The GEO Group, Inc. v. Newsom ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 THE GEO GROUP, INC., No. 2:20-cv-00533-TLN-AC 12 Plaintiff, 13 v. ORDER 14 GAVIN C. NEWSOM, in his official capacity as Governor of the State of 15 California; XAVIER BECERRA, in his official capacity as Attorney General of the 16 State of California, 17 Defendants. 18 19 20 This matter is before the Court on Plaintiff Geo Group, Inc.’s (“GEO”) Ex Parte 21 Application to Stay Proceedings Pending Resolution of Appeal. (ECF No. 31.) Defendants 22 Governor Gavin Newsom and Attorney General Xavier Becerra (collectively, “Defendants”) filed 23 an opposition. (ECF No. 32.) For the reasons set forth below, the Court GRANTS GEO’s 24 application. 25 /// 26 /// 27 /// 28 /// 1 I. FACTUAL AND PROCEDURAL BACKGROUND 2 GEO brought the instant action seeking (1) a declaratory judgment that SB-29, codified at 3 California Civil Code § 1670.9(d) (“§ 1670.9(d)”), violates the Supremacy Clause and is 4 unconstitutional as applied to GEO and (2) a preliminary and permanent injunction enjoining 5 Defendants from enforcing § 1670.9(d) against GEO. (ECF No. 1 at 17.) GEO filed a motion for 6 preliminary injunction on March 16, 2020. (ECF No. 16.) Defendants filed a motion to dismiss 7 on May 28, 2020. (ECF No. 24.) Both motions were noticed for an August 20, 2020 hearing 8 date. On August 13, 2020, the Court submitted both motions without oral argument and has not 9 yet ruled on either motion. (ECF No. 30.) 10 GEO filed the instant ex parte application on August 17, 2020. (ECF No. 31.) In its 11 application, GEO requests a stay of this action pending resolution of an appeal in Immigrant 12 Legal Resource Center v. City of McFarland, No. 1:20-cv-00966-TLN-AC (“ILRC”), a related 13 case in which GEO is a real party in interest. On August 11, 2020, this Court granted a 14 preliminary injunction in ILRC enjoining the City of McFarland and GEO from executing permit 15 modifications that allegedly violated § 1670.9(d). In granting the preliminary injunction, the 16 Court thoroughly addressed GEO’s constitutional arguments — which are nearly identical to the 17 arguments GEO raises in the instant case — and found that GEO had not demonstrated § 18 1670.9(d) is unconstitutional for the purposes of ruling on the preliminary injunction. GEO 19 appealed, and the matter is currently pending before the Ninth Circuit. 20 II. STANDARD OF LAW 21 A district court has the “power to stay proceedings” as part of its inherent power “to 22 control the disposition of the causes on its docket with economy of time and effort for itself, for 23 counsel, and for litigants.” Landis v. North American Co., 299 U.S. 248, 254–55 (1936). “A trial 24 court may, with propriety, find it is efficient for its own docket and the fairest course for the 25 parties to enter a stay of an action before it, pending resolution of independent proceedings which 26 bear upon the case.” Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 863–64 (9th Cir. 27 1979). “This rule . . . does not require that the issues in such proceedings are necessarily 28 controlling of the action before the court.” Id. 1 “Where it is proposed that a pending proceeding be stayed, the competing interests which 2 will be affected by the granting or refusal to grant a stay must be weighed.” CMAX, Inc. v. Hall, 3 300 F.2d 265, 268 (9th Cir. 1962). Those competing interests include “[1] possible damage 4 which may result from the granting of a stay, [2] the hardship or inequity which a party may 5 suffer in being required to go forward, and [3] the orderly course of justice measured in terms of 6 the simplifying or complicating of issues, proof, and questions of law which could be expected to 7 result from a stay.” Id. 8 III. ANALYSIS 9 In requesting a stay pending the outcome of the appeal in ILRC, GEO argues that because 10 ILRC involves the same constitutional questions presented in this action, it would be an 11 inefficient use of judicial resources for this Court to rule on the pending motions in this case 12 before the Ninth Circuit has clarified the law governing the relevant issues. (ECF No. 31 at 2.) 13 In opposition, Defendants argue GEO’s application should be denied for two reasons: (1) the 14 State is entitled to participate as a party in appellate proceedings that will likely address the 15 constitutionality of a state statute; and (2) GEO has failed to show good cause for ex parte relief. 16 (ECF No. 32 at 2.) 17 Looking to the CMAX factors, it is unclear what harm, if any, GEO would suffer if the 18 Court denies the stay. However, the harm to Defendants if the Court grants the stay is also 19 minimal.1 Indeed, if the Court grants the stay, § 1670.9(d) will remain in effect, resulting in no 20 harm to Defendants. Further, “it appears likely the other proceedings will be concluded within a 21 reasonable time in relation to the urgency of the claims presented to the court.” Leyva, 593 F.2d 22 at 864. Although Defendants argue they are entitled to participate as a party in appellate 23 proceedings that will likely address the constitutionality of a state statute, Defendant has not 24 1 Although Defendants take issue with GEO’s decision to seek a stay ex parte, it bears 25 mentioning that Defendants were given sufficient notice to file an opposition to the ex parte application. Therefore, whether or not an ex parte application was proper, it appears Defendants 26 were not harmed by the ex parte filing. Regardless, it is within the Court’s inherent power to 27 determine whether to impose a stay. See, e.g., N. Fork Rancheria of Mono Indians of California v. California, No. 115-CV-00419-AWI-SAB, 2016 WL 4208452, at *7 (E.D. Cal. Aug. 10, 2016) 28 (considering whether to impose a stay sua sponte). 1 demonstrated it is unable to intervene in the ILRC appeal, which will be decided with or without 2 Defendants regardless of a stay in the instant action. Therefore, the parties’ competing interests 3 carry equal weight. 4 As for the Court’s own interest in judicial economy, the parties do not dispute that ILRC 5 and the instant case both involve a nearly identical constitutional challenge to § 1670.9(d). As 6 such, the Court agrees with GEO that it would be an inefficient use of judicial resources to 7 proceed with the instant case when the Ninth Circuit’s ruling in ILRC may clarify the law on this 8 novel and complex constitutional legal question. Therefore, the “orderly course of justice” 9 weighs heavily in favor of granting the stay. See CMAX, 300 F.2d at 268. Based on the Court’s 10 strong interest in judicial economy — and in light of the minimal harm that would result to either 11 party — the Court GRANTS GEO’s application. 12 IV. CONCLUSION 13 For the foregoing reasons, Defendant’s ex parte application to stay the proceedings in this 14 case and hold in abeyance GEO’s motion for a preliminary or permanent injunction and the State 15 of California’s motion to dismiss until resolution of GEO’s related appeal in Immigrant Legal 16 Resource Center v. City of McFarland, No. 1:20-cv-00966-TLN-AC is GRANTED. 17 IT IS SO ORDERED. 18 DATED: August 30, 2020 19 20 21 22 23 24 25 26 27 28