Opinion
Case No. 13cv838-BEN (BLM)
05-09-2013
DAVID KOGOK, individually and on behalf of all others similarly situated, et al. Plaintiff, v. T-MOBILE USA, Inc. AND DOES 1 through 300, Defendants.
ORDER (1) DENYING DEFENDANT'S
EX PARTE APPLICATION TO STAY
STATE COURT DISCOVERY ORDER;
(2) DENYING DEFENDANT'S
REQUEST TO INCLUDE COUNSEL
FOR RELATED CASE IN ENE; (3)
DENYING DEFENDANT'S REQUEST
TO CONTINUE ENE; AND (4)
VACATING ENE AND SETTING CASE
MANAGEMENT CONFERENCE
[ECF No. 11]
Currently before the Court is Defendant's ex parte application to stay state court discovery, include counsel for related case in the Early Neutral Evaluation Conference ("ENE"), and continue the ENE [ECF No. 11 ("Def.'s Mot.")] and Plaintiffs' opposition to the motion. ECF No. 12 ("Oppo."). For the reasons set forth below, Defendant's motion is DENIED.
BACKGROUND
This matter was removed to this Court on April 5, 2013 from the Superior Court of the State of California, County of San Diego. ECF No. 1. The case, which was originally filed on June 12, 2012, is a class action case alleging several causes of action against Defendant stemming from Defendant's alleged failure to properly pay its California based Retail Sales Associates ("RSAs"). Id. at 6-7. The class includes current and former California RSAs from June 12, 2008 through the time of trial. Id. at 7. Defendant attempted to remove the matter to federal court on July 13, 2012, but "the Court sua sponte ordered the case remanded to state court." Id. Plaintiff filed an amended complaint on April 2, 2013 adding two named Plaintiffs and five additional claims. Id. at 7-8. Defendant successfully removed the case three days later. Id.
Prior to Defendant's removal, the matter was litigated in state court for approximately ten months. During that time, the state court judge, the Honorable Steven R. Denton, issued several orders relating to discovery in this matter. Def.'s Mot. at 4; Oppo. at 3. One of those orders required Defendant "to produce to Plaintiffs' counsel, a list of all putative class members' names and personal contact information who did not opt-out of such disclosure" by April 24, 2013. Def.'s Mot. at Sherr Declaration at 2; see also Id. at 11-2, Exh. A; and Belong Declaration at 1. Defendant did not produce the list.
On April 8, 2013, the Court issued a Notice and Order for Early Neutral Evaluation, setting an ENE for May 17, 2013. ECF No. 3. On April 12, 2013, Defendant filed a motion to dismiss for failure to state a claim that was taken under submission on May 8, 2013. ECF Nos. 4 & 13. On May 6, 2013, Defendant filed the instant ex parte motion. Def.'s Mot. Plaintiff filed an opposition on May 7, 2013. Oppo.
DISCUSSION
A. LEGAL STANDARD
"[A]fter removal, the federal court takes the case up where the State court left it off." Jenkins v. Commonwealth Land Title Ins. Co., 95 F.3d 791, 795 (9th Cir. 1996)(citing Granny Goose Foods, Inc. v. Brotherhood of Teamsters Local 70, 415 U.S. 423, 436 (1974) (quoting Duncan v. Gegan, 101 U.S. 810, 812 (1880)); see also 28 U.S.C. § 1450 ("Whenever any action is removed from a State court to a district court of the United States ... All injunctions, orders, and other proceedings had in such action prior to its removal shall remain in full force and effect until dissolved or modified by this district court."). "The federal court ... treats everything that occurred in the state court as if it had taken place in federal court." Carvalho v. Equifax Information Services, LLC, 629 F.3d 876, 887 (9th Cir. 2010) (citing Butner v. Neustadter, 324 F.2d 783, 785(9th Cir.1963)). Accordingly, where the state court has entered an order, the order should be treated as though it had been validly rendered in the federal proceeding." Id. (quoting Butner, 324 F.2 at 785). The Court does, however, have the authority to dissolve or modify a state court order that was entered prior to removal. See 28 U.S.C. § 1450. B. The State Court Discovery Order
The Court acknowledges that some courts have held that discovery requests filed in state court do not constitute "proceedings" within the meaning of 28 U.S.C. § 1450. See Sterling Savings Bank v. Federal Ins. Co., 2012 WL 3143909, *2 (E.D. Wash. Aug. 1, 2012) (finding that discovery requests filed in state court prior to removal are not binding in federal court because at the time of removal the Federal Rules of Civil Procedure control and pursuant to those rules, discovery does not begin until the parties participate in a Rule 26(f) conference)(citing McIntyre v. K-Mart Corp., 794 F.2d 1023, 1025 (5th Cir. 1986)) and (Riley v. Walgreen Co., 233 F.R.D. 496 (S.D. Tex. 2005) ("[b]y its express terms, Rule 26(d) bars discovery until after the parties have conferred about a discovery plan as directed by Rule 26(f)")).
Defendant seeks to have the Court temporarily stay "the March 8, 2013 order entered by Hon. Steven Denton . . . requiring [Defendant] to provide the personal contact information of employees who did not request exclusion from the privacy Mailing ("Contact List") until after the Early Neutral Evaluation." Def.'s Mot. at 1-2. In support, Defendant states that a stay will leave Defendant "better able to focus on getting prepared for the upcoming ENE and potential resolution, rather than wasting resources answering what is likely to be numerous inquiries from putative class members after being contacted by Plaintiff's counsel." Id. at 6. In further support, Defendant states that if it is required to train its management on how to handle employee inquiries, "it will not have the amount of time required to adequately prepare for the ENE." Id. at 6-7. Defendant notes that the Court has the authority to modify a state court discovery order issued prior to removal and argues that a stay will not prejudice Plaintiffs since they have "obtained sufficient discovery" to evaluate their case. Id. at 7.
Plaintiffs contend that "Defendant [has] violated the state court [discovery] order, and [that] the removal to Federal Court did not alter [Defendant's] obligation to comply with the court order." Oppo. at 5. In support, Plaintiffs state that it is "black letter law that even after removal to federal court, litigants remain bound to comply with the State court's orders issued prior to removal." Id. Plaintiffs further contend that relief should not be granted since Defendant's time to comply with the state court order has expired. Id. at 7. Plaintiffs argue that Defendant has not satisfied the necessary requirements for its requested relief since it has not shown that it will be "irreparably prejudiced if the underlying motion is heard according to regular noticed motion procedure" or that Defendant is "without fault in creating" the problem for which it is seeking relief. Id. Plaintiffs go on to note that Defendant has not cited any authority for its position and that Plaintiffs will be prejudiced if Defendant's motion is granted because they will have to re-request relief that was already granted by the state court, suffer a delay in the collection of discovery and their ability to assess the value of the case, and lose relevant discovery and witness contact information. Id. at 9-11.
Defendant's request to stay the state court discovery order is DENIED. The Court has reviewed the discovery rulings and Stipulated Order Regarding Discovery and Neutral Notice to Putative Class Members submitted by the parties [see MTC at Exhibit A; see also Oppo. at Exhibit 1] and finds they are appropriate. The Court acknowledges that Plaintiffs subsequently filed an amended complaint and that Defendant has filed a motion to dismiss several of the claims [see MTC at Exhibit B; see also ECF No. 4], but still finds it appropriate to follow the existing state court discovery orders. In addition, as discussed in the next section, the Court is vacating the ENE so Defendant's concern that it is unable both to prepare for the ENE and comply with its discovery obligations is moot. Finally, as discussed in the next section, the Court is scheduling a case management conference to discuss the case status so any additional issues can be raised during that conference. Accordingly, the Court confirms all discovery orders and deadlines issued or set by the Honorable Steven Denton, including the order requiring Defendant to produce the Class List by April 24, 2013. If Defendant has not yet complied with Judge Denton's discovery orders, including the order requiring Defendant to produce the Class List, Defendant must do so on or before May 13, 2013. C. The Early Neutral Evaluation Conference
This does not include any future conference dates that may have been set by the state court.
Defendant seeks the Court's permission to combine the ENE in this case with the ENE in another related matter (Gonzales, 13cv1029-BEN (BLM)) or, in the alternative, to allow Plaintiff's counsel from Gonzales, David Markham, to participate in the ENE for this case due to the "significant overlap of the claims and class members" in the two cases. Id. at 2, 8. Defendant argues that a combined ENE "will lead to a more streamlined, efficient process and will increase the likelihood of settlement as the resolution of either matter will have significant impact on the other." Id. at 4. Mr. Markham is interested in participating in a joint ENE, but is unavailable on May 17, 2013. Id., fn 1; see also Id. at Sherr Declaration at 3. Accordingly, Defendant asks the Court to continue the ENE for two weeks. Id. at 4, fn 1.
Plaintiffs agree that the ENE should be delayed albeit for different reasons. Plaintiffs note that since they have not received the witness list and had the "opportunity to investigate the claims of unpaid commissions," they "cannot possibly enter into meaningful negotiations based on the approximate value of the case." Id. at 8. Plaintiffs contend that continuing the ENE "makes sense only if (1) Defendant complies with the court Order and immediately produces the Class list, and (2) Defendant permits an inspection and copying of its computerized databases that record and calculate comissionable transactions, as previously ordered by the State court." Id. Plaintiffs believe those two events are necessary to allow "the parties to be in a position to analyze the value of the case and enter into meaningful settlement negotiations." Id. Plaintiffs do not address Defendant's request to permit the participation of Mr. Markham in the ENE.
Based upon the Court's review of the pleadings in this dispute, as well as the status of discovery conducted in the state proceedings, the pending litigation in this case, and the newly-filed related case, the Court finds it inappropriate to convene an ENE at this time. See CivLR 16.1(c)(1) (explaining that "[t]he judicial officer will hold such conferences as he or she deems appropriate"). Accordingly, Defendant's request to continue the ENE is DENIED, Defendant's request to allow Mr. Markham to participate in the ENE is DENIED, and the ENE currently scheduled for May 17, 2013 at 9:30 a.m. is hereby VACATED. The Court will hold a telephonic, attorneys-only Case Management Conference ("CMC") on May 20, 2013 at 2:00 p.m. Counsel should be prepared to discuss the status of discovery, the relationship between this case and the related case, and the state of settlement discussions. The Court will initiate the conference call.
Parties are hereby warned that failure to comply with this Order may result in the imposition of sanctions. Additionally, failure to respond to discovery requests or to comply with the Federal Rules of Civil Procedure regarding discovery may result in the imposition of sanctions including monetary sanctions, evidentiary sanctions and the dismissal or default of your case.
IT IS SO ORDERED.
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BARBARA L. MAJOR
United States Magistrate Judge