United States District Court, E.D. California
MEMORANDUM AND ORDER RE: PLAINTIFF’S MOTION TO
LIFT STAY
WILLIAM B. SHUBB UNITED STATES DISTRICT JUDGE
On May
17, 2016, this court stayed the present action pending
determination of CE Resource, Inc.’s, dba NetCE, motion
to dismiss, transfer, or stay the related and first-filed
declaratory judgment action in the Southern District of
Florida. (May 17, 2016 Order at 1 (Docket No. 41)); see
also Jouria v. CE Resource, Inc. d/b/a CME Resource and
NetCE, Civ. No. 15-61165 (S.D. Fla.). Presently before
the court is NetCE’s motion to lift the stay for the
limited purpose of seeking leave to file a Second Amended
Complaint. (Pl.’s Mot. to Lift Stay (Docket No. 42).)
Both defendants oppose. (Docket Nos. 44, 45.)
“‘The
same court that imposes a stay of litigation has the inherent
power and discretion to lift the stay.’”
Digital Software Servs., Inc. v. Entm’t Programs,
Inc., Civ. No. 2:09-02763 TLN DAD, 2014 WL 5816929, at
*3 (E.D. Cal. Nov. 7, 2014) (quoting Akeena Solar Inc. v.
Zep Solar Inc., Civ. No. 09-05040 JSW, 2011 WL 2669453,
at *2 (N.D. Cal. July 7, 2011)). The court may lift the stay
“‘[w]hen circumstances have changed such that the
court’s reasons for imposing the stay no longer exist
or are inappropriate.’” Id. (citation
omitted).
This
court stated in its May 17, 2016 Order that if the Southern
District of Florida denies NetCE’s motion to dismiss,
transfer, or stay and decides to proceed with the declaratory
judgment action, this court would consider whether the
first-to-file rule necessitates a further stay, dismissal, or
transfer of this action to the Southern District of Florida.
(May 17, 2016 Order at 2.) Further, if the Southern District
of Florida grants NetCE’s motion and defers to this
court, this court would provide NetCE with an opportunity to
file a Second Amended Complaint and defendants an opportunity
to respond. (Id.)
Now,
NetCE seeks to file a Second Amended Complaint prior to the
Southern District of Florida’s decision so that it can
re-join Jassin Jouria as a defendant in this action.
(Pl.’s Mot. to Lift Stay at 2, 4.) NetCE removed Jouria
as a defendant pending resolution of his bankruptcy case,
which has since been dismissed with prejudice. NetCE contends
that its motion to dismiss, transfer, or stay is based in
part on Jouria’s status as a defendant in the present
action and that the Southern District of Florida cannot make
a decision on its motion “under the conditions in which
it was filed” unless Jouria is re-joined as a
defendant. (Id. at 3.) NetCE also seeks to make
substantive revisions to clarify “areas of
confusion” raised by opposing counsel in their prior
motions to dismiss “[f]or the sake of
efficiency.” (Id.)
This
court, however, found that it was most efficient for the
court and the parties to stay the present action and
explicitly provided that NetCE would have an opportunity to
file a Second Amended Complaint after the Southern
District of Florida issued its decision on NetCE’s
motion. (May 17, 2016 Order at 2.) The circumstances under
which this court imposed its stay have not materially changed
as the court was aware at the time of its decision that
Jouria was not a party to the present action and that his
bankruptcy case had been dismissed. Moreover, the Southern
District of Florida has not yet ruled on NetCE’s
motion.[1]
NetCE
has also failed to explain why joining Jouria is necessary
for the Southern District of Florida to properly consider its
motion. Just as it did during the May 16, 2016 hearing in
this court, NetCE can explain to the Southern District of
Florida the nature of the proceedings, the role Jouria
allegedly played, and the reasons why Jouria is not currently
a defendant in the present action.
Moreover,
if the court were to lift the stay and allow NetCE to file a
Second Amended Complaint, defendants would be required to
expend additional time and money filing an answer or response
before receiving a ruling from the Southern District of
Florida. Given that the present action may not proceed in
this court, this would be an inefficient use of party
resources and would defeat the purpose of this court’s
Order imposing a stay.
Accordingly,
the court will deny NetCE’s motion to lift the stay for
the purpose of filing a motion for leave to amend.
IT IS
THEREFORE ORDERED that plaintiff NetCE’s motion to lift
the stay (Docket No. 42) be, and the same hereby is, DENIED.
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Notes:
[1] On June 15, 2016, the Southern
District of Florida lifted the automatic bankruptcy stay and
ordered the parties to file a Joint Scheduling ...