United States District Court, N.D. California
For Andre Ward, Plaintiff: James Lohman Sanders, LEAD ATTORNEY, Reed Smith LLP, Los Angeles, CA; Raymond A. Cardozo, LEAD ATTORNEY, Reed Smith LLP, San Francisco, CA; James C. McCarroll, Jordan W Siev, PRO HAC VICE, Reed Smith LLP, New York, NY.
For Dan Goossen, Goossen Tutor Promotions, LLC, Inc., Defendants: Charles Nathan Shephard, LEAD ATTORNEY, Bertram Harris Fields, James Ryan Molen, Greenberg Glusker Fields Claman & Machtinger LLP, Los Angeles, CA.
ORDER GRANTING DEFENDANTS' MOTION TO STAY PROCEEDINGS PENDING APPEAL
THELTON E. HENDERSON, United States District Judge.
Currently before the Court is Defendants' motion to stay these proceedings pending an appeal of the Court's Order denying Defendants' motion to compel arbitration (" Arbitration Order"). Pursuant to Civil Local Rule 7-1(b), the Court determines that this matter is appropriate for resolution without oral argument. After carefully considering the parties' submissions and the relevant case law, the Court hereby GRANTS Defendants' motion, for the reasons set forth below.
Professional boxer Andre Ward (" Plaintiff") has brought a civil suit against the Estate of Dan Goossen and Goossen Tutor Promotions, LLC (" Defendants"). Compl. (Docket No. 1). Plaintiff seeks damages resulting from Defendants' alleged violation of the Muhammad Ali Boxing Reform Act, which, in relevant part, requires promoters to make certain financial disclosures to their boxers. Plaintiff also seeks an accounting of profits derived from several boxing matches.
On October 15, 2014, the Court denied Defendants' motion to compel arbitration, finding that the Parties' Contract, composed of a Promotional Agreement and attached
Addendum, did not require the arbitration of claims unrelated to the validity and/or enforceability of the Contract. Oct. 15, 2014 Arbitration Order (Docket No. 34). Defendants' subsequently appealed the Court's decision, and filed a motion to stay the proceedings pending that appeal. Oct. 31, 2014 Mot. (Docket No. 40). Plaintiff filed his opposition on November 14. (Docket No. 45). During a telephonic case management conference held on November 17, the Court instructed the parties to submit supplemental briefs on the matter, with special attention paid to the question of irreparable harm. (Docket No. 46). These supplemental briefs were timely submitted to the Court and are considered, along with the parties' initial submissions, below. (Docket Nos. 47, 49, 51).
A district court's order denying a motion to compel arbitration does not result in an automatic stay of the proceedings pending the appeal. Britton v. Co-op Banking Group, 916 F.2d 1405, 1412 (9th Cir. 1990). Instead, the Federal Arbitration Act (" FAA") allows a district court to evaluate the merits of the moving party's claim, and to grant or deny a stay as a matter of discretion, based upon the particular facts of the case. Id. Accordingly, the party requesting the stay bears the burden of showing that the case's circumstances justify an exercise of the court's discretion in granting a stay. Nken v. Holder, 556 U.S. 418, 433-34, 129 S.Ct. 1749, 173 L.Ed.2d 550 (2009).
To determine whether the moving party has met its burden, the Ninth Circuit adheres to a four-factor test: (1) whether the party has made a strong showing it is likely to succeed on the merits; (2) whether the party will be irreparably injured absent a stay; (3) whether issuance of a stay will substantially injure the other parties in the proceeding; and (4) where the public's interest lies. Hilton v. Braunskill, 481 U.S. 770, 776, 107 S.Ct. 2113, 95 L.Ed.2d 724 (1987); see Stiener v. Apple Computer, Inc., No. 07-4486, 2008 WL 1925197, at *5 (N.D. Cal. Apr. 29, 2008) (applying the Hilton factors to determine whether to stay litigation pending appeal from an order denying a motion to compel arbitration). In weighing these factors, courts apply a " sliding scale, " whereby the elements of the test are balanced " so that a stronger showing of one element may offset a weaker showing of another." Leiva-Perez v. Holder, 640 F.3d 962, 964 (9th Cir. 2011).
1. Likelihood of Success or Substantial Legal Question
In the Ninth Circuit, " the minimum quantum of likely success necessary to justify a stay" can be articulated in several ways, including a " reasonable probability, " a " fair prospect, " raising " serious legal questions, " or bringing a " substantial case on the merits." Leiva-Perez, 640 F.3d at 967 (quotation marks omitted). Consequently, " [t]o satisfy the first Hilton factor, a movant need not show a probability of success on appeal." Eberle v. Smith, No. 07-0120, 2008 WL 238450, at *2 (S.D. Cal. Jan. 29, 2008) (citing C.B.S. Employees Fed. Credit Union v. Donaldson Lufkin & Jenrette Sec. Corp., 716 F.Supp. 307, 309-10 (W.D. Tenn. 1989) (explaining that it would be difficult for moving parties to persuade the trial court that its decision being appealed was wrong and would probably be reversed)). Courts alternatively articulate this lower standard as whether " serious legal issues" are raised on appeal or if the arbitration motion raises a " substantial question." Abbassi v. INS, 143 F.3d 513, 514 (9th Cir. 1998); Britton, 916 F.2d at 1412. Put another way, " district courts ...