United States District Court, W.D. Washington, Tacoma
ORDER ON MOTION TO STAY DISCOVERY PENDING RESOLUTION
OF SECOND MOTION TO COMPEL ARBITRATION
B. Leighton United States District Judge.
MATTER is before the Court on defendants' Motion to Stay
Discovery [Dkt. # 105] pending resolution of its second
Motion to Compel Arbitration [Dkt. # 100]. Kater sued
Churchill Downs in 2015. Judge Pechman granted Churchill
Downs' Motion to Dismiss, Kater appealed, and the Ninth
Circuit reversed. Churchill Downs moved to compel arbitration
a year ago, and the Court denied that Motion, based on its
determination that Defendants had waived their right to
arbitrate by choosing to litigate instead. [Dkt. # 75]. Two
months later, Kater served her first discovery on Churchill
February, Churchill Downs moved to join Big Fish Games as a
necessary party, and before that motion was decided, the
parties stipulated that Kater could file an amended complaint
naming Big Fish as a defendant. [Dkt. # 82]. The ensuing
Amended Complaint also added Suzie Kelly as a plaintiff [Dkt.
filed a second motion to compel arbitration [Dkt. # 100]. It
argues that the claims in the amended complaint are
arbitrable for all the reasons Churchill Downs cited the
first time around: plaintiffs agreed to arbitrate any claims
Big Fish for years. They argue that Kater and Kelly were
certainly aware of the TOU when they filed their amended
complaint; it was already the subject of a motion in this
now argue that forcing them to engage in discovery while
their new Motion to Compel Arbitration is pending risks
wasting the Court and the parties' time. They argue that
Kater and Kelly's claims against Big Fish and Churchill
Downs are inseparable, and cite authorities holding that in
such cases, a stay is appropriate. They also
argue that the Arbitration Act imposes a
mandatory stay while the arbitrability question is resolved
(even if some claims are not arbitrable) and seek a
discretionary stay in any event.
the Federal Arbitration Act (FAA), courts must stay judicial
determination of claims within the scope of a binding
arbitration agreement. 9 U.S.C. § 3. “It is,
however, within a district court's discretion whether to
stay, for ‘considerations of economy and
efficiency,' an entire action, including issues not
arbitrable, pending arbitration.” Congdon v. Uber
Techs., Inc., 226 F.Supp.3d 983, 990 (N.D. Cal. 2016)
(quoting United States ex rel. Newton v. Neumann
Caribbean Int'l, Ltd., 750 F.2d 1422, 1427 (9th Cir.
1985)). When deciding whether to stay claims involving
non-signatories to the arbitration agreement, courts should
weigh “the possible damage which may result from
granting the stay, the hardship or inequity which a party may
suffer in being required to go forward, and ‘the
orderly course of justice measured in terms of the
simplifying or complicating of issues, proof, and questions
of law which could be expected to result from a
stay.'” Id. (quoting CMAX, Inc. v.
Hall, 300 F.2d 265, 268 (9th Cir. 1962)).
generally grant motions to stay where the plaintiff's
claims against a non-signatory defendant are intertwined with
their arbitrable claims against another defendant. See,
e.g., Sharp Corp. v. Hisense USA Corp., No.
17-CV-03341-YGR, 2017 WL 6017897, at *5 (N.D. Cal. Dec. 5,
2017); Ballard v. Corinthian Colleges, Inc., No.
C06-5256 FDB, 2006 WL 2380668, at *2 (W.D. Wash. Aug. 16,
2006). “[S]imultaneous litigation of such claims in
separate forums would likely lead to a duplication of effort,
as well as the risk of inconsistent decisions and
inefficiencies.” Ballard, 2006 WL 2380668, at
*2. On the other hand, courts are more hesitant to stay
proceedings simply because the plaintiffs in another case
involving the same issues agreed to arbitrate. See, e.g.,
Congdon, 226 F.Supp.3d at 991. This is true partly
because an arbitrator's decision with respect to one
plaintiff would not be binding on a court overseeing a
different plaintiff's claim. Id. In short, a
stay is more appropriate when another defendant did not agree
to arbitrate but less appropriate when another plaintiff did
argues that Defendants have flatly refused to respond to
discovery first served almost eight months ago-before Big
Fish or Kelly were parties-effectively imposing their own
stay while they take another run at avoiding this lawsuit.
She concedes that discovery to Big Fish, and all discovery
related to Kelly's claims, should await the Court's
decision on the pending motion to compel arbitration. But she
argues that there is no basis for delaying further her
discovery to Churchill Downs.
Court agrees. None of the cases cited involve a procedural
history akin to the one here. Churchill Downs already sought
to compel arbitration, and lost. Kater's discovery predates
the additional parties and claims.
Motion to Stay all discovery to Big Fish, and all of
Kelly's discovery, is GRANTED and such discovery is
STAYED pending resolution of the motion to compel
arbitration. The Motion to Stay Kater's outstanding,
pre-amendment discovery to Churchill Downs is DENIED, and
Churchill Downs shall respond to it within 30 days.
 Defendants argue that participating in
discovery can be evidence of waiver of the right to
arbitrate. This Court already found that Churchill downs
waived its right to arbitrate Kater's claims and
requiring it to respond to discovery in the wake of that
decision is not ...