The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge
Through this action, Plaintiff Teresa Shappell ("Plaintiff") seeks damages for the denial of total disability benefits she claims entitlement to under disability insurance plans issued by Defendants Sun Life Assurance Company ("Sun Life") and Lincoln National Life Insurance ("Lincoln"). Those disability plans were obtained by Plaintiff's former employer, Employers Insurance Company of Nevada ("Employers").
Presently before the Court is a Joint Motion to Stay filed by Sun Life and Lincoln (hereafter "Defendants"). For the following reasons, Defendants' Motion is DENIED.*fn1
Plaintiff initiated this action against Sun Life, Lincoln and Employers on November 5, 2010, seeking to recover benefits under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. ("ERISA"). Plaintiff alleges she participated in an employee welfare benefit plan while employed by Employers, and the benefit plan included long-term disability benefits funded by policies issued by Defendants.
This Court granted a Motion to Dismiss Plaintiff's original Complaint filed by Defendant Sun Life as to Plaintiff's Second Cause of Action, which was initially couched as a claim for "Breach of Contract: Plan Benefits." Plaintiff subsequently filed the operative First Amended Complaint, which Sun Life and Lincoln answered.
Defendant Employers, however, then filed its own Motion to Dismiss, which this Court granted on May 20, 2011. According to Employers, Plaintiff's claims against it in the instant action were duplicative of those already pending against the company in a Nevada arbitration ("Nevada Arbitration").
The Nevada Arbitration came about when Plaintiff filed a gender discrimination, retaliation and breach of contract action against Employers in Nevada state court. Employers removed that action to federal court and moved to compel arbitration. The Nevada district court granted Employers' motion, and since that time the parties to the Nevada Arbitration have undertaken arbitration-related discovery. Through their instant Motion, Defendants now argue this action should be stayed pending completion of those discovery proceedings.
The power to issue a motion to stay derives from a federal district court's power to control its docket and to ensure that cases before it are justly determined. Levya v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 864 (9th Cir. 1979), cert. denied, 444 U.S. 827 (1979). Indeed, "[a] trial court may, with propriety, find it is efficient for its own docket and the fairest course for the parties to enter a stay of an action before it, pending resolution of independent proceedings which bear upon the case." Id. at 863. "This rule applies whether the separate proceedings are judicial, administrative, or arbitral in character, and does not require that the issues in such proceedings are necessarily controlling of the action before the court." Id. at 863-64. A federal district court has broad discretion in deciding whether to issue a stay. Fed. Sav. & Loan Ins. Corp. v. Molinaro, 889 F.2d 899, 902 (9th Cir. 1989).
Nonetheless, "[w]here it is proposed that a pending proceeding be stayed, the competing interests which will be affected by the granting or refusal to grant a stay must be weighed." CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962). "Among these competing interests are the possible damage which may result from the granting of a stay, the hardship or inequity which a party may suffer in being required to go forward, and 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." Id.
Defendants seek to stay this action pending discovery in the Nevada Arbitration. According to Defendants, "the review of the discovery and information from the Nevada Arbitration will allow the parties and the Court to efficiently consider all information necessary and relevant to [Plaintiff's] ERISA claims." Motion, 5:27-6:1. More specifically, Defendants contend "it would be most efficient for Defendants to obtain the deposition transcripts and discovery responses from Employers and [Plaintiff] from the Nevada Arbitration to review and determine whether to seek to supplement the administrative record in this ERISA action." Id., 6:20-22.
Defendants are putting the cart before the horse. In this Court's Pretrial Scheduling Order ("PTSO") (ECF No. 33), the Court ordered that since "[t]his case is governed by ERISA...all evidence for trial will be limited to the administrative record," but that "[t]he parties may move to admit evidence outside of the administrative record." PTSO, 2:2-4. Defendants have not made such a motion. Instead, they are asking the Court to stay this action while discovery is conducted in a separate and unrelated non-judicial proceeding, so Defendants can then review that discovery to determine whether they should, at some point in the future, move to supplement the record. Since the evidence here is currently limited to the administrative record, however, Defendants' ...