Local Search Association v. City & County of San Francisco et al
Filing
159
ORDER STAYING CASE, ***Civil Case Terminated.. Signed by Judge ARMSTRONG on 5/1/12. (lrc, COURT STAFF) (Filed on 5/2/2012)
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UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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OAKLAND DIVISION
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6 LOCAL SEARCH ASSOCIATION,
Plaintiff,
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vs.
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9 CITY AND COUNTY OF SAN
Case No: C 11-02776 SBA
ORDER GRANTING
DEFENDANTS’ MOTION FOR
STAY OF PROCEEDINGS
Docket 131, 148 and 151
FRANCISCO; BOARD OF SUPERVISORS
10 OF THE CITY AND COUNTY OF SAN
FRANCISCO; and EDWIN M. LEE, in his
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County of San Francisco,
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Defendants.
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Plaintiff Local Search Association (“LSA”) brings the instant action against the City
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and County of San Francisco, the Board of Supervisors of San Francisco and Mayor Edwin
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M. Lee (collectively “the City”), to challenge the constitutionality of City Ordinance 78-11
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(“Ordinance”). The parties are presently before the Court on the City’s Motion for Stay of
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Proceedings. Dkt. 131. Having read and considered the papers submitted and the record in
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this action, and being fully informed, the Court hereby GRANTS the motion. The Court, in
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its discretion, finds this matter suitable for resolution without oral argument. See Fed. R.
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Civ. P. 78(b); Civ. L.R. 7-1(b).
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I.
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BACKGROUND
On May 19, 2011, the San Francisco Board of Supervisors enacted the Ordinance as
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part of the City’s “zero waste” campaign. The purpose of the campaign is to reduce the
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publication of “Commercial Phone Directories,” such as LSA’s Yellow Pages, by
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prohibiting their delivery to residents and businesses that do not opt in to receiving these
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directories. S.F., Cal., Environment Code § 20.8(a). The Ordinance originally was
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scheduled to take effect on May 1, 2012, but has since been postponed due to the instant
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litigation.
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LSA, a trade association comprised of publishers and businesses involved in the
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local search industry, filed a complaint pursuant to 42 U.S.C. § 1983 on behalf of its
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publisher members on June 7, 2011. The Complaint alleges constitutional violations of the
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First Amendment, the Equal Protection Clause of the Fourteenth Amendment, the
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Supremacy Clause, and similar violations of free speech and equal protection under
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California Constitution provisions.
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On September 1, 2011, LSA filed a motion for preliminary injunction to enjoin the
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Ordinance, claiming that it has, and will, likely cause irreparable financial harm by
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depriving its members of, among other things, their free speech rights. Pl.’s Mot. for
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Prelim. Inj., Dkt. 48. The City’s position is, inter alia, that the Yellow Pages publication
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constitutes commercial speech, and therefore, may be restricted under the First Amendment
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in order to achieve the City’s substantial interests in reducing environmental waste and
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neighborhood blight. Defs.’ Opp’n, Dkt. 70. Before the hearing on the motion transpired,
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however, the City notified the Court of its voluntary decision to postpone enforcement of
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the Ordinance until thirty days after the Ninth Circuit renders its ruling in Dex Media West,
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Inc. v. City of Seattle (“Dex Media”), a case which also involves an ordinance restricting
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the distribution of the Yellow Pages. No. 11-35399 (9th Cir. filed May 11, 2011); No. 11-
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35787 (9th Cir. filed Sept. 21, 2011).
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Dex Media involves Ordinance 123427, enacted by the City of Seattle (“Seattle”),
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which requires a Yellow Pages publisher to meet the following conditions in order to
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distribute the directories: (1) obtain an annual distributor license; (2) pay fourteen cents for
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each directory distributed; and (3) clearly display on the front cover of each directory and
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web-site a message about opting out of receiving directories. Dex Media, 790 F. Supp. 2d
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1276, 1278-79 (W.D. Wash. 2011). Several publishers and LSA filed an action against
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Seattle alleging, among other things, violations of their First Amendment right to free
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speech. Trial Pleading, Dex Media, No. 210CV01857 (W.D. Wash. Nov. 15, 2010), 2010
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WL 4777881. The publishers moved for a preliminary injunction, which the district court
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denied. Dex Media, 790 F. Supp. 2d at 1278. In reaching its decision, the court found that
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the Yellow Pages directories amounted to commercial speech, which Seattle could
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reasonably restrict in order to achieve its substantial interests of waste reduction, resident
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privacy, and cost recovery. Id. at 1281-82. The court later granted Seattle’s summary
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judgment motion with regard to plaintiffs’ claims under the First Amendment and
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Commerce Clause. Dex Media West, Inc. v. City of Seattle, 793 F. Supp. 2d 1213, 1238
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(W.D. Wash. 2011). The publishers appealed the district court’s decision to the Ninth
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Circuit, which heard oral argument on the appeal on February 9, 2012.
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On March 6, 2012, Defendants filed the instant motion to stay proceedings until
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thirty days after the Ninth Circuit renders its decision in Dex Media or until October 15,
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2012, whichever is earlier. LSA opposes a stay, claiming that a stay will subject its
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members to irreparable harm due to the loss of advertising revenue and uncertainty of the
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Ordinance’s legality. In addition, LSA argues that Dex Media will not affect this case due
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to the differences between the ordinances at issue.
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II.
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DISCUSSION
Federal district courts have the power to stay ongoing proceedings “incidental to the
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power inherent in every court to control the disposition of the causes on its docket with
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economy of time and effort for itself, for counsel, and for litigants.” Landis v. N. Am. Co.,
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299 U.S. 248, 254, 57 (1936). Where there is an independent proceeding related to a matter
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before the trial court, the Court may “find it is efficient for its own docket and the fairest
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course for the parties to enter a stay of an action before it, pending resolution of
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independent proceedings which may bear upon the case.” Mediterranean Enters., Inc. v.
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Ssanyong Corp., 708 F.2d 1458, 1465 (9th Cir. 1983) (quoting Leyva v. Certified Grocers
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of Cal., Ltd., 593 F.2d 857, 863 (9th Cir. 1979)).
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In determining whether a stay is appropriate, the Court is to consider “the possible
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damage which may result from the granting of a stay, the hardship or inequity which a
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party may suffer in being required to go forward, and the orderly course of justice measured
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in terms of the simplifying or complicating of issues, proof, and questions of law which
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could be expected to result from a stay.” Landis, 299 U.S. at 254. A district court’s
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decision to grant or deny a stay is a matter of discretion. See Dependable Highway Exp.,
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Inc. v. Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir. 2007). The party seeking a
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discretionary stay bears the burden of proving that a stay is warranted. See Clinton v. Jones,
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520 U.S. 681, 708 (1997).
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Here, a stay pending the Ninth Circuit’s resolution of Dex Media is likely to
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simplify and inform the issues before the Court, and aid in the speedy resolution of the
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action, while conserving judicial resources and the parties’ time and resources. A central
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issue in Dex Media, as well as in the instant case, is whether the Yellow Pages directories
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should be deemed commercial speech—or non-commercial speech, which is entitled to a
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higher level of First Amendment protection. See Bolger v. Youngs Drug Prods. Corp., 463
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U.S. 60, 64-65 (1983) (“[T]he Constitution accords less protection to commercial speech
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than to other constitutionally safeguarded forms of expression.”). The Ninth Circuit’s
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resolution of that critical, threshold issue will be binding on this Court, and will directly
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impact its analysis and evaluation of LSA’s claims, irrespective of whether the two
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Ordinances differ in some respects. See Mediterranean Enters., 708 F.2d at 1465 (noting
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that a stay may be warranted even if the results of the other proceeding will not be
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controlling as to all issues in the pending action).
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LSA claims that a stay pending a decision in Dex Media will be unduly prejudicial
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due to the “uncertainty” regarding the legality of the Ordinance. Pl.’s Opp’n at 3-4. Such
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uncertainty, LSA posits, negatively impacts its members’ ability to conduct business and
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has a chilling effect on their speech. The Court is not persuaded. First, even if the Court
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declined to stay the action and adjudicated LSA’s pending motion for preliminary
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injunction, such uncertainty would continue to exist until the Ninth Circuit clarifies the
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level of protection to be afforded to ostensibly commercial publications such as the Yellow
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Pages. Indeed, there is little practical difference between a stay and a preliminary
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injunction since, under either scenario, the Ordinance will not be implemented. Moreover,
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the propriety of a preliminary injunction—to the extent that the Court were inclined to grant
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LSA’s motion in the first instance—is subject to being revisited depending on the holding
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of Dex Media.
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Second, the purported harms cited by LSA are principally financial harms, i.e., loss
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of advertising revenue and compliance costs. Such alleged expenditures generally are not
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considered irreparable harm. Los Angeles Mem’l Coliseum Comm’n v. Nat’l Football
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League, 634 F.2d 1197, 1202 (9th Cir. 1980) (noting that monetary harm does not
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constitute irreparable harm). Furthermore, any chilling effect on speech is minimal because
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the City has already volunteered to delay the enforcement of the Ordinance until thirty days
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after the conclusion of Dex Media (or by no later than October 15, 2012), and has
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acknowledged that a ruling in favor of the publishers in Dex Media would likely cause it to
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revisit the provisions of the Ordinance. See Defs.’ Mot. at 3 (noting that “[i]f LSA prevails
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before the Ninth Circuit on this issue and Yellow Page regulations are subject to strict
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scrutiny, the Ninth Circuit’s ruling will dispose of this case.”) (emphasis added). In the
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meantime, LSA’s members remain able to engage in free speech by continuing their
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publication and distribution of the Yellow Pages.1
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Finally, LSA asserts that the imposition of a temporary stay would be “reversible
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error” on the ground that a stay would have the practical effect of denying its motion for
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preliminary injunction. Pl.’s Opp’n at 5. The cases cited by LSA are distinguishable. In
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Privitera v. California Board of Medical Quality Assurance, 926 F.2d 890 (9th Cir. 1991),
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the Ninth Circuit held that a stay order based on abstention grounds was untenable under
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“the unique circumstances” presented. Id. at 896. The court explained that “[a]lthough the
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district court did not treat its order to stay the action and remove it from the active calendar
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as abstaining, the stay amount[ed] to abstention because it surrendered federal jurisdiction
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for an indefinite period to defer to a state court’s judgment.” Id. Here, the proposed stay is
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LSA’s assertion that the mere existence of the unimplemented Ordinance has a
chilling effect on its members’ speech is vague and unsupported. Likewise, there is no
evidence that LSA will not proceed with the publication of the next or any future editions
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not based on any abstention doctrine; rather, it is predicated upon the anticipated decision
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by the Ninth Circuit on an issue that undoubtedly will control the issues presented in this
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case. See Mediterranean Enters., 708 F.2d at 1465.2 In addition, the stay will not be
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indefinite, as it will continue until such time as the Ninth Circuit renders its decision in Dex
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Media or October 15, 2012 at the latest.
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Nor is a stay order tantamount to a denial of a preliminary injunction, as LSA insists.
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The Ordinance at issue has never taken effect. Although the Board of Supervisors
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approved the Ordinance, the City ultimately decided that it is more prudent to await the
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Ninth Circuit’s decision in Dex Media. To that end, the City will not implement or enforce
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the Ordinance, if at all, until at least thirty days after it receives the requisite guidance from
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the Ninth Circuit. LSA complains that no matter the outcome of Dex Media, the City will
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implement the Ordinance, and as such, the Court should decide the motion for preliminary
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injunction now.3 But, as noted, the City has acknowledged that the legal viability of the
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Ordinance is dependent upon the Ninth Circuit’s determination of whether the Yellow
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Pages publication constitutes commercial or non-commercial speech. To the extent that the
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City opts to proceed with the enforcement of the Ordinance in its present form after the
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ruling in Dex Media, LSA will have the opportunity to seek a preliminary injunction before
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the Ordinance takes effect.
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III.
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CONCLUSION
For the reasons set forth above, the Court, in its discretion, finds that a temporary
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stay will promote judicial economy and the orderly administration of justice, with
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negligible, if any, prejudice to the parties. Accordingly,
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The other case cited by LSA, Procter & Gamble Co. v. Kraft Foods Global, Inc.,
549 F.3d 842 (Fed. Cir. 2008), involved a stay pending reexamination of a patent by the
26 Patent and Trademark Office, and is not germane to the issues presented in the instant case.
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The City offered to stipulate to a stay with the imprimatur of court approval. LSA
refused the offer and instead insisted that the City stipulate to the entry of a preliminary
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IT IS HEREBY ORDERED THAT:
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The City’s Motion for Stay of Proceedings is GRANTED. All proceedings in
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this action are STAYED and all current deadlines are VACATED until thirty days after the
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Ninth Circuit Court of Appeals has decided Dex Media West, Inc. v. City of Seattle, Nos.
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11-35399 and 11-35787, or October 15, 2012, whichever is earlier. The stay of
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proceedings is conditioned upon the City’s agreement to stay implementation and
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enforcement of the Ordinance, as set forth above. During the pendency of the decision Dex
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Media, the action will remain closed. Within three (3) days of the Ninth Circuit’s decision
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in Dex Media or by October 15, 2012, whichever is earlier, the parties shall file a joint
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request to reopen the case and request that the Court to schedule a case management
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conference.
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The Clerk shall close the instant action during the pendency of the stay.
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LSA’s pending motions for preliminary injunction are DENIED without prejudice to
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renewal upon the reopening of this action.
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3.
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IT IS SO ORDERED.
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This Order terminates Docket Nos. 48, 131 and 151.
Dated: May 1, 2012
______________________________
SAUNDRA BROWN ARMSTRONG
United States District Judge
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