Gomez et al v. True Leaf Farms, LLC et al

Filing 48

Order by Hon. Ronald M. Whyte Regarding 25 Motion to Dismiss or Stay Action and 38 Motion for Sanctions. (rmwlc2, COURT STAFF) (Filed on 10/16/2015).

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

NORTHERN DISTRICT OF CALIFORNIA

10
11

RAFAEL GOMEZ, et al.,

Case No. 5:15-cv-02928-RMW

United States District Court
Northern District of California

Plaintiffs,
12
v.

ORDER REGARDING MOTION TO
DISMISS OR STAY ACTION AND
MOTION FOR SANCTIONS

13
14

TRUE LEAF FARMS, LLC, et al.,

Re: Dkt. Nos. 25, 38

Defendants.
15
16

Plaintiffs Rafael Gomez, Cesar Ruelas, and Brenda Acevedo filed a wage and hour class

17

action complaint on June 23, 2015. Dkt. No. 1. On August 4, 2015, Defendants True Leaf Farms,

18

LLC; True Leaf Holdings, LLC; Church Brothers, LLC; Steve Church; Tom Church; and David

19

Gill filed a motion to dismiss or, in the alternative, to stay this action under the Colorado River

20

doctrine pending the outcome of a separate class action that a different plaintiff filed in state court

21

against True Leaf Farms. Dkt. No. 25. Individual Defendants Tom Church, Steve Church, and

22

David Gill also move to dismiss the Fair Labor Standards Act claims against them under Rule

23

12(b)(6). Id. Separately, Defendants move for sanctions against Plaintiffs pursuant to Rule

24

11(b)(1) and the court’s inherent authority. Dkt. No. 38. For the reasons set forth below, the court

25

DENIES the motions to dismiss, GRANTS the motion for a stay only as to Plaintiffs’ state law

26

claims, and DENIES the motion for sanctions.

27
28

1
5:15-cv-02928-RMW
ORDER REGARDING MOTION TO DISMISS OR STAY ACTION AND MOTION FOR SANCTIONS
RS

1

I.

BACKGROUND
The named Plaintiffs are former employees at Defendants’ food processing facilities in San

2
Juan Bautista, California. Dkt. No. 1 ¶¶ 12-16. The complaint alleges that Defendant Steve Church
3
4
5

is “Chief Executive Officer or other officer” of Church Brothers, LLC; that Tom Church is
“President or other officer” of Church Brothers; and that David Gill is “Partner or other
shareholder or officer” of True Leaf Farms, LLC. Id. ¶¶ 18-20.

6
Plaintiffs commenced suit on June 23, 2015 alleging that Defendants failed to pay them
7
minimum wage, Dkt. No. 1 ¶¶ 41-48, 99-104; compensate them for all hours worked (including
8
overtime payments), id. ¶¶ 49-55, 56-64; provide them with legally compliant meal and rest
9
periods, ¶¶ 65-70; and comply with various record keeping requirements, id. ¶¶ 80-84, 111-117,
10

United States District Court
Northern District of California

11
12

among other alleged violations.1 Plaintiffs allege eight claims under California state law and two
claims based on federal statutes, the Fair Labor Standards Act (“FLSA”) 29 U.S.C. § 201, et seq.,
and the Migrant and Seasonal Agricultural Worker Protection Act (“MWPA”) 29 U.S.C. § 1801 et

13
seq. Dkt. No. 1 ¶¶ 41-117.
14
Plaintiffs propose to represent three, potentially overlapping classes of workers. All three
15
named Plaintiffs seek to represent a class alleging state law violations defined as follows:
16
All individuals who are currently employed, or have formerly been
employed, as nonexempt hourly employees at Defendants’ food
processing facilities in California, at any time within four years prior
to the filing of the original complaint until resolution of this action.

17
18
19

Id. ¶ 32. All named Plaintiffs also seek to represent a class alleging FLSA violations defined as:

20

All individuals who are currently employed, or have formerly been
employed, as nonexempt hourly employees at Defendants’ food
processing facilities in California, at any time within three years
prior to the filing of the original complaint until resolution of this
action.

21
22
23

Id. ¶ 33. Finally, Plaintiff Ruelas seeks to represent a class alleging violations of the MWPA,

24

defined as:

25

All migrant agricultural workers who are currently employed, or
have formerly been employed, as nonexempt hourly employees at

26
27
28

1

See generally Dkt. No. 1 ¶¶ 71-79, 85-98, 105-110.
2

5:15-cv-02928-RMW
ORDER REGARDING MOTION TO DISMISS OR STAY ACTION AND MOTION FOR SANCTIONS
RS

Defendants’ food processing facilities in California, at any time
from the applicable statute of limitations to until resolution of this
action.

1
2

Id. ¶ 34. The complaint seeks monetary and injunctive relief. Id. ¶¶ 10-11.
3
This is the third wage and hour class action filed against True Leaf Farms since December
4

2014.2 The first, entitled Norzagaray v. True Leaf Farms, LLC, et al., Case No. CU-14-00160, was

5
filed in San Benito County Superior Court on December 5, 2014. Dkt. No. 25-1 Ex. A at 1. The
6
sole named plaintiff Norzagaray alleges five claims under state law and seeks to represent a class
7
8

of current and former True Leaf employees. Id. at 1, 8. Defendants’ motion asserted that the
Norzagaray action had progressed to “imminent mediation.” Dkt. No. 25 at 8. Defendants

9
represented at the hearing on the current motions that the mediation was unsuccessful.
10
The second case, entitled Rodriguez v. True Leaf Farms, LLC et al., Case No.
11
United States District Court
Northern District of California

CU-15-00032, was filed in San Benito County Superior Court on March 5, 2015. Dkt. No. 25-2
12
Ex. B at 1. The sole named plaintiff Rodriguez alleged eight claims under state law and also
13
14
15

sought to represent a class of current and former True Leaf employees.3 Id. at 5. Significant to
Defendants’ request for sanctions, the Rodriguez complaint was signed by Cory G. Lee of The
Downey Law Firm, LLC, one of the firms representing Plaintiffs in the instant action.4

16

On June 4, 2015, the Superior Court issued an order granting True Leaf’s motion to abate

17
the Rodriguez case. Dkt. No. 25-3 Ex. D (order of abatement). The substance of the order reads, in
18
its entirety:
19
This matter came on regularly before the Honorable Judge Harry J.
Tobias in Department 1 of the above entitled Court on May 14,
2015, at 2:00 p.m. pursuant to a duly noticed Motion for Plea in
Abatement and Motion to Stay Proceedings. After full consideration
of the pleadings, authorities and exhibits submitted by counsel, and
having heard and considered oral argument, and Good Cause
appearing, the Court hereby GRANTS Defendant’s Motion and

20
21
22
23
24
25
26
27
28

2

Defendants have requested that the court take judicial notice of various filings in state court
related to other class actions against True Leaf. The court GRANTS the unopposed requests for
judicial notice. Wheeler v. City of Oakland, No. 05–0647–SBA, 2006 WL 1140992, at *5 (N.D.
Cal. Apr. 28, 2006).
3
The class defined in the Rodriguez complaint is identical to the state law class that Plaintiffs
Gomez, Ruelas, and Acevedo seek to represent. Dkt. No. 25-2 Ex. B at 5; Dkt. No. 1 at 7.
4
Different counsel represent plaintiff Norzagaray in his case. Dkt. No. 25-1 Ex. A at 1.
3
5:15-cv-02928-RMW
ORDER REGARDING MOTION TO DISMISS OR STAY ACTION AND MOTION FOR SANCTIONS
RS

ORDERS:

1

The instant action, filed as Rodriguez v. True Leaf Farms, LLC, et
al. (San Benito County Superior Court, Case No. CU-15-00032,
filed March 5, 2015) is hereby ABATED AS TO THE ENTIRE
ACTION.

2
3
4

Id. at 2. Defendants argue that the Rodriguez case was stayed pending the outcome of the

5

Norzagaray action, Dkt. No. 25 at 1, though the order itself does not specify the length of the stay.

6

Plaintiffs Gomez, Ruelas, and Acevedo filed the instant case in U.S. District Court alleging

7

violations of state and federal law on June 23, 2015. Dkt. No. 1. On August 4, 2015, Defendants

8

moved to dismiss or stay this action, arguing that this court should abstain from exercising

9

jurisdiction pending the outcome of the state court proceedings. Dkt. No. 25. The Individual
Defendants Messrs. Church and Gill also moved to dismiss for failure to state a claim. Id. at 14. In

11
United States District Court
Northern District of California

10

addition to their motion for dismissal, on August 31, 2015, Defendants moved for $73,752 in

12

sanctions. Dkt. No. 38 at 3. Defendants assert that the Downey Law Firm’s class action complaint

13

filed in federal court, after the state court’s abatement of the Rodriguez action, was made “for the

14

purpose of misleading, causing unnecessary delays and increasing the cost of litigation.”5 Id. at 2.

15

II.

ANALYSIS

16

A.

17

Defendants move to dismiss or stay this action pursuant to the Colorado River doctrine,

Motion to Dismiss or Stay Under the Colorado River Doctrine

18

Colorado River Conservation Dist. v. United States, 424 U.S. 800 (1976), contending that the

19

claims in this case overlap substantially with the claims in the Norzagaray action. When there are

20

concurrent state court proceedings concerning the same matters, a district court may abstain from

21

exercising jurisdiction to promote “wise judicial administration, giving regard to conservation of

22

judicial resources and comprehensive disposition of litigation.” Id. at 817. Abstention is “an

23

extraordinary and narrow exception to the duty of a District Court to adjudicate a controversy

24

properly before it.” Id. at 813. Even when abstention is appropriate, the Ninth Circuit “generally

25

require[s] a stay rather than a dismissal.” R.R. Street & Co. Inc. v. Transport Ins. Co., 656 F.3d

26
27
28

5

Defendants separately filed a motion (which the court denied) to compel personal appearances by
Plaintiffs and their attorneys at the hearing on the instant motions. Dkt. Nos. 31, 46.
4
5:15-cv-02928-RMW
ORDER REGARDING MOTION TO DISMISS OR STAY ACTION AND MOTION FOR SANCTIONS
RS

1
2
3

966, 978 n.8 (9th Cir. 2011).
Drawing on Colorado River and its progeny, our court of appeals has recognized eight
factors for assessing the appropriateness of a Colorado River stay or dismissal:

4

(1) which court first assumed jurisdiction over any property at stake;
(2) the inconvenience of the federal forum; (3) the desire to avoid
piecemeal litigation; (4) the order in which the forums obtained
jurisdiction; (5) whether federal law or state law provides the rule of
decision on the merits; (6) whether the state court proceedings can
adequately protect the rights of the federal litigants; (7) the desire to
avoid forum shopping; and (8) whether the state court proceedings
will resolve all issues before the federal court.

5
6
7
8
Id. at 978-79.
9
10

1.

Which Court First Assumed Jurisdiction of Property

Because real property is not at stake in this action, the parties do not argue that the first
11
United States District Court
Northern District of California

factor applies. Accordingly, the court does not consider it.
12
13

2.

Inconvenience of the Federal Forum

Defendants argue that the U.S. District courthouse in San Jose, California, is
14

approximately 45 minutes further away than the San Benito County courthouse from Defendants’

15
facilities in San Juan Bautista, California. Dkt. No. 25 at 7. The court agrees with Plaintiffs that
16
this difference is insignificant and does not weigh heavily in favor of abstention.
17
18
19
20

3.

Desire to Avoid Piecemeal Litigation

“Piecemeal litigation occurs when different tribunals consider the same issue, thereby
duplicating efforts and possibly reaching different results.” Am. Int’l Underwriters, (Philippines),
Inc. v. Cont’l Ins. Co., 843 F.2d 1253, 1258 (9th Cir.1988). Defendants argue that this factor

21
weighs heavily in favor of abstention because the present action will require the court to decide the
22
exact same issues as the Norzagaray action, duplicating efforts and possibly arriving at
23
inconsistent results. Dkt. No. 25 at 8. Plaintiffs respond that the Norzagaray action does not
24
encompass all of the state law claims or any of the federal claims in this action. Dkt. No. 30 at 7.
25
The court finds that this factor favors abstention. Out of the 8 state law causes of action
26
that Plaintiffs assert here, 7 are similar to the causes of action asserted in Norzagaray. Compare
27
28

5
5:15-cv-02928-RMW
ORDER REGARDING MOTION TO DISMISS OR STAY ACTION AND MOTION FOR SANCTIONS
RS

1

Dkt. No. 1 with Dkt. No. 25-1. Moreover, the proposed classes of workers in two actions are

2

almost identical. While Defendants argue that the Norzagaray action does not include all

3

Defendants in the present action, Dkt. No. 30 at 7, abstention does not require exact parallelism

4

between cases. “It is enough if the two proceedings are substantially similar.” Nakash v.

5

Marciano, 882 F.2d 1411, 1416 (9th Cir. 1989). The additional Defendants named in this case,

6

moreover, are simply officers of True Leaf and related companies, and Plaintiffs do not explain

7

why these additional Defendants could not be joined in the state court action.

8
9

The court notes, however, that this factor only favors a stay of plaintiffs’ state law claims,
not the federal claims that are not asserted in Norzagaray.

10

4.

Order of Jurisdiction

United States District Court
Northern District of California

11

Defendants argue that the Norzagaray action, filed in December 2014, has progressed

12

substantially, and counsel represented that mediation has occurred without success. Plaintiffs

13

concede that this factor slightly favors Defendants’ position. Dkt. No. 30 at 8. The extent to which

14

discovery has progressed is unclear, however, and no motion for class certification has apparently

15

been made.

16
17

5.

Whether Federal Law Provides the Rule of Decision

Plaintiffs argue against a dismissal or stay because California state law does not provide

18

the rule in resolving their FLSA or MWPA claims. The court agrees but notes that this argument

19

does not apply to the state law causes of action that form the basis for 8 of 10 claims in Plaintiffs’

20

complaint. Accordingly, this factor favors abstention with respect to the state law claims but

21

favors exercising jurisdiction over the federal claims.

22
23

6.

Adequacy of State Court

There is no question that the state court has the authority to address Plaintiffs’ state law

24

claims. Plaintiffs argue that their conversion claim for punitive damages is not presently before the

25

Norzagaray court, but plaintiffs have not explained why they could not bring such a claim in state

26

court. See Ross v. U.S. Bank Nat. Ass'n, 542 F. Supp. 2d 1014, 1022 (N.D. Cal. 2008) (“Plaintiffs’

27

failure to bring all available claims for the [state law] class creates the kind of piecemeal litigation

28

6
5:15-cv-02928-RMW
ORDER REGARDING MOTION TO DISMISS OR STAY ACTION AND MOTION FOR SANCTIONS
RS

1

that the Colorado River doctrine intends to prevent.”). Plaintiffs also do not dispute that they could

2

bring their FLSA claims in state court. See Dkt. No. 30 at 5.

3

Plaintiffs argue, however, that under 29 U.S.C. § 1854, federal courts have exclusive

4

jurisdiction over claims under the MWPA. That statute states that litigants wishing to sue under

5

the MWPA “may file suit in any district court of the United States having jurisdiction of the

6

parties.” In general, a state court has concurrent jurisdiction to enforce a right created by federal

7

law unless the statute excludes concurrent jurisdiction or is incompatible with such jurisdiction.

8

Charles Dowd Box Co. v. Courtney, 368 U.S. 502, 507-08 (1962). Defendants argue that the

9

MWPA uses permissive language and that in such circumstances, state and federal courts have
concurrent jurisdiction. Dkt. No. 36 at 4. Neither party has provided case law addressing whether

11
United States District Court
Northern District of California

10

claims under the MWPA can be brought in state court. Nevertheless, the court finds that the

12

language in the MWPA does not seem to divest state courts of jurisdiction.

13
14
15
16

In any event, this factor is neutral with respect to Plaintiffs’ federal claims because they are
not presently before the state court.
7.

Forum Shopping

Defendants argue that this action is an attempt by Plaintiffs’ counsel to circumvent the

17

state court’s order staying the Rodriguez action, in which the same law firm represented the

18

proposed class. Plaintiffs respond that the named Plaintiffs in this case are different from those in

19

prior cases and assert causes of action that are not before the state court. The court finds that this

20

factor is neutral. While Plaintiffs’ counsel have not tried to argue that they were unaware of the

21

stay of the Rodriguez action, this is not a case in which a party suffers an adverse ruling in state

22

court and then seeks a new forum in federal court. Rather, here, different named plaintiffs filed a

23

separate lawsuit.

24

8.

25
26

Whether the State Court Proceedings Will Resolve All Issues

Defendants argue that the Norzagaray class action will conclusively resolve the
substantive issues before this court. While this may be true of Plaintiffs’ state law claims, it is not

27
28

7
5:15-cv-02928-RMW
ORDER REGARDING MOTION TO DISMISS OR STAY ACTION AND MOTION FOR SANCTIONS
RS

1

true of the federal claims, which are not before the state court.6 Accordingly, the court finds that

2

this factor favors a stay of the state law claims but not the federal claims.

3

In sum, the court finds that the present action is substantially similar to the Norzagaray

4

action with respect to Plaintiffs’ state law claims. Taken together, the factors above present the

5

“exceptional circumstances” required to support a stay under the Colorado River doctrine. See

6

Krieger v. Atheros Communications, Inc., 776 F. Supp. 2d 1053 (N.D. Cal. 2011) (staying state

7

law claims but allowing federal claims to proceed). This stay does not apply, however, to

8

Plaintiffs’ federal law claims.

9

B.

Motion to Dismiss FLSA Claims Against Individual Defendants

Defendants argue that under Federal Rule of Civil Procedure 12(b)(6), Plaintiffs’ claims

10

United States District Court
Northern District of California

11

against Tom Church, Steve Church, and David Gill fail to state a claim upon which relief may be

12

granted. Dkt. No. 25 at 14. Specifically, Defendants argue that the complaint fails to adequately

13

allege that the two Church brothers and Gill, as company officers, are “employers” such that they

14

could be liable individually under the FLSA. Id. Defendants assert that Plaintiffs’ allegations that

15

Defendants “exercised control over wages, hours and/or working conditions” are “wholly

16

insufficient to put Defendants on notice as to the allegations presented against them.” Id. (citing

17

Dkt. No. 1 at 5).
A motion under Rule 12(b)(6) tests the legal sufficiency of a complaint. Navarro v. Block,

18
19

250 F.3d 729, 732 (9th Cir. 2001). In considering whether the complaint is sufficient, the court

20

must accept as true all of the factual allegations contained in the complaint. Ashcroft v. Iqbal, 556

21

U.S. 662, 678 (2009). However, the court need not accept as true “allegations that contradict

22

matters properly subject to judicial notice or by exhibit” or “allegations that are merely

23

conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Secs.

24

Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (citation omitted). While a complaint need not allege

25
26
27
28

6

While Plaintiffs’ conversion claim—assuming it even states a viable claim for relief—is also not
before the state court, this court finds that resolution of the conversion claim necessarily turns on
resolution of Plaintiffs’ other state law claims. See Dkt. No.1 ¶ 106 (incorporating allegations from
state wage and hour claims into Plaintiffs’ conversion claim).
8
5:15-cv-02928-RMW
ORDER REGARDING MOTION TO DISMISS OR STAY ACTION AND MOTION FOR SANCTIONS
RS

1

detailed factual allegations, it “must contain sufficient factual matter, accepted as true, to ‘state a

2

claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v.

3

Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads

4

factual content that allows the court to draw the reasonable inference that the defendant is liable

5

for the misconduct alleged. The plausibility standard is not akin to a ‘probability requirement,’ but

6

it asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at

7

678 (internal citation omitted).
Under the FLSA, the term “‘[e]mployer’ includes any person acting directly or indirectly

9

in the interest of an employer in relation to an employee.” 29 U.S.C. § 203(d). The Ninth Circuit

10

has explained that “[w]here an individual exercises ‘control over the nature and structure of the

11
United States District Court
Northern District of California

8

employment relationship,’ or ‘economic control’ over the relationship, that individual is an

12

employer within the meaning of the Act, and is subject to liability.” Boucher v. Shaw, 572 F.3d

13

1087, 1091 (9th Cir. 2009) (quoting Lambert v. Ackerley, 180 F.3d 997, 1012 (9th Cir. 1999) (en

14

banc)). Factors relevant to whether an individual is an “employer” under the FLSA include

15

whether they have “significant ownership interest with operational control of significant aspects of

16

the corporation’s day-to-day functions; the power to hire and fire employees; [the power to]

17

determin[e][ ]salaries; [the responsibility to] maintain [ ] employment records.” Lambert, 180 F.3d

18

at 1012.

19

The sufficiency of Plaintiffs’ allegations against the Individual Defendants is questionable

20

in part because Plaintiffs frequently use the plural term “Defendants” without specifying which

21

Defendants are responsible for particular actions. Nevertheless, viewed in the light most favorable

22

to Plaintiffs, the complaint at least makes it plausible that the two Church brothers and Gill are

23

“employers” under the FLSA. The complaint alleges that each of the Church brothers and Gill are

24

officers at one of the corporate Defendants, see Dkt. No. 1 ¶¶ 18-20, and Defendants’ motion does

25

not argue that the corporate Defendants are not “employers” under the FLSA. Moreover, the

26

complaint alleges that Defendants “have employed Class Members in this judicial district.” Id. ¶

27

22. Plaintiffs further allege: “Defendants have exercised control over the wages, hours and/or

28

9
5:15-cv-02928-RMW
ORDER REGARDING MOTION TO DISMISS OR STAY ACTION AND MOTION FOR SANCTIONS
RS

1

working conditions of Plaintiffs and Class Members, suffered or permitted Plaintiffs and Class

2

Members to work, and/or engaged Plaintiffs and Class Members.” Id. Plaintiffs’ allegations

3

against the Individual Defendants are thin, but in light of the Individual Defendants’ positions

4

within the companies and Plaintiffs’ allegations regarding the actions of all Defendants, this order

5

finds that Plaintiffs have stated at least a plausible claim.7

6

Accordingly, Defendants’ motion to dismiss under Rule 12(b)(6) is DENIED.

7

C.

8

Finally, Defendants move for $73,752 in sanctions under Federal Rule of Civil Procedure

9

Motion for Sanctions

11(b) and the court’s inherent power. Dkt. No. 38 at ECF 2-3. The thrust of Defendants’ argument
is that Plaintiffs’ complaint, which they assert is very similar to the one filed in Rodriguez, is an

11
United States District Court
Northern District of California

10

improper attempt to harass Defendants and circumvent the state court’s order abating that case.

12

Defendants also argue that the Downey law firm’s solicitation of potential class members

13

following the state court’s abatement order warrants sanctions. Plaintiffs assert that Defendants’

14

motion is itself a “bad faith” attempt “to harass and bully Plaintiffs from exercising” their legal

15

rights. Dkt. No. 42 at 1.
Rule 11(b)(1) requires, among other things, that when a party submits a paper to the court,

16
17

the attorney certifies that the paper “is not being presented for any improper purpose, such as to

18

harass, cause unnecessary delay, or needlessly increase the cost of litigation.” Rule 11(c) provides

19

for the possibility of sanctions for violating Rule 11(b).
Defendants cite no authority for the proposition that a federal court should order Rule 11

20
21

sanctions for allegedly disobeying a state court order. In any event, it does not appear that

22

Plaintiffs have disobeyed the state court’s abatement order. The order simply states: “The instant

23

action, filed as Rodriguez v. True Leaf Farms, LLC, et al. (San Benito County Superior Court,

24

Case No. CU-15-00032, filed March 5, 2015) is hereby ABATED AS TO THE ENTIRE

25
26
27
28

7

Defendants also argue that under California law, corporate agents acting within the scope of their
agency are not personally liable for a corporate employer’s failure to pay employees’ wages, Dkt. No.
25 at 14. Defendants’ motion, however, is directed at Plaintiffs’ federal claims, and Defendants cite no
authority for the proposition that a corporate officer cannot be an employer under the FLSA.
10
5:15-cv-02928-RMW
ORDER REGARDING MOTION TO DISMISS OR STAY ACTION AND MOTION FOR SANCTIONS
RS

1

ACTION.” Dkt. No. 25-3 Ex. D at 2. The order does not say anything about future actions filed (a)

2

by other plaintiffs or (b) in federal court alleging federal claims. If Defendants believed that

3

Plaintiffs’ complaint violated the state court’s order, they should have brought it to the attention of

4

the state court.
Defendants’ position appears to be that sanctions are warranted if a law firm represents a

5
6

class action plaintiff in federal court after a state court stays a proceeding filed by a different,

7

named class action client against the same defendant. Defendants’ argument is meritless. The

8

authorities Defendants cite in support of their motion for sanctions do not support the relief

9

Defendants have requested, and the court is unaware of any authority that supports Defendants’

10

position.
Accordingly, Defendants’ motion for sanctions is DENIED.8

United States District Court
Northern District of California

11
12

III.

ORDER
For the reasons explained above, Defendants’ motions to dismiss and motion for sanctions

13
14

are DENIED. Defendants’ motion to stay Plaintiffs’ state law claims is GRANTED. Plaintiffs’

15

federal claims will proceed. The court expects and anticipates that the parties will coordinate

16

discovery in this action and the Norzagaray case.
IT IS SO ORDERED.

17
18

Dated: October 16, 2015
______________________________________
Ronald M. Whyte
United States District Judge

19
20
21
22
23
24
25
26
27
28

8

Plaintiffs’ opposition brief requests sanctions for having to respond to Defendants’ motion. Dkt.
No. 42 at 4. At least because any motion for sanctions requires a separate, noticed motion, Civ.
L.R. 7-8, Plaintiffs’ request for sanctions is also DENIED.
11
5:15-cv-02928-RMW
ORDER REGARDING MOTION TO DISMISS OR STAY ACTION AND MOTION FOR SANCTIONS
RS