Manier et al v. Medtech Products, Inc. et al

Filing 22

ORDER Denying 18 Defendants' Motion to Stay Remand Order Pending Appeal. The hearing date set for June 27, 2014 is Vacated. Signed by Judge Gonzalo P. Curiel on 6/26/2014. (srm)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 12 SHARON MANIER, TERI SPANO, and HEATHER STANFIELD, individually, on behalf of themselves, all others similarly situated, and the general public, 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 vs. Plaintiffs, CASE NO. 14cv209-GPC(NLS) ORDER DENYING DEFENDANTS’ MOTION TO STAY REMAND ORDER PENDING APPEAL [Dkt. No. 18.] MEDTECH PRODUCTS, INC., a Delaware corporation; PRESTIGE BRANDS, INC., a Delaware corporation, and DOES 1-20, inclusive, entities, business form unknown, Defendants. Before the Court is Defendants’ motion to stay remand order pending appeal. (Dkt. No. 18.) Plaintiffs filed an opposition and Defendants replied. (Dkt. Nos. 20, 21.) After a review of the briefing and applicable law, the Court DENIES Defendants’ motion to stay remand order pending appeal. Procedural Background Plaintiffs Sharon Manier, Teri Spano and Heather Stanfield (collectively, “Plaintiffs”) filed this putative class action alleging Defendants Medtech Products, Inc. and Prestige Brands, Inc. (collectively, “Defendants”) falsely and/or deceptively advertised their homeopathic ear relief product, Murine Ear Drops for Earache Relief -1- [14cv209-GPC(NLS)] 1 in California in San Diego Superior Court. (Dkt. No. 1-1.) Plaintiffs allege Defendants 2 violated the Consumers Legal Remedies Act, Cal. Civ. Code § 1750 et. seq. (“CLRA”); 3 the Unfair Competition Law, Cal. Bus. & Prof. Code. § 17200 et. seq. (“UCL”), the 4 False Advertising Law, Cal. Bus. & Prof. Code § 17500 et. seq. (“FAL”), and breached 5 express and implied warranties of merchantability. (See Dkt. No. 1-1, Compl.) 6 On January 31, 2014, Defendants filed a Notice of Removal. (Dkt. No. 1.) In 7 response, Plaintiffs filed a Motion for Remand pursuant to 28 U.S.C. § 1447(c) on 8 February 28, 2014. (Dkt. No. 7.) On April 22, 2014, the Court granted Defendants’ 9 motion to remand. (Dkt. No. 16). This Court also certified and mailed a copy of its 10 Order granting Plaintiffs’ Motion for Remand to the San Diego Superior Court on that 11 date. (Id.) Two weeks later, on May 1, 2014, Defendants filed a Petition for 12 Permission to Appeal (“Petition”) under 28 U.S.C. § 1453(c) with the United States 13 Court of Appeals for the Ninth Circuit. (Dkt. No. 17.) On the same day, Defendants 14 also filed the instant Motion to Stay Remand Order Pending Appeal. (Dkt. No. 18.) 15 On May 20, 2014, the Hon. Eddie C. Sturgeon of the San Diego Superior Court 16 set a Case Management Conference in the case for December 12, 2014. (Dkt. No. 20-1, 17 Resendes Decl. ¶ 3, Ex. A.) 18 Discussion 19 A. Appeal of Remand Order 20 Defendants argue that the Court has jurisdiction to issue a stay of the remand 21 order while Plaintiffs contend that the Court is without jurisdiction to entertain the 22 instant motion since it certified and mailed a copy of its remand order to state court. 23 28 U.S.C. § 1447(d) provides that an order remanding a case to state court is 24 generally not reviewable on appeal. As a result, when a remand order is issued by a 25 district court, the district court is ordinarily divested of jurisdiction, allowing the state 26 court to proceed with the case. 28 U.S.C. § 1447(c). Under CAFA, Congress expressly 27 authorized federal courts of appeals to exercise their discretion to accept an appeal 28 from a remand order under CAFA “notwithstanding section 1447(d).” 28 U.S.C. § -2- [14cv209-GPC(NLS)] 1 1453(c). This provides an exception to the general rule that remand orders are not 2 appealable. 3 28 U.S.C. § 1453(c)(2) provides that “[i]f the court of appeals accepts an appeal 4 under paragraph (2), the court shall complete all action on such appeal, including 5 rendering judgment, not later than 60 days after the date on which such appeal was 6 filed, unless an extension is granted under paragraph (3).” 28 U.S.C. § 1453(a)(2). 7 The Ninth Circuit has held that an appeal pursuant to § 1453(c)(1) must comply with 8 Federal Rule of Appellate Procedure 5 which requires that a party file a petition for 9 permission to appeal. Amalgamated Transit Union v. Laidlaw Transit Services, Inc., 10 435 F.3d 1140, 1144 (9th Cir. 2006) (“[T]here is no appeal until the petition for 11 permission is granted, and the entry of the order granting permission serves as the 12 notice of appeal for all timing issues.”). Therefore, the 60 day period begins after the 13 petition for appeal is granted. Lewis v. Verizon Comms., Inc., 627 F.3d 395, 396 (9th 14 Cir. 2010). 15 In this case, the petition for permission to appeal was filed on April 30, 2014 16 with a response filed on May 15, 2014. The Ninth Circuit has not yet ruled on the 17 petition for permission to appeal and therefore, the 60 day period has not yet begun. 18 The Court finds that it is appropriate for the Court to address a motion to stay 19 pending appeal of a remand order as Congress has specifically allowed these remand 20 orders to be appealable. See Morgan v. Gay, 471 F.3d 469, 471 (3d Cir. 2006) 21 (defendants filed petition for leave to appeal remand order as well as a motion for stay 22 of the remand order pending appeal which was granted by the district court); Raskas 23 v. Johnson & Johnson, Nos. 12cv2174 JCH, 12:2266 HEA, 12cv2307 CDP, 2013 WL 24 1818133, at *1 (E.D. Mo. 2013); Lafalier v. Cinnabar Serv. Co., Inc., No. 10cv000525 CVE-TLW, 2010 WL 1816377, at *2 (N.D. Okla. 2010). However, the Court 26 concludes that Defendants have not demonstrated the factors to support a stay. 27 28 -3- [14cv209-GPC(NLS)] 1 B. Motion for Stay 2 When considering a motion to stay an order pending appeal, the court looks at 3 (1) whether the movant will suffer irreparable injury without the stay; (2) whether the 4 stay will substantially injure any other party interested in the proceeding; (3) whether 5 the movant has made a strong showing he is likely to succeed on the merits of the 6 appeal; and (4) where the public interest lies. See Hilton v. Braunskill, 481 U.S. 770, 7 776 (1987). The Ninth Circuit has applied the Hilton factors by requiring the party 8 seeking a stay to show either “a strong likelihood of success on the merits and the 9 possibility of irreparable harm” or that serious legal questions are raised and the 10 “balance of hardships tips sharply in . . . favor [of the party seeking the stay].” Golden 11 Gate Rest. Ass’n v. City & Cnty. of. San Francisco, 512 F.3d 1112, 1115–16 (9th Cir. 12 2008) (citations omitted). The court considers “where the public interest lies” 13 separately from and in addition to whether the moving party will be irreparably injured. 14 Id. at 1116. 15 Defendants seek a “short” stay until the Ninth Circuit decides whether to grant 16 their petition for permission to appeal. They argue that because the statute allows a 17 remand order to be appealable, district courts do not lose jurisdiction over cases 18 removed under CAFA due to a ministerial act of certifying a remand order and mailing 19 it to the state court. They argue that since the petition for permission to appeal 20 provides for an expedited 60 day review period, a stay of the proceedings would allow 21 the parties to avoid simultaneous expenditure of resources in the Ninth Circuit and in 22 state court. Plaintiffs oppose arguing that the Court lacks jurisdiction to address this 23 motion since the Remand was entered, certified and mailed to the state court. Plaintiffs 24 also argue that a stay would prejudice them because they would be unable to prosecute 25 their case. Moreover, any discovery conducted would be applicable either in state or 26 federal court. 27 1. 28 Defendants argue that the petition to appeal seeks guidance on a novel issue of Likely to Succeed on the Merits -4- [14cv209-GPC(NLS)] 1 whether a plaintiff may evade CAFA by alleging in one part of the complaint damages 2 sufficient to confer CAFA jurisdiction while inconsistently alleging damages elsewhere 3 that are below CAFA’s amount in controversy requirement. Plaintiff opposes arguing 4 Defendants have failed to show facts that the amount in controversy exceeds the 5 minimum amount under CAFA which cannot be based on speculative and conclusory 6 facts. 7 The moving party must make a “strong showing that he is likely to success on 8 the merits.” Leiva-Perez v. Holder, 640 F.3d 962, 966-67 (9th Cir. 2011). This means 9 that the moving party must show that it is “more likely than not that they will win on 10 the merits.” Id. 11 Defendants’ argument on appeal that the district court impliedly found that one 12 part of the complaint alleging “millions of dollars” satisfied the amount in controversy 13 is not accurate. As to the amount in controversy, the remand order states: 14 15 16 17 18 19 The Court finds that Plaintiffs’ reliance on the general allegation of “millions of dollars” as a basis for their calculation does not show by a preponderance of the evidence that the amount in controversy exceeds $5,000,000. In addition, while the Complaint alleges that Defendants have been wrongly “enriched” by “millions of dollars,” (Dkt. No. 1-1, Compl. ¶ 55), the Complaint also asserts that consumers “are unwittingly spending hundreds of thousands of dollars each year on a worthless Product.” (Id. ¶ 38.) The inconsistency in general allegations of “millions of dollars” and “hundreds of thousands of dollars each year” undermines Defendants’ position. 20 (Dkt. No. 16 at 5.) 21 The Court did not conclude that the allegation “millions of dollars” met the 22 amount in controversy. In fact, it concluded that such a general allegation does not 23 demonstrate by a preponderance of the evidence that the amount in controversy 24 exceeds $5,000,000. The Court concludes that Defendant has not demonstrated a 25 strong likelihood of success on the merits. 26 2. 27 Defendants argue that if the Ninth Circuit rules that the remand is improper, then Irreparable Harm 28 Defendants will lose almost any chance of litigating this case in a federal forum. -5- [14cv209-GPC(NLS)] 1 Moreover, they will be required to litigate in both the Ninth Circuit and state court. 2 Plaintiffs argue they will suffer irreparable harm if a stay is granted because it will 3 impede the collection of information and delay resolution of the case. They also 4 contend that Defendants will not suffer irreparable harm because if discovery reveals 5 that the federal court has jurisdiction, Defendants can remove the case. Moreover, any 6 discovery obtained in state court would be relevant and applicable if the case was later 7 removed to federal court. 8 The parties agree that the review of an appeal of a remand order is expedited. 9 While courts have stayed remand orders explaining that the harm to plaintiffs would 10 not be great due to the expedited nature of an appellate court reviewing a remand order, 11 Lafalier, 2010 WL 181677, at 2; Raskas, 2013 WL 1818133, at 2, the opposite also 12 holds true that no irreparable harm will result since review is expedited. Based on the 13 facts presented, Defendants have not demonstrated irreparable harm. In this case, the 14 state court did not set a case management conference until December 12, 2014, almost 15 six months away. As of the filing of the opposition on May 30, 2014, the parties have 16 not engaged in any meaningful discovery and no trial date has been set. (Dtk. No. 2017 1, Resendes Decl. ¶ 5.) No pending motions were denied without prejudice. See 18 Raskas, 2013 WL 1818133, at 2 (irreparable harm due to pending motions to dismiss 19 and motions to strike the class allegations that district court denied without prejudice 20 which may be refiled in state court and may lead to inconsistent outcomes). 21 Defendants have not shown that they will be required to litigate in both forums. 22 Moreover, the expedited appellate review process will limit any irreparable harm that 23 may result. 24 3. 25 Defendants assert that a stay would not harm the public interest but would Public Interest 26 benefit the public by conserving judicial resources and avoiding potentially 27 unnecessary adjudication of these matters in state court. Plaintiffs oppose arguing that 28 a stay would prevent Plaintiffs from seeking prompt redress of their claims. As stated -6- [14cv209-GPC(NLS)] 1 above, it appears that judicial resources are not being expended in both the Ninth 2 Circuit and state court. 3 4 Conclusion Based on the above, the Court DENIES Defendants’ motion to stay remand order 5 pending appeal. The hearing date set for June 27, 2014 shall be vacated. 6 IT IS SO ORDERED. 7 8 DATED: June 26, 2014 9 10 HON. GONZALO P. CURIEL United States District Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -7- [14cv209-GPC(NLS)]

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