Stafford v. Rite Aid Corporation

Opinion

1 2 3 4 5 UNITED STATES DISTRICT COURT 6 SOUTHERN DISTRICT OF CALIFORNIA 7 8 Bryon Stafford, Case No.: 3:17-cv-1340-AJB-JLB 9 Plaintiff, ORDER DENYING DEFENDANT’S 10 v. MOTION TO STAY PENDING THE COURT’S RESOLUTION OF THE 11 Rite Aid Corporation, MOTION TO COMPEL 12 Defendant. ARBITRATION (Doc. No. 82) 13 14 Before the Court is Rite Aid’s motion to stay the case pending the Court’s resolution 15 on the currently-pending motion to compel arbitration. (Doc. No. 82.) Because Rite Aid’s 16 motion was filed two years into litigation and after extensive discovery has already been 17 done, the Court finds a delay now would be prejudicial to the parties, the Court, and the 18 Court’s efficiency to run its docket. Accordingly, the Court DENIES Rite Aid’s motion to 19 stay. 20 I. BACKGROUND 21 The case’s facts are detailed in two orders denying dismissal. (Docs. No. 29, 41.) 22 Relevant to this motion is Rite Aid’s currently-pending motion to compel arbitration, which 23 is set for hearing on September 26, 2019. (Docs. No. 78, 91.) In the meantime, Stafford’s 24 motion for class certification is due in December, thus he has been conducting class and 25 merits discovery. (Doc. No. 82-1 at 6.) 26 II. LEGAL STANDARDS 27 A court’s power to stay proceedings is incidental to the inherent power to control the 28 disposition of its cases in the interests of efficiency and fairness to the court, counsel, and 1 litigants. See Landis v. N. Am. Co., 299 U.S. 248, 254–55 (1936). A stay may be granted 2 pending the outcome of other legal proceedings related to the case in the interests of judicial 3 economy. See Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 863–64 (9th Cir. 4 1979). Discretion to stay a case is appropriately exercised when the resolution of another 5 matter will have a direct impact on the issues before the court, thereby substantially 6 simplifying the issues presented. See Mediterranean Enters., Inc. v. Ssangyong Corp., 708 7 F.2d 1458, 1465 (9th Cir. 1983). 8 In determining whether a stay is appropriate, a district court “must weigh competing 9 interests and maintain an even balance.” Landis, 299 U.S. at 254–55. “[I]f there is even a 10 fair possibility that the stay . . . will work damage to someone else, the stay may be 11 inappropriate absent a showing by the moving party of hardship or inequity.” Dependable 12 Highway Express, Inc. v. Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir. 2007) (citation 13 and internal quotation marks omitted). “A stay should not be granted unless it appears 14 likely the other proceedings will be concluded within a reasonable time in relation to the 15 urgency of the claims presented to the court.” Leyva, 593 F.2d at 864. 16 III. DISCUSSION 17 Rite Aid argues the Court should grant the stay because if it is “required to proceed 18 with pre-trial obligations relating to the merits of the underlying dispute, including 19 discovery and class certification, before the Court decides whether to compel arbitration, 20 ‘the advantages of arbitration—speed and economy—are lost forever,’ a loss the Ninth 21 Circuit describes as ‘serious, perhaps, irreparable.’” (Doc. No. 82-1 at 9 (quoting Alascom, 22 Inc. v. ITT N. Elec. Co., 727 F.2d 1419, 1422 (9th Cir. 1984)).) Rite Aid also asserts that 23 the same argument applies to its discovery and pre-trial obligations as well. (Id.) Rite Aid 24 finally notes Stafford will not be prejudiced by such a stay. (Id.) 25 Stafford opposes the motion, arguing because it was filed so far into litigation after 26 the parties have already conducted extensive discovery at considerable expense. (Doc. No. 27 87 at 6–7.) Stafford cites to a district court case denying a stay in similar circumstances as 28 here where the motion to compel arbitration was brought so late in litigation. See Jones v. 1 || Deutsche Bank AG, et al., No. C 04 5357 JW (RS), 2007 WL 951811, at *1—2 (N.D. Cal. 2 ||Mar. 28, 2007). In that case, the Court relied on these precise reasons in denying the 3 || defendant’s motion to stay. Id. 4 Here, the balance weighs on Stafford’s side. Rite Aid has brought two dismissal 5 ||motions and, as admitted in Rite Aid’s own motion, has already produced significant 6 || discovery. (Doc. No. 82-1 at 6-7.) In fact, Rite Aid benefited from this very discovery 7 || when it focused on whether “arbitration agreements in contracts between itself and relevant 8 pharmacy benefits managers [ ] and third party payors [ ] are enforceable to require 9 || arbitration of Stafford’s claims under the equitable estoppel doctrine.” (/d. at 6.) This led 10 ||to Rite Aid’s revelation that “Stafford’s claims are inextricably intertwined with the 11 |}contracts between itself” and those “who adjudicated Stafford’s prescription purchases at 12 || the heart of his claims.” (/d.) This, Rite Aid argues, is why it is now seeking a motion to 13 || compel. Ud.) 14 Although Rite Aid may prevail on its arbitration motion, the Court finds granting a 15 || stay two years into litigation merely months before Plaintiffs class certification is due will 16 || prejudice the parties, the Court, and insert inefficiency into these proceedings. Based on 17 ||the parties’ representations, hundreds of thousands of documents have already been 18 || produced, (id.), thus it appears the lion share of the work may be over. Further, the Court 19 || finds it unjust to allow Rite Aid to benefit from the discovery process just enough to then 20 || use information discovered during that process as a sword to cut down Stafford’s case and 21 || further delay the Court’s schedule. 22 IV. CONCLUSION 23 Accordingly, the Court DENIES Rite Aid’s motion to stay the case pending the 24 || outcome of the motion to compel. (Doc. No. 82.) 25 IT IS SO ORDERED. 26 || Dated: August 14, 2019 | ZS Zz : Le 27 Hon. Anthony J.Battaglia 28 United States District Judge 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28