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Normand Perron, and G. David Hatfield, On Behalf of Themselves and All v. Hewlett-Packard Company


April 8, 2011


The opinion of the court was delivered by: Lucy H. Koh For the Northern District of California

United States District Court For the Northern District of California


Plaintiffs move to stay the instant class action pending appeal of a separate class action 18 settlement that extinguishes the claims brought by Plaintiffs in this case. The Court held a motion 19 hearing on April 7, 2011. Having considered the submissions and arguments of the parties, the 20 Court DENIES Plaintiffs' motion to stay. 21

I.Background 22

On February 18, 2010, Plaintiffs Normand Perron and G. David Hatfield, individually and 23 on behalf of a class and several subclasses, brought suit against Defendant Hewlett-Packard 24 Company ("HP"). The Complaint alleges that certain HP Notebook Computers incorporate a 25 defective Nvidia chip that renders the HP computers unable to connect to the Internet through the 26 internal wireless device. Compl. ¶¶ 8-11. 27

The Nvidia GPU litigation, Case No. 08-04312, is a separate consolidated class action 28 brought against Nvidia for defects in its graphics processing unit and media communications chip.

On September 15, 2010, Judge James Ware of this District issued an order preliminarily approving 2 a class settlement in the Nvidia GPU Litigation. Judge Ware's order prohibited settlement class 3 members from prosecuting any action that asserted claims released by the Nvidia settlement 4 pending a determination of whether the settlement should be finally approved. Because the parties 5 agreed that the claims asserted in the instant action might be released by the Nvidia settlement, they 6 stipulated to stay all proceedings in this action until 30 days after Judge Ware ruled upon the 7 motion for final approval of the Nvidia settlement. The Court issued an order staying this case on 8

On December 20, 2010, Judge Ware issued an order granting final approval of the Nvidia 10 class settlement. Thereafter, HP renewed its previously filed motion to dismiss the Complaint in this case for failure to state a claim and also filed a second motion to dismiss on grounds that Plaintiffs' claims were released by the Nvidia settlement. Plaintiffs objected to approval of the 13 Nvidia settlement before Judge Ware and have appealed the final judgment in the Nvidia GPU 14 Litigation to the Ninth Circuit. Plaintiffs concede that if the Ninth Circuit affirms the final 15 judgment in the Nvidia litigation, the claims brought in this action will be extinguished, but argue 16 that if they prevail on appeal, litigation of this case may resume. Plaintiffs therefore move to stay 17 this case until their appeal of the Nvidia settlement approval is resolved. HP opposes the motion. 18

The power to grant a stay in pending litigation is incidental to the power inherent in every 20 court to control the disposition of the cases on its docket. Landis v. North American Co., 299 U.S. 21 248, 254-55, (1936). In an exercise of that discretion, the Court must weigh "the competing 22 interests which will be affected by the granting or refusal to grant a stay." Lockyer v. Mirant 23 Cir. 1962)). "Among those competing interests are the possible damage which may result from the 25 granting of a stay, the hardship or inequity which a party may suffer in being required to go 26 forward, and the orderly course of justice measured in terms of the simplifying or complicating of 27 issues, proof, and questions of law which could be expected to result from a stay." Id. (quoting 28 October 7, 2010.

II.Legal Standard 19

Corp., 398 F.3d 1098, 1110 (9th Cir. 2005) (quoting CMAX Inc. v. Hall, 300 F.2d 265, 268 (9th 24 CMAX, 300 F.2d at 268). The Ninth Circuit has indicated that "while it is the prerogative of the district court to manage its workload, case management standing alone is not necessarily a 2 sufficient ground to stay proceedings." Dependable Highway Exp., Inc. v. Navigators Ins. Co., 498 3 F.3d 1059, 1066 (9th Cir. 2007). Generally, stays should not be of an indefinite nature and should 4 be granted only for a "short, or at least reasonable, duration." Id. at 1067. "The proponent of a 5 stay bears the burden of establishing its need." Clinton v. Jones, 520 U.S. 681, 708 (1997). 6

The parties' briefing of Plaintiffs' motion to stay focuses on whether a stay is necessary to 8 conserve judicial resources. In their opening brief, Plaintiffs argued that a stay pending appeal of 9 the Nvidia settlement would conserve the district court's judicial resources: "If Plaintiffs lose the 10 appeal, then their claims in this case will be extinguished. If Plaintiffs win the appeal, then their

III.Discussion 7

claims here will not be extinguished and the litigation can resume." Mot. to Stay, ECF No. 48. In its opposition brief, Defendant pointed out that because Plaintiffs concede that their claims are 13 released by the Nvidia settlement, this case is likely to be resolved with minimal use of judicial 14 resources. Defendant argues that Plaintiffs have no basis to oppose its motion to dismiss on the 15 ground that their claims have been released, and therefore the Court can resolve the litigation 16 simply by adopting Defendant's proposed order dismissing the action with prejudice. Plaintiffs do 17 not dispute this point, but argue in their reply brief that if the Court dismisses the action, Plaintiffs 18 will be forced to file an appeal in order to preserve the statute of limitations on this case. Thus, 19

Plaintiffs suggest that a stay would conserve judicial resources at the appellate level, if not for the 20 district court. Plaintiffs also point out that their opening brief in the Nvidia appeal is due April 28, 21

In cases where substantial litigation is likely to take place during the pendency of an appeal, 23 courts have at times granted a stay as a means of conserving judicial resources. See Canal 24

Cal. June 29, 2005) (granting stay where case on appeal was likely to have preclusive effect and 26 substantial litigation would likely take place during the pendency of the appeal). However, "the 27 Ninth Circuit has acknowledged that a stay pending appeal is of dubious character and may result 28 in indefinite delay." ASUSTek Computer Inc. v. Ricoh Co., Ltd., No. C 07-01942 MHP, 2007 WL 2011, and thus any stay will be of definite and reasonable duration. 22

Properties LLC v. Alliant Tax Credit V, Inc., No. C04-03201 SI, 2005 WL 1562807, at *3 (N.D. 25

4190689, at *3 (N.D. Cal. Nov. 21, 2007). Accordingly, district courts frequently deny requests 2 for a stay pending appeal of a separate, but related, action. See, e.g., id. at 2-3; Dister v. Apple-Bay 3

In this instance, the parties appear to agree that this action can be resolved without

5 extensive litigation before this Court. While the appeal of the Nvidia settlement is scheduled to be 6 fully briefed by mid-June, it is not possible to know when the Ninth Circuit will render a decision. 7

East, Inc., No. C 07-01377 SBA, 2007 WL 4045429, at *4-5 (N.D. Cal. Nov. 15, 2007). 4

Thus, it appears that a stay would have the effect of delaying this action for an indefinite period, 8 possibly for more than a year, while doing little to conserve judicial resources. Moreover, it is 9 unlikely that Plaintiffs will be prejudiced in the absence of a stay. If Plaintiffs are concerned about 10 preserving the statute of limitations in this action, they have the option of appealing any dismissal

of this action to the Ninth Circuit. Alternatively, if they succeed in reversing or vacating the Nvidia settlement, they can seek relief from any judgment in this case that is based upon the 13 preclusive effect of the settlement. See Fed. R. Civ. Pro. 60(b)(5). 14

Moreover, as Defendants pointed out at oral argument, the Final Judgment in the Nvidia GPU Litigation orders as follows: 16

or unknown, against each of every Released Person and the assertion, prosecution, or continuation by Settlement Class Members of any Released Claim is hereby

permanently barred and enjoined.

Upon the entry of this Final Judgment, the Releasing Persons have completely discharged, settled, dismissed with prejudice any Released Claim, whether known

Plaintiffs confirmed that no party or objector has moved to stay the effect of Judge Ware's Order 21 pending appeal. As Plaintiffs concede that they are class members whose claims are released, it is 22 not clear that a stay of this case would comply with Judge Ware's Order. Defendant's motion to 23 dismiss based on the Final Judgment and settlement is set for hearing on May 5, 2011. The Court 24 will determine at that time whether the Nvidia settlement and Final Judgment require dismissal of 25 this action. Considering all of these factors, the Court finds that a stay is not warranted. 26

For the foregoing reasons, Plaintiffs' motion to stay is DENIED. As discussed at the

28 motion hearing, the parties may be able to resolve this case and address Plaintiffs' concerns about Nvidia GPU Litigation, No. C 08-4312 JW, at ¶ 10 (N.D. Cal. Dec. 20, 2010). At the hearing, 20


the statute of limitations by stipulation. Accordingly, as agreed at the hearing on this motion, by 2

April 18, 2011, Defendant shall file a statement indicating whether it is willing to stipulate to (1) 3 dismissal of this case without prejudice to Plaintiffs' renewing their claims if the Ninth Circuit 4 reverses or vacates the Nvidia settlement such that Plaintiffs claims are no longer released, and (2) 5 narrowly tailored tolling of the statute of limitations in that event. If Defendant is willing to so 6 stipulate, the parties shall file a stipulation of dismissal by April 25, 2011. Otherwise, the 7

Defendant's motions to dismiss shall be heard, as scheduled, on May 5, 2011. 8



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