Judge: Armen Tamzarian, Case: 23STCV17249, Date: 2023-11-30 Tentative Ruling

Case Number: 23STCV17249    Hearing Date: April 5, 2024    Dept: 52

Plaintiff Aaron Friedman’s Motion to Lift Stay Pending Appeal

Plaintiff Aaron Friedman moves to lift the stay of this action pending appeal.  On November 30, 2023, the court denied defendant GR0.com, LLC’s motion to compel arbitration of this action.  Defendant perfected its appeal in December 2023.  Doing so automatically stayed the action.  On January 1, 2024, a new law took effect.  Code of Civil Procedure section 1294(a) now provides, “Notwithstanding Section 916, the perfecting of such an appeal shall not automatically stay any proceedings in the trial court during the pendency of the appeal.”

Plaintiff shows good cause to lift the automatic stay.  There is a “presumption that statutes operate prospectively absent a clear indication the voters or the Legislature intended otherwise.”  (Californians for Disability Rights v. Mervyn’s, LLC (2006) 39 Cal.4th 223, 230 (CDR).)  But “a statute that establishes rules for the conduct of pending litigation without changing the legal consequences of past conduct is not made retroactive merely because it draws upon facts existing prior to its enactment... .  [Instead,] [t]he effect of such statutes is actually prospective in nature since they relate to the procedure to be followed in the future.”  (Id. at p. 231, internal quotes omitted.) 

The “legal consequences of past conduct” generally refers to matters such as expanding “liability for past conduct by imposing broader duties,” imposing liability for something previously protected at the time by “an immunity statute,” or increasing criminal punishments or defining new conduct as criminal.  (CDR, supra, 39 Cal.4th at p. 231.)  In this context, past conduct typically means the underlying events giving rise to the litigation—not what happened earlier in the litigation.    

Statutes regarding an automatic stay pending appeal are rules for the conduct of pending litigation.  Undoing the automatic stay does not change the legal consequences of defendant’s past conduct.  The new statute leaves “entirely unchanged the substantive rules governing” the right to arbitrate and the legal rights giving rise to plaintiff’s action against defendant.  (CDR, supra, 39 Cal.4th at p. 232.)  Moreover, applying Code of Civil Procedure section 1294(a) now does not retrospectively deprive defendant of the benefits of the former law.  This case has been stayed pending the appeal.  Lifting that stay now, pursuant to plaintiff’s noticed motion, does not retrospectively undo the prior stay.  Lifting the stay “affect[s] only future conduct—the future conduct of” this action.  (Elsner v. Uveges (2004) 34 Cal.4th 915, 936.)    

Defendant’s opposition also argues the court should exercise its discretion to maintain the stay.  The court declines to do so.  The purpose of the amendment to Code of Civil Procedure section 1294(a) was to “give[] courts the discretion to prevent corporations from using a common delay tactic against workers and consumers.”  (Assem. Com. on Appr., Analysis of Sen. Bill No. 365 (2023-2024 Reg. Sess.) July 12, 2023, p. 1.)  The court denied defendant’s motion to compel arbitration because defendant delayed paying arbitration fees under Code of Civil Procedure section 1281.98.  Issuing a discretionary stay to further delay this proceeding would undermine the purpose of both section 1281.98 and Senate Bill 365.

Plaintiff Aaron Friedman’s motion to lift stay pending appeal is granted.  The court hereby lifts the stay of this action.