Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_05-cv-01741/USCOURTS-casd-3_05-cv-01741-0/pdf.json

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

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 1 - 05 CV 1741 WQH(NLS)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

THEODORE ARABIAN, MARTIN SAUER,

EKREM SARAC, STEVE VARADI, and

DAVID JOHNSON

Plaintiff,

CASE NO. 05 CV 1741 WQH(NLS)

ORDER DENYING PLAINTIFFS’

MOTION FOR A STAY

vs.

SONY ELECTRONICS INC.,

Defendant.

HAYES, Judge

The matter before the Court is the Motion to Stay filed by Plaintiffs Arabian, Sauer, Sarac,

Varadi, and Johnson (“Plaintiffs”). On July 3, 2006, the Court granted Defendant Sony Electronics,

Inc.’s (“Sony”) Motion for Partial Stay with respect to the putative class of Sony GRX laptop

purchasers. Plaintiffs’ Motion to Stay the remainder of the action with respect to FX laptop

purchasers is now before the court. The Court takes these matters under submission on the papers and

without oral argument pursuant to Civil Local Rule 7.1(d)(1). 

INTRODUCTION

Plaintiffs have brought an action against Sony on behalf of persons in the U.S. who

purchased Sony Vaio GRX laptops and persons in the U.S. and Canada who purchased Sony Vaio

FX laptops. Plaintiffs allege that the entirety of this action is similar to an action pending in state

court entitled, Hapner v. Sony Electronics, Inc., Case No. GIC839244 (Superior Court of San

Case 3:05-cv-01741-WQH-NLS Document 64 Filed 10/10/06 Page 1 of 8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 2 - 05 CV 1741 WQH(NLS)

Diego County, California) (“Hapner action”). In the Hapner action, a class has been certified with

respect to the GRX laptops only. Plaintiffs claim that both the GRX and FX laptops have

essentially the same defect with regard to the memory slots, and now move to stay the action with

respect to the FX purchasers until the Hapner action is resolved.

Sony opposes a stay of the FX portion of the case. Sony claims that the GRX and FX

actions are distinguishable in that they involve two separate alleged classes of plaintiffs alleging

defects in different products. Based on this distinction, Sony claims that it is not proper to

postpone the resolution of the FX case pending the resolution of the GRX claims in the Hapner

action. Defendant seeks to proceed with the FX case.

BACKGROUND

Sony has marketed, sold, and serviced thousands of Vaio GRX and FX series notebook

computers within the U.S. (Answer at 2 and 6.) At the time each series was sold, the computers

contained two memory slots and were available in various configurations offering differing

amounts of installed memory. (Id.) Sony has not issued any warnings or recall programs with

respect to these notebooks. (Id. at 4.)

Plaintiffs brought this case as a purported class action to obtain damages and injunctive

relief against Sony for alleged defects in the memory slots of the GRX and FX series notebooks. 

On March 22, 2006, Magistrate Judge Stormes ordered that discovery as to the GRX laptops be

stayed because of the Hapner action, a parallel GRX class action brought in the San Diego

Superior Court. (Order Following Case Management Conference at 2.) However, Magistrate

Judge Stormes ordered that discovery as to the FX laptops should proceed as the FX laptops were

not part of the Hapner action. (Id.)

Sony moved for a Partial Stay as to the GRX claims, pending the resolution of the Hapner

action. Rather than oppose Sony’s Motion, Plaintiffs attempted to file an untimely-noticed CrossMotion for Stay of the entire proceeding. On June 19, 2006, the Court granted Sony’s Motion for

Partial Stay of the proceedings relating to the claims of the GRX Plaintiffs. 

Plaintiffs had previously argued to Magistrate Judge Stormes that the allegations of defects

in the FX notebooks were unaffected by the Hapner action and that this portion of the action

Case 3:05-cv-01741-WQH-NLS Document 64 Filed 10/10/06 Page 2 of 8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 3 - 05 CV 1741 WQH(NLS)

should proceed. In Plaintiffs’ Case Management Statement and Proposed Discovery Plan, dated

March 22, 2006, Plaintiffs opposed staying any portion of the case and expressed a desire to

proceed with discovery. (See Maxwell Decl. Ex. F at 62.) Plaintiffs stated, “there is nothing in the

Hapner Action concerning the FX model series, as no plaintiff in that case purchased an FX

model. Thus, there is no basis not to proceed with the instant action.” (Id.) Plaintiffs argued for

coordination with plaintiffs’ counsel in the Hapner action regarding discovery and litigation rather

than a stay. (Id. at lines 20-22.) Plaintiffs’ alleged that the defect in the GRX and FX laptops was

similar if not the same and that the claims could be most expeditiously dealt with by coordinating

discovery between the state and federal court actions. 

After the Court granted Sony’s Motion to Stay the GRX portion of the case, Plaintiffs

moved to stay the portion of the case involving the FX series. (See Pl’s Mem. of Points and

Authorities in Supp. of Mot. for Stay 1.) Plaintiffs contend that there are multiple common

questions of law and fact that exist between the GRX and FX classes of Plaintiffs, including, but

not limited to, whether Sony made false and/or misleading statements concerning the alleged

defects; whether the laptops experienced memory failure; and whether Sony engaged in unfair

business practices with respect to the advertising, marketing, and sale of Vaio GRX and FX

laptops. (Id. at 3.)

According to Sony Technical Support Engineer Fred Iravani, the GRX and FX series

notebooks differ in several ways. (Declaration of Fred Iravani in Support of Sony Electronics

Inc.’s Opposition to Plaintiffs’ Motion to Stay (“Iravani Decl.”) at 2, Exs. A and B.) First, they are

not the same size. (Id.) The GRX series is wider and longer and weighs about one pound more

than the FX series. (Id.) Second, the memory slots of the GRX and FX series of notebooks are

made of different materials, are given different part numbers by Sony, and are not interchangeable. 

(Id.) Finally, the memory sockets on the FX laptops contain a metal piece that is not present in the

GRX laptops. (Id.)

Plaintiffs do not dispute that the GRX and FX models are different. (Reply at 2 n. 3.) 

However, Plaintiffs contend that purchasers of both the GRX and FX notebooks complain of the

same problem with the memory slots: “the computer stops reading all of the memory that Sony has

Case 3:05-cv-01741-WQH-NLS Document 64 Filed 10/10/06 Page 3 of 8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 4 - 05 CV 1741 WQH(NLS)

said the laptop contains, in particular, it fails to read the memory available in Slot 2.” (Complaint,

at 33.) Plaintiffs also allege that the cause of the problem with the memory slots is the same for

the GRX laptops as for the FX laptops. Plaintiffs point to a Sony Technical News bulletin, dated

July 30, 2003, where Sony informed employees that if owners of the either the FX or GRX laptops

complained of either the computer not booting or not recognizing memory, that “the cause is the

solder exfoliation of the connector in the memory slot.” (See Reply Declaration of Patricia L.

Avery in Support of Motion for Stay (“Avery Reply Decl.”) at Ex. A). Plaintiffs contend that this

same defect, and the same cause of the defect, is alleged by the plaintiffs in the Hapner action with

regard to the GRX notebooks, and that the Court should stay the FX portion of the litigation

pending the outcome of the GRX case in state court. 

STANDARD OF REVIEW

“The power to stay proceedings is incidental to the power inherent in every court to control

the disposition of the cases on its docket with economy of time and effort for itself, for counsel,

and for litigants.” Landis v. American Water Works & Elec. Co., 299 U.S. 248, 254 (1936). The

use of this power requires exercise of sound discretion. Id. Additionally, it is necessary to weigh

competing interests of those that will be affected by the stay. Id. at 254- 255. See CMAX, Inc. v.

Hall, 300 F.2d 265, 268 (9th Cir. 1962). These competing interests include: 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. CMAX, 300 F.2d at 268. The moving party “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 someone else.” Landis, 299 U.S. at 255. 

A district court has the discretion to evaluate a motion to stay pending resolution of a

concurrent state court proceedings under the Colorado River doctrine. Colorado River Water

Conservation Dist. v. U.S., 424 U.S. 800, 817 (1976). A district court is justified in dismissing or

staying a federal proceeding when it determines that (1) a parallel proceeding exists in a state

court, and (2) “exceptional circumstances” exist that warrant abstention. See Colorado River, 424

Case 3:05-cv-01741-WQH-NLS Document 64 Filed 10/10/06 Page 4 of 8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 5 - 05 CV 1741 WQH(NLS)

U.S. at 819. “Parallel proceedings exist when substantially similar parties are contemporaneously

litigating substantially similar issues in both the federal and state courts.” Enfission, Inc. v. Leaver,

408 F. Supp. 2d 1093, 1096 (W.D.Wash. 2005) (citing Nakash v. Marciano, 882 F.2d 1411, 1416

(9th Cir. 1989). The Ninth Circuit has held that “any substantial doubt as to whether the state

proceedings will resolve the federal action precludes the granting of a [Colorado River] stay.” Id.

(quoting Intel Corp. v. Advanced Micro Devices, Inc., 12 F.3d 908, 913 (9th Cir. 1993).

DISCUSSION

Sony contends that a stay of the FX case pending the resolution of the Hapner action in

state court may result in possible damage and unfair prejudice to Sony. (Opp’n 6-7.) Sony argues

that awaiting the resolution of the GRX case in state court might take several years, which would

unfairly prejudice Sony by leaving meritless claims in limbo. (Id. 6.) Sony contends that

prejudice would result from an increased potential for spoliation of evidence as time passes, and

diminution of the value of the requested relief to the class. (Id.) Absent class members are more

likely to get rid of their laptops and, even if they keep them, Sony argues that it will become more

difficult over time to determine what defects, if any, were present at the time of manufacturing and

which are the result of age. (Id.) In response, Plaintiffs assert that a stay of the FX case will not

unfairly prejudice Sony because the claim that the two laptop models have the same defect is

meritorious. (Reply 3.) Plaintiffs also contend that the potential for spoliation of evidence is a

“red herring” because Sony is not entitled to take discovery of absent class members. (Id. at 5

(citing Danzig v. Superior Court, 87 Cal. App. 3d 604, 612 (1978)).) 

The Court finds that staying the FX action creates a potential for spoliation of evidence. 

The resolution of the Hapner action could take years, during which time evidence needed to

litigate the FX case in federal court could be destroyed or become stale. As time goes on, absent

class members are more likely to dispense with their laptops and manufacturing defects may

become more difficult to detect. Although no determination has been made as to whether Sony can

take discovery of absent class members, it is possible that the necessity for such discovery will be

demonstrated. Therefore, the Court finds that there is a fair possibility that Sony would be unfairly

prejudiced by a stay of the FX case until the resolution of the Hapner action. 

Case 3:05-cv-01741-WQH-NLS Document 64 Filed 10/10/06 Page 5 of 8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 6 - 05 CV 1741 WQH(NLS)

Because there is a fair possibility that a stay will work damage to Sony, Plaintiffs must

make out a clear case of hardship or inequity in being required to go forward with the FX case. 

See Landis, 299 U.S. at 255. Plaintiffs contend that there will be duplication of time, effort and

resources of the court, as well as duplicate class certification motions, if the FX portion of the case

is not stayed. (See Reply 5.) Plaintiffs also contend that staying the FX portion of the case

pending the outcome of the Hapner action is needed to avert the possibility of inconsistent rulings

on discovery and dispositive motions, as well as inconsistent verdicts. (Pl.’s Mem. of Points and

Authorities in Supp. of Mot. for Stay 4.) Plaintiffs point to a Sony news bulletin as evidence that a

defect in both the GRX and FX notebooks is caused by “the solder exfoliation of the connector in

the memory slot.” (Avery Reply Decl., Ex. A.) 

However, the Court concludes that because the two notebook models have different

memory slots, further discovery is required to determine whether solder exfoliation affects the

laptops in the same way or leads to the same alleged defect. Plaintiffs have not established that a

stay would reduce the time and effort spent on discovery and have failed to make out a clear case

of hardship or inequity that would merit the granting of a stay.

Another factor that the Court must evaluate is whether granting the stay will simplify the

issues, proof, and questions of law in the case. See CMAX, 300 F.2d at 268. Plaintiffs contend

that evidence obtained as part of the Hapner action regarding GRX laptops is applicable to the

issues of proof and causation in the FX portion of the federal case. In response, Sony asserts that a

stay of the FX case will confuse rather than simplify the issues, as the jury would have to

understand how differences in the memory slots of the two notebooks might impact the allegations

of a defect. Sony contends that a stay would not simplify the issues because a judgment in the

Hapner action will not be res judicata as to the FX Plaintiffs, because the federal and state actions

involve different parties and different claims which would be proved with different evidence. 

Plaintiffs do not address Sony’s contention that the state court action would not be res judicata as

to the FX proceeding.

Although evidence from the Hapner action may prove to be relevant to the FX portion of

this case, this is not established. In addition, there is considerable doubt that the resolution of the

Case 3:05-cv-01741-WQH-NLS Document 64 Filed 10/10/06 Page 6 of 8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 7 - 05 CV 1741 WQH(NLS)

Hapner action would be res judicata as to the FX portion of the case due to the differing parties

and claims as between the two actions. Because it is uncertain that the outcome in state court

would simplify or resolve any of the issues in the FX portion of the case, the Court concludes that

there is not sufficient evidence that a stay of the FX case would simplify the issues, proof and

questions of law. 

The Court concludes that the balance of the competing interests under Landis and CMAX

weighs against a stay of the FX portion of the case. 

In addition, although neither party cited to the Colorado River doctrine in their papers, the

Colorado River doctrine is also applicable to motions to stay federal proceedings pending a

concurrent state court action. See Intel Corp. v. Advanced Micro Devices, Inc., 12 F.3d 908, 913

(9th Cir. 1993); see also Travelers Indemnity Co. v. Madonna, 914 F.2d 1364, 1372 (9th Cir.

1990). Application of the Colorado River doctrine in federal court “presumably concludes that the

parallel state-court litigation will be an adequate vehicle for the complete and prompt resolution of

the issues between the parties.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S.

1, 28 (1983). Although “exact parallelism” between the federal and state proceedings is not

required in order for the federal court to stay a proceeding, Nakash v. Marciano, 882 F.2d 1411,

1416 (9th Cir. 1989), the “existence of a substantial doubt as to whether state proceedings will

resolve the federal action precludes the granting of a stay.” Intel Corp., 12 F.3d at 912. In the

instant case, the state court GRX action and the FX portion of the federal court proceeding are

sufficiently distinguishable that such a doubt exists, and a stay would not be warranted under the

Colorado River doctrine. Although the possibility exists that resolution of the GRX case in state

court might have an impact on the FX portion of the instant matter, the Court concludes that there

is substantial doubt that the resolution of the state court GRX action would resolve the claims

brought by the FX Plaintiffs in federal court. 

Accordingly, the Court denies Plaintiffs’ Motion for a Stay.

//

//

//

Case 3:05-cv-01741-WQH-NLS Document 64 Filed 10/10/06 Page 7 of 8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 8 - 05 CV 1741 WQH(NLS)

CONCLUSION AND ORDER

For the foregoing reasons, the Court DENIES Plaintiffs’ Motion for a Stay (Doc. No. 41).

IT IS SO ORDERED.

DATED: October 10, 2006

WILLIAM Q. HAYES

United States District Judge

Case 3:05-cv-01741-WQH-NLS Document 64 Filed 10/10/06 Page 8 of 8