Scriber v. Ford Motor Company

Filing 41

ORDER Denying 32 Motion for Leave to Amend and for Indicative Ruling. Signed by Judge Michael M. Anello on 6/4/24. (aas)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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MICHAEL SCRIBER, et al., individually
and on behalf all others similarly situated,

Case No. 22-cv-1716-MMA-MMP

v.

ORDER DENYING MOTION FOR
LEAVE TO AMEND AND FOR
INDICATIVE RULING

FORD MOTOR COMPANY,

[Doc. No. 32]

Plaintiffs,

Defendant.

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Plaintiffs Michael Scriber, Stacy Powell, Doug Harrigan, and Susan Wisner

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Phillips (collectively, “Plaintiffs”) bring this putative class action against Ford Motor

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Company (“Ford”). On November 7, 2023, the Court denied Ford’s motion to compel

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arbitration, Doc. No. 27, and on December 1, 2023, Ford filed a Notice of Appeal, Doc.

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No. 28, USCA Case No. 23-3966. Plaintiffs have since filed a motion seeking leave to

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amend and asking the Court to issue an indicative ruling. Doc. No. 32. Ford filed a

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response in opposition to the motion, to which Plaintiffs replied. Doc. Nos. 39, 40. The

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Court found this motion suitable for determination on the papers and without oral

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argument pursuant to Civil Local Rule 7.1.d.1 and Federal Rule of Civil Procedure 78(b).

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Doc. No. 35. For the reasons set forth below, the Court DENIES the motion.
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I. BACKGROUND
Plaintiffs are owners of Ford vehicles. Doc. No. 20 (“Second Amended

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Complaint” or “SAC”) ¶¶ 6, 11, 16. Generally speaking, they allege that Ford continued

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to manufacture and sell vehicles with a 3G modem despite being aware as early as 2019

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that that AT&T intended to phase out the 3G network in 2022. See, e.g., id. ¶¶ 2, 31. As

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a result, Plaintiffs contend they lost access to various features when the 3G modem in

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their vehicles stopped working. Id. ¶¶ 2, 8, 13, 20, 25. Plaintiffs plead the following

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claims: (1) breach of express warranty; (2) breach of the implied warranty of

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merchantability; (3) violation of California’s Consumer Legal Remedies Act, Cal. Civ.

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Code § 1750 et seq.; (4) violation of California’s Unfair Competition Law, Cal. Bus. &

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Prof. Code § 17200 et seq.; and (5) fraudulent omission.

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On June 29, 2023, Ford filed a motion to compel arbitration. Doc. No. 21. Ford’s

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motion was based on arbitration provisions in three categories of agreements: the Sale

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Contracts, the Lease Agreements, and the “Connected Services” Agreements. The Court

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denied Ford’s motion in its entirety, Doc. No. 27, and the Court incorporates that order

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by reference here. As to the Sale Contracts, the Court found that while Plaintiffs

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“unambiguously plead an agency relationship,” id. at 7, between Ford and the dealerships

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“in a perfunctory manner,” id. at 10, Ford failed to demonstrate that the dealerships were

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acting as Ford’s agents when they sold the vehicles and entered into the Sale Contracts,

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id. at 11. The Court also found that Ford could not compel arbitration under the Sale

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Contracts under the theory of equitable estoppel. Id. at 13. Turning to the Lease

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Agreements, the Court found that Ford’s agency and equitable estoppel theories failed for

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the same reasons, and further rejected Ford’s argument that it was a third-party

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beneficiary under these agreements. Id. at 15–17. Finally, the Court found that the

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Connected Services Agreements did not contain a mandatory and binding arbitration

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clause under Michigan law. Id. at 21.

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Ford has appealed from the Court’s denial of its motion to compel arbitration.
USCA No. 23-3966.
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II. DISCUSSION
“The filing of a notice of appeal divests the district court of jurisdiction.” Gould v.

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Mutual Life Ins. Co., 790 F.2d 769, 772 (9th Cir. 1986); see also Griggs v. Provident

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Consumer Discount Co., 459 U.S. 56, 58, (1982) (“The filing of a notice of appeal is an

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event of jurisdictional significance — it confers jurisdiction on the court of appeals and

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divests the district court of its control over those aspects of the case involved in the

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appeal.”). This rule, sometimes referred to as the Griggs principle, “promote[s] judicial

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economy and avoid[s] the confusion that would ensue from having the same issues before

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two courts simultaneously.” Natural Res. Def. Council, Inc. v. Sw. Marine Inc., 242 F.3d

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1163, 1166 (9th Cir. 2001). However, “[t]he principle of exclusive appellate jurisdiction

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is not . . . absolute.” Id. Rather, the trial court retains the inherent power “during the

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pendency of an appeal to act to preserve the status quo,” id., “and to ensure the

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effectiveness of the eventual judgment,” Tribal Vill. of Akutan v. Hodel, 859 F.2d 662,

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663 (9th Cir. 1988) (quoting 11 Charles Alan Wright et al., Federal Practice and

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Procedure § 2904, at 315 (1973)).

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Here, Plaintiffs do not ask the Court to preserve the status quo. And as the

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Supreme Court has explained, when the denial of a motion to compel arbitration under

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the Federal Arbitration Act is appealed, “[b]ecause the question on appeal is whether the

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case belongs in arbitration or instead in the district court, the entire case is essentially

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involved in the appeal.” Coinbase, Inc. v. Bielski, 599 U.S. 736, 741 (2023) (internal

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quotation marks and citation omitted). Thus, pursuant to the Griggs principle, as applied

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and discussed in Coinbase, these proceedings are stayed, and the Court lacks the

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authority to issue an order concerning any matter “involved in the appeal,” Griggs, 459

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U.S. at 58, which here means “the entire case[, ] essentially,” Coinbase, 599 U.S. at 741.

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More specifically, the Court finds that because the precise matter involved in the appeal

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is whether the claims in Plaintiffs’ Second Amended Complaint are subject to arbitration

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based upon the applicable law, agreements, and allegations in Plaintiffs’ pleading, the

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Court lacks the ability to grant Plaintiffs leave to file a Third Amended Complaint.
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Seemingly recognizing that the Court lacks the present ability to grant leave to

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amend, Plaintiffs ask the Court to issue an indicative ruling pursuant to Federal Rule of

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Civil Procedure1 62.1. Rule 62.1 provides:

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If a timely motion is made for relief that the court lacks authority to grant
because of an appeal that has been docketed and is pending, the court may:
(1) defer considering the motion;
(2) deny the motion; or
(3) state either that it would grant the motion if the court of appeals
remands for that purpose or that the motion raises a substantial issue.

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Fed. R. Civ. P. 62.1(a). The corresponding Federal Rule of Appellate Procedure provides

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that “[i]f the district court states that it would grant the motion or that the motion raises a

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substantial issue, the court of appeals may remand for further proceedings but retains

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jurisdiction unless it expressly dismisses the appeal. Fed. R. App. P. 12.1(b). “A district

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court’s decision to make an indicative ruling is discretionary.” Silbersher v. Allergan

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Inc., No. 18-cv-03018-JCS, 2024 U.S. Dist. LEXIS 83249, at *14 (N.D. Cal. May 7,

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2024) (citation omitted).

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Here, Plaintiffs ask the Court to issue an indicative ruling that it would grant

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Plaintiffs’ motion for leave to amend. Doc. No. 32-1 at 6. Plaintiffs primarily argue that

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amendment is appropriate under Rule 15. See generally Doc. No. 32-1. They submit to

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the Court for consideration their proposed Third Amended Complaint. Doc. No. 32-2. A

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review of the redline version, comparing the Second and Third Amended Complaints,

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reveals only one substantive alteration: Plaintiffs have removed the first sentence of

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paragraph 70, which reads “Plaintiffs and the other Class members had sufficient direct

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dealings with Defendant and its agents (dealers) to establish privity of contract between

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themselves and Defendant. As alleged supra, Plaintiffs purchased their Class Vehicles

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Unless otherwise noted, all “Rule” references are to the Federal Rules of Civil Procedure.
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from Ford dealerships, agents of Ford.” Doc. No. 32-3 at 17. According to Plaintiffs,

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Ford relies on this agency allegation in arguing on appeal that the Court erroneously

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determined the dealerships did not act as Ford’s agents. Doc. No. 32-1 at 7.

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Ford opposes the motion on various grounds. See Doc. No. 39. As an initial

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matter, the Court is not persuaded by Ford’s argument that Rule 62.1 does not apply to

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motions for leave to amend. Id. at 3. Although Rule 62.1 arose from the practice of

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handling Rule 60(b) motions to vacate orders already appealed, the rule plainly applies to

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“any motion.” Fed. R. Civ. P. 62.1 advisory committee’s notes (“This new rule adopts

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for any motion that the district court can-not grant because of a pending appeal the

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practice that most courts follow when a party makes a Rule 60(b) motion to vacate a

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judgment that is pending on appeal.”) (emphasis added). And here, Plaintiffs have filed a

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motion that the Court lacks the authority to rule on because of Ford’s appeal. Plaintiffs’

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motion, thus, definitionally falls within the scope of Rule 62.1. And Ford’s discussion of

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Plaintiffs’ ability to seek amendment at the appellate level, see Doc. No. 39 at 3, has no

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bearing on how the Court should resolve the present situation. Plaintiffs have filed a

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motion that the Court cannot grant due to Ford’s pending appeal. Thus, regardless of any

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avenues of relief at the appellate level, the Court must either deny Plaintiffs’ motion,

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defer consideration, or issue an indicative ruling pursuant to Rule 62.1.

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That said, the Court will exercise its discretion here and deny Plaintiffs’ request for

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an indicative ruling. Accepting Plaintiffs’ argument that removal of the agency

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allegation would render Ford’s appeal moot seems to presume that this allegation is

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dispositive on the issue of Ford’s agency with the dealerships, which the Court found not

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to be the case. Thus, by asking the Court to indicate to the Ninth Circuit that it would

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grant amendment in this respect, Plaintiffs essentially ask the Court to inform the Ninth

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Circuit that it believes its own ruling is incorrect and subject to reversal in the absence of

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amendment. Cf. Ret. Bd. of the Policemen’s Annuity & Benefit Fund of Chi. v. Bank of

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N.Y. Mellon, 297 F.R.D. 218, 221 (S.D.N.Y. 2013); see also Silbersher, 2024 U.S. Dist.

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LEXIS 83249, at *17–18. This hardly seems consistent with the purpose of Rule 62.1.
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To that end, because the significance of Plaintiffs’ singular agency allegation is

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precisely before the Ninth Circuit, an indicative ruling here would not promote judicial

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efficiency or fairness but would “only interrupt[] the appellate process.” Ret. Bd., 297

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F.R.D. at 221; Amarin Pharms. Ir., Ltd. v. FDA, 139 F. Supp. 3d 437, 447 (D.D.C. 2015);

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Silbersher, 2024 U.S. Dist. LEXIS 83249, at *19. Moreover, a review of Ford’s opening

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brief reveals that the agency allegation issue is only one of four issues presented on

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appeal. Thus, issuing the requested indicative ruling, and assuming the Ninth Circuit

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remands for that purpose, would not meaningfully further the appeal or obviate its

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necessity. Ret. Bd., 297 F.R.D. at 221; Silbersher, 2024 U.S. Dist. LEXIS 83249, at *19.

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Therefore, the Court finds that an indicative ruling would neither obviate the need

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for Ford’s appeal nor assist the Ninth Circuit with deciding the issues before it.

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Additionally, the Court finds that an indicative ruling would not promote judicial

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economy but would needlessly interfere with appellate jurisdiction. For these reasons,

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the Court DENIES Plaintiffs’ motion.

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III. CONCLUSION
Based on the foregoing, the Court DENIES Plaintiffs’ motion for an indicative

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ruling. This case remains STAYED pending resolution of Ford’s appeal and the Court

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therefore DENIES Plaintiffs’ motion for leave to amend without prejudice.

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IT IS SO ORDERED.
Dated: June 4, 2024

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_____________________________

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HON. MICHAEL M. ANELLO
United States District Judge

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