Desarrollo Urbanistico Del Pacifico, S.A. De C.V. v. Genomics Reference Laboratory US, LLC et al
Filing
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ORDER granting 22 Defendants' Motion to Stay. Signed by Judge John A. Houston on 10/18/2017. (jpp)
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
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DESARROLLO
URBANISTICO 15cv1729-JAH (DHB)
DEL PACIFICO, S.A. De C.V.,
ORDER GRANTING DEFENDANTS’
Plaintiff,
MOTION TO STAY (Doc. No. 22)
v.
GENOMICS
REFERENCE
LABORATORY US, LLC, a limited
liability company; and DOES 1
through 100, inclusive
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Defendants.
(Caption Continued on Next Page)
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15CV1729-JAH (DHB)
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GENOMICS
REFERENCE
LABORATORY US, LLC
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Counterclaimant
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and
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GENOMICS REFERENCE
LABORATORY, S. De R.L. De
C.V.
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Additional Counterclaimant
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v.
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DESARROLLO
URBANISTICO
DEL PACIFICO, S.A. De C.V.,
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Counterclaim Defendant
and
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ALBERTO MAY ALVA
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Additional Counterclaim-Defendant
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INTRODUCTION
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Pending before this court is Defendant/Counterclaimant Genomics Reference
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Laboratory US, LLC (“GRL US”) and Counterclaimant Genomics Reference Laboratory,
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S. De R.L. De C.V. (“GRL Mexico”) (“Defendants”) motion to stay the present litigation.
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Doc. No. 22. The motion is fully briefed. Plaintiff Desarrollo Urbanistico Del Pacifico,
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S.A. De C.V. (“Plaintiff”) filed an opposition to the motion. Doc. No. 28. After careful
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review of the pleadings, relevant law, and reasons set forth below, the Court GRANTS
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Defendants’ motion to stay.
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//
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15cv1729-JAH (DHB)
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BACKGROUND
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According to the Complaint, Defendants entered into a written guaranty of lease
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agreement (“Lease Agreement”) with Plaintiff in March of 2014. Doc. No. 1 at pg. 3.
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Plaintiff posits that per the parties’ agreement, Defendants, the lessees, were to pay
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Plaintiff, the lessor, in exchange for renting Plaintiff’s Tijuana property. Doc. No. 1. On
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August 4, 2015, Plaintiff filed a complaint (“Complaint”) alleging that Defendants
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breached the Lease Agreement by failing to pay rent. Id. On October 13, 2015, Defendants
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filed an Answer to the Complaint along with a Counterclaim alleging Plaintiff knew the
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property had significant structural defects before entering into the Lease Agreement. Doc.
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No. 3. Defendants argued that, because Plaintiff leased the property knowing there were
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structural defects, Plaintiff breached the Lease Agreement and payment of rent is
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unenforceable. Id. On May 15, 2017, Defendants filed a motion to stay the case pending
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resolution of nearly analogous Mexican litigation involving Plaintiff. Doc. No. 22.
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Defendants argue that if the decision in the pending Mexican litigation, a matter concerning
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Plaintiff’s adherence to safety standards in maintaining the leased property, and Plaintiff is
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liable, Plaintiff will have breached the Lease Agreement with Defendant which would
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automatically absolve Defendant of all alleged liability. Id.
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DISCUSSION
I.
Legal Standard
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A court’s power to stay proceedings is incidental to its inherent power to control the
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disposition of its cases in the interests of efficiency and fairness to the court, counsel, and
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litigants. Landis v. N. Am. Co., 299 U.S. 248, 254-55 (1936); see also Clinton v. Jones,
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520 U.S. 681, 706-07 (1997); Single Chip Sys. Corp. v. Intermec IP Corp., 495 F. Supp.
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2d 1052, 1057 (S.D. Cal. 2007). For the sake of judicial economy, a stay may be granted
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pending the outcome of other legal proceedings related to the case. Leyva c. Certified
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Grocers of Cal., Ltd., 593 F.2d 857, 863-64 (9th Cir. 1979). A stay is also appropriate
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pending the resolution of another matter that will impact the issues before the court. San
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15cv1729-JAH (DHB)
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Diego Padres Baseball P’ship v. United States, No. 99-cv-0828, 2001 WL 710601, at * 1
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(S.D. Cal. May 10, 2001).
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In determining whether a stay is appropriate, a district court “must weight competing
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interests and maintain an even balance.” Landis, 299 U.S. at 254-55. Among the
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competing interests are: (1) the possible damage which may result from the granting of a
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stay, (2) the hardship of inequity which a party may suffer in being required to go forward,
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and (3) the orderly course of justice measured in terms of the simplifying or complicating
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of issues, proof, and questions of law which could be expected to result from a stay.
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CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962).
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II.
Analysis
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Defendants argue that if Plaintiff breached the lease agreement due to a failure to
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maintain safety conditions at the leased property, Defendants have no liability under
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Section 1.3 of their lease agreement. Doc. No. 22-1 at pg. 7. Defendants posit the Ninth
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Circuit has cited a test to determine when to exercise international adjudicatory comity.
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Id. at pg. 8. Defendants contend the test weighs three factors: “(1) the strength of the
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United States’ interest in using a foreign forum; (2) the strength of the foreign
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governments’ interests; and (3) the adequacy of the alternative forum.” Id. at pg. 8; see
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Mujica v. AirScan, Inc., 771 F.3d 580, 603 (9th Cir. 2014). Defendants argue all three
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factors weigh in favor of granting the motion to stay. Id. at pg. 9. Defendants, citing
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Mujica, argue that the location, nationality of parties, nature of conduct, U.S. foreign policy
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interests, and public policy interests should be taken into consideration. Id. Defendants
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argue that the events giving rise to the Complaint took place in Mexico, involve Mexican
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parties, and therefore no real foreign policy considerations exist. As a result, Plaintiff
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posits that international adjudicatory comity is appropriate to satisfy public policy interests.
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Id.
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In opposition, Plaintiff argues that nothing currently pending in Mexican courts that
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would justify a stay of this case. Doc. No. 28 at pgs. 4-5. Plaintiff argues that a ruling in
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a Mexican court should not impact the status of the case in this Court. Id. In addition,
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15cv1729-JAH (DHB)
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Plaintiff contends Defendants’ motion to stay is merely an attempt to delay proceedings.
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Plaintiff posits that Defendants have been negligent in handling matters in this case. Id. at
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pgs. 5-7. Thus, Plaintiff argues Defendants’ motion to stay the case should be denied. Doc.
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No. 28.
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Here, Defendants have the burden of proving the necessity of the motion to stay the
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case. In support of this motion, Defendants point to a potentially dispositive issue pending
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in Mexican court that could affect the status of this case. Doc No. 22-1 at pg. 7. Defendants
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also cite a three-part test based on controlling, Ninth Circuit caselaw convincingly arguing
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that here, the test favors Defendants. Id. at pgs. 8-9. The Court believes Defendants have
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provided sufficient evidence in support of its claim and has sufficiently met its burden.
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CONCLUSION
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Accordingly, IT IS HEREBY ORDERED that Defendants’ motion to stay is
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GRANTED pending resolution of litigation in Mexican courts. Parties are to file a status
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report in thirty (30) days of this order. In addition, the parties are to contact this Court once
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the relevant litigation in Mexican courts has concluded.
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DATED:
October 18, 2017
_________________________________
JOHN A. HOUSTON
United States District Judge
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15cv1729-JAH (DHB)
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