United States District Court, D. Nevada
ORDER MOTION TO STAY PENDING THE COURT'S DECISION
ON DEFENDANTS' MOTION TO COMPEL ARBITRATION (ECF NO.
FERENBACH UNITED STATES MAGISTRATE JUDGE
the Court is Defendant AffinityLifeStyles.com, Inc. dba Real
Alkalized Water's (“Real Water's”) Motion
to Stay Pending the Court's Decision on Defendants'
Motion to Compel Arbitration (ECF No. 24). Plaintiff Lisa
Marie Bailey filed a Response (ECF No. 25) and Real Water
filed a Reply (ECF No. 26).
November 22, 2016, Bailey filed her Complaint alleging that
Real Water, as Bailey's employer, discriminated against
her based on her religion, disability, gender, and age.
See ECF No. 1 at 2. Real Water answered the
complaint on January 17, 2017. See ECF No. 9. On
February 3, 2017, the parties submitted a joint proposed
discovery plan and scheduling order, which this Court
approved three days later. See ECF Nos. 11, 12.
Water filed a motion to compel arbitration on April 10, 2017.
See ECF No. 17. The parties filed a stipulation to
stay discovery for 30 days on May 9, 2017, pending a decision
on Real Water's motion to compel arbitration.
See ECF Nos. 21; 24 at Ex. A. The parties sought a
brief stay “so that neither the parties nor the Court
will be required to spend time and resources conducting
discovery which may ultimately be the responsibility of an
arbitrator.” Id. This Court approved the
parties' stipulation, but construed the stipulation to
stay discovery as a stipulation to extend discovery.
See ECF No. 22. On May 31, 2017, Real Water filed
its motion to stay pending the court's decision on
defendants' motion to compel arbitration. See
ECF No. 24.
Water asks this Court to stay all pre-trial obligations,
including discovery, pending a decision on its motion to
compel arbitration (ECF No. 17). Real Water argues that a
stay is warranted, because “[o]nce presented with a
motion to compel arbitration, the Court's jurisdiction
and, in turn, any discovery or other pre-trial obligations,
is limited only to determining whether the dispute is
arbitrable.” See ECF No. 24 at 2. Real Water
asserts that courts in the Ninth Circuit regularly stay
discovery in similar situations “to ensure that parties
seeking to enforce an arbitration agreement are not
irreparably harmed by the loss of the advantages of
arbitration - speed and efficiency - while the arbitration
agreement is still being litigated.” Id. A
brief stay, according to Real Water, will neither harm, nor
prejudice either party. Id.
responds that, under the factors articulated in Fisher v.
A.G. Becker Paribas Inc., 791 F.2d 691 (9th Cir. 1986),
Real Water waived its right to compel arbitration by
“actively participating” in the discovery process
for months. See ECF No. 25 at 3, 6-7. Bailey claims
that Real Water was on notice of an existing right to
arbitration from the beginning of this case because it had
already been involved in a similar matter
(Echevarria-Hernandez v. Affinitylifestyles.com,
Inc., No. 2:16-cv-00943-GMN-VCF, 2017 WL 1160571, at *1
(D. Nev. Mar. 27, 2017)). Id. at 7. Bailey asserts
that Real Water engaged in acts that are inconsistent with
its right to arbitrate. In particular, Bailey notes that Real
Water (1) “filed an Answer without asserting any
affirmative defenses related to a desire to arbitrate
Plaintiff's claims” and “actually conceded
that this Court has proper jurisdiction and venue to address
Plaintiff's Complaint”; (2) “has gone through
over half the entire discovery period, including noticing its
own depositions and written discovery requests to
Plaintiff”; and (3) “attended the Early Neutral
Evaluation (which is only required for cases properly before
the District of Nevada) … without mentioning that it
felt this case should be in arbitration.” See
ECF Nos. 25 at 4, 7-8; 25-1. Bailey asserts under the third
and final Fisher factor that she is prejudiced due
to Real Water's inconsistent acts. Id. at 8.
Bailey argues that she “has planned out her entire
litigation strategy and discovery methods based on
Defendant's undisputed indications that this case is
properly before the Court and not suitable for
arbitration.” Id. at 9. According to Bailey,
Real Water “should not be able to benefit in the
discovery process by exhausting Plaintiff's memory via
written discovery requests, and then expect Plaintiff to hold
off for months, and potentially a year, before she can
conduct depositions that will also exhaust the memories of
members of Defendant's company” which will
“inevitably fade.” Id. at 11.
“Granting a stay of discovery at this late stage,
” Bailey claims, would only prejudice her; not Real
Water. Id. at 3, 9, 11.
Water replies that discovery is not nearly complete.
See ECF No. 26 at 2. Real Water asserts that
“each party has propounded written discovery requests,
and Real Water has issued basic subpoenas for records from
Plaintiff's prior employers and the Nevada Equal Rights
Commission, ” but no depositions have been conducted in
this case. Id. According to Real Water, “there
is far more discovery remaining than discovery that has been
completed, ” including at least seven depositions,
probable subpoenas, any remaining written discovery,
potential discovery motions, and briefing summary judgment
motions. Id. at 3. Real Water argues that failure to
grant a stay could result in “serious and
irreparable” prejudice, including the loss of the
advantages of arbitration-the inexpensive and expeditious
means by which the parties had agreed to resolve their
disputes. See ECF Nos. 26 at 5, 11; 24 at 2, 5. Real
Water also notes that it “is in the interest of
conserving the resources of the parties and the Court to stay
discovery in this action pending a determination of Real
Water's Motion to Compel.” See ECF No. 26.
district court has discretionary power to stay proceedings in
its own court. See Landis v. N.A. Co., 299 U.S. 248,
254-255 (1936) (“[T]he power to stay proceedings is
incidental to the power inherent in every court to control
the disposition of the causes on its docket with economy of
time and effort for itself, for counsel, and for
litigants.”); see also Leyva v. Certified Grocers
of California, Ltd., 593 F.2d 857, 863-64 (9th Cir.
1979) (“A trial court may, with propriety, find it is
efficient for its own docket and the fairest course for the
parties to enter a stay of an action before it
…”); 7C Charles Alan Wright, Arthur R. Miller
& Richard L. Marcus, Federal Practice and
Procedure, § 1838 (3d ed. 2010) (“[W]hether
to grant a stay in a particular case is a matter addressed to
the sound discretion of the district court.”).
evaluating a motion to stay discovery while an allegedly
dispositive motion is pending, the Court initially considers
the goal of Federal Rule of Civil Procedure 1: The Rules
“should be construed, administered, and employed by the
court and the parties to secure the just, speedy, and
inexpensive determination of every action and
proceeding.” See Fed. R. Civ. P. 1; see
also 4 Wright et al., supra, § 1029
(“There probably is no provision in the federal rules
that is more important than this mandate. It reflects the
spirit in which the rules were conceived and written, and in
which they should be interpreted.”). Discovery is not
“a free form exercise conducted in a free for all
spirit”; it's expensive. See, e.g., In
re Convergent Techs. Sec. Litig., 108 F.R.D. 328, 331
(N.D. Cal. 1985). Courts have a duty to resolve civil matters
fairly, but without undue cost or delay. See Fed. R.
Civ. P. 1 advisory committee notes, 1993 Amendments
(explaining that the purpose of the 1993 amendment “is
to recognize the affirmative duty of the court to exercise
the authority conferred by these rules to ensure that civil
litigation is resolved not only fairly, but also without
undue cost or delay.”); see also 4 Wright et
al., supra, § 1011.This directive is echoed by
Rule 26, which instructs the Court to balance the expense of
discovery against its likely benefit.
Court is determining the issue of whether an action should be
stayed and the parties compelled to arbitrate, “a
federal court may consider only issues relating to the making
and performance of the agreement to arbitrate.”
Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 726
(9th Cir. 1999) (citing Prima Paint Corp. v. Flood &
Conklin Mfg. Co., 388 U.S. 395, 404 (1967); see also
Sparking v. Hoffman Construction Co., 864 F.2d 635, 638
(9th Cir. 1988). “[D]iscovery and a full trial in
connection with a motion to compel arbitration” is
permitted under 9 U.S.C. § 4 only if “the making
of the arbitration agreement or the failure, neglect, or
refusal to perform the same be in issue.” See
id.; see also 9 U.S.C § 4. To require the
parties to proceed with the action pending a ruling on the
motion to compel arbitration and any appeal thereof would
cause the party ...