Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_08-cv-01521/USCOURTS-casd-3_08-cv-01521-4/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1114 Trademark Infringement

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

KAROUN DAIRIES, INC., a

California corporation,

Plaintiff,

v.

KARLACTI, INC., a Delaware

corporation, et al.,

Defendants.

 

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Civil No. 08cv1521 AJB (WVG)

ORDER GRANTING MOTION

TO STAY TRIAL PROCEEDINGS

PENDING DECISION BY THE

NINTH CIRCUIT COURT OF

APPEAL IN A RELATED CASE

AND REQUIRING THE PARTIES

TO SUBMIT A JOINT STATUS

REPORT IN 60 DAYS 

(Doc. No. 261)

Before the Court is Defendants’ Motion to Stay Trial Proceedings Pending a

Related Decision by the Ninth Circuit Court of Appeal. (Doc. No. 261.) For the reasons

set forth below, Defendants’ motion is GRANTED, and this action is hereby STAYED

pending the Ninth Circuit’s decision. 

PROCEDURAL BACKGROUND1

On November 24, 2011, Plaintiff sought leave to file a Third Amended Complaint

in order to add a new claim for breach of an alleged oral contract, among other things. 

2

With regard to the proposed breach of oral contract claim, Plaintiff claimed Defendant

Ara Baghdassarian (“Ara”) had breached an oral agreement with his brother Anto

 A more detailed, factual background of this case may be found in the Court’s 1

previous order denying Plaintiff’s Motion for Reconsideration. (Doc. No. 234 at 2-6.)

Doc. No. 83. 2

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Baghdassarian (“Anto”) in addition to breaching a written agreement already raised as a

claim in this action. On June 24, 2011, the Court denied Plaintiff’s request to add a

breach of oral contract claim in this matter. (Doc. No. 208.) 3

Five months after this Court’s ruling, Anto filed a breach of oral contract claim

based on similar facts against Ara in the Superior Court of the State of California for the

County of Los Angeles, North Central Division on November 14, 2011. Ara subse- 4

quently removed the case to the Central District of California (the “Central District”) and

filed a Notice of Pendency of Other Proceedings. Ara then moved to dismiss the 5

 Defendants attached a Request for Judicial Notice (“RJN”) to their Motion for a 3

Stay. (Doc. No. 261-2.) Defendants seek judicial notice of the following: (1) a

transcript from this Court’s June 24, 2011 hearing on Plaintiff’s Motion to File a Third

Amended Complaint; (2) a notice of removal filed by Ara in the related case in the

Central District; (3) a notice of pendency of other actions filed by Ara in the related case

in the Central District; (4) a motion to dismiss or, alternatively, a motion to transfer filed

by Ara in the related case in the Central District; (5) the Central District’s February 16,

2012 order denying Anto’s motion to remand the related case; (6) the Central District’s

February 16, 2012 order granting Ara’s motion to dismiss the related case with

prejudice; (7) Anto’s opening brief appealing the Central District’s ruling before the

Ninth Circuit; (8) Ara’s response brief in the appeal before the Ninth Circuit; (9) Anto’s

reply brief in the appeal before the Ninth Circuit; and (10) a transcript from the Central

District’s February 6, 2012 hearing regarding Anto’s breach of contract claim. These

items were attached as Exhibits A-J to Defendants’ Motion to Stay. Plaintiffs have not

objected to Defendants’ request for judicial notice of these items. 

As an initial matter, the June 24, 2011 and February 6, 2011 hearing transcripts

from this Court and the Central District respectively are not determinative of any of the

issues raised by Defendants’ motion; nor are the transcripts necessary to the Court’s 

resolution of the motion. Accordingly, the Court declines to take judicial notice of the

transcripts in Exhibits A and J.

Because the remaining documents are matters of public record and relevant to the

Court’s decision herein, the Court takes judicial notice of the existence of the remaining

documents, but not the truth of the disputed matters asserted by the parties therein. See

Fed. R. Evid. 201(b)(2) (stating that the court may take notice of facts that are “not

subject to reasonable dispute in that [they are] . . . capable of accurate and ready

determination by resort to sources whose accuracy cannot be reasonably questioned.”);

Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006)

(finding that matters that are part of the public record may be judicially noticed); Lee v.

City of L.A., 250 F.3d 668, 689 (9th Cir. 2001) (taking judicial notice of the existence of

the documents, but not the truth of disputed matters asserted therein). 

 RJN, Ex. B, Notice of Removal & attached Complaint in Antranik

4

Baghdassarian v. Ara Baghdassarian.

 RJN, Ex. C, Notice of Pendency. 

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Central District action, or in the alternative, to transfer it to the Southern District. Anto

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moved to remand the case to state court. On February 16, 2012, the Central District: (1)

denied Anto’s motion for remand, finding diversity jurisdiction under 28 U.S.C. § 1332;7

and (2) granted Ara’s motion to dismiss with prejudice, holding Anto’s breach of oral

contract claim time-barred. The Central District ruled that Anto’s “claim for breach of 8

oral contract is clearly barred” by the statute of limitations as Anto became aware of the

“alleged breach of the Oral Agreement in 2006 when [Ara’s] counsel notified him that

[Ara] intended to apply for the Karoun trademark.”9

On August 20, 2012, Anto appealed the Central District’s ruling regarding the oral

contract claim’s statute of limitations and the denial of the motion to remand to the Ninth

Circuit Court of Appeal. On October 3, 2012, Ara filed his responsive brief, arguing 10

that: (a) the district court properly exercised diversity jurisdiction; (b) removal was

proper; (c) the court also has federal question jurisdiction; (d) Anto’s duplicative lawsuit

in the Central District is barred because it violates the rule against claim splitting; (e) the

Central District correctly dismissed Anto’s complaint because his claim was barred by

the statute of limitations; (f) the dismissal was also proper because the alleged oral

agreement is void against California’s law and public policy prohibiting restraint of

trade; and (g) dismissal was proper because the alleged oral agreement is invalid under

Lebanese law because it does not comply with Lebanon’s statute of frauds. On 11

November 5, 2012, Anto filed his reply. Anto and Ara are currently awaiting the Ninth 12

 RJN, Ex. D, Ara’s Central District Motion to Dismiss. 6

 RJN, Ex. E, Central District Minute Order Denying Anto’s Motion to Remand. 7

 RJN, Ex. F, Central District Minute Order Granting Ara’s Motion to Dismiss. 8

RJN, Ex. F at 159. 9

RJN, Ex. G, Anto’s Opening Brief. 10

RJN, Ex. H, Ara’s Responsive Brief. 11

RJN, Ex. I, Anto’s Reply Brief. 12

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Circuit’s decision in Antranik Baghdassarian v. Ara Baghdassarian, 11-cv-10385

SVW(JCx) (C.D. Cal. 2012), appeal docketed, No. 12-55458 (9th Cir. Mar. 9, 2012).

On June 28, 2013, Ara and the other Defendants in this action filed the instant

Motion to Stay Trial Proceedings Pending a Related Decision by the Ninth Circuit Court

of Appeal regarding the alleged oral contract between Anto and Ara. Plaintiff filed an

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opposition to Defendants’ motion on July 12, 2013. On July 19, 2013, Defendants filed

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their reply. 

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LEGAL STANDARD

A court's power to stay proceedings is incidental to its inherent power to control

the disposition of its cases in the interests of efficiency and fairness to the court, counsel,

and litigants. Landis v. N. Am. Co., 299 U.S. 248, 254-55 (1936); see also Clinton v.

Jones, 520 U.S. 681, 706-07 (1997); Single Chip Sys. Corp. v. Intermec IP Corp., 495 F.

Supp. 2d 1052, 1057 (S.D. Cal. 2007). For the sake of judicial economy, such a stay

may be granted pending the outcome of other legal proceedings related to the case.

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

discretion is appropriately used when the resolution of another matter will have a direct

impact on the issues before the court, substantially simplifying issues presented. 

Mediterranean Enters. v. Ssangyong Corp., 708 F.2d 1458 (9th Cir. Cal. 1983); San

Diego Padres Baseball P’ship v. United States, 2001 WL 710601, at *1 (S.D. Cal. May

10, 2001). 

The district court's determination of whether a stay is appropriate, "must weigh

competing interests and maintain an even balance." Landis, 299 U.S. at 254-55. The

Ninth Circuit has noted that these competing interests include:

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 mea-

 Doc. No. 261. 13

Doc. No. 271.

14

 Doc. No. 289. 15

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sured in terms of the simplifying or complicating of issues,

proof, and questions of law which could be expected to result

from a stay. 

CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962) (citing Landis, 299 U.S. at 254-

55). However, “‘if there is even a fair possibility that the stay . . . will work damage to

someone else,’ the stay may be inappropriate absent a showing by the moving party of

‘hardship or inequity.’” Dependable Highway Express, Inc. v. Navigators Ins. Co., 498

F.3d 1059, 1066 (9th Cir. 2007)(citing Landis, 299 U.S. at 255). “If a stay is especially

long or its term is indefinite, we require a greater showing to justify it.” Young v. I.N.S.,

208 F.3d 1116, 1119 (9th Cir. 2000) (reversing stay imposed until the resolution of an

appeal that might be lengthy). “[A] stay should not be granted unless it appears likely

the other proceedings will be concluded within a reasonable time.” Dependable

Highway, 498 F.3d at 1066 (quoting Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d

857, 864 (9th Cir. 1979)).

DISCUSSION

Based on the above factors, the Court finds a stay of proceedings is appropriate in

this case for the following reasons. 

I. Prejudice to Moving Party by Denying Stay

As noted by Defendants in their moving papers, the Ninth Circuit is currently

considering the validity of an oral contract that is also at issue in this case. Defendants

argue moving forward with trial proceedings without awaiting the Ninth Circuit’s

decision requires the parties to expend significant time and expense to litigate issues

surrounding the oral contract that may be completely invalidated by the Ninth Circuit’s

decision. Additionally, Defendants argue moving forward would require witnesses, jury

members, and the Court to waste time on an issue that may be fully adjudicated by the

Ninth Circuit. 

Under the circumstances, the Court agrees. The breach of oral contract claim

brought by Anto against Ara in the Central District appears to be the same one rejected

by this Court when it denied Plaintiff leave to add a breach of oral contract claim against

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Ara here. As a result, Ara has already been required to litigate the same issue in two

forums simultaneously, resulting in a much greater expense of time and resources than

ordinarily required. It would cause further prejudice to Defendants if litigation continued in this action and the Ninth Circuit subsequently issued a decision that would require

relitigation of this case in accordance with its ruling. Contrary to Plaintiff’s assertion, it

does not appear Defendants are seeking to avoid trial or needlessly drag out litigation. 

Rather, it appears the Ninth Circuit will consider issues that will also need to be considered by the Court in this case. Thus, it would result in prejudice to both parties if the

decision reached by the Ninth Circuit required additional expense and effort in this case

by virtue of the case proceeding forward without awaiting its decision. 

II. Prejudice to Non-Moving Party by Granting Stay

In contrast, Plaintiff argues a stay of trial for an indefinite amount of time would

result in prejudice to Plaintiff. Specifically, Plaintiff asserts that any further delay of trial

allows witnesses to grow older and their memories to fade, hampers Plaintiff’s business

activities, and increases expenses by litigating in an inconsistent fashion. 

As support for this argument, Plaintiff relies upon Murray v. City of Carlsbad for

the proposition that the potential delay of trial and the corresponding consequences to

Plaintiff outweigh the potential efficiency and expense saved by Defendants and the

Court. In Murray, the court did find delay of trial constituted damage to the non16

moving party, such that the moving party needed to make a clear case of hardship or

inequity in being required to proceed with trial. However, when the court denied the 17

stay pending a decision by the Ninth Circuit in Murray, the court found the legal issues

raised by the plaintiff’s claims in the Ninth Circuit case were “separate and distinct from

the legal issues” raised in the case before the court. Accordingly, the moving party had

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(Pl. Resp. 21-22 (Doc. No. 271)(citing Murray v. City of Carlsbad, 2010 WL

16

4822744, at *1 (S.D. Cal. Nov. 22, 2010)).)

Murray v. City of Carlsbad, 2010 WL 4822744, at *1 (S.D. Cal. Nov. 22, 2010).

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Id.

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not satisfied its burden. In stark contrast to the situation in Murray, the issues raised in

the Ninth Circuit case are not “separate and distinct” from the issues raised here. As

noted above, the Ninth Circuit’s decision may have a direct impact on the proceedings in

this case. Accordingly, it would be inequitable to Defendants and a hardship upon both

parties to require further litigation of this issue here before the Ninth Circuit issues its

ruling.

Plaintiff also relies upon Palomar Medical Center v. Sebelius as support for

imposing an enhanced burden on Defendants in seeking a stay of an undetermined

duration at this late stage of the case. In that case, the court noted the moving party had

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an enhanced burden to justify the stay where the stay requested was indefinite and denied

a stay pending a decision in a related case. However, the facts in Palomar Medical 20

Center are also distinguishable from this case. First, the court in Palomar Medical

Center observed that the related case “was just recently filed and its conclusion unknown.” Second, the moving party in that case had “waited almost eight months before

filing” the motion for a stay. In this instance, the time frame is less uncertain as the

Ninth Circuit has not only accepted the appeal, but Anto filed his reply in November

2012, thereby completing the briefing on the issue. There is no reason to expect these

proceedings will not be concluded within a reasonable time. Additionally, there is no

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evidence Defendants unreasonably delayed filing their request for a stay in this case. 

Rather, Defendants have kept this Court informed regarding the status of the related case

in the Central District and its subsequent appeal to the Ninth Circuit.

Palomar Medical Center v. Sebelius, 2010 WL 2985839, at *1 (S.D. Cal. July 19

28, 2010).

 Palomar Medical Center v. Sebelius, 2010 WL 2985839, at *1 (S.D. Cal. July 20

28, 2010).

 Plaintiff argues Ara’s failure to request an expedited hearing schedule before the 21

Ninth Circuit can lead to only one conclusion: Ara failed to do so in order “to delay the

trial of this long-pending case indefinitely and for as long as possible.” (Pl. Resp. 17.) 

The Court declines to make this inference as there are any number of reasons a party

might choose not to request an expedited hearing schedule that have absolutely nothing

to do with intentionally delaying a related case. 

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Even with an enhanced burden based on the indefinite time period of the requested

stay, the Court finds Defendants have made a persuasive case for hardship or inequity for

the Defendants if the stay is not granted. In fact, Defendants have made a persuasive

case for hardship or inequity on behalf of all those involved – the litigants, the witnesses,

the jury members, and the Court – if a stay is denied. There is a distinct possibility that

the Ninth Circuit’s ruling will impact the resolution of issues in this case. As discussed

above, moving forward with trial without awaiting the Ninth Circuit’s ruling on these

issues would result in significant expenditures of time and resources by the parties to

litigate issues that may ultimately be invalidated. 

In light of this potential hardship for both parties and non-parties, the Court is not

persuaded by Plaintiff’s argument that any delay of trial allows witnesses to grow older

and their memories to fade, hampers Plaintiff’s business activities, and increases

expenses by litigating in an inconsistent fashion. The generalized risks cited by Plaintiff

are not unique to the situation here. The Court's determination of whether a stay is

appropriate, "must weigh competing interests and maintain an even balance." Landis,

299 U.S. at 254-55. Even taking into account the damage to Plaintiff from delaying trial,

the Court finds that the potential prejudice to the parties if the trial moves forward

outweighs the potential prejudice to Plaintiff if a stay is granted.

III. Judicial Economy

Similarly, a stay serves the Court’s interest in judicial economy. Staying proceedings pending the Ninth Circuit’s decision could simplify and clarify the issues presented

for the Court’s consideration in the parties’ Daubert motions and motions in limine as

well as the issues to be presented to the jury at trial. Under these circumstances, the

Court finds significant value in temporarily staying proceedings to wait for any insight

provided in the Ninth Circuit’s opinion. It makes little sense to address the complicated

issues of Lebanese contract law raised in the parties’ Daubert motions, and likely to be

raised in the parties’ motions in limine, while these issues are simultaneously being

considered by the Ninth Circuit. In all likelihood, the Ninth Circuit’s consideration of

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the oral contract will substantially aid the resolution of the present action by narrowing

and simplifying the issues and facts presented before for the jury and Court.

Furthermore, the Court echoes Defendants’ concern that moving forward with trial

prior to a decision being reached by the Ninth Circuit could result in inconsistent rulings. 

It appears many of the issues raised before the Ninth Circuit would also be raised before

this Court with regard to the parties’ Daubert motions and motions in limine. If this

Court or the jury reaches conclusions contrary to those reached by the Ninth Circuit, it

would result in significant confusion and would likely extend litigation in order to

address the inconsistent decisions. As a result, inconsistent rulings would waste judicial

time and resources as well as impose further hardship and inequity to the parties.

Based on these considerations, the Court concludes a stay serves the interest of

judicial economy. Overall, it appears the issues before the Ninth Circuit may have a

direct impact on the issues currently before this Court, and the prejudice to the parties in

moving forward without the benefit of the Ninth Circuit’s decision outweighs the

damage to Plaintiff of further delaying trial in this matter. Therefore, a stay is warranted

under the circumstances. 

CONCLUSION

For the reasons set forth above, the Court GRANTS Defendants’ Motion to Stay

Trial Proceedings. It is further ORDERED as follows:

1. This case is STAYED pending a decision by the Ninth Circuit in the related

case, Antranik Baghdassarian v. Ara Baghdassarian, 11-cv-10385

SVW(JCx) (C.D. Cal. 2012), appeal docketed, No. 12-55458 (9th Cir. 

Mar. 9, 2012); 

2. As a result, the parties’ pending Daubert Motions and accompanying 

Motions to Seal are hereby taken off calender. These motions will be reset 22

once the stay has been lifted.

 (Doc. Nos. 253, 256, 257, 258, 259, 262, 263, 264, 265, and 268.) 22

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3. The parties must submit a joint status report in 60 days to inform the Court 

of the status of the Ninth Circuit case.

IT IS SO ORDERED. 

DATED: September 3, 2013

Hon. Anthony J. Battaglia

U.S. District Judge

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