Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_14-cv-00209/USCOURTS-casd-3_14-cv-00209-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

SHARON MANIER, TERI SPANO,

and HEATHER STANFIELD,

individually, on behalf of themselves,

all others similarly situated, and the

general public,

Plaintiffs,

CASE NO. 14cv209-GPC(NLS)

ORDER DENYING DEFENDANTS’

MOTION TO STAY REMAND

ORDER PENDING APPEAL

vs. [Dkt. No. 18.]

MEDTECH PRODUCTS, INC., a

Delaware corporation; PRESTIGE

BRANDS, INC., a Delaware

corporation, and DOES 1-20,

inclusive, entities, business form

unknown,

Defendants.

Before the Court is Defendants’ motion to stay remand order pending appeal. 

(Dkt. No. 18.) Plaintiffs filed an opposition and Defendants replied. (Dkt. Nos. 20,

21.) After a review of the briefing and applicable law, the Court DENIES Defendants’

motion to stay remand order pending appeal. 

Procedural Background

Plaintiffs Sharon Manier, Teri Spano and Heather Stanfield (collectively,

“Plaintiffs”) filed this putative class action alleging Defendants Medtech Products, Inc.

and Prestige Brands, Inc. (collectively, “Defendants”) falsely and/or deceptively

advertised their homeopathic ear relief product, Murine Ear Drops for Earache Relief

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in California in San Diego Superior Court. (Dkt. No. 1-1.) Plaintiffs allege Defendants

violated the Consumers Legal Remedies Act, Cal. Civ. Code § 1750 et. seq. (“CLRA”);

the Unfair Competition Law, Cal. Bus. & Prof. Code. § 17200 et. seq. (“UCL”), the

False Advertising Law, Cal. Bus. & Prof. Code § 17500 et. seq. (“FAL”), and breached

express and implied warranties of merchantability. (See Dkt. No. 1-1, Compl.)

On January 31, 2014, Defendants filed a Notice of Removal. (Dkt. No. 1.) In

response, Plaintiffs filed a Motion for Remand pursuant to 28 U.S.C. § 1447(c) on

February 28, 2014. (Dkt. No. 7.) On April 22, 2014, the Court granted Defendants’

motion to remand. (Dkt. No. 16). This Court also certified and mailed a copy of its

Order granting Plaintiffs’ Motion for Remand to the San Diego Superior Court on that

date. (Id.) Two weeks later, on May 1, 2014, Defendants filed a Petition for

Permission to Appeal (“Petition”) under 28 U.S.C. § 1453(c) with the United States

Court of Appeals for the Ninth Circuit. (Dkt. No. 17.) On the same day, Defendants

also filed the instant Motion to Stay Remand Order Pending Appeal. (Dkt. No. 18.) 

On May 20, 2014, the Hon. Eddie C. Sturgeon of the San Diego Superior Court

set a Case Management Conference in the case for December 12, 2014. (Dkt. No. 20-1,

Resendes Decl. ¶ 3, Ex. A.) 

Discussion

A. Appeal of Remand Order

Defendants argue that the Court has jurisdiction to issue a stay of the remand

order while Plaintiffs contend that the Court is without jurisdiction to entertain the

instant motion since it certified and mailed a copy of its remand order to state court. 

28 U.S.C. § 1447(d) provides that an order remanding a case to state court is

generally not reviewable on appeal. As a result, when a remand order is issued by a

district court, the district court is ordinarily divested of jurisdiction, allowing the state

court to proceed with the case. 28 U.S.C. § 1447(c). Under CAFA, Congress expressly

authorized federal courts of appeals to exercise their discretion to accept an appeal

from a remand order under CAFA “notwithstanding section 1447(d).” 28 U.S.C. §

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1453(c). This provides an exception to the general rule that remand orders are not

appealable. 

28 U.S.C. § 1453(c)(2) provides that “[i]f the court of appeals accepts an appeal

under paragraph (2), the court shall complete all action on such appeal, including

rendering judgment, not later than 60 days after the date on which such appeal was

filed, unless an extension is granted under paragraph (3).” 28 U.S.C. § 1453(a)(2). 

The Ninth Circuit has held that an appeal pursuant to § 1453(c)(1) must comply with

Federal Rule of Appellate Procedure 5 which requires that a party file a petition for

permission to appeal. Amalgamated Transit Union v. Laidlaw Transit Services, Inc.,

435 F.3d 1140, 1144 (9th Cir. 2006) (“[T]here is no appeal until the petition for

permission is granted, and the entry of the order granting permission serves as the

notice of appeal for all timing issues.”). Therefore, the 60 day period begins after the

petition for appeal is granted. Lewis v. Verizon Comms., Inc., 627 F.3d 395, 396 (9th

Cir. 2010). 

In this case, the petition for permission to appeal was filed on April 30, 2014

with a response filed on May 15, 2014. The Ninth Circuit has not yet ruled on the

petition for permission to appeal and therefore, the 60 day period has not yet begun. 

The Court finds that it is appropriate for the Court to address a motion to stay

pending appeal of a remand order as Congress has specifically allowed these remand

orders to be appealable. See Morgan v. Gay, 471 F.3d 469, 471 (3d Cir. 2006)

(defendants filed petition for leave to appeal remand order as well as a motion for stay

of the remand order pending appeal which was granted by the district court); Raskas

v. Johnson & Johnson, Nos. 12cv2174 JCH, 12:2266 HEA, 12cv2307 CDP, 2013 WL

1818133, at *1 (E.D. Mo. 2013); Lafalier v. Cinnabar Serv. Co., Inc., No. 10cv0005-

CVE-TLW, 2010 WL 1816377, at *2 (N.D. Okla. 2010). However, the Court

concludes that Defendants have not demonstrated the factors to support a stay. 

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B. Motion for Stay

When considering a motion to stay an order pending appeal, the court looks at

(1) whether the movant will suffer irreparable injury without the stay; (2) whether the

stay will substantially injure any other party interested in the proceeding; (3) whether

the movant has made a strong showing he is likely to succeed on the merits of the

appeal; and (4) where the public interest lies. See Hilton v. Braunskill, 481 U.S. 770,

776 (1987). The Ninth Circuit has applied the Hilton factors by requiring the party

seeking a stay to show either “a strong likelihood of success on the merits and the

possibility of irreparable harm” or that serious legal questions are raised and the

“balance of hardships tips sharply in . . . favor [of the party seeking the stay].” Golden

Gate Rest. Ass’n v. City & Cnty. of. San Francisco, 512 F.3d 1112, 1115–16 (9th Cir.

2008) (citations omitted). The court considers “where the public interest lies”

separately fromand in addition to whether the moving party will be irreparably injured. 

Id. at 1116. 

Defendants seek a “short” stay until the Ninth Circuit decides whether to grant

their petition for permission to appeal. They argue that because the statute allows a

remand order to be appealable, district courts do not lose jurisdiction over cases

removed under CAFA due to a ministerial act of certifying a remand order and mailing

it to the state court. They argue that since the petition for permission to appeal

provides for an expedited 60 day review period, a stay of the proceedings would allow

the parties to avoid simultaneous expenditure of resources in the Ninth Circuit and in

state court. Plaintiffs oppose arguing that the Court lacks jurisdiction to address this

motion since the Remand was entered, certified and mailed to the state court. Plaintiffs

also argue that a stay would prejudice them because they would be unable to prosecute

their case. Moreover, any discovery conducted would be applicable either in state or

federal court. 

1. Likely to Succeed on the Merits

Defendants argue that the petition to appeal seeks guidance on a novel issue of

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whether a plaintiff may evade CAFA by alleging in one part of the complaint damages

sufficient to conferCAFA jurisdiction while inconsistently alleging damages elsewhere

that are below CAFA’s amount in controversy requirement. Plaintiff opposes arguing

Defendants have failed to show facts that the amount in controversy exceeds the

minimum amount under CAFA which cannot be based on speculative and conclusory

facts.

The moving party must make a “strong showing that he is likely to success on

the merits.” Leiva-Perez v. Holder, 640 F.3d 962, 966-67 (9th Cir. 2011). This means

that the moving party must show that it is “more likely than not that they will win on

the merits.” Id.

Defendants’ argument on appeal that the district court impliedly found that one

part of the complaint alleging “millions of dollars” satisfied the amount in controversy

is not accurate. As to the amount in controversy, the remand order states:

The Court finds that Plaintiffs’ reliance on the general allegation of

“millions of dollars” as a basis for their calculation does not show by

a preponderance of the evidence that the amount in controversy

exceeds $5,000,000. In addition, while the Complaint alleges that

Defendants have been wrongly “enriched” by “millions of dollars,”

(Dkt. No. 1-1, Compl. ¶ 55), the Complaint also assertsthat consumers

“are unwittingly spending hundreds of thousands of dollars each year

on a worthless Product.” (Id. ¶ 38.) The inconsistency in general

allegations of “millions of dollars” and “hundreds of thousands of

dollars each year” undermines Defendants’ position. 

(Dkt. No. 16 at 5.) 

The Court did not conclude that the allegation “millions of dollars” met the

amount in controversy. In fact, it concluded that such a general allegation does not

demonstrate by a preponderance of the evidence that the amount in controversy

exceeds $5,000,000. The Court concludes that Defendant has not demonstrated a

strong likelihood of success on the merits. 

2. Irreparable Harm

Defendants argue that if the Ninth Circuit rules that the remand isimproper, then

Defendants will lose almost any chance of litigating this case in a federal forum. 

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Moreover, they will be required to litigate in both the Ninth Circuit and state court. 

Plaintiffs argue they will suffer irreparable harm if a stay is granted because it will

impede the collection of information and delay resolution of the case. They also

contend that Defendants will not suffer irreparable harm because if discovery reveals

that the federal court has jurisdiction, Defendants can remove the case. Moreover, any

discovery obtained in state court would be relevant and applicable if the case was later

removed to federal court. 

The parties agree that the review of an appeal of a remand order is expedited. 

While courts have stayed remand orders explaining that the harm to plaintiffs would

not be great due to the expedited nature of an appellate court reviewing a remand order,

Lafalier, 2010 WL 181677, at 2; Raskas, 2013 WL 1818133, at 2, the opposite also

holds true that no irreparable harm will result since review is expedited. Based on the

facts presented, Defendants have not demonstrated irreparable harm. In this case, the

state court did not set a case management conference until December 12, 2014, almost

six months away. As of the filing of the opposition on May 30, 2014, the parties have

not engaged in any meaningful discovery and no trial date has been set. (Dtk. No. 20-

1, Resendes Decl. ¶ 5.) No pending motions were denied without prejudice. See

Raskas, 2013 WL 1818133, at 2 (irreparable harm due to pending motions to dismiss

and motions to strike the class allegations that district court denied without prejudice

which may be refiled in state court and may lead to inconsistent outcomes). 

Defendants have not shown that they will be required to litigate in both forums. 

Moreover, the expedited appellate review process will limit any irreparable harm that

may result. 

3. Public Interest

Defendants assert that a stay would not harm the public interest but would

benefit the public by conserving judicial resources and avoiding potentially

unnecessary adjudication of these mattersin state court. Plaintiffs oppose arguing that

a stay would prevent Plaintiffs from seeking prompt redress of their claims. As stated

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above, it appears that judicial resources are not being expended in both the Ninth

Circuit and state court. 

Conclusion

Based on the above, the Court DENIES Defendants’ motion to stay remand order

pending appeal. The hearing date set for June 27, 2014 shall be vacated.

IT IS SO ORDERED.

DATED: June 26, 2014

HON. GONZALO P. CURIEL

United States District Judge

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