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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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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BROADWAY GRILL, INC.,

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v.

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VISA INC., et al.,

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United States District Court
Northern District of California

Case No. 16-cv-04040-PJH

Plaintiff,

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ORDER DENYING MOTION TO STAY
REMAND ORDER PENDING APPEAL
Re: Dkt. No. 32

Defendants.

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Before the court is defendants Visa Inc., Visa International Service Association,

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and Visa U.S.A. Inc.’s (collectively, “Visa”) motion to stay this court’s order remanding

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this case pending appeal. Dkt. 32. Having read the parties’ papers and carefully

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considered their arguments and the relevant legal authority, and good cause appearing,

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the court hereby DENIES the motion.

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BACKGROUND
On September 27, 2016, the court granted plaintiff Broadway Grill Inc.’s

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(“Broadway Grill”) motion for leave to file an amended complaint, and remanded the case

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to state court on that basis. Dkt. 29 at 6. In particular, the court found that the original

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putative class definition—“[a]ll California individuals, businesses, and other entities who

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accepted Visa-Branded Cases in California”—was “ambiguous” as to whether it was

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limited to California citizens or reached any merchant based in California. Id. at 5–6.

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The court thus permitted Broadway Grill to amend its complaint “after removal to clarify

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issues pertaining to federal jurisdiction under CAFA.” See Benko v. Quality Loan Serv.

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Corp., 789 F.3d 1111, 1117 (9th Cir. 2015). Because the amended complaint made clear

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that the putative class was limited to California citizens, the court found that there was no

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minimal diversity among the parties, and the case must be remanded for lack of subject

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matter jurisdiction. Dkt. 29 at 6.
Later that same day, Visa filed a petition to appeal the remand order pursuant to

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28 U.S.C. § 1453(c)(1), and a motion to stay this court’s remand order pending resolution

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of its appeal. Dkt. 32. The court granted a temporary stay of the remand order until

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Visa’s motion to stay could be briefed on an expedited schedule. Dkt. 33. The matter is

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now fully briefed and ripe for resolution.
DISCUSSION

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A.

Legal Standard

United States District Court
Northern District of California

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An order remanding a case to state court is not generally reviewable on appeal.

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28 U.S.C. § 1447(d). However, the Class Action Fairness Act (“CAFA”) carves out an

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exception to this rule, providing that “a court of appeals may accept an appeal from an

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order of a district court granting or denying a motion to remand a class action to the State

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court from which it was removed if application is made to the court of appeals not more

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than 10 days after entry of the order.” 28 U.S.C. § 1453(c)(1). If a petition to appeal is

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granted, “the [appellate] court shall complete all action on such appeal, including

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rendering judgment, not later than 60 days after the date on which such appeal was

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filed.” Id. § 1453(c)(2).

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In deciding whether to grant a stay, the court must consider “(1) whether the stay

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applicant has made a strong showing that he is likely to succeed on the merits; (2)

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whether [he] will be irreparably injured absent a stay; (3) whether issuance of the stay will

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substantially injure the other parties . . . ; and (4) where the public interest lies.” Nken v.

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Holder, 556 U.S. 418, 426 (2009) (quotation omitted). The first two stay factors are “the

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most critical.” Lair v. Bullock, 697 F.3d 1200, 1204 (9th Cir. 2012).

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Because the remand order is appealable under CAFA, this court retains

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jurisdiction over the request to stay the case. See Manier v. Medtech Prod., Inc., 29 F.

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Supp. 3d 1284, 1286–87 (S.D. Cal. 2014).
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Analysis
As to the first Nken factor, the court finds that Visa has not established a likelihood

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of success on the merits. The remand here falls squarely within the rule of Benko that

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“[w]here a defendant removes a case to federal court under CAFA, and the plaintiffs

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amend the complaint to explain the nature of the action for purposes of our jurisdictional

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analysis, [the court] may consider the amended complaint to determine whether remand

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to the state court is appropriate.” 789 F.3d at 1117. Visa argues that the amendment

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here was not a “clarification” permitted by Benko because plaintiff had “no intention” of

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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.

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United States District Court
Northern District of California

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29 at 5. Moreover, Broadway Grill’s counsel and its Vice President both aver that they

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intended only to represent citizens of California. Dkt. 9-1, 9-2. Since the class definition

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was fairly susceptible to that interpretation, the amendments were clarifications to aid in

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the court’s jurisdictional analysis. Judges in this district have uniformly held that similar

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amendments may be considered under Benko. See Dkt. 29 at 5 (citing cases).

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Moreover, there is no irreparable harm to Visa. Visa’s motion relies primarily on

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the “injury” of having to litigate similar claims in both state court and an MDL. Visa does

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not explain why this situation—a not-uncommon result given the limited jurisdiction of

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federal courts—constitutes irreparable harm. In its reply brief, Visa suggests that denial

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of a stay might cause the Ninth Circuit to lose jurisdiction. Visa cites no authority for this

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notion, and it appears that the Ninth Circuit has heard appeals in similar cases even

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without a stay. See, e.g., Doyle v. OneWest Bank, FSB, 764 F.3d 1097 (9th Cir. 2014).

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On the third factor, there is no significant harm to Broadway Grill either if a stay

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were granted. However, the case would be further delayed, perhaps significantly, while

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the Ninth Circuit decides whether to hear an appeal in this matter. See Lewis v. Verizon

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Commc'ns, Inc., 627 F.3d 395, 396 (9th Cir. 2010) (holding that the 60-day period to

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resolve CAFA appeals does not begin until the petition for permission to appeal is

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resolved).
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Finally, the court finds that the public interest factor is neutral. While Visa argues

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that there is a risk of wasted judicial resources if the case proceeds in state court but then

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ultimately returns to federal court, the interim proceedings in state court may well help

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advance the resolution of the case.

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In summary, Visa has not shown either of the two most critical factors—a

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likelihood of success on the merits and irreparable harm—necessary to justify a stay

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pending appeal. At least as it is currently pled, this court lacks jurisdiction over the case.

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Broadway Grill should be able pursue its claims in state court without any further delay.

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CONCLUSION

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For the foregoing reasons, Visa’s motion to stay this court’s remand order is

United States District Court
Northern District of California

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DENIED. The Clerk is hereby directed to REMAND the case back to the Superior Court

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of California, San Mateo County, and close the case on this court’s docket.

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IT IS SO ORDERED.
Dated: October 17, 2016

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__________________________________
PHYLLIS J. HAMILTON
United States District Judge

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