Case 2:20-cv-09581-FLA-RAO Document 74 Filed 10/15/21 Page 1 of 22 Page ID #:822
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`EMILY JOHNSON HENN (SBN 269482)
`ehenn@cov.com
`COVINGTON & BURLING LLP
`3000 El Camino Real
`5 Palo Alto Square, 10th Floor
`Palo Alto, CA 94306-2112
`Telephone: + 1 (650) 632-4700
`Facsimile: + 1 (650) 632-4800
`
`SIMON J. FRANKEL (SBN 171552)
`sfrankel@cov.com
`MATTHEW Q. VERDIN (SBN 306713)
`mverdin@cov.com
`JENNA L. ZHANG (SBN 336105)
`jzhang@cov.com
`COVINGTON & BURLING LLP
`Salesforce Tower
`415 Mission Street, Suite 5400
`San Francisco, CA 94105-2533
`Telephone: + 1 (415) 591-6000
`Facsimile: + 1 (415) 591-6091
`Attorneys for Defendant
`Nike, Inc.
`
`UNITED STATES DISTRICT COURT
`FOR THE CENTRAL DISTRICT OF CALIFORNIA
`
` Civil Case No.: 2:20-cv-09581-FLA-RAO
`
`DEFENDANT NIKE, INC.’S NOTICE
`OF MOTION AND MOTION TO STAY
`OR, ALTERNATIVELY, TO CERTIFY
`ORDER FOR INTERLOCUTORY
`APPEAL AND STAY
`
`Hearing Date: November 19, 2021
`Hearing Time: 1:30 p.m.
`Honorable Fernando L. Aenlle-Rocha
`
`Defendants.
`
`
`
`NIKE’S NOTICE OF MOTION AND MOTION TO STAY OR, ALTERNATIVELY,
`TO CERTIFY ORDER FOR INTERLOCUTORY APPEAL AND STAY
`Case No.: 2:20-cv-09581-FLA-RAO
`
`Plaintiff,
`
`v.
`
`BURHAAN SALEH, individually and
`on behalf of all others similarly situated,
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`
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`NIKE, INC., and FULLSTORY, INC.,
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`Case 2:20-cv-09581-FLA-RAO Document 74 Filed 10/15/21 Page 2 of 22 Page ID #:823
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`NOTICE OF MOTION AND MOTION
`PLEASE TAKE NOTICE that on November 19, 2021 at 1:30 p.m., or as soon
`thereafter as the matter may be heard before the Honorable Fernando L. Aenlle-Rocha in
`Courtroom 6B of the United States District Court for the Central District of California,
`located at 350 W. 1st Street, 6th Floor, Los Angeles, CA 90012, Defendant Nike, Inc.
`(“Nike”), will and hereby does move for an order staying this action pending the Ninth
`Circuit’s decision in Johnson v. Blue Nile, Inc., No. 21-16378, or, alternatively, to certify
`the Court’s September 27, 2021 Order (Dkt. 71) for interlocutory appeal under 28 U.S.C.
`§ 1292(b) and to stay this action pending that appeal.
`The Motion is based on this Notice of Motion and Motion, the Memorandum of
`Points and Authorities, the Declaration of Matthew Q. Verdin and accompanying exhibits,
`and such further evidence and argument as may be presented to the Court at or before the
`hearing on this matter.
`The Motion is made following the conference of counsel pursuant to Local Rule 7-
`3, which took place on October 8, 2021.
`
`
`COVINGTON & BURLING LLP
`
`By: /s/ Emily Johnson Henn
`Emily Johnson Henn
`
`Attorney for Defendant
`Nike, Inc.
`
`DATED: October 15, 2021
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`NIKE’S NOTICE OF MOTION AND MOTION TO STAY OR, ALTERNATIVELY,
`TO CERTIFY ORDER FOR INTERLOCUTORY APPEAL AND STAY
`Case No.: 2:20-cv-09581-FLA-RAO
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`Case 2:20-cv-09581-FLA-RAO Document 74 Filed 10/15/21 Page 3 of 22 Page ID #:824
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`B.
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`2.
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`3.
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`TABLE OF CONTENTS
`INTRODUCTION .......................................................................................... 1
`I.
`BACKGROUND ............................................................................................ 2
`II.
`III. ARGUMENT .................................................................................................. 4
`A.
`This Action Should Be Stayed Pending the Ninth Circuit’s
`Decision in Johnson. ............................................................................ 4
`1.
`A Stay Will Facilitate the Orderly Course of Justice. ............... 5
`2.
`Nike Will Suffer Unnecessary Hardship if Required to Proceed
`with This Case Before Johnson Is Decided. .............................. 7
`Plaintiff Will Not Be Prejudiced by a Temporary Stay ............. 8
`3.
`In the Alternative, This Court Should Certify Its September 27
`Order for Interlocutory Appeal and Stay This Action Pending That
`Appeal................................................................................................... 9
`1. Whether the Party Exception Under Section 631 Extends to a
`Party’s Service Provider Is a Controlling Question of Law. ..... 9
`There Is Substantial Ground for a Difference of Opinion As to
`the Controlling Question of Law. ............................................ 11
`An Immediate Appeal May Materially Advance the Litigation.
` .................................................................................................. 14
`The Court Should Stay This Action During the Pendency of the
`Interlocutory Appeal. ............................................................... 14
`IV. CONCLUSION ............................................................................................. 15
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`4.
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`NIKE’S NOTICE OF MOTION AND MOTION TO STAY OR, ALTERNATIVELY,
`TO CERTIFY ORDER FOR INTERLOCUTORY APPEAL AND STAY
`Case No.: 2:20-cv-09581-FLA-RAO
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`TABLE OF AUTHORITIES
`
`Page(s)
`
`Cases
`Asis Internet Servs. v. Active Response Grp.,
`2008 WL 4279695 (N.D. Cal. Sept. 16, 2008) ............................................................. 12
`In re Cal. Title Ins. Antitrust Litig.,
`2010 WL 785798 (N.D. Cal. Mar. 3, 2010) ................................................................. 13
`Casas v. Victoria’s Secret Stores, LLC,
`2015 WL 13446989 (C.D. Cal. Apr. 9, 2015) ........................................................ 14, 15
`Castrellon v. Fitness Club Mgmt., LLC,
`2018 WL 5099741 (C.D. Cal. June 6, 2018) .................................................................. 6
`In re Cement Antitrust Litig. (MDL No. 296),
`673 F.2d 1020 (9th Cir. 1982) ...................................................................................... 10
`CMAX, Inc. v. Hall,
`300 F.2d 265 (9th Cir. 1962) .......................................................................................... 6
`Couch v. Telescope Inc.,
`611 F.3d 629 (9th Cir. 2010) ........................................................................................ 11
`Env’t World Watch, Inc. v. Walt Disney Co.,
`2014 WL 10979864 (C.D. Cal. Apr. 2, 2014) .............................................................. 14
`Finder v. Leprino Foods Co.,
`2016 WL 4095833 (E.D. Cal. Aug. 1, 2016) ................................................................ 12
`Fox Television Stations, Inc. v. FilmOn X, LLC,
`2015 WL 13648582 (C.D. Cal. July 24, 2015) ............................................................. 14
`In re Google Inc. St. View Elec. Commc’ns Litig.,
`794 F. Supp. 2d 1067 (N.D. Cal. 2011) ........................................................................ 10
`In re Google Inc. St. View Elec. Commc’ns Litig.,
`2011 WL 13257346 (N.D. Cal. July 18, 2011) ............................................................ 11
`Graham v. Noom, Inc.,
`2021 WL 1312765 (N.D. Cal. Apr. 8, 2021) ........................................................ 2, 3, 12
`NIKE’S NOTICE OF MOTION AND MOTION TO STAY OR, ALTERNATIVELY,
`TO CERTIFY ORDER FOR INTERLOCUTORY APPEAL AND STAY
`Case No.: 2:20-cv-09581-FLA-RAO
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`Graham v. Noom, Inc.,
`2021 WL 3602215 (N.D. Cal. Aug. 13, 2021) ............................................................... 3
`Grivas v. Metagenics, Inc.,
`2016 WL 11266835 (C.D. Cal. Mar. 31, 2016) .............................................................. 5
`Gustavson v. Mars, Inc.,
`2014 WL 6986421 (N.D. Cal. Dec. 10, 2014) ............................................................ 5, 8
`Helman v. Alcoa Glob. Fasteners Inc.,
`2009 WL 2058541 (C.D. Cal. June 16, 2009) ........................................................ 11, 14
`
`United States ex rel. Integra Med Analytics LLC
`v. Providence Health & Servs.,
`2019 WL 6973547 (C.D. Cal. Oct. 8, 2019) ................................................................ 10
`Johnson v. Blue Nile, Inc.,
`2021 WL 1312771 (N.D. Cal. Apr. 8, 2021) ......................................................... passim
`Johnson v. Blue Nile, Inc.,
`2021 WL 3602214 (N.D. Cal. Aug. 13, 2021) ........................................................... 2, 3
`Johnson v. Blue Nile, Inc.,
`No. 21-16378 (9th Cir. filed Aug. 23, 2021) .............................................................. 2, 3
`Johnson v. Starbucks Corp.,
`2019 WL 3220273 (N.D. Cal. July 17, 2019) ................................................................ 5
`Kelley v. Colonial Penn Life Ins. Co.,
`2020 WL 6150922 (C.D. Cal. July 13, 2020) ..................................................... 5, 7, 8, 9
`Kim v. CashCall, Inc.,
`2017 WL 8186683 (C.D. Cal. June 8, 2017) .................................................................. 5
`Landis v. N. Am. Co.,
`299 U.S. 248 (1936) ........................................................................................................ 4
`Lockyer v. Mirant Corp.,
`398 F.3d 1098 (9th Cir. 2005) ........................................................................................ 4
`Ludlow v. Flowers Foods, Inc.,
`2020 WL 773253 (S.D. Cal. Feb. 18, 2020) ................................................................... 9
`
`NIKE’S NOTICE OF MOTION AND MOTION TO STAY OR, ALTERNATIVELY,
`TO CERTIFY ORDER FOR INTERLOCUTORY APPEAL AND STAY
`Case No.: 2:20-cv-09581-FLA-RAO
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`Mauia v. Petrochem Insulation, Inc.,
`2020 WL 1031911 (N.D. Cal. Mar. 3, 2020) ............................................................... 12
`Nat’l Credit Union Admin. Bd. v. Goldman Sachs & Co.,
`2013 WL 12306438 (C.D. Cal. July 11, 2013) ....................................................... 10, 11
`Oliver v. Cnty. of Los Angeles,
`66 Cal. App. 4th 1397 (1998) ....................................................................................... 13
`Reese v. BP Expl. (Alaska) Inc.,
`643 F.3d 681 (9th Cir. 2011) ............................................................................ 11, 13, 14
`Rogers v. Ulrich,
`52 Cal. App. 3d 894 (1975) ................................................................................... passim
`Rollins v. Dignity Health,
`2014 WL 6693891 (N.D. Cal. Nov. 26, 2014) ............................................................. 12
`Saleh v. Nike, Inc.,
`2021 WL 4437734 (C.D. Cal. Sept. 27, 2021) ......................................................... 4, 12
`In re Sprouts Farmers Mkt., Inc. Emp. Data Sec. Breach Litig.,
`2017 WL 3051243 (D. Ariz. May 24, 2017) .................................................................. 8
`Stone v. Sterling Infosystems, Inc,
`2015 U.S. Dist. LEXIS 173664 (C.D. Cal. Oct. 21, 2015) ............................................ 7
`Warden v. Kahn,
`99 Cal. App. 3d 805 (1979) .......................................................................................... 13
`Washington v. Six Continents Hotels, Inc.,
`2017 WL 111913 (C.D. Cal. Jan. 9, 2017) ..................................................................... 8
`Yale v. Clicktale, Inc.,
`2021 WL 1428400 (N.D. Cal. Apr. 15, 2021) .......................................................... 3, 12
`Yale v. Clicktale, Inc.,
`2021 WL 4025797 (N.D. Cal. Aug. 24, 2021) ............................................................... 3
`Statutes
`28 U.S.C. § 1292 ......................................................................................................... passim
`Cal. Penal Code § 631 ................................................................................................. passim
`NIKE’S NOTICE OF MOTION AND MOTION TO STAY OR, ALTERNATIVELY,
`TO CERTIFY ORDER FOR INTERLOCUTORY APPEAL AND STAY
`Case No.: 2:20-cv-09581-FLA-RAO
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`MEMORANDUM OF POINTS AND AUTHORITIES
`
`I.
`
`INTRODUCTION
`Nike respectfully requests a temporary stay of this action pending the Ninth
`Circuit’s decision in Johnson v. Blue Nile, Inc. That appeal involves the precise question
`presented by plaintiff’s California wiretap claim: whether use of FullStory’s software-
`based service by a website operator (there, Blue Nile, here Nike) to collect data on a
`visitor’s interactions with its website violates section 631 of the California Invasion of
`Privacy Act. Analyzing a virtually identical complaint filed by the same plaintiff’s
`counsel, the district court in Johnson answered in the negative, concluding that the party
`exception bars such a claim. If the Ninth Circuit agrees or affirms on other grounds, it
`would dispose of this action. A temporary stay is necessary to ensure that the Court and
`the parties do not waste time, effort, and resources—engaging in fact and expert
`discovery, and potential class certification proceedings—only to find that plaintiff’s
`claim must be dismissed based on the Ninth Circuit’s decision in Johnson.
`In the alternative, Nike respectfully requests that this Court certify its September
`27, 2021 Order for interlocutory appeal under 28 U.S.C. § 1292(b). This Court’s ruling
`addressed the same question presented in the Johnson appeal. Distilled to its legal
`essence, that question asks whether the party exception extends to service providers of a
`party to an allegedly wiretapped communication. If it does, then Nike did not aid and
`abet wiretapping, as plaintiff alleges, because FullStory, as Nike’s service provider, did
`not engage in wiretapping in the first place. This Court split with the Northern District of
`California in Johnson when it answered this controlling question of law in the negative,
`concluding that FullStory, despite being a service provider, was a “third party” to
`plaintiff’s communications. Immediate appeal could dispose of this action if the Ninth
`Circuit reverses this Court’s Order. For that reason and because it would conserve the
`Court’s and the parties’ resources, a stay is also appropriate pending any interlocutory
`appeal.
`
`NIKE’S NOTICE OF MOTION AND MOTION TO STAY OR, ALTERNATIVELY,
`TO CERTIFY ORDER FOR INTERLOCUTORY APPEAL AND STAY
`Case No.: 2:20-cv-09581-FLA-RAO
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`II.
`
`BACKGROUND
`This Lawsuit. Nike uses FullStory’s software-based service, which is designed to
`improve a FullStory client’s website and the user experience on the website. See Dkt. 1
`(“Compl.”) ¶ 15; Dkt. 24 (“Am. Compl.) ¶¶ 35–36. Nike embedded FullStory’s software
`code on its website (nike.com) to collect data regarding a user’s interactions with the
`website (e.g., keystrokes, mouse clicks, and page scrolling). Am. Compl. ¶¶ 17, 37–38.
`In October 2020, plaintiff filed this putative class-action lawsuit against Nike, alleging
`that FullStory wiretapped—and that Nike aided and abetted the wiretapping of—
`plaintiff’s communications with Nike when he visited Nike’s website, and that this
`conduct violated section 631 of the California Invasion of Privacy Act. See Am. Compl.
`¶¶ 59–72. In other words, plaintiff’s claim is predicated on FullStory’s conduct: Nike
`cannot be held liable under section 631 if FullStory did not engage in the alleged
`wiretapping because there would be no wiretapping to aid and abet.
`The Pending Ninth Circuit Appeal. In Johnson v. Blue Nile, Inc., the Ninth
`Circuit is poised to address the very same issue presented by plaintiff’s claim in this case:
`whether use of FullStory’s software-based service by a website operator (there, Blue
`Nile, here Nike) to collect data on a visitor’s interactions with its website violates section
`631. 2021 WL 3602214 (N.D. Cal. Aug. 13, 2021) (“Johnson II”), appeal filed, No. 21-
`16378 (9th Cir. Aug 23, 2021).
`The district court in Johnson concluded that the party exception under section 631
`barred such a claim against a website operator (there, Blue Nile). Johnson v. Blue Nile,
`Inc., 2021 WL 1312771, at *2 (N.D. Cal. Apr. 8, 2021) (“Johnson I”). It held that
`FullStory was “not a third-party eavesdropper”; rather, FullStory, as a service provider, is
`an “extension” of the website operator, an undisputed party to the plaintiff’s
`communication. Graham v. Noom, Inc., 2021 WL 1312765, at *5 (N.D. Cal. Apr. 8,
`2021) (emphasis added); Johnson I, 2021 WL 1312771, at *2 (incorporating reasoning by
`reference). In so ruling, the district court analogized FullStory’s software-based service
`NIKE’S NOTICE OF MOTION AND MOTION TO STAY OR, ALTERNATIVELY,
`TO CERTIFY ORDER FOR INTERLOCUTORY APPEAL AND STAY
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`to the tape recorder in Rogers v. Ulrich, 52 Cal. App. 3d 894, 897-99 (1975), “allow[ing]
`[the website operator] to record and analyze its own data in aid of [its] business.”
`Graham, 2021 WL 1312765, at *5. On that basis, the district court held that the party
`exception barred a wiretapping claim against FullStory, as well as the aiding-and-abetting
`claim against the website operator because there was no wiretapping to aid and abet.
`Johnson I, 2021 WL 1312771, at *2.
`The plaintiff was given the opportunity to amend, and included new allegations
`“illuminating the functionalities of the software,” which the district court concluded “do
`not change th[e] conclusion” in its earlier order. Johnson II, 2021 WL 3602214, at *1.
`For that reason, the district court dismissed the plaintiff’s complaint with prejudice. Id. at
`*2. The plaintiff then filed an appeal of the decision on August 23, 2021. Johnson v.
`Blue Nile, Inc., No. 21-16378 (9th Cir. filed Aug. 23, 2021). That appeal is pending
`before the Ninth Circuit.1
`This Court’s September 27 Order. In ruling on Nike’s motion to dismiss, this
`Court split with the Northern District of California’s decision in Johnson (as well as its
`decisions in Graham and Yale, supra at p. 7 n.1).2 Whereas the Johnson court held that
`the party exception barred a section 631 claim against a website operator that uses
`FullStory’s software-based service, this Court held that it did not. It held that FullStory
`was a “third party” to plaintiff’s communications with the website operator (here, Nike).
`
`
`1 On the same grounds, the district court also dismissed virtually identical complaints
`filed by the same plaintiff’s counsel here in two other cases, one of which involved
`FullStory and another website operator (Noom). Graham v. Noom, Inc., 2021 WL
`1312765, at *10 (N.D. Cal. Apr. 8, 2021), dismissing with prejudice, 2021 WL 3602215,
`at *2 (N.D. Cal. Aug. 13, 2021); Yale v. Clicktale, Inc., 2021 WL 1428400, at *3 (N.D.
`Cal. Apr. 15, 2021), dismissing with prejudice, 2021 WL 4025797, at *1 (N.D. Cal. Aug.
`24, 2021). The plaintiffs in Graham and Yale did not file an appeal.
`2 Defendants submitted the Graham, Yale, and Johnson decisions to this Court along with
`Notices of Supplemental Authority on April 13, April 20, August 13, and August 25,
`2021. Dkts. 42, 45, 65, 67.
`NIKE’S NOTICE OF MOTION AND MOTION TO STAY OR, ALTERNATIVELY,
`TO CERTIFY ORDER FOR INTERLOCUTORY APPEAL AND STAY
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`Saleh v. Nike, Inc., 2021 WL 4437734, at *10–11 (C.D. Cal. Sept. 27, 2021). In so
`holding, this Court distinguished Rogers, reasoning that FullStory’s software-based
`service was not similar in kind to the tape recorder in Rogers. Id. at *11. Rather, unlike
`a tape recorder, this Court reasoned that FullStory is “a separate legal entity that offers
`‘software-as-a-service’ and not merely a passive device.” Id. On that basis, this Court
`held that the party exception did not bar a wiretapping claim against FullStory and, as a
`result, plaintiff stated a claim against Nike for aiding and abetting the alleged
`wiretapping. Id.
`In light of the pending Johnson appeal before the Ninth Circuit, which presents the
`same issue involving the same software-based service offered by the same service
`provider, Nike asked plaintiff to agree to a temporary stay of this action pending a
`decision in the Johnson appeal. Declaration of Matthew Q. Verdin (“Verdin Decl.”) ¶ 2.
`Plaintiff refused. Id.
`
`III. ARGUMENT
`A. This Action Should Be Stayed Pending the Ninth Circuit’s Decision in
`Johnson.
`A stay of proceedings until the Ninth Circuit rules in Johnson on the same question
`presented in this case is necessary to conserve both the Court’s and the parties’ resources.
`The power to stay proceedings is incidental to this Court’s power to control the
`disposition of a case “with economy of time and effort for itself, for counsel, and for
`litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). Courts weigh three factors
`when considering a stay pending an appeal: (1) the stay’s facilitation of the “orderly
`course of justice,” measured in terms of “simplifying or complicating of issues, proof,
`and questions of law”; (2) hardship or inequity to the movant in the absence of a stay; and
`(3) possible damage to the non-movant resulting from a stay. Lockyer v. Mirant Corp.,
`398 F.3d 1098, 1110 (9th Cir. 2005) (citation omitted). All of these factors weigh in
`favor of a stay.
`
`NIKE’S NOTICE OF MOTION AND MOTION TO STAY OR, ALTERNATIVELY,
`TO CERTIFY ORDER FOR INTERLOCUTORY APPEAL AND STAY
`Case No.: 2:20-cv-09581-FLA-RAO
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`1.
`A Stay Will Facilitate the Orderly Course of Justice.
`A stay pending the Johnson decision is strongly favored because it will facilitate
`the “orderly course of justice” and simplify the issues by ensuring that the parties and the
`Court have the Ninth Circuit’s guidance on a potentially dispositive question: whether
`use of FullStory’s software-based service by a website operator (there, Blue Nile, here
`Nike) to collect data on a visitor’s interactions with its website violates section 631.
`The outcome in Johnson may have a “substantial,” if not dispositive, impact on
`this case, which is “a particularly compelling reason to grant a stay.” Kim v. CashCall,
`Inc., 2017 WL 8186683, at *8 (C.D. Cal. June 8, 2017). Indeed, if the Ninth Circuit were
`to adopt the reasoning of the district court in Johnson, the ruling would eliminate
`plaintiff’s remaining claim and dispose of this case in its entirety. Courts routinely grant
`motions to stay pending a Ninth Circuit appeal where, as here, the outcome may resolve a
`central issue in the case. See, e.g., Kelley v. Colonial Penn Life Ins. Co., 2020 WL
`6150922, at *7 (C.D. Cal. July 13, 2020) (staying case pending Ninth Circuit appeal that
`is “likely to rule in a way that will provide clarity” in the case); Johnson v. Starbucks
`Corp., 2019 WL 3220273, at *2 (N.D. Cal. July 17, 2019) (staying case pending Ninth
`Circuit appeal that “will likely be determinative of [an] issue” in the case); Grivas v.
`Metagenics, Inc., 2016 WL 11266835, at *6 (C.D. Cal. Mar. 31, 2016) (staying case
`pending Ninth Circuit appeals that “will likely resolve substantial questions” in the case).
`Whatever the outcome in Johnson, however, a stay will also promote judicial
`economy in this case. Considerations of judicial economy are “highly relevant” in
`evaluating whether the orderly course of justice weighs in favor of a stay. Gustavson v.
`Mars, Inc., 2014 WL 6986421, at *3 (N.D. Cal. Dec. 10, 2014). The Ninth Circuit’s
`ruling in Johnson will likely provide controlling precedent informing the section 631
`claim at issue in this case. Judicial economy will be best served if this Court does not
`expend additional resources in this litigation, “only to have to re-visit [its] decision[s] . . .
`following a controlling decision from the Ninth Circuit.” Id. (staying action pending a
`NIKE’S NOTICE OF MOTION AND MOTION TO STAY OR, ALTERNATIVELY,
`TO CERTIFY ORDER FOR INTERLOCUTORY APPEAL AND STAY
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`Ninth Circuit appeal that is “likely to provide substantial guidance”); see also Castrellon
`v. Fitness Club Mgmt., LLC, 2018 WL 5099741, at *7 (C.D. Cal. June 6, 2018) (staying
`action pending a Ninth Circuit appeal that is “likely to provide controlling precedent
`informing [the] action”).
`Moreover, multiple pending lawsuits filed by the same plaintiff’s counsel here
`challenging the use of session replay software like FullStory’s raise similar issues.3
`Indeed, three days after this Court’s ruling on Nike’s motion to dismiss, plaintiff’s
`counsel filed another lawsuit against Nike in the Eastern District of California, alleging
`the same claim, seeking to certify the same class, based on the same alleged conduct by
`Nike and FullStory. Castro v. Nike, Inc., No. 2:21-cv-01808 (E.D. Cal. filed Sept. 30.
`2021) (ECF No. 1); Verdin Decl. Ex. A (copy of Castro complaint). A stay will further
`the uniform treatment of the similar—and in the case of Castro, identical—issues in these
`session replay cases, which by itself is a compelling reason for staying this case. CMAX,
`Inc. v. Hall, 300 F.2d 265, 269 (9th Cir. 1962) (affirming a stay pending a decision in
`related administrative proceedings, reasoning in part that, in light of “several other
`similar cases” that were pending, a stay is “[i]n the interests of uniform treatment of like
`suits”).
`Accordingly, the orderly course of justice weighs strongly in favor of a stay
`pending the Ninth Circuit’s decision in Johnson, which will simplify the issues by
`providing guidance on a potentially dispositive question involving the same software-
`based service offered by the same service provider.
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`3 See, e.g., Yoon v. Lululemon USA Inc., No. 5:20-cv-02439 (C.D. Cal. filed July 29,
`2021) (ECF No. 32) (second amended complaint) (alleging section 631 claims against
`session replay vendor and customer); Massie v. Gen. Motors LLC, No. 1:21-cv-00787 (D.
`Del. filed Feb. 26, 2021) (ECF No. 25) (first amended complaint) (same); Sacco v.
`Mouseflow, Inc., No. 2:20-cv-02330 (E.D. Cal. filed Feb. 17, 2021) (ECF No. 27) (first
`amended complaint) (alleging section 631 claim against session replay vendor); Verdin
`Decl. Exs. B–D (copies of Yoon, Massie, and Sacco complaints).
`NIKE’S NOTICE OF MOTION AND MOTION TO STAY OR, ALTERNATIVELY,
`TO CERTIFY ORDER FOR INTERLOCUTORY APPEAL AND STAY
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`2.
`
`Nike Will Suffer Unnecessary Hardship if Required to Proceed
`with This Case Before Johnson Is Decided.
`Going forward with litigation before the Ninth Circuit’s Johnson decision would
`also force Nike to incur significant expenses that may be needlessly incurred, strongly
`favoring a stay. It would be a waste of time, effort, and resources for Nike (as well as for
`plaintiff and the Court) to proceed with discovery and potential class certification
`proceedings when the Ninth Circuit is poised to issue a ruling that has the potential to
`dispose of plaintiff’s claim.
`Courts have “repeatedly granted a stay where,” as here, “it would conserve
`resources and avoid potentially unnecessary litigation.” Kelley, 2020 WL 6150922, at *7.
`In Stone v. Sterling Infosystems, Inc., for example, the Court addressed similar
`circumstances where, as here, a defendant was seeking a stay pending an appeal that
`could dispose of the case. 2015 U.S. Dist. LEXIS 173664, at *8–9 (C.D. Cal. Oct. 21,
`2015). In granting the stay, the Court reasoned that the defendant would otherwise be
`forced to begin the “herculean effort” of defending a putative class action, and there is
`“no reason” why the plaintiff should be allowed to “forc[e] [the defendant] to incur
`unnecessary expenses” in the face of a pending appeal on a potentially dispositive issue.
`Id. That reasoning applies equally here. See also Kelley, 2020 WL 6150922, at *7
`(staying proceedings pending a Ninth Circuit appeal because, absent a stay, the defendant
`may be forced to expend resources in potentially unnecessary litigation).
`Indeed, regardless of the outcome in Johnson, Nike would incur unnecessary and
`significant expenses in the absence of a stay. If the Ninth Circuit decides that the
`virtually identical allegations in Johnson do not give rise to a section 631 claim, then that
`decision will have the effect of eliminating plaintiff’s claim. Even if it did not, however,
`the decision will likely provide controlling precedent governing the claim (see supra at
`pp. 9–10), and the parties would need to revisit whatever issues are impacted by the
`decision. This would result in “the potential need to re-depose key witnesses, conduct
`
`NIKE’S NOTICE OF MOTION AND MOTION TO STAY OR, ALTERNATIVELY,
`TO CERTIFY ORDER FOR INTERLOCUTORY APPEAL AND STAY
`Case No.: 2:20-cv-09581-FLA-RAO
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`further discovery, and re-brief class certification” and other issues. Gustavson, 2014 WL
`6986421, at *3. In either event, therefore, Nike would “clearly suffer significant and
`potentially unnecessary hardship if compelled to proceed.” Id. (staying proceedings
`where decision in appeal could “change[] the applicable law or the relevant landscape of
`facts that need to be developed”); see also Washington v. Six Continents Hotels, Inc.,
`2017 WL 111913, at *2 (C.D. Cal. Jan. 9, 2017) (staying proceedings where the
`defendant would otherwise be forced to conduct discovery “without knowing what law
`will ultimately apply”).
`3.
`Plaintiff Will Not Be Prejudiced by a Temporary Stay
`In contrast to the prejudice that Nike would suffer if forced to proceed, a temporary
`stay while the parties and the Court await necessary guidance from the Ninth Circuit will
`not prejudice or damage plaintiff. This factor, therefore, similarly favors a stay.
`This case is at an early stage, and no scheduling order has issued. “A (relatively)
`young case, at least from the standpoint of litigation efforts, if not time alone, favors
`staying this action.” Kelley, 2020 WL 6150922, at *6. Plaintiff cannot plausibly
`maintain that waiting for the Ninth Circuit to provide guidance on the central issue in this
`case would cause prejudice. Far from it. A stay would benefit not only Nike, but also
`plaintiff. In the absence of a stay, plaintiff would be forced to expend resources in
`discovery “without knowing what law will ultimately apply at summary judgment or at
`trial—a fool’s errand, to say the least.” Washington, 2017 WL 111913, at *2 (finding no
`prejudice to plaintiff from a stay).
`Nor would the temporary delay in resolving plaintiff’s monetary and injunctive
`relief claims provide a basis to deny a stay. “