United States District Court, N.D. California
ORDER DENYING DEFENDANTS' MOTIONS FOR A STAY
PENDING APPEAL Re: Dkt. Nos. 203, 208
Jacqueline Scott Corley United States Magistrate Judge.
filed this putative class action against Pacific Fertility
Center (“Pacific Fertility”), Prelude Fertility,
Inc. (“Prelude”), and Chart Industries
(“Chart”) alleging various state law
claims. Pacific Fertility responded by moving to
compel arbitration based on the Plaintiffs' fertility
services agreement with Pacific Fertility. Prelude, Pacific
Fertility MSO, and Chart filed separate joinders likewise
moving to compel arbitration. After two rounds of briefing,
the Court granted Pacific Fertility's motion to compel
arbitration, but denied Prelude, Pacific Fertility MSO, and
Chart's motions to compel arbitration, and denied the
accompanying requests to stay proceedings pending
arbitration. (Dkt. No. 192.) Prelude, Pacific Fertility MSO,
and Chart have since appealed the denial of their motions to
compel arbitration and now move for a stay pending appeal.
(Dkt. Nos. 203 & 208.) Having considered the parties'
briefs and having had the benefit of oral argument on June
20, 2019, the Court DENIES the motions to stay. Defendants
have failed to demonstrate that their appeals raise serious
legal issues or that they face probable irreparable injury
absent a stay.
Fertility markets and sells egg and embryo cryopreservation
services. (Dkt. No. 196, First Amended Consolidated Amended
Class Action Complaint (“FAC”) at ¶
Cryopreservation involves preservation of tissue using
cooling techniques. (Id. at ¶ 1.) Plaintiffs
engaged Pacific Fertility's services to cryopreserve
their eggs and embryos between 2010 and 2016, and in doing
so, signed Informed Consent Agreements containing arbitration
clauses. (Id. at ¶ 4.) In 2017, unbeknownst to
Plaintiffs, Prelude took over operation of Pacific
Fertility's egg and embryo storage facilities through its
operating subsidiary Pacific MSO. (Id. at ¶ 5.)
Prelude operates a national network of egg and embryo
long-term freezer storage facilities. (Id.) On March
4, 2018, Prelude “discovered that the liquid nitrogen
levels in a tank known as ‘Tank 4' had dropped to
an unsafe level for an undetermined period of time,
destroying or jeopardizing the eggs and embryos stored in the
tank, including those belonging to Plaintiffs.”
(Id. at ¶ 6.) The at-issue tank was
manufactured by Chart. (Id. at ¶ 8.)
March 11, 2018, Plaintiffs were notified via email of
“‘a very unfortunate incident' in which the
storage tank containing Plaintiffs' cryopreserved eggs
and embryos ‘lost liquid nitrogen for a brief period of
time,' [and] that a ‘preliminary analysis'
suggested some of the eggs and embryos in the tank may have
been destroyed.” (Id. at ¶ 7.) Following
receipt of this email, Plaintiffs filed this putative class
action, which was later consolidated with two other actions
pending in the Northern District of California: Bauer, et
al. v. Pacific Fertility Center, et al., No.
3:18-cv-01634 (N.D. Cal. filed Mar. 15, 2018) and A.B.,
et al. v. Pacific Fertility Center, et al., No.
3:18-cv-02298 (N.D. Cal. Filed April 17, 2018). (Dkt. No.
17.) These actions are now known as the In re: Pacific
after the actions were consolidated, Pacific Fertility filed
a motion to compel arbitration in which Prelude and Chart
filed separate joinders. (Dkt. Nos. 52, 56, 67.) The motions
to compel arbitration first came before the Court for a
hearing on November 9, 2018. At that hearing, Plaintiffs
requested leave to amend their complaint to reflect
information learned through discovery. The Court granted
Plaintiffs' request and ordered the parties to file
supplemental briefing related to the motion to compel
arbitration. (Dkt. No. 133.) Plaintiff's FAC added
Pacific MSO, Prelude's subsidiary, as a defendant and
pleads the following 11 claims for relief: (1) negligence
and/or gross negligence as to Prelude and Pacific MSO; (2)
negligent failure to recall as to Chart; (3) bailment as to
Prelude and Pacific MSO; (4) premise liability as to Prelude
and Pacific MSO; (5) violation of California's Unfair
Competition Law (UCL), Cal. Bus. & Prof. Code §
17200 et seq. as to all Defendants; (6) violation of
California's Consumer Legal Remedies Act (CLRA), Cal.
Civ. Code § 1750 et seq. as to Pacific Fertility,
Prelude, and Pacific MSO; (7) fraudulent concealment as to
Pacific Fertility, Prelude, and Pacific MSO; (8) strict
products liability-failure to warn as to Chart; (9) strict
products liability-manufacturing defect as to Chart; (10)
strict products liability-design defect-consumer expectations
test as to Chart; and (11) strict products liability-design
defect-risk utility test as to Chart. (Dkt. No. 196.) The
Court thereafter granted multiple extensions of the briefing
schedule and ultimately, the motions to compel arbitration
came before the Court for a second hearing on March 12, 2019.
(Dkt. Nos. 149, 162, 178.)
March 25, 2019, the Court issued its Order granting Pacific
Fertility's motion to compel arbitration, but denying
Prelude, Pacific Fertility MSO, and Chart's joinders, as
well as their motions to stay proceedings pending arbitration
of the claims against Pacific Fertility. (Dkt. No. 192.) A
month later, Prelude, Pacific Fertility MSO, and Chart filed
notices of appeal and the underlying motions to stay pending
appeal. (Dkt. Nos. 201, 202, 204, 208.) The following day,
the parties appeared for a Further Case Management Conference
where the Court set a briefing schedule on the motion to
stay, and a schedule for the rest of the action with a
deadline of January 16, 2020 for hearing Plaintiffs'
class certification motion and a trial date of September 8,
2020. (Dkt. No. 206.) The Court also lifted the stay of
discovery and is presently actively engaged in overseeing
district court's order denying a motion to compel
arbitration does not automatically result in a mandatory stay
of proceedings pending appeal of that order. See Britton
v. Co-op Banking Group, 916 F.2d 1405, 1412 (9th Cir.
1990). A stay pending appeal is a matter of judicial
discretion, not of right. Lair v. Bullock, 697 F.3d
1200, 1203 (9th Cir. 2012) (citing Nken v.
Holder, 556 U.S. 418, 433 (2009)). “The party
requesting a stay bears the burden of showing that the
circumstances justify an exercise of [the Court's]
discretion.” Nken, 556 U.S. at 433.
deciding whether to exercise that discretion, courts consider
the following factors:
(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.
Id. (citation omitted). 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). In particular, a moving party who under
the first factor cannot satisfy a strong likelihood of
success, must at minimum show that its appeal presents
“a substantial case on the merits.” Id.
at 966. Courts alternatively articulate this lesser threshold
as whether “serious legal issues” are raised.
See Abbassi v. INS, 143 F.3d 513, 514 (9th Cir.
1998). “[A] party satisfying this lower threshold under
the first Nken factor must [also] demonstrate that
the balance of hardships under the second and third factors
tilts sharply in its favor.” Jimenez v. Menzies
Aviation Inc, No. 15-CV-02392-WHO, 2015 WL 5591722, at
*2 (N.D. Cal. Sept. 23, 2015) (internal citation and
quotation marks omitted).
and Chart advance similar arguments in favor of a
stay. Both insist that their appeals raise
serious legal issues and that they would face irreparable
harm if proceedings were ...