(PC) Wilson v. Tuolomne County

[7] 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA [10] 11 CHRISTOPHER JOHN WILSON, Case No. 1:21-cv-00196-KES-SKO (PC) 12 Plaintiff, ORDER TO SHOW CAUSE WHY CASE SHOULD NOT BE STAYED 13 v. (Doc. 61) 14 TUOLOMNE COUNTY, et al., 15 Defendants. [16] 17 Plaintiff Christopher John Wilson, a state prisoner and previous county detainee, is 18 proceeding pro se and in forma pauperis in this civil rights action. This case proceeds on 19 Plaintiff’s Eighth Amendment deliberate indifference to serious medical needs and failure to 20 protect claims against Defendant Son and Eighth Amendment excessive force claim against 21 Defendant Teague. 22 I. INTRODUCTION 23 On November 19, 2024, Defendant Son filed a Notice of Stay. (Doc. 61.) The notice 24 concerns bankruptcy proceedings in the United States Bankruptcy Court for the Southern District 25 of Texas, Houston Division, regarding Wellpath Holdings, Inc. and some of its debtor affiliates. 26 That court issued an order (referred to as the “PC Stay Order”) on November 14, 2024, imposing 27 a stay on litigation involving Wellpath Holdings, Inc. or its debtor affiliates, including Defendant Son’s employer, Wellpath CFMG, Inc. The PC Stay Order cites to section 362 of Title 11 of the 1 United States Bankruptcy Code. Defendant Son asserts that “[a]s a result of the extension of the 2 automatic stay to the Defendant, all parties are stayed from any further continuation of these 3 proceedings until such time as the Bankruptcy Court may order otherwise.” 4 On December 4, 2024, Plaintiff filed a document titled “Motion for Defendants To Pay all 5 Debt, Honor, Satisfy, Obligations.” (Doc. 62.) Regarding Defendant Son’s notice, Plaintiff asks 6 what the notice means in layman’s terms and whether he is “going to get what [he] asked for.” He 7 states it is not his “fault that the Defendants went bankrupt” and contends “defendants are 8 obligated to pay [him] or put a lien on all Defendants property assets, and such, till they pay in 9 full upon debt, satisfy all obligations of the court action and proceedings.” 10 II. DISCUSSION 11 Plaintiff is advised Defendant Son’s Notice of Stay filed November 19, 2024, seeks to 12 operate as a stay or “hold” of these proceedings until further order of the bankruptcy court.1 13 To the extent Plaintiff asserts any Defendant in this action is obligated “to pay” him, he is 14 mistaken. This Court has not issued any ruling awarding damages to Plaintiff from either 15 Defendant Son or Defendant Teague. While Plaintiff has alleged he is entitled to damages, those 16 allegations have not been proven. This action has not yet moved into the discovery phrase and 17 any merits-based decision regarding Plaintiff’s claims against Defendants would not occur until 18 discovery has been completed. In any event, this Court is not persuaded Defendant Son’s notice 19 requires it to stay these proceedings in their entirety. 20 In this circuit, section 362(a) does not empower bankruptcy courts to stay proceedings 21 against non-debtor defendants, like Defendant Teague. See In re Miller, 262 B.R. 499 , 503-04 & 22 n.6 (B.A.P. 9th Cir. 2001); In re Silverman, 616 F.3d 1001 , 1005 n.1 (9th Cir. 2010) (holding that 23 non-bankruptcy courts should “treat the BAP’s decisions as persuasive authority given its special 24 expertise in bankruptcy issues and to promote uniformity of bankruptcy law throughout the Ninth [25] 26 1 Section 362(a)(1) stays the “commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could 27 have been commenced before the commencement of the case.” 11 U.S.C. § 362 (a)(1). Pursuant to 11 U.S.C. § 362 (a) all actions against a defendant who has filed a bankruptcy petition are automatically stayed once the petition is filed. Sternberg v. Johnston, 559 F.3d 937, 943 (9th Cir. 2010). 1 Circuit”); see also Acosta v. Valley Garlic, Inc., No. 1:16-cv-01156-AWI-EPG, 2017 WL 2 3641761, at *1, n.1 (E.D. Cal. Aug. 24, 2017), on reconsideration, No. 1:16-cv-01156-AWI-EPG, [3] 2018 WL 288017 (E.D. Cal. Jan. 4, 2018) (citing In re Miller and declining to stay proceedings 4 against non-debtor defendants). Because the Court is persuaded by In re Miller, it declines to stay 5 the case against the non-debtor Defendant Officer Teague pursuant to 11 U.S.C. § 362 (a). 6 District courts have the inherent power to stay a lawsuit. Landis v. North American Co., [7] 299 U.S. 248, 254-55 (1936). If an independent and related case is pending, in certain 8 circumstances federal courts may stay the instant suit while the independent proceeding moves 9 forward. Dependable Highway Exp., Inc. v. Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir. 10 2007); Leyva v. Certified Grocers of California, Ltd., 593 F.2d 857, 863 (9th Cir. 1979). 11 To determine whether a Landis stay is appropriate, courts weigh the following competing 12 interests: (1) whether there is a fair possibility that a stay will cause damage; (2) whether a party 13 may suffer hardship or inequity if a stay is not imposed; and (3) whether a stay will contribute to 14 the orderly course of justice. CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962). 15 Additionally, a Landis stay (4) cannot be imposed only for judicial economy and (5) cannot be 16 indefinite and result in undue delay. Dependable Highway Exp., Inc., 498 F.3d at 1066-67 . A stay 17 may be the most efficient and fairest course when there are “independent proceedings which bear 18 upon the case.” Leyva, 593 F.2d at 863 . 19 III. CONCLUSION AND ORDER 20 In light of the pending bankruptcy proceedings, it is HEREBY ORDERED that: 21 1. Within 21 days of the date of service of this order, Plaintiff SHALL show cause in 22 writing why the entire action should not be stayed until the bankruptcy proceeding in 23 the related case is resolved. Plaintiff shall address the five Landis factors identified 24 above to the best of his ability; and 25 // 26 // 27 // 1 2. Within 21 days of the date of service of this order, Defendant Teague SHALL file 2 written notice advising the Court of his position regarding a stay of these proceedings 3 pursuant to Landis. [4] IT IS SO ORDERED. [5] 6 Dated: December 9, 2024 /s/ Sheila K. Oberto . UNITED STATES MAGISTRATE JUDGE