Broadway Grill, Inc. v. Visa Inc. et al

Filing 40

Order by Hon. Phyllis J. Hamilton denying 32 Motion to Stay Remand Order Pending Appeal.(pjhlc2S, COURT STAFF) (Filed on 10/17/2016)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 BROADWAY GRILL, INC., 9 v. 10 VISA INC., et al., 11 United States District Court Northern District of California Case No. 16-cv-04040-PJH Plaintiff, 8 ORDER DENYING MOTION TO STAY REMAND ORDER PENDING APPEAL Re: Dkt. No. 32 Defendants. 12 13 14 Before the court is defendants Visa Inc., Visa International Service Association, 15 and Visa U.S.A. Inc.’s (collectively, “Visa”) motion to stay this court’s order remanding 16 this case pending appeal. Dkt. 32. Having read the parties’ papers and carefully 17 considered their arguments and the relevant legal authority, and good cause appearing, 18 the court hereby DENIES the motion. 19 20 BACKGROUND On September 27, 2016, the court granted plaintiff Broadway Grill Inc.’s 21 (“Broadway Grill”) motion for leave to file an amended complaint, and remanded the case 22 to state court on that basis. Dkt. 29 at 6. In particular, the court found that the original 23 putative class definition—“[a]ll California individuals, businesses, and other entities who 24 accepted Visa-Branded Cases in California”—was “ambiguous” as to whether it was 25 limited to California citizens or reached any merchant based in California. Id. at 5–6. 26 The court thus permitted Broadway Grill to amend its complaint “after removal to clarify 27 issues pertaining to federal jurisdiction under CAFA.” See Benko v. Quality Loan Serv. 28 Corp., 789 F.3d 1111, 1117 (9th Cir. 2015). Because the amended complaint made clear 1 that the putative class was limited to California citizens, the court found that there was no 2 minimal diversity among the parties, and the case must be remanded for lack of subject 3 matter jurisdiction. Dkt. 29 at 6. Later that same day, Visa filed a petition to appeal the remand order pursuant to 4 5 28 U.S.C. § 1453(c)(1), and a motion to stay this court’s remand order pending resolution 6 of its appeal. Dkt. 32. The court granted a temporary stay of the remand order until 7 Visa’s motion to stay could be briefed on an expedited schedule. Dkt. 33. The matter is 8 now fully briefed and ripe for resolution. DISCUSSION 9 10 A. Legal Standard United States District Court Northern District of California 11 An order remanding a case to state court is not generally reviewable on appeal. 12 28 U.S.C. § 1447(d). However, the Class Action Fairness Act (“CAFA”) carves out an 13 exception to this rule, providing that “a court of appeals may accept an appeal from an 14 order of a district court granting or denying a motion to remand a class action to the State 15 court from which it was removed if application is made to the court of appeals not more 16 than 10 days after entry of the order.” 28 U.S.C. § 1453(c)(1). If a petition to appeal is 17 granted, “the [appellate] court shall complete all action on such appeal, including 18 rendering judgment, not later than 60 days after the date on which such appeal was 19 filed.” Id. § 1453(c)(2). 20 In deciding whether to grant a stay, the court must consider “(1) whether the stay 21 applicant has made a strong showing that he is likely to succeed on the merits; (2) 22 whether [he] will be irreparably injured absent a stay; (3) whether issuance of the stay will 23 substantially injure the other parties . . . ; and (4) where the public interest lies.” Nken v. 24 Holder, 556 U.S. 418, 426 (2009) (quotation omitted). The first two stay factors are “the 25 most critical.” Lair v. Bullock, 697 F.3d 1200, 1204 (9th Cir. 2012). 26 Because the remand order is appealable under CAFA, this court retains 27 jurisdiction over the request to stay the case. See Manier v. Medtech Prod., Inc., 29 F. 28 Supp. 3d 1284, 1286–87 (S.D. Cal. 2014). 2 1 2 B. Analysis As to the first Nken factor, the court finds that Visa has not established a likelihood 3 of success on the merits. The remand here falls squarely within the rule of Benko that 4 “[w]here a defendant removes a case to federal court under CAFA, and the plaintiffs 5 amend the complaint to explain the nature of the action for purposes of our jurisdictional 6 analysis, [the court] may consider the amended complaint to determine whether remand 7 to the state court is appropriate.” 789 F.3d at 1117. Visa argues that the amendment 8 here was not a “clarification” permitted by Benko because plaintiff had “no intention” of 9 limiting the class to California citizens. However, that is not what the record reflects. The court has already found that the original putative class definition was “ambiguous.” Dkt. 11 United States District Court Northern District of California 10 29 at 5. Moreover, Broadway Grill’s counsel and its Vice President both aver that they 12 intended only to represent citizens of California. Dkt. 9-1, 9-2. Since the class definition 13 was fairly susceptible to that interpretation, the amendments were clarifications to aid in 14 the court’s jurisdictional analysis. Judges in this district have uniformly held that similar 15 amendments may be considered under Benko. See Dkt. 29 at 5 (citing cases). 16 Moreover, there is no irreparable harm to Visa. Visa’s motion relies primarily on 17 the “injury” of having to litigate similar claims in both state court and an MDL. Visa does 18 not explain why this situation—a not-uncommon result given the limited jurisdiction of 19 federal courts—constitutes irreparable harm. In its reply brief, Visa suggests that denial 20 of a stay might cause the Ninth Circuit to lose jurisdiction. Visa cites no authority for this 21 notion, and it appears that the Ninth Circuit has heard appeals in similar cases even 22 without a stay. See, e.g., Doyle v. OneWest Bank, FSB, 764 F.3d 1097 (9th Cir. 2014). 23 On the third factor, there is no significant harm to Broadway Grill either if a stay 24 were granted. However, the case would be further delayed, perhaps significantly, while 25 the Ninth Circuit decides whether to hear an appeal in this matter. See Lewis v. Verizon 26 Commc'ns, Inc., 627 F.3d 395, 396 (9th Cir. 2010) (holding that the 60-day period to 27 resolve CAFA appeals does not begin until the petition for permission to appeal is 28 resolved). 3 1 Finally, the court finds that the public interest factor is neutral. While Visa argues 2 that there is a risk of wasted judicial resources if the case proceeds in state court but then 3 ultimately returns to federal court, the interim proceedings in state court may well help 4 advance the resolution of the case. 5 In summary, Visa has not shown either of the two most critical factors—a 6 likelihood of success on the merits and irreparable harm—necessary to justify a stay 7 pending appeal. At least as it is currently pled, this court lacks jurisdiction over the case. 8 Broadway Grill should be able pursue its claims in state court without any further delay. 9 CONCLUSION 10 For the foregoing reasons, Visa’s motion to stay this court’s remand order is United States District Court Northern District of California 11 DENIED. The Clerk is hereby directed to REMAND the case back to the Superior Court 12 of California, San Mateo County, and close the case on this court’s docket. 13 14 IT IS SO ORDERED. Dated: October 17, 2016 15 16 17 __________________________________ PHYLLIS J. HAMILTON United States District Judge 18 19 20 21 22 23 24 25 26 27 28 4

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