Summary
Granting a stay of proceedings pending a decision by the Supreme Court and holding that it would be an unnecessary waste of the court and the parties' resources to proceed with the litigation "before the Supreme Court more precisely defines the claims at issue."
Summary of this case from Acton v. Intellectual Capital Mgmt., Inc.Opinion
Master Docket NO. M-21-90 (GBD).
February 27, 2001.
MEMORANDUM ORPINION AND ORDER
On August 14 and 15, 2000, respectively, Plaintiffs in Posner v. Gale Group, Inc. and Plaintiffs in Authors Guild v. Dialog Corp. filed complaints on behalf of themselves and a class of freelance authors in the United States District Courts for the Northern District of California and the Southern District of New York. In both cases, Plaintiffs allege that defendants — who collectively own, operate and control large electronic databases that store and provide access to written material collected from newspapers, magazines and other periodical publications — violated the copyrights of freelance authors by making their works available to the public without their prior consent.
On August 22, 2000, the Plaintiffs in Laney v. Dow Jones Co., Inc. filed a similar complaint on behalf of themselves and a class of freelance authors in the United States District Court for the District of Delaware. On September 8, 2000, the Laney Plaintiffs filed a motion with the Judicial Panel on Multidistrict Litigation for transfer and coordination or consolidation under 28 U.S.C. § 1407. On September 28, 2000, the Posner Plaintiffs voluntarily dismissed their case in the Northern District of California and refiled it in the Southern District of New York. By order dated December 6, 2000, the panel granted the Laney Plaintiffs' motion, and all three cases were assigned to the United States District Court for the Southern District of New York.
In this multidistrict litigation, all Plaintiffs and Defendants, other than the Laney Plaintiffs, request that this Court stay all proceedings pending a decision by the United States Supreme Court in New York Times Co. v. Tasini, No. 00-201 (U.S. Sup.Ct. writ of certiorari granted, November 6, 2000). In Tasini v. New York Times Co., 206 F.3d 161 (2d Cir. 2000), the Second Circuit Court of Appeals reversed as a matter of law the District Court's dismissal of the plaintiffs freelance authors' copyright infringement claims. The District Court in Tasini had held that, in the absence of any agreement to the contrary, newspaper and magazine publishers had the presumptive right to publish periodicals electronically as well as in paper version. Tasini v. New York Times Co., 972 F. Supp. 804 (S.D.N Y 1997). In its reversal, the Second Circuit Court of Appeals held that, in the absence of an agreement to do so, periodical publishers did not obtain the right to publish on electronic services or CD-ROM.
On a grant of certiorari, the United States Supreme Court has scheduled oral argument in Tasini for March 28, 2001. The parties here anticipate a decision by the United States Supreme Court before the end of the Court's term in June.
All parties agree that Tasini is relevant here. The Posner and Authors Guild Plaintiffs believe that any holding by the Supreme Court in Tasini will significantly impact the course and scope of this multidistict litigation and that judicial economy militates in favor of a stay. All Defendants argue that if the Supreme Court reverses the decision of the Second Circuit in Tasini, it would dispose of all the named Plaintiffs' claims and, therefore, necessarily, of all the claims of any class members whom those named Plaintiffs would permissibly represent. Defendants further argue that even an affirmance would certainly powerfully affect future litigation of the claims in these cases in ways impossible to foresee.
The Laney Plaintiffs alone oppose the application for a stay and argue that regardless of the potential outcome in Tasini, expeditiously moving forward best serves the interests of judicial economy. They urge, in particular, that the class certification process should begin, and that this Court should encourage the parties, at a minimum, to agree on a program for appropriate class-related and other discovery pending the Supreme Court's decision. They argue that the Second Circuit's ruling in Tasini only addressed authors and publishers without written agreements. The Laney Plaintiffs primarily premise their opposition to a stay of all proceedings on their position that they seek to represent both authors with written agreements and those without written agreements. Therefore, they argue that because the Supreme Court's decision in Tasini will implicate only authors without written agreements, the claims of authors with written agreements can and should proceed regardless of that decision.
A district court's power to stay proceedings was settled in Landis v. North American Co., 299 U.S. 248, 254 (1936): "[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its own docket with economy of time and effort for itself, for counsel, and for litigants." A court may properly exercise this power when a higher court is close to settling an important issue of law bearing on the action. See e.g. Marshel v. AFW Fabric Corp., 552 F.2d 471, 472 (2d Cir. 1977) (per curiam) (instructing district court to stay further proceedings pending a Supreme Court decision in a closely related case which was likely to determine the question of liability); Goldstein v. Time Warner New York City Cable Group, 3 F. Supp.2d 423, 439 (S.D.N.Y. 1998) (staying a case involving a controversial FCC regulation in order to allow the D.C. Court of Appeals to determine the validity of the regulation). Where it is efficient for a trial court's docket and the fairest course for the parties, a stay may be proper even when the issues in the independent proceeding are not necessarily controlling of the action before the court. Goldstein 3 F. Supp. at 438 (citing Leyva v. Certified Grocers of California, Ltd., 593 F.2d 857, 864 (9th Cir. 1979), cert. denied, 444 U.S. 827 (1979)).
In deciding whether to grant a stay, courts generally consider five factors:
(1) the private interests of the plaintiffs in proceeding expeditiously with the civil litigation as balanced against the prejudice to the plaintiffs if delayed; (2) the private interests of and burden on the defendants; (3) the interests of the courts; (4) the interests of persons not parties to the civil litigation; and (5) the public interest.
Kappel v. Comfort, 914 F. Supp. 1056, 1058 (S.D.N.Y. 1996) (citing Volmar Distributors v. New York Post Co., 152 F.R.D. 36, 39 (S.D.N.Y. 1993)).
The party moving for a stay "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 some one else." Landis 299 U.S. at 255. The Supreme Court cautioned that it would be rare for a court to cause a litigant in one case to "stand aside while a litigant in another settles the rule of law that defines the rights of both," but noted that such considerations "are counsels of moderation rather than limitations upon power." Id. In short, "[t]he proponent of a stay bears the burden of establishing its need." Clinton v. Jones, 520 U.S. 681, 708 (1997).
In this case, all parties, except the Laney Plaintiffs, agree that the above considerations weigh in favor of a stay of all proceedings. The Supreme Court's review of Tasini is likely to have a significant, if not dispositive, impact on the cases here. Proceeding with this litigation several months before the Supreme Court more precisely defines the claims at issue would be unnecessarily wasteful of both the Court's and the litigants' resources. Moreover, a stay of several months will cause no prejudice or hardship to the Laney Plaintiffs.
The Laney Plaintiffs argue that, since they also seek to represent class members who had written agreements, the case should proceed with respect to those claims. However, the named Laney Plaintiffs fail to allege any facts in their Amended Complaint indicating that they are authors with written agreements. They will therefore be unable to represent a limited class of other authors with written agreements if they themselves are not members of the class sought to be represented. See e.g. General Tel. Co. v. Falcon, 457 U.S. 147, 156 (1982) (holding that Title VII plaintiff who alleged that he was not promoted because of his Mexican-American ethnicity could not represent class of those not hired because they were Mexican-American); Kazcmarek v. Int'l Bus. Mach. Corp., 186 F.R.D. 307, 313 (S.D.N.Y. 1999) (denying class certification where named plaintiffs suing over defective computer part sought to represent a class of purchasers who owned different computer models with different warranties). There is no compelling reason to attempt to parcel out such a limited issue at this time.
It would be an inefficient use of time and resources of the court and the parties to proceed in light of a pending U.S. Supreme Court decision that all agree will significantly impact this multidistrict litigation. All Plaintiffs in two of the three lawsuits, and all fourteen named Defendants in all cases, agree that a moderate stay of all proceedings is warranted. A decision in the cause before the United States Supreme Court "may not settle every question of fact and law" before this Court, "but in all likelihood it will settle many and simplify them all" Landis, 299 U.S. at 256. Accordingly, this Court finds that a stay within the bounds of moderation, automatically ending upon a decision by the United States Supreme Court in Tasini, is an appropriate exercise of this Court's discretion.
For the foregoing reasons, the application for a stay of proceedings is granted. The case will be placed on the suspense docket until the Supreme Court issues its decision in Tasini. The parties are directed to contact this Court within 30 days of the date of that decision.
SO ORDERED: