Court Opinion

ID: 9392673
Source: CourtListenerOpinion
Date Created: 2023-05-05 20:01:13.768824+00
Date Added: 2024-06-11T17:18:47.939316
License: Public Domain

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

VALLEJO ENTERTAINMENT LLC,
Plaintiff,
Vv. Case No. 1:22-cv-01548-RCL

SMALL BUSINESS ADMINISTRATION, ez
al.,

Defendants.

 

 

MEMORANDUM ORDER
Upon consideration of the defendants’ motion to stay this case pending the D.C. Circuit’s
issuance of a decision in Concert Investor LLC v. Small Business Administration, No. 22-5253
(D.C. Cir.), Def.’s Mot. to Stay (“Def.’s Mot.”), ECF No. 20, the plaintiff's opposition, Pl’s. Mem.
Opp’n, ECF No. 21, the defendant’s reply, Def.’s Reply, ECF No. 22, the applicable law, and the
whole record, the Court GRANTS the motion and ORDERS that the case be stayed until
resolution of Concert Investor in the D.C. Circuit.
I. LEGAL STANDARD
The Court’s authority to order a stay is well established. “The power to stay proceedings
is incidental to the power inherent in every court to control . . . its docket with economy of time

and effort for itself, for counsel, and for litigants.” Landis v. North Am. Co., 299 U.S. 248, 254

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(1936). In considering a stay pending resolution of independent proceedings, a court “‘must weigh

competing interests and maintain an even balance’ between the court’s interests in judicial
economy and any possible hardship to the parties.” Belize Soc. Dev. Ltd. v. Gov't of Belize, 668

F.3d 724, 733 (D.C. Cir. 2012) (quoting Landis, 299 U.S. at 254-55). A stay cannot be indefinite
or “oppressive in its consequences” and should promote “public welfare or convenience.” Landis,
299 U.S. at 256.

If there is a “fair possibility” that the stay will harm “someone else,” the movant must
“make out a clear case of hardship or inequity in being required to go forward.” Id. at 255. At the
same time, a party may be required “to submit to delay not immoderate in extent and not oppressive
in its consequences if . .. convenience will thereby be promoted.” Jd. at 256.

I. DISCUSSION

Courts in this District have stayed multiple cases pending resolution of Concert Investors
because it is poised to answer a jurisdictional question that may render the cases moot — the same
jurisdictional question present in this case.! Champion Matters LLC v. Small Business
Administration, Civ. A. No. 22-0616-RDM, Minute Order (F eb. 13, 2023); Sokol World Ent., Inc.
y. Small Business Administration, Civ. A. No. 21-2385-TSC, Minute Order (Feb. 15, 2023). A stay
will very likely conserve significant judicial and party resources that would otherwise be needed
to brief the issues. Given the balance of economic gains against a lack of a fair possibility of harm
to the plaintiff, the Court will stay this case pending resolution of Concert Investors in the D.C.
Circuit.

A. Judicial Economy Favors a Stay

A stay may be granted for the “economy of time and effort for [the Court], for counsel and
for litigants.” Landis, 299 U.S. at 254, To determine whether economy supports a stay, courts often
consider the length of the stay; whether the independent proceeding will decide an issue dispositive

for or important to the stayed case; and how likely it is that the issue will be decided. See Belize,

 

1 The question is whether a court can order the obligation of funds that Congress has rescinded from the Shuttered
Venues Operators Grant (SVOG) Program and therefore whether a lack of possibility of relief renders the cases moot.
Def.’s Reply, ECF No. 22 at 2-4.
668 F.3d at 732 (explaining that a stay cannot be indefinite, which occurs when the record does
not show what resolution of a case would entail or when it is likely to be reached); Nat'l Indus. for
Blind v. Dep’t of Veterans Aff, 296 F. Supp. 3d 131, 142-43 (D.D.C. 2017) (considering whether
an independent appellate proceeding would reach the legal issue present in the stayed case and
how likely it was to entirely resolve the stayed case); Univ. of Colorado Health at Memorial
Hospital v. Burwell, 233 F. Supp. 3d 69, 87 (D.D.C. 2017) (considering whether an independent
appellate proceeding would have a preclusive effect on the stayed case).

Defendants point to many reasons why a stay would promote judicial economy. First,
Concert Investor will almost assuredly answer a key question potentially dispositive in this case:
whether congressional rescission of unobligated funds from the Shuttered Venue Operators Grant
(SVOG) Program prevents courts from providing relief. Brief for Appellee at 17, Concert Investor,
No. 22-5253 (D.C. Cir.), Doc. No. 1995504; Def.’s Mot. 2-3. If a court cannot provide the relief
sought, the case is moot and the court loses jurisdiction. Zukerman v. U.S. Postal Serv., 961 F.3d
431, 442 (D.C. Cir. 2020). A court must answer this jurisdictional question before reaching the
merits. Solis Meza v. Renaud, 9 F.4th 930, 933 (D.C. Cir. 2021) (“[W]e must decide jurisdictional
questions before merits ones.”). Consequently, the question common to this case and Concert
Investor is both necessary and potentially dispositive.

A stay would also be finite. The parties in Concert Investor have already begun submitting
briefs and final briefs are due July 17, 2023. Clerk’s Order (Apr. 24, 2023) Concert Investor, No.
22-5253 (D.C. Cir.). That puts a clear and finite timeline on the length of a stay here.

Plaintiff asserts that a stay is unlikely to promote judicial economy because defendants
have not shown a likelihood of prevailing on the merits in Concert Investor. Pl’s. Mem. Opp’n 5.

However, the likelihood of the movant prevailing on the merits is considered for a stay pending
appeal, not a stay pending resolution of independent proceedings. See Cuomo v. United States
Nuclear Regul. Comm’n, 772 F.2d 972, 974 (D.C. Cir. 1985) (setting out the standard for a stay
pending appeal). In the latter scenario, what matters is that the independent proceeding will very
likely decide an issue common to both cases, not that it decides the issue in a particular way. While
a decision mooting the stayed case would provide even stronger evidence that a stay is warranted,
it is not essential.

Overall, the Court is persuaded that a stay pending resolution of Concert Investor will
promote efficient use of the court’s and parties’ resources because Concert Investor is nearly
certain to resolve a core issue in this case shortly.

B. The Balance of Hardship to The Parties Favors a Stay

If there is a “fair possibility” that the stay will “work damage” to the plaintiffs interests,
the movant must make a “clear case of hardship or inequity in being required to go forward.”
Landis, 299 U.S. at 255. Defendant claims that it need not make such a case because there is no
fair possibility of harm to plaintiff. The Court agrees.

Plaintiff makes two claims of harm. First, any delay would exacerbate the financial harm
it suffered during the pandemic. P1.’s Mem. Opp’n. 9. Even if there is a fair possibility of continued
financial harm (although plaintiff has not demonstrated it), it would be caused by the lack of SVOG
funds for dispersal, not a stay.” The Small Business Administration (“SBA”) declared that due to
the rescission, “there are no remaining unobligated funds to make any awards in this case, or any
other case. . . . [I]t cannot approve, through reconsideration or otherwise, any further SVOG

grants.” Decl. of Allison Richards, Ex. 1 to Def.’s Reply § 12, ECF No. 22. Plaintiff asserts that

 

2 Plaintiff hasn’t submitted any evidence that further delay would impact its finances. It demonstrated revenue loss
during the pandemic shutdown. Pl.’s Amended Compl. { 22, ECF No. 14. It asserts that it still has debt. Pl.’s Mem.
Opp’n. 2. But plaintiff has since begun operating again and hasn’t shown anything related to its current financial state
(debt owed, debt to asset ratio, current revenue, etc.).
funds will likely become available. Pl.’s Mem. Opp’n. 7-8. But absent a claim that funds are
currently available or will become available within the expected short duration of the stay, brief
delay does not prevent plaintiff from lining up to collect funds, if indeed it ultimately prevails.

Plaintiff also claims that “with each passing day” the risk increases that it won’t receive
funding if it prevails on the merits. Pl’s. Mem. Opp’n 9-10. But plaintiff contradicts this very
point. In support of its argument that the case is not moot, plaintiff states that SBA “assured SVOG
plaintiffs in public Court filings . . . that funds would remain available for all cases currently
pending.” Id. at 6; see also Def.’s Notice 1-2, ECF No. 7.2 As above, SBA’s current position is
that no funds are currently available. In either scenario, a short delay would not clearly impact
plaintiffs financial state. It will either have access to the funds claimed by succeeding on the
merits, or the funds were never available in the first place.

While courts should only cautiously delay the administration of justice, a stay is
appropriate if it results in an efficient and accurate decision, so long as the gains outweigh the
harm. Here, the harm to plaintiff is unclear while the efficiency gains are clear, certain, and
definite.

II. CONCLUSION

For the reasons stated above, it is hereby ORDERED that the motion for a stay is
GRANTED and the case shall be stayed until resolution of Concert Investor in the D.C. Circuit.
The clerk is ORDERED to administratively terminate this case on the active docket of this Court.

It is hereby ORDERED that the parties shall submit a joint status report every sixty days
updating the Court on the status of Concert Investor and then within fourteen days of the district

court in Concert Investor receiving a mandate from the D.C. Circuit. Within thirty days of the

 

3 “SBA estimates that there is ample funding remaining to cover the potential liability in this case, as well as the other
pending cases.” Def.’s Notice 1-2.
mandate being issued in Concert Investor, either party may ask this Court to reinstate the case on
the active docket of this Court.

IT IS SO ORDERED.
Date: May F 2023 “dad ' DLs

Royce C. Lamberth
United States District Judge