Reyes v. Educational Credit Management Corporation

Filing 143

ORDER granting Defendant's 137 Motion to Stay Pending Appeal of Class Certification Order; denying Plaintiff's 125 Motion for Leave to File Amendment Adding Beheshta Mahboob as a Class Representative. All district court proceedings a re stayed. Either party may file a request to lift the stay within seven days of the Ninth Circuit's decision of Defendant's Rule 23(f) appeal. Plaintiff is permitted to refile a motion to amend the pleadings within fourteen days of the Ninth Court's decision on Defendant's Rule 23(f) appeal. Signed by Judge Cynthia Bashant on 3/13/2018. (jah)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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AJ REYES,
Plaintiff,

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Case No. 15-cv-00628-BAS-AGS
ORDER:

v.

(1) GRANTING MOTION TO
STAY [ECF No. 137]

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EDUCATIONAL CREDIT
MANAGEMENT CORPORATION,

AND

Defendant.

(2) DENYING WITHOUT
PREJUDICE MOTION TO
AMEND PLEADINGS
[ECF No. 125]

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Presently before the Court are two motions filed by each respective party.

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Plaintiff AJ Reyes seeks leave to file an amended complaint.

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amendments concern adding a new named plaintiff to the case and amending the

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allegations pertaining to the class definition. (ECF Nos. 125-1, 128.) Defendant

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ECMC has renewed its request for a stay of all district court proceedings pending the

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Ninth Circuit’s disposition of the Rule 23(f) appeal of this Court’s class certification

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order. (ECF No. 137.) For the reasons stated below, the Court grants Defendant’s

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motion to stay. Because the Court grants the motion to stay, the Court denies without

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prejudice Plaintiff’s motion to amend the pleadings.
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The proposed

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DISCUSSION

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Federal Rule of 23(f) provides a mechanism for interlocutory appeal of a

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court’s order granting or denying class certification. Such appeals do “not stay

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proceedings in the district court unless the district court or the court of appeals so

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orders.” Fed. R. Civ. P. 23(f). “A stay is not a matter of right, even if irreparable

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injury might otherwise result.” Nken v. Holder, 556 U.S. 418 (2009). The decision

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of whether to grant a stay is an “exercise of judicial discretion” and “the propriety of

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its issue is dependent upon the circumstances of the particular case.” Id. A court

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balances four factors in determining how to exercise its discretion: (1) whether the

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movant is likely to succeed on the merits; (2) whether the movant is likely to suffer

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irreparable harm in the absence of a stay; (3) whether the issuance of the stay would

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not substantially harm the non-moving party; and (4) whether a stay will serve the

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public interest. Rainbow Bus. Solutions v. Merch. Servs., Inc., No. C 10-1993 CW,

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2014 WL 1783945, at *1 (N.D. Cal. May 5, 2014). The first two factors of the

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standard “are the most critical.” Id.

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The factors are examined on a “flexible continuum” or “sliding scale

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approach.” Aguayo v. U.S. Bank, No. 08-cv-2139 W (BLM), 2015 WL 13344756, at

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*1 (S.D. Cal. June 26, 2015). Specifically, a party seeking a stay must either (1)

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make a strong showing it is likely to succeed on the merits and show it will be

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irreparably harmed absent a stay, or (2) demonstrate that its appeal presents a serious

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question on the merits and the balance of hardships tilts sharply in its favor.” A stay

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may be appropriate if the party moving for a stay demonstrates that serious legal

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questions are raised and the balance of hardships tips sharply in its favor. Morse v.

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Servicemaster Global Holdings, Inc., Nos. C 10-00628, C 08-03894, C 09-04044, C

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09-05152, C 09-05153, 2013 WL 123610, at *2 (N.D. Cal. Jan. 8, 2013).

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The Court previously considered whether a stay in this case was warranted

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when Defendant filed its Rule 23(f) petition with the Ninth Circuit. (ECF No. 127.)

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The Ninth Circuit granted Defendant’s petition after the Court issued its order on the
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earlier stay request. (ECF No. 133.) The grant of the petition satisfies the first factor

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for a stay and also alters the calculus of the harms that Defendant faces if proceedings

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in this Court proceed. Although the Court previously determined that the equities

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did not tip sharply in favor of a full stay of the proceedings (ECF No. 127), it is clear

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that Defendant faces the risk of litigating on two fronts now that its petition has been

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granted. Indeed, Plaintiff seeks to add a new class plaintiff to this case and amend

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the class certification order currently on appeal to name that plaintiff as a class

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representative. (ECF Nos. 125, 128-1.) Both parties also face the risk of potentially

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wasteful expenditure of resources if the proceedings are not stayed, including

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Plaintiff who disputes whether the certified class is a failsafe class. (ECF No. 138 at

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5–6.) Lastly, the public interest is best served by the avoidance of potentially

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conflicting judicial pronouncements regarding this case. For example, any ruling on

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Plaintiff’s motion for leave to amend presents a risk that this Court might issue a

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decision that would conflict with the Ninth Circuit’s jurisdiction over the Rule 23(f)

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appeal or the Ninth Circuit’s ultimate resolution of that appeal.
CONCLUSION & ORDER

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For the foregoing reasons, the Court GRANTS Defendant’s motion to stay.

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(ECF No. 137.) All district court proceedings in this case are HEREBY STAYED.

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Either party may file a request to lift the stay within seven days of the Ninth Circuit’s

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decision on Defendant’s Rule 23(f) appeal.

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The Court DENIES WITHOUT PREJUDICE Plaintiff’s motion to add

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Beheshta Mahboob as a named plaintiff and add her as a class representative to the

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certified class. (ECF Nos. 125-1; 128.) Plaintiff is hereby permitted to refile a

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motion for leave to amend the pleadings within fourteen days of the Ninth Circuit’s

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decision on Defendant’s Rule 23(f) appeal.

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IT IS SO ORDERED.

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DATED: March 13, 2018
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