Judge: Martha K. Gooding, Case: 2021-01238852, Date: 2022-10-10 Tentative Ruling

1) Motion for Protective Order

2) Motion to Compel Deposition (Oral or Written)

(1) MOTION FOR A PROTECTIVE ORDER

Plaintiff Nowarta Biopharma, Inc. moves to stay all discovery pending the outcome of its motion to disqualify Madison Law from representing Merchant Star.  The motion to disqualify was filed on this same day and heard on 9/19/22 and decided on 9/21/22.  The ruling is now on appeal.

Accordingly, the motion for a protective order is denied as moot.

(2) MOTION TO COMPEL DEPOSITION

Defendant Merchant Star International General Trading, LLC’s motion to compel the deposition of third-party Matthew Matta is continued to December 12, 2022, at 1:30 p.m. for further briefing, as set forth below.

On 9/22/22, Defendant filed a Notice of Appeal of the Court’s order disqualifying Madison Law from representing Defendant.

Code Civ. Proc., § 916 provides:

(a)  Except as provided in Sections 917.1 to 917.9, inclusive, and in Section 116.810, the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order.

(b) When there is a stay of proceedings other than the enforcement of the judgment, the trial court shall have jurisdiction of proceedings related to the enforcement of the judgment as well as any other matter embraced in the action and not affected by the judgment or order appealed from.

In URS Corp. v. Atkinson/Walsh Joint Venture (2017) 25 Cal. App. 5th 872, as an issue of first impression, the Court of Appeal considered whether an appeal of an order disqualifying counsel resulted in an automatic stay pursuant to Civil Procedure Code section 916. 

The court held that an order disqualifying an attorney from continuing to represent a party in ongoing litigation is a mandatory injunction, which is therefore automatically stayed by an appeal. (Id. at 887.) 

In considering whether the automatic stay extends to all trial court proceedings, the court stated:

Although all trial court proceedings are not subject to the automatic stay, there are some potential issues embraced in or affected by the appeal from the disqualification order that could be subject to the automatic stay. (See § 916, subd. (a).) The trial court disqualified Pepper Hamilton based on its possession and potential use of certain privileged and/or confidential documents. Further trial court proceedings concerning the protected nature of the documents or their permissible use could affect our determination of the disqualification issue, and may be subject to the automatic stay. The parties, however, have not identified any such trial court proceedings, and we therefore lack the factual record necessary to define the parameters of the automatic stay. We simply note the automatic stay's scope in the disqualification context depends on the facts of the particular case.

(Id. at 888–889 [footnote omitted].)

Whether this Court should stay all discovery pending the appeal of the disqualification order has only been briefed in Matthew Matta’s opposition brief. 

As a result, the Court continues the hearing on this motion to compel deposition to allow Plaintiff and Defendant to brief the issue as well. 

The supplemental briefing shall be simultaneous.  Each party’s supplemental brief shall address only this specific issue; shall not exceed 5 pages in length (excluding the caption page); and shall be served and filed no later than November 21, 2022.

Defendant Merchant Star is ordered to give notice of the rulings on both motions.