United States District Court, N.D. California
ORDER GRANTING DEFENDANT'S MOTION TO STAY PENDING
Jeffrey S. White, United States District Judge
before the Court for consideration is the motion to stay
filed by Defendants Comcast Corporation; Comcast Cable
Communications Management, LLC; and Comcast Cable
Communications, LLC (“Defendants”). The Court has
considered the parties' papers, relevant legal authority,
and the record in this case, and the Court finds the motion
suitable for disposition without oral argument. See
N.D. Civ. L.R. 7-1(b). Accordingly, the Court VACATES the
hearing currently set for December 8, 2017. For the reasons
set forth below, the Court HEREBY GRANTS Defendants'
motion to stay.
2017, Plaintiff filed this action in California state court
alleging that Defendants violated California Penal Code
Section 632.7, which prohibits the recording of telephone
conversations without all parties' consent. After
removal, Defendants moved to stay this action and to compel
arbitration pursuant to an arbitration provision contained in
Defendants' Residential Subscriber Agreement. On October
5, 2017, the Court denied Defendants' motion to compel
arbitration. Defendants filed a timely notice of appeal of
this order, and now seek to have this case stayed pending the
outcome of that appeal.
Court considers the following four factors in determining
whether to issue a stay a case pending appeal: “(1)
whether the stay applicant has made a strong showing that he
is likely to succeed on the merits; (2) whether the applicant
will be irreparably injured absent a stay; (3) whether
issuance of the stay will substantially injure the other
parties interested in the proceeding; and (4) where the
public interest lies.” Leiva-Perez v. Holder,
640 F.3d 962, 964 (9th Cir. 2011) (quoting Niken v.
Holder, 556 U.S. 418, 434 (2009)). These factors are
examined on a flexible “continuum, ” which is
“essentially the same thing as the ‘sliding
scale' approach” applied to requests for
preliminary injunctions. Id. at 964-66. Accordingly,
“the elements . . . are balanced, so that a stronger
showing of one element may offset a weaker showing of
another.” Id. at 964.
first factor, Defendants need not show that it is “more
likely than not” that they will prevail on appeal.
Rather, Defendants must show that they have a
“substantial case for relief on the merits, ”
which the Ninth Circuit has variously defined as a
“reasonable probability, ” a “fair
prospect, ” or that “serious legal questions are
raised.” Id. at 967-68. The Court finds that
Defendants have raised “serious legal questions”
regarding whether its Residential Subscriber Agreement
unambiguously delegates questions of arbitrability to the
Court also finds that Defendants would be irreparably injured
if the Court did not stay this action pending appeal. When a
party is denied the opportunity to arbitrate and is required
to incur the expense and delay of trial before being able to
appeal, “the advantages of arbitration- speed and
economy-are lost forever.” Alascom, Inc. v. ITT
North Elec. Co., 727 F.2d 1419, 1422 (9th Cir. 1984).
The Ninth Circuit has found that “this consequence
‘serious, perhaps, irreparable.'”
Id.; see also Ali v. JP Morgan Chase Bank,
No. 13-cv-01184-JSW, 2014 WL 12691084, at *1 (N.D. Cal. Mar.
10, 2014) (“If the litigation proceeded to trial, and
then the Ninth Circuit reversed this Court's order
denying arbitration, then the benefits of arbitration would
have been lost.”). The Court also notes that Plaintiff
has brought this case as a class action, thus increasing the
expense Defendants will incur. See, e.g.,
Richards v. Ernst & Young LLP, No.
08-cv-04988-RMW, 2012 WL 92738, at *3 (N.D. Cal. Jan. 11,
2012); see also Smith v. Legal Helpers Debt Resolution,
LLC, No. 11-cv-5054-RJB, 2012 WL 12863172, at *2 (W.D.
Wash. Apr. 24, 2012).
Court next finds that granting Defendants' motion to stay
will not substantially injure Plaintiff (or the putative
class he seeks to represent). Plaintiff contends that because
of the length of time it will take the Ninth Circuit to
resolve Defendants' appeal, there is a “likelihood
that witnesses will forget key facts and documentary evidence
will be lost.” (Dkt. No. 32, at 13.) This, however, can
be said in any case where a party seeks a stay. Plaintiff has
not pointed to any specific witness or documentary evidence
in this case that is at risk of being lost. See Ali,
2014 WL 12691084, at *1.
the Court finds that the public interest is in equipoise. On
one hand, courts have “found that the federal policy
favoring arbitration embodied in the FAA and the economical
use of judicial resources lead the public interest to favor a
stay, even when other interests are at play.”
Antonelli v. Finish Line, Inc., No.11-cv-3874-EJD,
2012 WL 2499930, at *3 (N.D. Cal. June 27, 2012). On the
other hand, this case involves the alleged surreptitious
recording of communications in violation of California law.
The Court therefore finds that there is an equally strong
countervailing public interest in seeing California's
privacy laws enforced. Cf. Covillo v. Specialty's
Cafe, No. 11-cv-0594-DMR, 2012 WL 4953085, at *5 (N.D.
Cal. Oct. 17, 2012) (“[T]he existence of a federal
public policy does not necessarily mean that a stay is always
in the public interest, particularly given California's
own public policy interests in enforcing worker
the Court concludes that a stay is warranted pending the
outcome of Defendants' appeal.
foregoing reasons, the Court GRANTS Defendants' motion
for a stay pending the appeal of the Court's order
parties are ORDERED to submit a joint status report to the
Court within 14 days of the Ninth Circuit issuing ...