Equal Employment Opportunity Commission v. Peter's Bakery

Filing 114

ORDER DENYING 109 DEFENDANT'S SECOND MOTION TO STAY PROCEEDINGS. Fact discovery shall re-open on 3/25/2015. Signed by Hon. Beth Labson Freeman on 3/4/2015. (blflc2, COURT STAFF) (Filed on 3/4/2015)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION,
Plaintiff,

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United States District Court
Northern District of California

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Case No. 13-cv-04507-BLF
ORDER DENYING DEFENDANT'S
SECOND MOTION TO STAY
PROCEEDINGS

v.
PETERS' BAKERY,

[Re: ECF 109]

Defendant.

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Before the Court is defendant Peters’ Bakery’s Second Administrative Motion to Extend

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the Stay of Case, ECF 109, whereby Defendant seeks to continue the stay of proceedings in this

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action pending resolution of Defendant’s February 13, 2015 petition for writ of mandamus to the

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United States Court of Appeals for the Ninth Circuit. By way of background, the Court

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disqualified Defendant’s counsel on December 22, 2014 and stayed proceedings for 30 days to

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allow Defendant to retain new counsel. See ECF 103. Defendant then sought an extension of the

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stay in order to prepare its petition for writ of mandamus, which this Court granted on January 14,

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2015. See ECF 107. By its own terms, the extended stay was lifted on February 13, 2015. See id.

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For the reasons stated herein, the Court DENIES Defendant’s motion.

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“A party seeking a stay must establish that he is likely to succeed on the merits, that he is

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likely to suffer irreparable harm in the absence of relief, that the balance of equities tip in his

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favor, and that a stay is in the public interest.” Humane Soc. of U.S. v. Gutierrez, 558 F.3d 896,

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896 (9th Cir. 2009). The factors are similar to those considered when issuing a preliminary

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injunction because “similar concerns arise whenever a court order may allow or disallow

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anticipated action before the legality of that action has been conclusively determined.” Nken v.

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Holder, 556 U.S. 418, 434 (2009). “The first two factors of the traditional standard are the most

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critical,” and “[i]t is not enough that the chance of success on the merits be better than negligible.”

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Id. (internal quotations and citations omitted). In this circuit, a stay may also issue where “the

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likelihood of success is such that serious questions going to the merits were raised and the balance

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of hardships tips sharply in [] favor [of the party requesting a stay],” provided that the irreparable

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harm and public interest factors are also satisfied. Alliance for the Wild Rockies v. Cottrell, 632

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F.3d 1127, 1131 (9th Cir. 2011) (citation and internal quotation marks omitted). Under either

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standard, “[t]he party requesting a stay bears the burden of showing that the circumstances justify

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an exercise of that discretion.” Nken, 556 U.S. at 433-34.

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Defendant has not demonstrated a likelihood of success on the merits of its petition for writ
of mandamus, nor even a serious question going to the merits. “The remedy of mandamus is a

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United States District Court
Northern District of California

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drastic one, to be invoked only in extraordinary situations.” Kerr v. U.S. Dist. Court, 426 U.S.

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394, 402 (1976). “[T]he district court has the prime responsibility for controlling the conduct of

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lawyers practicing before it, and [] an order disqualifying counsel will not be disturbed if the

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record reveals ‘any sound’ basis for the district court’s action.” In re Coordinated Pretrial

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Proceedings in Petroleum Prods. Antitrust Litig., 658 F.2d 1355, 1358 (9th Cir. 1981) (citing

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Gas–A–Tron of Ariz. v. Union Oil Co. of Cal., 534 F.2d 1322, 1325 (9th Cir. 1976)); see also In re

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Atoptech, Inc., 565 F. App’x 912, 913 (Fed. Cir. 2014) (applying Ninth Circuit law to deny

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mandamus petition challenging district court’s disqualification of counsel). This Court conducted

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an evidentiary hearing, made findings of fact, and applied prevailing state law to those facts in

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disqualifying Defendant’s counsel from this action. Defendant may dispute the Court’s

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conclusions from that exercise, but given the extraordinarily high standard for mandamus, this

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Court is not persuaded that Defendant has raised any serious question on the merits of its petition

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to the Ninth Circuit, let alone demonstrated a likelihood of success.

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Recognizing the difficulty that a district court faces in determining the likelihood of a

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party’s success in overturning its own prior ruling, the undersigned has reviewed the parties’

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arguments with a careful eye to the balance of hardships and potential injury to Defendant from

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having to continue litigating this action with new counsel. The disqualification of a party’s first-

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choice counsel is unquestionably harmful. See Cole v. U.S. Dist. Court For Dist. of Idaho, 366
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F.3d 813, 817 (9th Cir. 2004). However, fact discovery in this action has not concluded—in fact,

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this Court stayed discovery on October 30, 2014 pending resolution of the disqualification motion,

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which disrupted a number of scheduled depositions—and trial is not set to begin until July. Any

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potential harm to Defendant from having to choose new counsel can be mitigated by adjustments

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to the case schedule. Moreover, Plaintiff and the charging party also have an interest in

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completing discovery and obtaining timely justice, and it would be extremely prejudicial to them

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to stay this action indefinitely pending a decision from the Ninth Circuit on Defendant’s

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mandamus petition. Based on the foregoing, the Court concludes that a further stay of

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proceedings would not be in the interest of justice, and Defendant’s Second Administrative

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United States District Court
Northern District of California

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Motion to Extend the Stay of Case is DENIED.
Pursuant to Federal Rule of Appellate Procedure 8(a)(2), Defendant may seek a stay from

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the Ninth Circuit Court of Appeals. This action shall proceed, and fact discovery shall re-open on

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March 25, 2015. Unless Defendant has obtained a stay from the Ninth Circuit by that date, the

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Court expects new counsel to enter an appearance and work expeditiously with Plaintiff to

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conclude discovery. The parties are encouraged to meet and confer after the re-opening of

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discovery to assess whether any adjustments need to be made to the case schedule.

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IT IS SO ORDERED.
Dated: March 4, 2015
______________________________________
BETH LABSON FREEMAN
United States District Judge

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