Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_19-cv-01184/USCOURTS-cand-3_19-cv-01184-2/pdf.json

Nature of Suit Code: 899
Nature of Suit: Other Statutes - Administrative Procedure Act/Review or Appeal of Agency Decision
Cause of Action: 05:551 Administrative Procedure Act

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

STATE OF CALIFORNIA,

Plaintiff,

v.

ALEX AZAR, et al.,

Defendants.

Case No. 19-cv-01184-EMC 

RELATED TO

Case No. 19-cv-01195-EMC 

ESSENTIAL ACCESS HEALTH, INC., et 

al.,

Plaintiffs,

v.

ALEX M. AZAR II, et al.,

Defendants.

ORDER DENYING DEFENDANTS’ 

MOTIONS FOR STAY PENDING 

APPEAL

Docket No. 117, C-19-1184

Docket No. 91, C-19-1195

On March 4, 2019, Defendants promulgated a new rule implementing Title X of the Public 

Health Service Act. See Compliance with Statutory Program Integrity Requirements, 84 Fed. Reg. 

7714 (2019) (“Final Rule”). Plaintiffs in these related actions, the State of California and 

Essential Access Health, moved to preliminary enjoin enforcement of the Final Rule. See 

California v. Azar, No. 3:19-cv-1184-EMC (N.D. Cal.) (“California”), Docket No. 26; Essential 

Access Health, Inc. v. Azar, No. 3:19-cv-1195-EMC (N.D. Cal.) (“Essential”), Docket No. 25. On 

April 26, 2019, this Court granted Plaintiffs’ motions in substantial part and enjoined the Final 

Rule from being enforced in California. See California Docket No. 103 (“PI Order”). 

Currently before the Court are Defendants’ motions to stay proceedings in this Court 

pending resolution of their appeal from the PI Order. California Docket No. 117; Essential 

Case 3:19-cv-01184-EMC Document 132 Filed 07/09/19 Page 1 of 4
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Docket No. 91 (collectively, “Mot.”). The Court DENIES the motions to stay.

I. DISCUSSION

A. Legal Standard

Under Landis v. North American Co., 299 U.S. 248 (1936), “[a] district court has 

discretionary power to stay proceedings in its own court.” Lockyer v. Mirant Corp., 398 F.3d 

1098, 1109 (9th Cir. 2005). Where a court is asked to stay proceedings pending the outcome of a 

related proceeding,

the competing interests which will be affected by the granting or 

refusal to grant a stay must be weighed. Among those competing 

interests are the possible damage which may result from the granting 

of a stay, the hardship or inequity which a party may suffer in being 

required to go forward, and the orderly course of justice measured in 

terms of the simplifying or complicating of issues, proof, and 

questions of law which could be expected to result from a stay.

Id. at 1110 (quoting CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962)). “The proponent of a 

stay bears the burden of establishing its need.” Clinton v. Jones, 520 U.S. 681, 708 (1997) (citing 

Landis, 299 U.S. at 255).

B. The Orderly Course of Justice

Defendants’ primary argument is that a stay will result in a simplification of issues. 

According to Defendants, “the Ninth Circuit’s disposition of the appeal is likely to be controlling 

with respect to the central merits issues presented in this case,” and so forging ahead without 

waiting for an appellate decision would cause “the parties and the Court [to] waste time and 

resources briefing and considering legal issues that are to be determined by the Ninth Circuit.” 

Mot. at 4–5. This rationale is unpersuasive. It is true that in reviewing any preliminary injunction 

order, the appellate court must preview the merits of the case. But the Ninth Circuit has 

“repeatedly admonished district courts not to delay trial preparation to await an interim ruling on a 

preliminary injunction.” California v. Azar, 911 F.3d 558, 583–84 (9th Cir. 2018) (citations 

omitted). “Because of the limited scope of [appellate] review of the law applied by the district 

court and because the fully developed factual record may be materially different from that initially 

before the district court, [the Ninth Circuit’s] disposition of appeals from most preliminary 

injunctions may provide little guidance as to the appropriate disposition on the merits.” Id. at 584. 

Case 3:19-cv-01184-EMC Document 132 Filed 07/09/19 Page 2 of 4
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Here, for instance, the Court rendered its preliminary injunction decision before the full 

administrative record became available. That record has now been produced and will ground the 

litigation going forward. Further, Plaintiffs asserted constitutional claims in their complaints that 

were not raised at the preliminary injunction stage. Moving forward with these proceedings would 

also allow those claims to be adjudicated in a timely manner.

Defendants cite Washington v. Trump, No. C17-0141JLR, 2017 WL 1050354 (W.D. 

Wash. Mar. 17, 2017) and Hawai’i v. Trump, 233 F. Supp. 3d 850 (D. Haw. 2017) in support of 

their argument that a stay is warranted on efficiency grounds. But the courts in Washington and 

Hawai’i each stayed determination of a pending motion for a temporary restraining order (“TRO”) 

while the Ninth Circuit ruled on an appeal from a substantively identical TRO issued by a 

different court. See Washington, 2017 WL 1050354, at *5; Hawai’i, 233 F. Supp. 3d at 855. 

Here, in contrast, Defendants assert that merits proceedings should be halted altogether while the 

Ninth Circuit reviews a preliminary injunction ruling this Court has already made. Neither 

Washington nor Hawai’i stand for such a proposition.

The “orderly course of justice” factor in Lockyer weighs against granting a stay.

C. The Possible Damage Resulting from a Stay and the Hardship or Inequity from Going 

Forward

The “[party seeking] a stay must make out a clear case of hardship or inequity in being 

required to go forward, if there is even a fair possibility that the stay for which he prays will work 

damage to some one else.” Lockyer, 398 F.3d at 1109–10 (quoting Landis, 299 U.S. at 255 

(alteration in original)). There is clearly more than “a fair possibility” that a stay would harm 

Plaintiffs here. In the PI Order, the Court found that “[u]nless enjoined, the Final Rule will 

irreparably harm individual patients and public health in California as a whole” by “decimat[ing]

the network of Title X providers in California and drastically restrict[ing] patients’ access to a 

wide range of vital services.” PI Order at 2. Delaying the ultimate resolution of the Final Rule’s 

lawfulness would expose Plaintiffs to this harm if the Ninth Circuit dissolves the preliminary 

injunction and the final adjudication of this case is delayed because of an extended stay. In 

contrast, Defendants do not articulate any injury they would suffer if the lawsuit were to proceed, 

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much less “make out a clear case of hardship or inequity in being required to go forward.” 

Lockyer, 398 F.3d at 1109–10.

II. CONCLUSION

Defendants’ motions to stay are DENIED. Defendants are ORDERED to respond to 

Plaintiffs’ complaints by July 30, 2019. The motion hearing on July 16, 2019 is VACATED.

This order disposes of California Docket No. 117 and Essential Docket No. 91.

IT IS SO ORDERED.

Dated: July 9, 2019

______________________________________

EDWARD M. CHEN

United States District Judge

Case 3:19-cv-01184-EMC Document 132 Filed 07/09/19 Page 4 of 4