UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA
December 1, 2010
HOYT A. FLEMING,
V. TOM COVERSTONE, DEFENDANT. TOM COVERSTONE, COUNTERCLAIMANT,
HOYT A. FLEMING; TERESA A. FLEMING; AND PARK, VAUGHAN & FLEMING, LLP, COUNTERDEFENDANTS.
The opinion of the court was delivered by: Hayes, Judge:
The matter before the Court is the Motion to Stay Trial filed by Defendant Tom Coverstone. (ECF No. 150).
I. Procedural History
This action concerns a dispute over the sale of a patent portfolio. On February 28, 2008, Hoyt A. Fleming ("Fleming") initiated this action by filing a complaint against Tom Coverstone ("Coverstone"). (ECF No. 1).
In March 2009, Fleming filed a separate lawsuit in the Federal District of Idaho alleging patent infringement against Escort, Inc. ("Escort") who is not a party in this case. On June 29, 2009, Escort alleged counterclaims of invalidity and unenforceability of Fleming's patents in the Idaho action. (ECF No. 151-8 at 20-21).
Fleming filed a Second Amended Complaint (ECF No. 29) and on July 29, 2009, Fleming filed his Third Amended Complaint ("TAC"), which is the operative pleading in this case. (ECF No. 84). The TAC alleges breach of contract for the sale of Fleming's patents.
On August 12, 2009, Coverstone filed his Answer and Counterclaim to Plaintiff's Third Amended Complaint. (ECF No. 86).
On June 25, 2010, the parties appeared before the Court for a pretrial conference and the Court set a trial date of January 25, 2011. (ECF No. 138).
On October 14, 2010, Coverstone filed a Motion to Stay Trial. (ECF No. 150). On November 1, 2010, Fleming filed an Opposition to Coverstone's Motion to Stay Trial. (ECF No. 151). On November 8, 2010, Coverstone filed a Reply.
Coverstone moves this Court to "stay and/or continue the trial in this matter for four months to allow the Idaho court to reach its determination on validity and enforceability [of the patents] prior to trying this case." (ECF No. 150-1 at 2). Coverstone further "requests that in issuing its order, this court set a status conference for May 31, 2011, to revisit the issue and make a determination as to whether a further stay is necessary or whether this case is ready to proceed to trial." Id. at 7-8.
Coverstone contends that the issues of invalidity and unenforceability of the patents in this case will be "fully adjudicated" in the Idaho case because the defendant in that case has a filing deadline of February 28, 2011 for a motion for summary judgment and the Idaho court stated in its scheduling order that it would "'make every effort'" to issue a ruling by May 29, 2011. Id. at 3 (quoting Fleming v. Escort, Inc. et al., Case No. 09-cv-105-S-BLW, (D. Idaho Aug. 2, 2010) (case management order)). Coverstone contends that a judicial determination that the patents are invalid or unenforceable in the Idaho case, will provide him a complete defense to the breach of contract claim in this case due to failure of consideration. Coverstone also contends that resolution of the invalidity issue in the Idaho case will simplify the issue of damages in this case and prevent double recovery.
Fleming contends that the Motion is untimely and is an improper attempt to avoid trial. Fleming contends that "Coverstone's motion (patent invalidity) seeks to raise an issue that: (1) Coverstone never pled by way of an affirmative defense or counterclaim; (2) the parties never addressed during discovery or expert reports; and (3) forms no part of any issue in the party's recently submitted joint proposed Pre-Trial Order." (ECF No. 151 at 4).
"The power to stay proceedings is incidental to the power inherent in every court to control the disposition of the cases on its docket with economy of time and effort for itself, for counsel, and for litigants." Landis v. American Water Works & Elec. Co., 299 U.S. 248, 254 (1936). The use of this power requires exercise of sound discretion. Id. It is necessary to weigh competing interests of those that will be affected by the stay. Id. at 254- 255. See CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962). These competing interests include: (1) "the possible damage that may result from the granting of a stay;" (2) "hardship or inequity that a party may suffer if required to go forward;" and (3) "the orderly course of justice measured in terms of the simplifying or complicating of issues, proof, and questions of law which could be expected to result from a stay." Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9th Cir. 2005). The "party requesting a stay bears the burden of showing that the circumstances justify an exercise of that discretion." Ind. State Police Pension Trust v. Chrysler LLC, __ U.S. __, 129 S. Ct. 2275, 2276 (2009). The moving party "must make out a clear case of hardship or inequity in being required to go forward, if there is even a fair possibility that the stay for which he prays will work damage to someone else." Landis, 299 U.S. at 255.
A court may stay an action pending the resolution of independent proceedings which bear upon the case. Leyva v. Certified Grocers of Cal., Ltd, 593 F.2d 857, 863-64 (9th Cir. 1979). However, "[a] stay should not be granted unless it appears likely the other proceedings will be concluded within a reasonable time in relation to the urgency of the claims presented to the court. Id. at 864; see also Dependable Highway Exp., Inc. v. Navigators Ins. Co., 498 F.3d 1059, 1066-67 (9th Cir. 2007) ("stays should not be indefinite in nature.").
The Idaho case was filed over one year after this case. The date set for completion of discovery in the Idaho case is after the trial in this case. The motion in the Idaho case that Coverstone contends will dispose of this case has not yet been filed and is not due until February 28, 2011, over one month after the trial in this case. Because the motion has not yet been filed, the Court cannot determine whether it actually seeks summary judgment on the validity and enforceabilty of the all of the patents at issue in this case. This case has been pending for nearly three years. The stay requested would further delay trial in favor of waiting resolution of a motion for summary judgment which has not yet been filed in another forum. The Court does not find that "it appears likely the other proceedings will be concluded within a reasonable time in relation to the urgency of the claims presented to the court." Leyva, 593 F.2d at 864; see also Dependable Highway Exp., Inc., 498 F.3d 1066-67.
IT IS HEREBY ORDERED that Coverstone's Motion to Stay Trial (ECF No. 150) is DENIED.
United States District Judge WILLIAM Q. HAYES
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