Carly E. Simon v. Starbucks Corporation, No. 2:2009cv09074 - Document 10 (C.D. Cal. 2009)

Court Description: NOTICE OF MOTION AND MOTION to Stay Case pending Decision by the United States Supreme Court on a Controlling Issue of Law filed by Defendant Starbucks Corporation. Motion set for hearing on 1/7/2010 at 08:30 AM before Judge George H Wu. (Attachments: # 1 Proposed Order Proposed Order on Motion to Stay)(Kapur, Theane)

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Case 2:09-cv-09074-GW-PLA Document 10 1 2 3 4 Filed 12/14/09 Page 1 of 14 GIBSON, DUNN & CRUTCHER LLP ORIN SNYDER (Pro Hac Vice Application Pending) osnyder@gibsondunn.com 200 Park Avenue, 47th Floor New York, New York 10166-0193 Telephone: (212) 351-4000 Facsimile: (212) 351-4035 5 6 7 8 9 10 THEANE EVANGELIS KAPUR, SBN 243570 tkapur@gibsondunn.com KATIE TOWNSEND, SBN 254321 ktownsend@gibsondunn.com 333 South Grand Avenue Los Angeles, California 90071-3197 Telephone: (213) 229-7000 Facsimile: (213) 229-7520 Attorneys for Defendant, Starbucks Corporation 11 12 UNITED STATES DISTRICT COURT 13 CENTRAL DISTRICT OF CALIFORNIA 14 WESTERN DIVISION 15 16 CARLY E. SIMON, 17 Plaintiff, 18 v. 19 STARBUCKS CORPORATION, 20 Defendant. 21 22 23 24 25 CASE NO. CV09-09074 GW (PLAx) DEFENDANT STARBUCKS CORPORATION S NOTICE OF MOTION AND MOTION TO STAY PENDING DECISION BY THE UNITED STATES SUPREME COURT ON A CONTROLLING ISSUE OF LAW; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT [Request for Judicial Notice Filed Concurrently] Date: Time: Place: Judge: January 7, 2010 8:30 a.m. Courtroom 10 Hon. George H. Wu 26 27 28 Gibson, Dunn & Crutcher LLP DEFENDANT STARBUCKS CORPORATION S NOTICE OF MOTION AND MOTION TO STAY PENDING DECISION BY THE UNITED STATES SUPREME COURT ON A CONTROLLING ISSUE OF LAW; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT Case 2:09-cv-09074-GW-PLA Document 10 Filed 12/14/09 Page 2 of 14 1 TO THE CLERK OF THE ABOVE-ENTITLED COURT AND TO PLAINTIFF AND 2 HER COUNSEL OF RECORD: 3 PLEASE TAKE NOTICE that on January 7, 2010, at 8:30 a.m., or as soon 4 thereafter as the matter may be heard before the Honorable George H. Wu, United 5 States District Judge, in Courtroom 10 of the United States District Court, Central 6 District of California, Western Division, Defendant Starbucks Corporation 7 ( Starbucks ) will move this Court for an Order staying further proceedings in this 8 case. 9 By this Motion, Starbucks seeks the following relief: an Order temporarily 10 staying further proceedings pending controlling guidance from the United States 11 Supreme Court as to this Court s jurisdiction over this action under 28 U.S.C. §§ 1332 12 and 1441. 13 This Motion is based upon this Notice of Motion and Motion, the Memorandum 14 of Points and Authorities, the papers on file in this case, all facts of which judicial 15 notice may be taken, any oral argument that may be heard by the Court, and any other 16 matters that the Court deems appropriate. 17 This Motion is made following the conference of counsel pursuant to L.R. 7-3, 18 which took place on November 23, 2009. 19 DATED: December 14, 2009 20 21 Theane Evangelis Kapur GIBSON, DUNN & CRUTCHER LLP 22 23 By: 24 Theane Evangelis Kapur Attorneys for Defendant Starbucks Corporation 25 26 27 28 Gibson, Dunn & Crutcher LLP DEFENDANT STARBUCKS CORPORATION S NOTICE OF MOTION AND MOTION TO STAY PENDING DECISION BY THE UNITED STATES SUPREME COURT ON A CONTROLLING ISSUE OF LAW; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT Case 2:09-cv-09074-GW-PLA Document 10 Filed 12/14/09 Page 3 of 14 TABLE OF CONTENTS 1 Page 2 3 I. INTRODUCTION .................................................................................................... 1 4 II. ARGUMENT........................................................................................................... 1 5 A. The Ninth Circuit s Test For Determining A Corporation s Principal Place of Business Is An Outlier Among The Courts Of Appeals...................................................................................................... 2 B. The Supreme Court s Decision In Hertz Will Directly Impact This Court s Jurisdiction Over This Case ......................................................... 3 C. This Court Should Exercise Its Inherent Authority To Stay These Proceedings Pending A Decision In Hertz................................................ 6 6 7 8 9 10 III. CONCLUSION...................................................................................................... 8 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Gibson, Dunn & Crutcher LLP i DEFENDANT STARBUCKS CORPORATION S NOTICE OF MOTION AND MOTION TO STAY PENDING DECISION BY THE UNITED STATES SUPREME COURT ON A CONTROLLING ISSUE OF LAW; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT Case 2:09-cv-09074-GW-PLA Document 10 1 TABLE OF AUTHORITIES Page(s) 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Gibson, Dunn & Crutcher LLP Filed 12/14/09 Page 4 of 14 Cases Beck v. Starbucks Corporation, C-08-2930 MMC, 2008 U.S. Dist. LEXIS 111053 (N.D. Cal. Sept. 19, 2008) .......................................................................................................................... 4 Capitol Indem. Corp. v. Russellville Steel Co., 367 F.3d 831 (8th Cir. 2004) ..................................................................................... 3 CMAX, Inc. v. Hall, 300 F.2d 265 (9th Cir. 1962) ..................................................................................... 8 Davis v. HSBC Bank, 557 F.3d 1026 (9th Cir. 2009) ............................................................................... 2, 3 Demshki v. Monteith, 255 F.3d 986 (9th Cir. 2001) ..................................................................................... 6 Dresser Indus. v. Underwriters at Lloyd s of London, 106 F.3d 494 (3d Cir. 1997) ...................................................................................... 8 Espinoza v. County of Fresno, 2009 U.S. Dist. LEXIS 58025 (E.D. Cal. June 18, 2009) ......................................... 7 Friend v. Hertz Corp., 297 Fed. Appx. 690 (9th Cir. 2008) ......................................................................... 4 Gadlin v. Sybron Int l Corp., 222 F.3d 797 (10th Cir. 2000) ................................................................................... 3 Gafford v. General Elec. Co., 997 F.2d 150 (6th Cir. 1993) ..................................................................................... 3 Hertz Corp. v. Friend, 08-1107 (U.S. cert. granted June 8, 2009)................................................................. 1 Hertz Corp. v. Friend, 129 S. Ct. 2766, 174 L. Ed. 2d 269 (2009)................................................................ 4 J.A. Olson Co. v. Winona, 818 F.2d 401 (5th Cir. 1987) ..................................................................................... 3 Kelly v. United States Steel Corp., 284 F.2d 850 (3d Cir. 1960) ...................................................................................... 3 Landis v. N. Am. Co., 299 U.S. 248, 57 S. Ct. 163, 81 L. Ed. 153 (1936) ................................................... 6 Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d 857 (9th Cir. 1979) ................................................................................. 6, 8 Lockyer v. Mirant Corp., 398 F.3d 1098 (9th Cir. 2005) ............................................................................... 6, 7 MacGinnitie v. Hobbs Group, LLC, 420 F.3d 1234 (11th Cir. 2005) ................................................................................. 3 Mbalati v. Starbucks Corporation, CV 07-3267 RGK (FFMx) (C.D. Cal. June 12, 2007) .............................................. 5 ii DEFENDANT STARBUCKS CORPORATION S NOTICE OF MOTION AND MOTION TO STAY PENDING DECISION BY THE UNITED STATES SUPREME COURT ON A CONTROLLING ISSUE OF LAW; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT Case 2:09-cv-09074-GW-PLA Document 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Filed 12/14/09 Page 5 of 14 Metro. Life Ins. Co. v. Estate of Cammon, 929 F.2d 1220, 1223 (7th Cir. 1991) ......................................................................... 3 Nordyke v. King, 563 F.3d 439 (9th Cir. 2009) ..................................................................................... 7 Ortega v. J.B. Hunt Transp., Inc., 258 F.R.D. 361 (C.D. Cal. 2009)............................................................................... 8 Pena v. Cid, 2009 U.S. Dist. LEXIS 92605 (E.D. Cal. Oct. 2, 2009)............................................ 7 Pratt Cent. Park Ltd. Partnership v. Dames & Moore, 60 F.3d 350 (7th Cir. 1995) ....................................................................................... 6 San Diego Padres Baseball P ship v. United States, 2000 U.S. Dist. LEXIS 10987 (S.D. Cal. July 12, 2000) .......................................... 6 Tosco Corp. v. Cmtys. for a Better Env t, 236 F.3d 495 (9th Cir. 2001) ................................................................................. 2, 4 Statutes 28 U.S.C. § 1332..................................................................................................... 1, 4, 8 28 U.S.C. § 1332(a) ........................................................................................................ 2 28 U.S.C. § 1332(c) ................................................................................................ 1, 2, 4 28 U.S.C. § 1441......................................................................................................... 1, 8 28 U.S.C. § 1441(a) ........................................................................................................ 2 28 U.S.C. § 1441(b) ........................................................................................................ 2 28 U.S.C. § 1446(d) ........................................................................................................ 6 28 U.S.C. § 1447(d) ........................................................................................................ 8 17 18 19 20 21 22 23 24 25 26 27 28 Gibson, Dunn & Crutcher LLP iii Case 2:09-cv-09074-GW-PLA Document 10 Filed 12/14/09 Page 6 of 14 MEMORANDUM OF POINTS AND AUTHORITIES 1 2 By this Motion, Defendant Starbucks seeks a temporary stay of all proceedings 3 in this case pending controlling guidance from the United States Supreme Court as to 4 this Court s proper exercise of jurisdiction over this action under 28 U.S.C. §§ 1332 5 and 1441. I. INTRODUCTION 6 7 On October 9, 2009, Plaintiff Carly E. Simon ( Simon or Plaintiff ), a citizen 8 of Massachusetts (Cmplt. at ¶ 2), filed this action against Defendant Starbucks in Los 9 Angeles Superior Court. On December 10, 2009, Starbucks, a corporation both 10 incorporated and headquartered in the State of Washington, timely removed this action 11 on the basis of diversity pursuant to 28 U.S.C. §§ 1332 and 1441. 12 Currently pending before the United States Supreme Court is Hertz Corporation 13 v. Friend, 08-1107 (U.S. cert. granted June 8, 2009) ( Hertz ), which is expected to 14 clarify the proper test for determining a corporation s principal place of business, 15 and thus its citizenship, for purposes of federal diversity jurisdiction under 28 U.S.C. § 16 1332. The outcome of Hertz likely will have a direct and potentially dispositive 17 impact on this Court s jurisdiction over this action under 28 U.S.C. §§ 1332 and 1441. 18 Considerations of fairness, efficiency, and sound judicial administration therefore 19 militate strongly in favor of staying these proceedings until the Supreme Court renders 20 a decision in Hertz. 21 22 II. ARGUMENT This Court has jurisdiction over this action because Starbucks is incorporated in 23 the State of Washington and its principal place of business is also in the State of 24 Washington. 28 U.S.C. § 1332(c). Under the Ninth Circuit s test for determining a 25 corporation s principal place of business, however, federal district courts in California 26 have reached conflicting decisions regarding Starbucks citizenship. The Supreme 27 Court currently is considering the proper interpretation of principal place of business 28 Gibson, Dunn & Crutcher LLP 1 DEFENDANT STARBUCKS CORPORATION S NOTICE OF MOTION AND MOTION TO STAY PENDING DECISION BY THE UNITED STATES SUPREME COURT ON A CONTROLLING ISSUE OF LAW; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT Case 2:09-cv-09074-GW-PLA Document 10 Filed 12/14/09 Page 7 of 14 1 in Hertz, and it is expected to adopt a test that is different from the operative test in the 2 Ninth Circuit. As a result, this Court should stay this case pending Hertz because that 3 decision will directly impact this Court s jurisdiction. 4 A. The Ninth Circuit s Test For Determining A Corporation s Principal Place 5 of Business Is An Outlier Among The Courts Of Appeals 6 As a general rule, any civil action brought in a State court of which the district 7 courts of the United States have original jurisdiction, may be removed by the 8 defendant [], to federal district court. 28 U.S.C. § 1441(a). Pursuant to 28 U.S.C. § 9 1332(a), federal district courts have original jurisdiction over civil actions where the 10 matter in controversy exceeds the sum or value of $75,000, exclusive of interest and 11 costs, and there is diversity of citizenship. Thus, such actions are removable by a 12 defendant if filed in state court, provided that none of the parties in interest properly 13 joined and served as defendants is a citizen of the State in which such action is 14 brought. 28 U.S.C. § 1441(b). A corporation, for purposes of federal diversity 15 jurisdiction, is deemed a citizen of (1) the state under whose laws it is organized or 16 incorporated; and (2) the state of its principal place of business. 28 U.S.C. § 17 1332(c). 18 19 In the Ninth Circuit, two tests are used to determine a corporation s principal place of business. Davis v. HSBC Bank, 557 F.3d 1026, 1028 (9th Cir. 2009). 23 First, we apply the place of operations test. Under that test, a corporation s principal place of business is the state containing a substantial predominance of corporate operations. If no state contains a substantial predominance of corporate operations, we apply the nerve center test, which locates the corporation s principal place of business in the state where the majority of its executive and administrative functions are performed. 24 Id. (quoting Tosco Corp. v. Cmtys. for a Better Env t, 236 F.3d 495, 500 (9th Cir. 25 2001)). 20 21 22 26 27 28 Gibson, Dunn & Crutcher LLP The primary test currently applied by the Ninth Circuit in this context the substantial predominance or place of operations test requires a comparison of 2 DEFENDANT STARBUCKS CORPORATION S NOTICE OF MOTION AND MOTION TO STAY PENDING DECISION BY THE UNITED STATES SUPREME COURT ON A CONTROLLING ISSUE OF LAW; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT Case 2:09-cv-09074-GW-PLA Document 10 Filed 12/14/09 Page 8 of 14 1 [the] corporation s business activity in the state at issue to its business activity in other 2 individual states. Davis, 557 F.3d at 1028 29. Under this test, courts employ a 3 number of factors to determine if a given state contains a substantial predominance of 4 corporate activity, including the location of employees, tangible property, production 5 activities, sources of income, and where sales take place. Id. The location of the 6 corporation s executive headquarters, or nerve center, however, is taken into account 7 only if the place of operations test proves inconclusive. The Courts of Appeals are in conflict on the appropriate test for determining a 8 9 corporation s principal place of business. No other circuit follows the Ninth 10 Circuit s two tests approach, and the majority of circuits give weight, at the outset, to 11 the location of a corporation s headquarters.1 For example, the Seventh Circuit looks 12 exclusively to the location of a corporation s headquarters when determining its 13 principle place of business for purposes of federal diversity jurisdiction. See Metro. 14 Life Ins. Co. v. Estate of Cammon, 929 F.2d 1220, 1223 (7th Cir. 1991) ( a corporation 15 has a single principal place of business where its executive headquarters are located ). 16 B. The Supreme Court s Decision In Hertz Will Directly Impact This Court s 17 Jurisdiction Over This Case 18 The validity of the Ninth Circuit s complicated and somewhat counterintuitive 19 approach to determining a corporation s principal place of business is currently 20 under review by the Supreme Court. In Friend v. Hertz Corp., 297 Fed. Appx. 690, 21 22 1 23 24 25 26 27 28 Gibson, Dunn & Crutcher LLP See, e.g., MacGinnitie v. Hobbs Group, LLC, 420 F.3d 1234, 1239 (11th Cir. 2005); Capitol Indem. Corp. v. Russellville Steel Co., 367 F.3d 831, 836 (8th Cir. 2004); Gadlin v. Sybron Int l Corp., 222 F.3d 797, 799 800 (10th Cir. 2000); J.A. Olson Co. v. Winona, 818 F.2d 401, 409 10 (5th Cir. 1987) ( the principal place of business of a far-flung corporation will generally be its nerve center ); Gafford v. General Elec. Co., 997 F.2d 150, 162 (6th Cir. 1993) ( Where the bulk of a corporation s business is dispersed over several states, the corporation s headquarters assumes more significance as the compelling factor in the principal place of business test. ); Kelly v. United States Steel Corp., 284 F.2d 850, 854 (3d Cir. 1960). 3 DEFENDANT STARBUCKS CORPORATION S NOTICE OF MOTION AND MOTION TO STAY PENDING DECISION BY THE UNITED STATES SUPREME COURT ON A CONTROLLING ISSUE OF LAW; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT Case 2:09-cv-09074-GW-PLA Document 10 Filed 12/14/09 Page 9 of 14 1 691 (9th Cir. 2008), the Ninth Circuit, applying the place of operations test, affirmed 2 a district court s determination that, for purposes of federal diversity jurisdiction, Hertz 3 Corporation ( Hertz ) is a citizen of the State of California. Although Hertz is 4 incorporated in Delaware and maintains its corporate headquarters in New Jersey, the 5 Ninth Circuit held that the district court had correctly applied the place of operations 6 test to determine Hertz s principal place of business, and properly concluded that 7 because Hertz s relevant business activities are significantly larger in California 8 than in the next largest state, Florida, California contains a substantial predominance 9 of Hertz s operations, and is thus Hertz s principal place of business. Id. at 691 10 11 (quoting Tosco Corp., 236 F.3d at 500). Hertz filed a petition for writ of certiorari in the Supreme Court presenting the 12 question: Whether, for purposes of determining principal place of business for 13 diversity jurisdiction citizenship under 28 U.S.C. § 1332, a court can disregard the 14 location of a nationwide corporation s headquarters. The Court granted review on 15 June 8, 2009 (Hertz Corp. v. Friend, 129 S. Ct. 2766; 174 L. Ed. 2d 269 (2009)), and 16 heard oral argument on November 10, 2009. 17 Plaintiff s suit against Starbucks presents the identical question currently being 18 considered by the Supreme Court in Hertz: whether the location of Starbucks 19 corporate headquarters, or nerve center Washington must be taken into account 20 in determining Starbucks citizenship under 28 U.S.C. § 1332. Hertz necessarily will 21 have a direct impact on this case because the district courts in the Ninth Circuit have 22 rendered conflicting decisions regarding Starbucks principal place of business under 23 28 U.S.C. § 1332(c). At least one federal district court in California has determined 24 that Starbucks is a citizen of Washington. See Beck v. Starbucks Corporation, C-08- 25 2930 MMC, 2008 U.S. Dist. LEXIS 111053, at *1 (N.D. Cal. Sept. 19, 2008) (noting 26 that in its Notice [of Removal], Starbucks alleges sufficient facts to support a finding 27 that Starbucks is a citizen of Washington for diversity purposes). (Request for 28 Gibson, Dunn & Crutcher LLP 4 DEFENDANT STARBUCKS CORPORATION S NOTICE OF MOTION AND MOTION TO STAY PENDING DECISION BY THE UNITED STATES SUPREME COURT ON A CONTROLLING ISSUE OF LAW; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT Case 2:09-cv-09074-GW-PLA Document 10 Filed 12/14/09 Page 10 of 14 1 Judicial Notice ( RJN ), Ex. A.) However, one district court in California has ruled 2 that, under the Ninth Circuit s current place of operations test, Starbucks principal 3 place of business is in California a ruling that directly conflicts with Beck. Despite 4 the fact that Starbucks, like Hertz, is neither incorporated in nor headquartered in 5 California, the district court in Mbalati v. Starbucks Corporation, CV 07-3267 RGK 6 (FFMx) (C.D. Cal. June 12, 2007), concluded that Starbucks is a citizen of California 7 because the overall predominance of [Starbucks ] business activity occurs in 8 California. (RJN, Ex. B.) 9 Because Starbucks is incorporated and headquartered in Washington, this Court 10 has jurisdiction over this case. However, the Supreme Court s decision in Hertz will, 11 at the very least, provide this Court with substantial guidance as to the proper test for 12 diversity jurisdiction in this case and likely will resolve the conflict among the federal 13 district courts in California on this issue. Indeed, the Justices appeared to acknowledge 14 as much during oral argument in Hertz on November 10, 2009: 15 16 17 18 19 20 CHIEF JUSTICE ROBERTS: Where is under the Ninth Circuit test, where is what is the principal place of business of Starbucks? [COUNSEL] MR. SCHNEIDER: Under the Ninth Circuit test, the principal place of Starbucks, there is a case that says Starbucks is in California. Let me give you, Mr. Chief Justice JUSTICE SCALIA: That s a surprise. (Laughter). 21 (RJN, Ex. C at 44:15 22; id. at 44:15 46:4.) And it is widely believed in the legal 22 trade press that the Supreme Court will reject the Ninth Circuit s amorphous test in 23 favor of a test that weighs a corporation s headquarters heavily in determining its 24 principal place of business. (See RJN, Ex. D (Tony Mauro, Justices Sympathetic to 25 Applying Headquarters Standard to Corporate Jurisdiction, LAW.COM (Nov. 11, 26 2009).) 27 28 Gibson, Dunn & Crutcher LLP 5 DEFENDANT STARBUCKS CORPORATION S NOTICE OF MOTION AND MOTION TO STAY PENDING DECISION BY THE UNITED STATES SUPREME COURT ON A CONTROLLING ISSUE OF LAW; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT Case 2:09-cv-09074-GW-PLA Document 10 1 C. Filed 12/14/09 Page 11 of 14 This Court Should Exercise Its Inherent Authority To Stay These 2 Proceedings Pending A Decision In Hertz 3 Courts have inherent authority to stay proceedings before them. Landis v. N. 4 Am. Co., 299 U.S. 248, 254; 57 S. Ct. 163, 166; 81 L. Ed. 153, 158 (1936) ( [T]he 5 power to stay proceedings is incidental to the power inherent in every court to control 6 the disposition of the causes on its docket with economy of time and effort for itself, 7 for counsel, and for litigants. ).2 Pursuant to that authority, [a] trial court may, with 8 propriety, find it is efficient for its own docket and the fairest course for the parties to 9 enter a stay of an action before it, pending resolution of independent proceedings 10 which bear upon the case. 3 Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 11 863 64 (9th Cir. 1979); see also Demshki v. Monteith, 255 F.3d 986, 988 (9th Cir. 12 2001); San Diego Padres Baseball P ship v. United States, 2000 U.S. Dist. LEXIS 13 10987, at *1 (S.D. Cal. July 12, 2000) (staying proceedings before it pending 14 resolution of another matter [that] will have a direct impact on the issues before the 15 court). In Lockyer v. Mirant Corp., the Ninth Circuit explained that the competing 16 17 interests which will be affected by the granting or refusal to grant a stay must be 18 weighed in evaluating the propriety of stay. 398 F.3d 1098, 1110 (9th Cir. 2005) 19 (internal citation omitted). Those competing interests include: (1) the hardship or 20 inequity which a party may suffer in being required to go forward, and (2) the 21 22 2 Of course, this Court has jurisdiction over this matter to determine whether it has jurisdiction. See 28 U.S.C. § 1446(d); see also Pratt Cent. Park Ltd. Partnership v. Dames & Moore, 60 F.3d 350 (7th Cir. 1995) (noting that a judge may take evidence and resolve conflicts to decide the citizenship of the parties when determining whether there is a sound basis for federal diversity jurisdiction). 3 A court s determination regarding whether or not a stay in a given case is appropriate pending resolution of independent proceedings is not dependant on the parties involved. See Landis, 299 U.S. at 256 (rejecting as too mechanical and narrow the view that a court may not stay proceedings pending the outcome of a controversy to which the litigants before it are strangers). 23 24 25 26 27 28 Gibson, Dunn & Crutcher LLP 6 DEFENDANT STARBUCKS CORPORATION S NOTICE OF MOTION AND MOTION TO STAY PENDING DECISION BY THE UNITED STATES SUPREME COURT ON A CONTROLLING ISSUE OF LAW; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT Case 2:09-cv-09074-GW-PLA Document 10 Filed 12/14/09 Page 12 of 14 1 orderly course of justice measured in terms of the simplifying or complicating of 2 issues, proof, and questions of law which could be expected to result from a stay. Id. 3 District courts frequently find that these considerations weigh in favor of a stay 4 of proceedings when, as is the case here, an action pending before an appellate court is 5 expected to provide controlling authority or significant guidance on a key issue of law 6 in the case pending before the district court. For example, in Pena v. Cid, the district 7 court stayed proceedings before it pending an en banc decision by the Ninth Circuit 8 that was expected to address issues broad in scope and material to the case brought by 9 plaintiffs. 2009 U.S. Dist. LEXIS 92605, *3-6 (E.D. Cal. Oct. 2, 2009). The district 10 court concluded that Pena, which arose out of the plaintiffs Second Amendment 11 challenge to the constitutionality of California s Handgun Roster Scheme should be 12 stayed pending the Ninth Circuit s en banc review of its decision in Nordyke v. King, 13 563 F.3d 439 (9th Cir. 2009), which held that the Due Process Clause of the 14 Fourteenth Amendment incorporates the Second Amendment. The district court in 15 Pena noted that a foundational issue in both Nordyke and in this case is whether the 16 Second Amendment is incorporated and thus, applicable to state and local 17 governments. . . . Further, the en banc decision in Nordyke will . . . almost certainly 18 provide crucial direction to the court in its analysis of the firearms regulation in this 19 case. Id. at *6. See also Espinoza v. County of Fresno, 2009 U.S. Dist. LEXIS 20 58025, *2-4 (E.D. Cal. June 18, 2009) (staying proceedings pending decisions by the 21 Ninth Circuit in two cases presenting issues indispensable to a well-reasoned analysis 22 of the present litigation, because a short delay would promote judicial economy, 23 provide guidance to the district courts, and avoid unnecessary costs and fees ). 24 In sum, where, as here, another court s resolution of a legal issue will have a 25 significant impact on the course of [the] litigation, a stay will serve the interests of the 26 parties and the orderly course of justice measured in terms of the simplifying . . . of 27 issues, proof, and questions of law which could be expected to result from a stay. 28 Gibson, Dunn & Crutcher LLP 7 DEFENDANT STARBUCKS CORPORATION S NOTICE OF MOTION AND MOTION TO STAY PENDING DECISION BY THE UNITED STATES SUPREME COURT ON A CONTROLLING ISSUE OF LAW; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT Case 2:09-cv-09074-GW-PLA Document 10 Filed 12/14/09 Page 13 of 14 1 Ortega v. J.B. Hunt Transp., Inc., 258 F.R.D. 361, 371 (C.D. Cal. 2009) (staying 2 proceedings pending decision by the California Supreme Court on interpretation of 3 state law at issue). Hertz almost certainly will result in controlling precedent regarding this Court s 4 5 jurisdiction over this action pursuant to 28 U.S.C. §§ 1332 and 1441. Moreover, the 6 prejudice to Starbucks is great if this case is remanded to state court under an 7 erroneous interpretation of the controlling statutes, thereby depriving Starbucks of its 8 right to a federal forum,4 with no ability to appeal. 28 U.S.C. § 1447(d). In addition, 9 because a decision in Hertz is likely to be reached in a reasonable period of time, a stay 10 of these proceedings pending that ruling likely will be brief, and Plaintiff will not 11 suffer any hardship as a result of delay. See Leyva, 593 F.2d at 864 (a stay is 12 appropriate where it is likely the other proceedings will be concluded within a 13 reasonable time in relation to the urgency of the claims presented in this court ). This 14 is especially true given that Plaintiff s Complaint seeks only money damages not 15 injunctive relief. See CMAX, Inc. v. Hall, 300 F.2d 265, 268-69 (9th Cir. 1962) (noting 16 that a delay in trial would only delay recovery in money damages and, therefore, the 17 party opposing the stay had not made a strong showing that it would suffer harm as a 18 result of a stay). On balance, these factors weigh heavily in favor of staying these 19 proceedings pending a decision in Hertz. 20 III. CONCLUSION 21 Whether this Court has jurisdiction over this action pursuant to 28 U.S.C. 22 §§ 1332 and 1441 is a fundamental issue that must be addressed by this Court, and the 23 Supreme Court s decision in Hertz will create controlling precedent regarding that 24 25 4 26 27 28 Gibson, Dunn & Crutcher LLP See Dresser Indus. v. Underwriters at Lloyd s of London, 106 F.3d 494, 499 (3d Cir. 1997) ( the generally accepted view [is] that diversity jurisdiction was established to provide access to a competent and impartial tribunal, free from local prejudice or influence ). 8 DEFENDANT STARBUCKS CORPORATION S NOTICE OF MOTION AND MOTION TO STAY PENDING DECISION BY THE UNITED STATES SUPREME COURT ON A CONTROLLING ISSUE OF LAW; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT Case 2:09-cv-09074-GW-PLA Document 10 Filed 12/14/09 Page 14 of 14 1 precise issue. Therefore, this Court should exercise its broad discretion to temporarily 2 stay further proceedings in this case pending resolution of Hertz to ensure that its 3 decision regarding jurisdiction in this case will be consistent with controlling 4 precedent, fair to the parties involved, and in the interest of the sound administration of 5 justice. 6 DATED: December 14, 2009 7 8 Theane Evangelis Kapur GIBSON, DUNN & CRUTCHER LLP 9 10 By: 11 Theane Evangelis Kapur Attorneys for Defendant Starbucks Corporation 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Gibson, Dunn & Crutcher LLP 9 DEFENDANT STARBUCKS CORPORATION S NOTICE OF MOTION AND MOTION TO STAY PENDING DECISION BY THE UNITED STATES SUPREME COURT ON A CONTROLLING ISSUE OF LAW; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT

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