United States District Court, D. Nevada
J. Dawson, United States District Judge.
before the Court is Defendant's Motion to Stay (#20).
Plaintiffs filed a response in opposition (#30) to which
Defendant replied (#32).
September 7, 2017, Defendant Equifax Information Services,
LLC (“Equifax”) announced a data security breach
that had occurred on or before July 29, 2017. The present
putative class action was filed by Plaintiffs on September
10, 2017. Equifax was served with the summons and complaint
on or about September 12, 2017. The operative First Amended
Complaint was filed on September 17, 2017.
September 11, 2017, plaintiffs in related cases filed a
motion for consolidation and transfer under 28 U.S.C. §
1407 with the Judicial Panel on Multidistrict Litigation
(“JPML”). That motion seeks to have twenty-two
(22) related actions consolidated with McGonnigal v.
Equifax Inc., No. 1:17-cv-03422-WSD (N.D.Ga. Sept. 7,
2017) and transferred to the Northern District of Georgia. On
September 25, 2017, Equifax filed the present motion seeking
a stay of this action pending resolution of the motion for
consolidation and transfer that is before the JPML.
has discretionary ability to stay a proceeding as part of its
power to “control the disposition of the causes on its
docket with economy of time and effort for itself, for
counsel, and for litigants.” Landis v. N. Am.
Co., 299 U.S. 248, 254-55 (1936). “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, pending resolution of independent
proceedings which bear upon the case.” Leyva v.
Certified Grocers of Cal., Ltd., 593 F.2d 857, 863 (9th
Cir. 1979). When deciding whether to stay a proceeding, a
court should consider the parties' “competing
interests” that will be effected by the potential stay.
Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9th
Cir. 2005) (quoting Landis, 299 U.S. at 268). When
considering a stay pending the JPML's consideration of a
motion to consolidate and transfer a case, courts should
consider three factors: (1) the judicial resources that would
be saved by avoiding duplicative litigation if the cases are
in fact consolidated; (2) the hardship or inequity to the
moving party if the action is not stayed; and (3) the
potential prejudice to the non-moving party. See Tobler
v. DePuy Orthopaedics, Inc., 2012 WL 3598291 (D. Nev.
August 17, 2012)(citing Rivers v. Walt Disney Co.,
980 F.Supp. 1358, 1360 (C.D. Cal. 1997)).
Conserve Judicial Resources
staying the action promotes the interest of efficiency and
judicial economy. Without a stay, two courts would have to
expend time and resources to conduct initial case management
activities. Two courts would have to resolve the questions
presented by these claims arising under 15 U.S.C. §
1681g(a)(1), (3). The primary benefit of consolidation would
be to prevent conflicting decisions on important legal
issues. See Hertz Corp. v. The Gator Corp., 250
F.Supp.2d 421, 428 (D. N.J. 2003). Some of the legal issues
at play in this case are to what extent preliminary
injunctive relief is available under the Fair Credit
Reporting Act and whether the information compromised in the
data breach was a “consumer report.”
Additionally, it is best determined by the transferee court
to what extent this putative class action conflicts or
overlaps with others. See In re Plumbing Fixtures,
308 F.Supp. 242, 243-44 (J.P.M.L. 1970).
Risk of Hardship to Equifax
the action limits hardship or inequity to Equifax from
unnecessary proceedings, inconsistent rulings, duplicative
discovery and having to relitigate claims in multiple
jurisdictions. Further, resolution of the consumer fraud
claims Plaintiffs attempt to raise under state law rely
heavily on interpretation and definitions of the federal
credit reporting statutes. Despite Plaintiffs'
heavy-handed use of hyperbole - constantly asserting that
failing to grant injunctive relief in their favor would
amount to “court-sanctioned consumer fraud” -
their chance of success on the merits will rely heavily on
favorable interpretations of the federal statute, not the
state statute. Therefore, this factor also favors staying
the action pending a ruling on the motion to consolidate and
Prejudice to Plaintiff
to Plaintiff will not arise from a stay. With the facts
mostly undisputed, Plaintiffs' arguments are chiefly
legal. A brief stay to allow resolution of the motion to
consolidate and transfer will not result in continuing damage
to Plaintiffs. Plaintiffs' argue that they are damaged by
Defendant's failure to fully disclose whether their data
was included in the July 29th breach. However, it
seems clear that Defendant's use of the phrase “may
have been impacted” signifies that an individual
plaintiff's data was available to the third party hacker,
but whether the hacker downloaded or copied the information
would only be known to the hacker. In either event,
Plaintiffs' duty to use common sense, a third party
credit protection service, and/or the free credit protection
services offered by Defendant would be the same. Thus,
prejudice to Plaintiff would not be heightened by the small
delay of time caused by a stay.