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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1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 United States District Court For the Northern District of California 10 JAMES KARL, individually and on behalf of all others similarly situated, No. C 18-04176 WHA 11 Plaintiff, 12 v. 13 14 15 16 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 17 Defendants. / 18 19 In this putative employment class action, defendants move to stay pending resolution of 20 its petition for writ of mandamus. For the reasons herein, defendants’ motion is GRANTED IN 21 PART and DENIED IN PART. Pursuant to Civil Local Rule 7-1(b), this order finds defendants’ 22 motion suitable for submission without oral argument and hereby VACATES the hearing 23 scheduled for January 10. 24 In August 2015, plaintiff James Karl signed a sales associate agreement with defendants 25 Zimmer US, Inc., Biomet U.S. Reconstruction, LLC, and Biomet Biologics, LLC and thereafter 26 began working for defendants as a sales representative in California. The agreement classified 27 plaintiff and other California-based sales representatives as independent contractors and included 28 a forum-selection clause identifying Indiana as the exclusive forum (Dkt. Nos. 1 at 1; 14-2). 1 Plaintiff alleges that defendants misclassified him and other sales representatives as 2 independent contractors rather than employees. As such, he raises claims for relief for violations 3 of the FLSA, Industrial Welfare Commission Wage Order 4-2001, the California Labor Code for 4 unpaid wages and overtime premiums, and related California Labor Code claims, including: 5 meal and rest period violations, failure to provide itemized wage statements, failure to reimburse 6 business expenses, and related civil and statutory penalties. 7 An order dated November 6, 2018, denied defendants’ motion to transfer the instant 8 action to the Northern District of Indiana pursuant to the forum-selection clause found in the 9 sales associate agreement based on California Labor Code Section 925, which makes United States District Court For the Northern District of California 10 forum-selection clauses voidable per public policy (Dkt. No. 27 at 2–11). That order also denied 11 defendants’ motion to dismiss and strike (id. at 12–21). 12 On November 29, 2018, defendants filed a petition for writ of mandamus with our court 13 of appeals in connection with the order denying defendants’ motion to transfer (Dkt. No. 35). 14 Defendants now move to stay proceedings pending resolution by our court of appeals of the writ 15 petition (Dkt. No. 33). Plaintiff opposes (Dkt. No. 37). 16 Whether to issue a stay is within the district court’s discretion. Our court of appeals 17 considers four factors in determining if a stay pending appeal of the denial of a motion to transfer 18 is warranted: (1) whether the stay applicant has made a strong showing that he is likely to 19 succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) 20 whether issuance of the stay will substantially injure the other parties interested in the 21 proceeding; and (4) where the public interest lies. Leiva-Perez v. Holder, 640 F.3d 962, 964 (9th 22 Cir. 2011). These factors are weighed on a “sliding scale,” whereby the elements are balanced 23 so that “a stronger showing of one element may offset a weaker showing of another.” Ibid. 24 (quoting Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011)). 25 Here, while defendants have not made a strong showing that it is likely to succeed on the 26 merits, they have shown irreparable harm absent a stay to a certain extent. This order therefore 27 finds that the balance of equities weigh in favor of granting a partial brief stay. 28 2 1 That is, this order agrees that defendants would be irreparably harmed if plaintiff moves 2 for conditional certification of a FLSA collective action by the January 24 deadline in the event 3 our court of appeals grants their writ petition. Upon the grant of writ petition, the forum- 4 selection clause would be enforceable and therefore this action would be transferred to the 5 Northern District of Indiana — where, under the United States Court of Appeals for the Seventh 6 Circuit law, defendants would face a different standard for conditional certification. In light of 7 this, the filing deadline for plaintiff’s conditional certification motion shall be continued until 8 March 28 at noon in order to allow the chance to have the benefit of the ruling of our court of 9 appeals. United States District Court For the Northern District of California 10 A stay on discovery, however, is not warranted. Defendants have not shown the requisite 11 irreparable harm due to reasonable discovery. Though defendants argue that discovery would be 12 burdensome as their witnesses are located in Indiana, this order finds that plaintiff — who chose 13 the venue — should bear the burden of deposing relevant witnesses in Indiana. The gravamen of 14 defendants’ alleged discovery woes are thus moot anyway. 15 This case will go forward somewhere — whether here or in Indiana — so we might as 16 well make progress on discovery while the petition remains unresolved. So, the discovery will 17 be useful even if this action is ultimately transferred to the Northern District of Indiana. 18 Therefore, to the extent stated above, defendants’ request for a stay pending our court of 19 appeals’ ruling on the writ petition is GRANTED IN PART. Plaintiff shall file his motion for 20 conditional certification of an FLSA action by MARCH 28 AT NOON. Defendants’ motion is 21 otherwise DENIED. Discovery shall proceed as scheduled. The hearing scheduled for January 22 10 is VACATED. 23 24 IT IS SO ORDERED. 25 26 Dated: January 8, 2019. WILLIAM ALSUP UNITED STATES DISTRICT JUDGE 27 28 3

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