United States District Court, N.D. California
CAROLE LEE GREENBERG, Individually and on Behalf of All Others Similarly Situated, Plaintiff,
SUNRUN INC., et al., Defendants.
ORDER DENYING MOTION TO STAY STATE-COURT
CHARLES R. BREYER UNITED STATES DISTRICT JUDGE.
earning the dismissal of this securities class action with
prejudice, Defendant Sunrun, Inc. (“Sunrun”)
moves to stay discovery in a parallel state court
action. Plaintiffs there have specially appeared
here to oppose. See Opp'n (dkt. 88) at 1.
the Private Securities Litigation Reform Act of 1995 (the
“PSLRA”), “all discovery” in a
securities class action filed in federal court “shall
be stayed during the pendency of any motion to dismiss,
” except under certain circumstances. 15 U.S.C. §
77z-1(b)(1). This automatic stay provision prevents
plaintiffs from, among other things, exploiting federal-court
discovery to force settlement. See SG Cowen Sec. Corp. v.
U.S. Dist. Ct., 189 F.3d 909, 911 (9th Cir. 1999). And
to prevent them from using state-court discovery to
circumvent the automatic stay, the Securities Litigation
Uniform Standards Act of 1998 (the “SLUSA”)
allows a federal court to “stay discovery proceedings
in any private action in a State court as necessary in aid of
its jurisdiction, or to protect or effectuate its judgments,
in an action subject to a stay of discovery pursuant to this
subsection.” 15 U.S.C. § 77z-1(b)(4). The problem
for Sunrun is that this action is no longer “subject to
a stay of discovery pursuant” to the PSLRA; the case
has been dismissed and judgment entered. See Order
on MTD (dkt. 79) at 14; Judgment (dkt. 80). So although the
Court has subject-matter jurisdiction to hear Sunrun's
motion,  it lacks the statutory authority to grant
the requested relief.
own cases confirm this understanding. Not one of them
contemplated-let alone imposed-a stay of state-court
discovery after the district court had entered judgment.
See, e.g., In re Dot Hill Systems Corp. Sec.
Lit., 594 F.Supp.2d 1150, 1168 (S.D. Cal. 2008)
(“The stay shall remain in effect until the Court
denies a future motion to dismiss . . . or grants the motion
to dismiss with prejudice.”); In re DPL Inc., Sec.
Lit., 247 F.Supp.2d 946, 951 (S.D. Ohio 2003)
(“Th[e] stay will remain in effect until the Court has
ruled upon a to-be-filed motion seeking dismissal of the
Plaintiffs' federal securities claims.”);
Moomjy v. HQ Sustainable Mar. Indus., Inc., 2011 WL
4048792, at *3 (W.D. Wash. Sept. 12, 2011) (“[T]he
Court grants defendants' motion to stay discovery in the
state court action . . . until after this Court has ruled on
defendants' anticipated motions to dismiss.”);
accord Newby v. Enron Corp., 338 F.3d 467, 476 n.4
(5th Cir. 2003) (praising district court's restraint in
“barring discovery in the state case only pending
decision on the” motion to dismiss).
requested relief is unprecedented in the most literal sense:
it appears that no federal court has ever granted it. The
Court therefore DENIES the instant motion without oral
argument pursuant to Local Rule 7-1(b). Whatever the wisdom
of staying discovery in state court pending appeal here, that
decision rests with the state court.
 The Court remanded that case to San
Mateo Superior Court last July. See Remand Order,
Pytel v. Sunrun et al., case no. 16-2566 (dkt. 27)
at 1. It concerns many of the same alleged violations of the
Securities Act of 1933 on behalf of the very same class.
Compare CAC (dkt. 56) ¶¶ 1, 81-8,
with State Court CAC (dkt. 88-3) ¶¶ 1,
34-35. What is more, two law firms involved there sought to
serve as co-lead counsel here. See Mot. to Appoint
Lead Plaintiff & Lead Counsel (dkts. 31 &
 State courts themselves often issue
protective orders to prevent such circumvention, which
somewhat obviates the need for a stay of state-court
discovery. See In re Gilead Sciences Sec. Lit., 2004
WL 3712008, at *3 (N.D. Cal. Nov. 22, 2004). The state court
here has done just that. See generally State-Court
Protective Order (dkt. 88-5).
 “Once a notice of appeal is
filed, the district court is divested of jurisdiction over
the matters being appealed.” Nat. Res. Def.
Council, Inc. v. Sw. Mar. Inc., 242 F.3d 1163, 1166 (9th
Cir. 2001). But where, as here, a motion leaves
“unchanged the core questions before” the Court
of Appeals, the district court is not necessarily barred from
considering it. Id. at 1167; see also Stein v.
Wood, 12 F.3d 1187, 1190 (9th Cir. 1997) (“A
district court may retain jurisdiction when it has a duty to