding; and (4) where the public interest lies. Leiva-Perez v. Holder, 640 F.3d 962, 964 (9th

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Cir. 2011). These factors are weighed on a “sliding scale,” whereby the elements are balanced

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so that “a stronger showing of one element may offset a weaker showing of another.” Ibid.

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(quoting Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011)).

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Here, while defendants have not made a strong showing that it is likely to succeed on the

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merits, they have shown irreparable harm absent a stay to a certain extent. This order therefore

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finds that the balance of equities weigh in favor of granting a partial brief stay.

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That is, this order agrees that defendants would be irreparably harmed if plaintiff moves

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for conditional certification of a FLSA collective action by the January 24 deadline in the event

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our court of appeals grants their writ petition. Upon the grant of writ petition, the forum-

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selection clause would be enforceable and therefore this action would be transferred to the

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Northern District of Indiana — where, under the United States Court of Appeals for the Seventh

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Circuit law, defendants would face a different standard for conditional certification. In light of

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this, the filing deadline for plaintiff’s conditional certification motion shall be continued until

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March 28 at noon in order to allow the chance to have the benefit of the ruling of our court of

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appeals.

United States District Court
For the Northern District of California

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A stay on discovery, however, is not warranted. Defendants have not shown the requisite

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irreparable harm due to reasonable discovery. Though defendants argue that discovery would be

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burdensome as their witnesses are located in Indiana, this order finds that plaintiff — who chose

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the venue — should bear the burden of deposing relevant witnesses in Indiana. The gravamen of

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defendants’ alleged discovery woes are thus moot anyway.

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This case will go forward somewhere — whether here or in Indiana — so we might as

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well make progress on discovery while the petition remains unresolved. So, the discovery will

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be useful even if this action is ultimately transferred to the Northern District of Indiana.

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Therefore, to the extent stated above, defendants’ request for a stay pending our court of

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appeals’ ruling on the writ petition is GRANTED IN PART. Plaintiff shall file his motion for

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conditional certification of an FLSA action by MARCH 28 AT NOON. Defendants’ motion is

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otherwise DENIED. Discovery shall proceed as scheduled. The hearing scheduled for January

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IT IS SO ORDERED.

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Dated: January 8, 2019.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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