Brady v. LendingClub Bank, National Association

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 MICHAEL BRADY, Case No.: 23-CV-495 TWR (WVG)

12 Plaintiff, ORDER (1) GRANTING IN PART 13 v. AND DENYING IN PART JOINT MOTION TO STAY ACTION AND 14 LENDINGCLUB BANK, NATIONAL ARBITRATE ALL CLAIMS AND ASSOCIATION, 15 (2) DISMISSING ACTION Defendant. WITHOUT PREJUDICE 16 17 (ECF No. 7) 18 Presently before the Court is the Parties’ Joint Motion to Stay Action and Arbitrate 19 All Claims (the “Joint Motion”). (See ECF No. 7, “Joint Mot.”) After carefully reviewing 20 the relevant law and the Parties’ submission, the Court GRANTS IN PART and DENIES 21 IN PART the Joint Motion. 22 BACKGROUND 23 Plaintiff Michael Brady initiated this action against Defendant LendingClub Bank, 24 National Association (“LendingClub”) on March 19, 2023. (See ECF No. 1.) The 25 Complaint alleges Defendant violated the Telephone Consumer Protection Act (“TCPA”) 26 and Rosenthal Fair Debt Collection Practices Act (“RFDCPA”) by using an automated 27 telephone dialing system and/or an artificial or pre-recorded voice to collect a debt 28 allegedly owed by Plaintiff. (See id. at 1–2 (citing 47 U.S.C. § 227 et. seq. and Cal. Civ. 1 Code §§ 1788–1788.32).) On March 20, 2023, the Clerk of Court issued a Summons, (see 2 ECF No. 2), and Plaintiff served Defendant with the Complaint and Summons at some 3 undisclosed time thereafter, (see generally ECF No. 3). 4 According to the Parties, Defendant’s initial responsive pleading was due on or 5 before April 11, 2023. (See id. at 2.) LendingClub did not file an answer or responsive 6 motion by that deadline. (See generally Docket.) Instead, on April 11, 2023, the Parties 7 filed an untimely joint motion seeking a one-month extension of Defendant’s responsive 8 pleading deadline. (See generally ECF No. 3.) See also Standing Order for Civil Cases § 9 IV (“Absent extraordinary circumstances, any request for a continuance must be filed no 10 later than three (3) court days before the relevant date.” (emphasis in original)). Still, the 11 Court granted the motion nunc pro tunc, extending Defendant’s responsive pleading 12 deadline to May 11, 2023. (See generally ECF No. 4.) 13 Again, Defendant failed to respond by the deadline set by the Court. (See generally 14 Docket.) Rather, on May 11, 2023, the Parties again filed an untimely joint motion seeking 15 an additional two-week extension of Defendant’s responsive pleading deadline. (See 16 generally ECF No. 5.) Both motions for an extension claimed Defendant “require[d] 17 additional time to investigate [Plaintiff’s] claims in order to prepare a response to the 18 complaint,” and asserted that an extension would “permit the parties to explore possible 19 early settlement and resolution of the matter.” (See ECF No. 3 at 2; ECF No. 5 at 2.) Upon 20 a finding of good cause, the Court granted the motion and extended Defendant’s responsive 21 pleading deadline to May 25, 2023. (See ECF No. 6 at 2.) Still, the Court cautioned the 22 Parties that, absent extenuating circumstances, it would not grant additional requests to 23 extend Defendant’s responsive pleading deadline because further extensions would unduly 24 delay the litigation process. (See id.) 25 Consequently, the Parties did not seek a third extension of Defendant’s responsive 26 pleading deadline. (See generally Docket.) Instead, on May 23, 2023, the Parties filed the 27 instant Joint Motion seeking an indefinite stay of this action pending the completion of 28 arbitration. (See Joint Mot.) 1 ANALYSIS 2 A court’s power to stay proceedings is incidental to its inherent power “to control 3 the disposition of the causes on its docket with economy of time and effort for itself, for 4 counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). Such power 5 is “firmly imbedded in our judicial system.” Scripps-Howard Radio v. F.C.C., 316 U.S. 4, 6 13 (1942). Moreover, “[a] stay is not a matter of right” but rather “an exercise of judicial 7 discretion . . . dependent upon the circumstances of the particular case.” Virginian Ry. Co. 8 v. U.S., 272 U.S. 658, 672–73 (1926). Accordingly, any party seeking a stay “bears the 9 burden of showing that the circumstances justify an exercise of [the court’s] discretion.” 10 Nken v. Holder, 556 U.S. 418, 433–34 (2009) (first citing Clinton v. Jones, 520 U.S. 681, 11 798 (1997); and then citing Landis, 299 U.S. at 255). 12 The court’s discretion to stay or permit judicial proceedings is circumscribed by the 13 parties’ right to arbitrate. See 9 U.S.C. § 3. Pursuant to the Federal Arbitration Act 14 (“FAA”), contractual provisions through which parties agree to arbitrate any controversy 15 arising out of their contract are generally “valid, irrevocable, and enforceable.” See 9 16 U.S.C. § 2. A party may seek a court order compelling arbitration under such an agreement, 17 see 9 U.S.C. § 4, or the parties may jointly stipulate to binding arbitration, see, e.g., Van 18 Waters & Rogers Inc. v. Int’l Bhd. of Teamsters, Chauffeurs, Warehousemen & Helpers of 19 Am., Loc. Union 70, 913 F.2d 736, 740 (9th Cir. 1990); Plasterers Loc. Union No. 346 v. 20 Wyland Enterprises Inc., 819 F.2d 217, 218 (9th Cir. 1987). 21 If a court determines that a suit or proceeding may be referred to arbitration under 22 the FAA, it “shall” issue a stay pending the completion of arbitration upon a motion from 23 either party. See 9 U.S.C. § 3. Although “Congress’s use of ‘shall’ appears to require 24 courts to stay litigation that is subject to mandatory arbitration,” the Ninth Circuit “has long 25 carved out an exception if all claims are subject to arbitration.” Forrest v. Spizzirri, 62 26 F.4th 1201, 1204 (9th Cir. 2023). “[N]otwithstanding the language of § 3, a district court 27 may either stay the action or dismiss it outright when . . . the court determines that all of 28 the claims raised in the action are subject to arbitration.” Johnmohammadi v. 1 || Bloomingdale’s, Inc., 755 F.3d 1072, 1073-74 (9th Cir. 2014) (citing Sparling v. Hoffman 2 Constr. Co., 864 F.2d 635, 638 (9th Cir.1988)); see also Forrest, 62 F.4th at 1204—05; 3 || Thinket Ink Info. Res., Inc. v. Sun Microsystems, Inc., 368 F.3d 1053, 1060 (9th Cir. 2004); 4 || Martin Marietta Aluminum, Inc. v. Gen. Elec. Co., 586 F.2d 143, 147 (9th Cir. 1978) (“The 5 ||[Federal Arbitration] Act provides for a stay pending compliance with a contractual 6 || arbitration clause. But a request for a stay is not mandatory.”). 7 Here, the Parties have agreed “‘to submit all claims to binding individual arbitration 8 || pursuant to the terms of the arbitration provision contained in the borrow agreement .. . 9 || governing Plaintiff's loan with Lendingclub.” (See Joint Mot. at 2.) The Parties have also 10 ||jointly moved to stay this action pending the completion of arbitration. (See id.) Because 11 || the Parties have agreed that “all claims” are subject to arbitration, this Court has discretion 12 dismiss the action. See, e.g., Forrest, 62 F. 4th at 1204-05; Johnmohammadi, 755 F.3d 13 1073-74. The Parties have not provided any justification for staying the action, (see 14 || generally Joint Mot.), and the Court finds no reason why this matter should languish on its 15 ||docket when there are no claims left to adjudicate. For the foregoing reasons, the Court 16 ||concludes that a stay would not serve the interests of justice or judicial economy. 17 CONCLUSION 18 Therefore, the Court GRANTS IN PART and DENIES IN PART the Parties’ Joint 19 || Motion. Specifically, the Court DENIES the Parties’ request to stay, GRANTS the request 20 || to arbitrate all claims, and DISMISSES WITHOUT PREJUDICE this action. 21 IT IS SO ORDERED. 22 Dated: May 26, 2023 —_—~ 23 | (2 re Honorable Todd W. Robinson 95 United States District Judge 26 27 28