CRS Recovery Inc et al v. Laxton et al

Filing 199

ORDER by Judge Claudia Wilken denying 184 Motion to Stay Pending Appeal (scc, COURT STAFF) (Filed on 12/9/2008)

1 2 3 4 5 6 7 8 9 10 United States District Court For the Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Defendants John Laxton and Northbay Real Estate move for a stay, pending resolution of their appeal before the Ninth Circuit, of the Court's injunction requiring them to initiate a transfer of the domain name rl.com to Richard Lau, an agent of Plaintiff CRS Recovery. Plaintiffs oppose the motion. CRS RECOVERY, INC., a Virginia Corporation, and DALE MAYBERRY, Plaintiffs, v. JOHN LAXTON, aka [e-mail], et al., Defendants. / No. C 06-7093 CW ORDER DENYING DEFENDANTS' MOTION FOR A STAY PENDING APPEAL IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

Rule 62(c) of the Federal Rules of Civil Procedure provides, "While an appeal is pending from an interlocutory order or final judgment that grants, dissolves, or denies an injunction, the court may suspend, modify, restore, or grant an injunction on terms for bond or other terms that secure the opposing party's rights." The

standard for granting a stay pending appeal is similar to that for

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a preliminary injunction. (9th Cir. 1983).

Lopez v. Heckler, 713 F.2d 1432, 1435

Thus, a party seeking a stay must show either (1)

a likelihood of success on the merits of its appeal and the possibility of irreparable harm, or (2) that serious questions regarding the merits exist and the balance of hardships tips sharply in its favor. 775 (9th Cir. 2007). See Lands Council v. McNair, 494 F.3d 771, "These two alternatives are extremes of a

single continuum in which the greater the relative hardship to the party seeking the [stay], the less probability of success must be shown." Id. (internal quotation marks omitted).

When ruling on a motion for a stay of a final judgment, the district court will already have ruled on the legal issue being appealed. When evaluating the movant's likelihood of success on

the merits in this context, the court need not conclude that it is likely to be reversed on appeal in order to grant the stay. Strobel v. Morgan Stanley Dean Witter, 2007 WL 1238709, at *1 (S.D. Cal.). Rather, it may grant the stay when it has ruled on "an

admittedly difficult legal question and when the equities of the case suggest that the status quo should be maintained." Wash.

Metro. Area Transit Comm'n v. Holiday Tours, Inc., 559 F.2d 841, 844-45 (D.C. Cir. 1977). No difficult legal questions are presented on Defendants' appeal. This was not a close case. Defendants' position relied

primarily on their contention that Virginia law should apply to Plaintiffs' claims. Yet they articulated no specific interest that Under the

Virginia would have in applying its law to this case.

applicable governmental interest test, it was clear that California law should apply. As for the issue of liability under California 2

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law, Defendants' primary defense was that Plaintiff Mayberry abandoned his right to rl.com. Yet they could point to no clear,

unequivocal and decisive act constituting abandonment. The equities of this case also fail to support a stay. earlier order, the Court stated that it was inclined to deny Defendants' motion, but under the condition that Plaintiffs would not be permitted to alienate rl.com pending resolution of Defendants' appeal. Defendants have not identified any specific In an

harm, let alone irreparable harm, they would be likely to face under this arrangement. Although they would prefer that neither

party be permitted use of the domain name, they have not demonstrated that Plaintiffs are likely to devalue rl.com, and there is no legitimate reason to eliminate all productive use of the domain name during the pendency of the appeal. Because Defendants' appeal does not raise serious legal questions, and because the balance of hardships does not tip sharply in Defendants' favor, Defendants' motion for a stay (Docket No. 184) is DENIED. Defendants must comply with the Court's

injunction (Docket No. 173) within ten days of the date of this order. If Defendants intend to seek a stay from the Ninth Circuit, Because Defendants

they must do so within this period of time.

have not submitted any evidence showing that they will be harmed by the transfer of rl.com to Plaintiffs, Plaintiffs are not required to post a bond. The domain registrar eNom is authorized, pursuant to this order and the injunction, to transfer the registration of rl.com from Northbay Real Estate, Inc. to Richard Lau, and to permit Richard Lau to control the content of rl.com. 3 Once the transfer to

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Richard Lau is effected, eNom shall not transfer, suspend or otherwise modify the registration record until resolution of the appeal of this action. IT IS SO ORDERED.

Dated: _12/9/08__

CLAUDIA WILKEN United States District Judge

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