United States District Court, N.D. California
ORDER DENYING PETITIONERS’ MOTION TO ENJOIN
STATE COURT PROCEEDINGS
THELTON E. HENDERSON United States District Judge
matter came before the Court on July 11, 2016 for a hearing
on Petitioners’ motion to enjoin Respondent’s
counsel and/or their client(s), including but not limited to,
James Patrick Souza Jr., from filing and/or prosecuting
duplicative claims or actions, or in the alternative, to stay
such claims or actions (“Mot.”). Docket No. 34.
Having carefully considered the parties’ written and
oral arguments, the Court now DENIES Petitioners’
motion for the reasons set forth below.
above-captioned action, as well as the related action
Malone v. KAG West, LLC, et al., No.
15-CV-04262-TEH, concerns Respondent Patrick Malone’s
various wage and hour claims against Petitioners KAG West,
LLC and the Kenan Advantage Group (collectively
“Petitioners”). The Court granted
Petitioners’ Motion to Compel Arbitration on November
3, 2015. Compel Order at 8 (Docket No. 26). In its order
compelling arbitration, the Court noted that Respondent did
not challenge the validity of the Arbitration Agreement at
issue, and that the parties had agreed that the Arbitration
Agreement delegated threshold questions to the arbitrator by
incorporating the American Arbitration Association Rules.
Id. at 4.
those observations in mind, the Court held that the issues of
whether the dispute should be arbitrated on an individual or
class-wide basis and the arbitrability of Respondent’s
PAGA claims were threshold questions to be decided by the
arbitrator. Id. at 5-7. The Court stayed all of
Respondent’s claims pending a decision by the
arbitrator, and noted that if the arbitrator decided that the
PAGA claims are not arbitrable, those claims would be stayed
pending arbitration of Respondent’s other claims due to
their derivative nature. Id. at 7-8. The parties
stipulated to arbitrate before JAMS, and an arbitrator was
assigned on April 5, 2016. Mot. at 5 (Docket No. 34). The
matter is currently in arbitration, and a hearing regarding
the threshold issues of clause construction regarding class
and representative arbitration was held on June 29, 2016.
instant motion, Petitioners seek to enjoin an action filed by
Respondent’s counsel on May 4, 2016 in Alameda County
Superior Court, on behalf of Plaintiff James Patrick Souza,
Jr. See Ex. A to Notice of Duplicative Action
(Docket No. 38). Briefing was timely completed on the instant
motion. See Opp’n (Docket No. 40); Reply
(Docket No. 41). Mr. Souza’s claim is a “PAGA
only” action, raises the exact same violations, facts
and theories as Respondent’s complaint, and is governed
by the same Arbitration Agreement as Respondent’s
the Federal Arbitration Act (“FAA”) requires
courts to stay their own proceedings where the issues being
litigated are subject to an agreement to arbitrate, 9 U.S.C.
§ 3, “it does not specifically authorize federal
courts to stay proceedings pending in state courts.”
Ultracashmere House, Ltd. v. Meyer, 664 F.2d 1176,
1180 (11th Cir. 1981) (overruled on other grounds by
Baltin v. Alaron Trading Corp., 128 F.3d 1466 (11th Cir.
1997)). Therefore, the district court’s authority to
enjoin state-court proceedings is subject to the legal and
equitable standards for injunctions generally.
Anti-Injunction Act, 28 U.S.C. § 2283, establishes
“the general rule that courts of the United States
shall not enjoin proceedings in state courts.”
Merle Norman Cosmetics, Inc. v. Victa, 936 F.2d 466,
468 (9th Cir. 1991). However, the Act establishes three
specific exceptions to the general rule: A federal court may
enjoin state proceedings “only ‘as expressly
authorized by Act of Congress, or where necessary in aid of
its jurisdiction, or to protect or effectuate its
judgments.’ ” Id. (quoting the
Anti-Injunction Act). These exceptions to the Anti-Injunction
Act must be construed narrowly. Lou v. Belzberg, 834
F.2d 730, 739 (9th Cir. 1987); Atl. Coast Line R.R. Co.
v. Bhd. of Locomotive Eng’rs, 398 U.S. 281, 287
one of the three statutory exceptions applies, a federal
injunction restraining prosecution of a lawsuit in state
court is absolutely prohibited. Belzberg, 834 F.2d
at 739-40. Doubts as to the propriety of a federal injunction
against a state court proceeding should be resolved in favor
of permitting the state action to proceed. Id. at
739; Atl. Coast Line, 398 U.S. at 297. Furthermore,
the fact that an injunction may issue under the
Anti-Injunction Act does not mean that it must issue,
Blalock Eddy Ranch v. MCI Telecomms. Corp., 982 F.2d
371, 375 (9th Cir. 1992), and the decision whether to enjoin
a state court proceeding pursuant to the narrow exceptions in
the Anti-Injunction Act is committed to the discretion of the
district court. Bechtel Petroleum, Inc. v. Webster,
796 F.2d 252, 253 (9th Cir. 1986).
The Anti-Injunction Act Applies, Regardless of the Order of
parties are aware, Petitioners’ motion to enjoin was
filed prior to the filing of Mr. Souza’s claim in state
court. The Anti-Injunction Act only prohibits interference in
a “pending” state proceeding. Dombrowski v.
Pfister, 380 U.S. 479, 484 n.2 (1965). Circuit Courts
are in disagreement as to whether the Anti-Injunction Act
applies when the federal suit is filed first – i.e., if
a court considering whether a state action is
“pending” should look only at the time the motion
to enjoin was filed, or if it may consider subsequent
filings. The Ninth Circuit has not spoken on this issue.
Seventh, Eighth, and First Circuits have held that the
Anti-Injunction Act does not apply when the federal suit is
filed prior to the state suit; rather, courts should decide
whether a state court suit is pending at the “time when
the federal court’s injunctive powers are
invoked.” Barancik v. Inv’rs Funding
Corp., 489 F.2d 933, 936-37 (7th Cir. 1973); see
also Nat’l City Lines v. LLC Corp., 687 F.2d 1122,
1127 (8th Cir. 1982); Hyde Park Partners, L.P. v.
Connolly, 839 F.2d 837, 842 n.6 (1st Cir. 1988). The
general reasoning behind the Seventh, Eighth and First
Circuits’ holdings ...