Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-03903/USCOURTS-cand-3_06-cv-03903-4/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 42:2000e Job Discrimination (Employment)

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

DAISY JAFFE, et al.,

Plaintiffs,

v.

MORGAN STANLEY DW, INC.,

Defendant.

NO. C06-3903 TEH 

ORDER GRANTING

DEFENDANT’S MOTION TO

STAY CLASS AND SUBCLASS

GENDER DISCRIMINATION

CLAIMS

This matter came before the Court on Monday, December 18, 2006, on Defendant’s

motion to stay Plaintiffs’ class and subclass gender discrimination claims. The parties agree

that the proposed class definition and class claims in this case are identical to those in AugstJohnson v. Morgan Stanley DW, Inc., Case No. 06-C-01142-RWR, filed in the District Court

for the District of Columbia on the same day as Plaintiffs filed this case.

Augst-Johnson (“the D.C. action”) does not, however, plead any claims based on state

law, whereas the two subclass gender discrimination claims in this case are based on

California and Michigan anti-discrimination statutes. Plaintiffs do not contend that

Defendant’s liability would differ under these state laws as compared with Title VII, but they

do argue, without rebuttal from Defendant, that the two state statutes allow for unlimited

compensatory and punitive damages while Title VII does not. Thus, the D.C. action

duplicates the class claims in this case but not the subclass claims. However, the parties

agree that, because the liability issues between the class and subclass claims overlap, a stay

only on the class claims without a stay on the subclass claims would be meaningless.

While the parties’ briefs focused primarily on the first-to-file rule, this Court need not

rely on that rule because it concludes, for the reasons discussed below, that a short stay

would be an appropriate exercise of the Court’s inherent powers to manage its own docket.

As the Ninth Circuit has explained:

Case 3:06-cv-03903-TEH Document 67 Filed 01/19/07 Page 1 of 3
United States District Court

For the Northern District of California

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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. This rule applies whether the separate

proceedings are judicial, administrative, or arbitral in character,

and does not require that the issues in such proceedings are

necessarily controlling of the action before the court. In such

cases the court may order a stay of the action pursuant to its

power to control its docket and calendar and to provide for a just

determination of the cases pending before it.

Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 863-64 (9th Cir. 1979).

At the October 30, 2006 case management conference, the parties notified the Court

of the existence of the D.C. action, and Defendant represented that extensive settlement

negotiations had been ongoing in that case since April 2005. The parties in the D.C. action

retained Hunter Hughes as a mediator, and the parties in this case gave oral consent to this

Court to contact Mr. Hughes, provided that the Court discussed only procedural matters and

not the merits of the class claims or the substance of any settlement discussions in the D.C.

action. Staying within these constraints, the Court spoke with Mr. Hughes by telephone in

late November 2006.

Upon consideration of Mr. Hughes’s comments, the Court concludes that settlement

negotiations in the D.C. action are, as Defendant represented to the Court, at a very advanced

stage. Plaintiffs’ doubts to the contrary are simply unfounded. Moreover, there does not

appear to be any indication of collusion between the parties in the D.C. action, nor is there

any sign that the plaintiffs’ counsel in that case are incapable of representing the best

interests of the class.

Although the Court would be highly reluctant to dismiss the class and subclass claims

in this case or indefinitely stay such claims pending resolution of the D.C. action in its

entirety, Defendant does not request such extreme relief. To the contrary, Defendant asks

only for a stay until March 15, 2007 – a date less than two months away – and acknowledged

at oral argument that, if this Court were to grant a stay, Defendant would bear a “very high

burden” if they sought an extension of the stay. The Court finds Defendant’s request to be

reasonable in light of the advanced stage of the settlement negotiations in the D.C. action and

Case 3:06-cv-03903-TEH Document 67 Filed 01/19/07 Page 2 of 3
United States District Court

For the Northern District of California

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Defendant does not seek a stay on Plaintiffs’ individual race and age discrimination

claims, and this order therefore does not affect those claims.

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the Court’s estimation, in consultation with Mr. Hughes, of the probability that those

negotiations will be successfully completed prior to Defendant’s proposed deadline. 

Plaintiffs have also failed to persuade the Court that their interests, either individually or on

behalf of the proposed class, would be prejudiced in any significant way by a two-month stay

of this action.

Accordingly, with good cause appearing, IT IS HEREBY ORDERED that

Defendant’s motion to stay Plaintiffs’ class and subclass gender discrimination claims is

GRANTED. Such claims are hereby stayed until March 15, 2007.1

 If a class settlement is

reached in the D.C. action prior to that date, then the Court may consider briefly extending

the stay to allow time for the class notice and opt-out process to run its course. If, however,

the parties have not reached a settlement by March 15, then, as Defendant’s counsel admitted

at oral argument, Defendant will bear an extremely high burden of persuading the Court that

an extension of the stay is warranted. The Court’s decision to grant the stay is influenced by

the short duration of the requested stay, and the Court will not lightly grant an extension.

IT IS FURTHER ORDERED that the parties shall appear for a case management

conference on Monday, April 9, 2007, at 1:30 PM. The parties shall meet and confer and

file a joint case management conference statement on or before April 2, 2007.

IT IS SO ORDERED.

Dated: 01/19/07 

THELTON E. HENDERSON, JUDGE

UNITED STATES DISTRICT COURT

Case 3:06-cv-03903-TEH Document 67 Filed 01/19/07 Page 3 of 3