Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_14-cv-01789/USCOURTS-cand-5_14-cv-01789-12/pdf.json

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

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Case No.: 5:14-cv-01789-EJD

ORDER DENYING DEFENDANT’S MOTION TO STAY

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

CISCO SYSTEMS, INC., et al.,

Plaintiffs,

v.

LOC XUAN HOANG, et al.,

Defendants.

Case No. 5:14-cv-01789-EJD 

ORDER DENYING DEFENDANT’S 

MOTION TO STAY

Re: Dkt. No. 166

In this civil action, Plaintiffs Cisco Systems, Inc. and Cisco Technology, Inc. (collectively, 

“Cisco”) allege that, from January, 2006, through January, 2013, several individuals and other 

entities engaged in a conspiracy to buy stolen products and confidential information from Cisco 

employees and then resell those products to brokers and other resellers. Cisco asserts nine causes 

of action against these individuals in an Amended Complaint (“AC”) filed on September 10, 2015, 

including claims for trademark infringement, counterfeiting and dilution; unfair competition; and 

violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961, et seq.

Federal jurisdiction arises pursuant to 28 U.S.C. § 1331. Presently before the court is 

Defendant Vu Nguyen’s (“Nguyen”) motion to either stay the action against him or stay discovery

in light of a related criminal case also pending in this court, namely United States v. Dang, 5:13-

cv-00486-EJD (the “Criminal Case”). Dkt. No. 166. Cisco opposes the motion. Having carefully 

considered the pleadings filed by the parties, the court finds, concludes and orders as follows:

1. The district court’s “power to stay proceedings is incidental to the power inherent 

in every court to control the disposition of the causes on its docket with economy of time and 

effort for itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). 

Case 5:14-cv-01789-EJD Document 207 Filed 05/20/16 Page 1 of 5
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Case No.: 5:14-cv-01789-EJD

ORDER DENYING DEFENDANT’S MOTION TO STAY

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Using this power, one case may be stayed in favor of another. Leyva v. Certified Grocers of Cal., 

Ltd., 593 F.2d 857, 863-64 (9th Cir. 1997) (“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.”).

2. Notably, “[t]he Constitution does not ordinarily require a stay of civil proceedings 

pending the outcome of criminal proceedings.” Keating v. Office of Thrift Supervision, 45 F.3d 

322, 324 (9th Cir. 1995). Instead, “[t]he decision whether to stay civil proceedings in the face of a 

parallel criminal proceeding should be made ‘in light of the particular circumstances and 

competing interests involved in the case.’” Id. (quoting Fed. Sav. & Loan Ins. Corp. v. Molinaro, 

889 F.2d 899, 902 (9th Cir. 1989)). Absent some form of substantial prejudice to the rights of the 

parties, civil and criminal proceedings can continue simultaneously. Id. 

3. To determine whether substantial prejudice exists, the court must consider the 

extent to which the a criminal defendant’s Fifth Amendment rights are implicated by the civil 

proceeding, as well as the following factors: “(1) the interest of the plaintiffs in proceeding 

expeditiously with this litigation or any particular aspect of it, and the potential prejudice to 

plaintiffs of a delay; (2) the burden which any particular aspect of the proceedings may impose on 

defendants; (3) the convenience of the court in the management of its cases, and the efficient use 

of judicial resources; (4) the interests of persons not parties to the civil litigation; and (5) the 

interest of the public in the pending civil and criminal litigation.” Id. at 324-25. “The proponent 

of a stay bears the burden of establishing its need.” Clinton v. Jones, 520 U.S. 681, 708 (9th Cir. 

1997). 

4. Nguyen contends this case significantly implicates his Fifth Amendment rights. To 

that end, Nguyen argues that requiring him to respond to the AC or to participate in discovery 

related to it will force him to choose between revealing information which might implicate him in 

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Case No.: 5:14-cv-01789-EJD

ORDER DENYING DEFENDANT’S MOTION TO STAY

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the Criminal Case or refusing to respond and possibly suffering a default judgment. However, 

Nguyen was not indicted and has not been named a defendant in the Criminal Case. Thus, while 

Nguyen’s privilege is certainly not negligible given the factual overlap between this case and the 

Criminal Case, his position is nonetheless “‘a far weaker one’” when it comes to the implication of 

any Fifth Amendment privilege. Molinaro, 889 F.2d at 903; eBay, Inc. v. Digital Point Solutions, 

Inc., No. C 08-4052 JF (PVT), 2010 U.S. Dist. LEXIS 23253, at *10, 2010 WL 702463 (N.D. Cal. 

Feb. 25, 2010) (recognizing that the interest of an unindicted civil defendant is “more remote” that 

that of an indicated civil defendant). That Nguyen may need to choose between participating in 

this action and invoking his Fifth Amendment privilege does not make his interest any stronger. 

See Keating, 45 F.3d at 326 (observing that a “defendant has no absolute right not to be forced to 

choose between testifying in a civil matter and asserting his Fifth Amendment privilege,” even if 

the assertion results in adverse inferences before the trier of fact). 

5. Cisco’s interest in expeditiously proceeding with this action and preventing further

delay is strong. As some defendants have already admitted, Cisco was the victim of a scheme to 

steal its products and deprive it of profits. Fraud victims like Cisco “are at great risk if they do not 

promptly and diligently act to protect themselves as soon as they have reason to believe they have 

been defrauded.” IBM Corp. v. Brown, 857 F. Supp. 1384, 1391 (C.D. Cal. 1994). This is so for 

several reasons, some of which include the defrauder’s ability to flee or dispose of fraudulentlyobtained property and the victim’s inability to use traditional methods of preserving assets pending 

the resolution of litigation. Id. To be sure, “the passage of time increases the risk of further 

depletion of any assets remaining to satisfy a possible judgment.” Id. Here, these types of 

concerns are not simply hypothetical since at least two of the scheme’s participants cannot be 

located and are believed to have fled. Cisco’s contention that a stay may cause it further prejudice

in this regard is therefore credible. 

6. Furthermore, imposing either form of stay proposed by Nguyen would prevent 

Cisco from preserving and obtaining evidence related to its allegations against the unindicted civil 

defendants and would frustrate its ability to bring claims against unknown individuals before the 

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Case No.: 5:14-cv-01789-EJD

ORDER DENYING DEFENDANT’S MOTION TO STAY

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expiration of the statute of limitations. As time passes, evidence disappears, witnesses become

more difficult to track down, and memories of events that occurred years prior become less acute. 

See SEC v. Dresser Indus., Inc., 628 F.2d 1368, 1377 (D.C. Cir. 1980) (“If Justice moves too 

slowly the statute of limitations may run, witnesses may die or move away, memories may fade, or 

enforcement resources may be diverted.”); see also Sw. Marine, Inc. v. Triple A Machine Shop, 

Inc., 720 F. Supp. 805, 809 (N.D. Cal. 1989). This issue is particularly compelling for this case -

which has already been pending for over two years without disclosures or discovery having been 

exchanged - because, if stayed, it would be unknown when discovery could eventually proceed. 

Since there is no specific timeline for the conclusion of the Criminal Case or the expiration of the 

limitations period for charges against Nguyen, the abatement of this action would be indefinite, at 

least initially. These circumstances weigh against a stay. 

7. The burden on Nguyen does not shift the balance in his favor. In a declaration 

submitted with the reply, Nguyen’s counsel states “[t]t will be a considerable legal burden, and 

thus a financial burden, on [Nguyen,] if he has to respond to the First Amended Complaint herein 

or to potential discovery to him, due to the pendency of the criminal prosecution.” But Nguyen’s 

counsel does not go on to describe any burden uniquely or unusually imposed because of the 

Criminal Case. Responding to pleadings in the most advantageous way is an exercise undertaken

by all civil defendants, as is incurring fees for an attorney to assist in that effort. Accordingly, the 

court finds Nguyen’s argument unpersuasive. 

8. Similarly, consideration of the third Keating factor does not favor a stay. “The 

Court has an interest in managing its cases efficiently.” eBay, 2010 U.S. Dist. LEXIS 23253, at 

*17. Without doubt, a stay imposed for an unknown duration in a case that is already two years 

old frustrates the court’s ability to efficiently manage its docket and assist in bringing resolution to 

already aged claims. And to the extent it is relevant, the fourth Keating factor requiring 

consideration of third-party interests weighs against a stay. As Cisco points out, delaying 

resolution may cause harm to third parties who purchase counterfeit or stolen products without 

knowing the products are not endorsed by Cisco. 

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Case No.: 5:14-cv-01789-EJD

ORDER DENYING DEFENDANT’S MOTION TO STAY

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9. As to the fifth factor, the court observes the public has an interest in the “speedy 

resolution” of controversies. Keating, 45 F.3d at 326. Although this interest sometimes invests 

precedence in criminal actions over civil ones, the court is satisfied that allowing this case to 

continue unabated will do no harm to the integrity of the Criminal Action. Nguyen does not argue 

otherwise. 

Having undertaken the relevant analysis, the court concludes that Nguyen has not satisfied 

his burden to show substantial prejudice. Nor has he persuasively reasoned why he should be 

exempt from discovery at this time, especially when his “Fifth Amendment rights can be protected 

through less drastic means, such as asserting the privilege on a question-by-question basis.” ESG 

Capital Partners LP v. Stratos, 22 F. Supp. 3d 1042, 1045-46 (C.D. Cal. 2014). 

Consequently, the motion to stay is DENIED. 

IT IS SO ORDERED.

Dated: May 20, 2016

______________________________________

EDWARD J. DAVILA

United States District Judge

Case 5:14-cv-01789-EJD Document 207 Filed 05/20/16 Page 5 of 5