Sarieddine v. Connected Int'l Inc.
Trial Court Opinion
8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA
11 No. 2:22-cv-02168-DJC-AC MIKE SARIEDDINE, Plaintiff, 13 ORDER v. CONNECTED INTERNATIONAL INC., et 15 al., 16 Defendants.
CONNECTED INTERNATIONAL INC., et 18 al., Counterclaimants, v. MIKE SARIEDDINE, et al., Counterdefendants.
24 Plaintiff, who sells nicotine-related products under the trademark ALIEN VAPE and other related marks, has brought this trademark infringement action against Defendants, who sell cannabis-related products under ALIENLABS and other related marks, alleging there is a likelihood of confusion between the marks. Plaintiff previously moved for a preliminary injunction to enjoin Defendants’ use of their marks, which the Court denied. Plaintiff appealed that denial, and now seeks a stay in this Court pending the Ninth Circuit’s review, arguing the Ninth Circuit’s decision will provide helpful guidance for the Parties and this Court on central issues in this case and that a short stay will not prejudice either Party. Defendants oppose, arguing a stay will hinder their ability to obtain timely relief on their counterclaims which are unrelated to the appeal and will provide limited guidance to the Parties and Court moving forward.
8 Having considered the Parties’ briefings, the Court finds that imposing a stay would unduly prejudice Defendants while providing Plaintiff and the Court with only 10 minor benefits. Accordingly, the Court will deny the request to stay.
11 BACKGROUND 12 Plaintiff brought this action on December 6, 2022, and subsequently filed a 13 Motion for Preliminary Injunction on July 3, 2024, seeking to enjoin Defendants from 14 “any and all use of the ALIENLABS and AREA 41 trademarks.” (ECF Nos. 1, 43.) The 15 Court denied Plaintiff’s Motion for Preliminary Injunction on September 19, 2024, 16 finding Plaintiff had not established a likelihood of confusion between his and 17 Defendants’ marks under AMF Incorporated v. Sleekcraft Boats (“Sleekcraft”), 599 F.2d 18 341 (9th Cir. 1979). (ECF No. 49.) Plaintiff appealed the Court’s denial of a 19 preliminary injunction on October 21, 2024. (ECF No. 53.) Plaintiff now moves to stay 20 this action pending that appeal. (Mot. Stay (ECF No. 77).) Plaintiff’s Motion to Stay is 21 fully briefed and was submitted on the papers under Local Rule 230(g). (ECF No. 85.)
22 LEGAL STANDARD 23 When a party files an interlocutory appeal from the denial of a motion for a 24 preliminary injunction, a stay is “not a matter of right . . . .” Nken v. Holder, 556 U.S. 25 418, 433 (2009). The decision to grant a stay “is instead ‘an exercise of judicial 26 discretion,’ and ‘[t]he propriety of its issue is dependent upon the circumstances of the 27 particular case.’” Id. “The moving party has the burden of persuading the court that the circumstances of the case justify a stay.” Cesca Therapeutics Inc. v. SynGen Inc., No. 2:14-CV-2085-TLN (KJNx), 2017 WL 1174062, at *2 (E.D. Cal. Mar. 30, 2017).
3 District courts in this circuit follow one of two standards when evaluating a motion to stay pending an interlocutory appeal: the Nken test or the Landis test. The Ninth Circuit has not addressed which test applies for a motion to stay proceedings.
6 See Mobilize the Message LLC v. Bonta, No. 2:21-cv-05115-VAP-JPR(X), 2021 WL 7 6104312, at *1–2 (C.D. Cal. Sept. 17, 2021). However, in Flores v. Bennett, Judge Thurston authored a published opinion considering the applicable test for a stay at the district court level pending interlocutory appeal of a district court order. 675 F. 10
24 Here, Plaintiff seeks a stay of the proceedings, not the effect of a judgment or 25 injunction. Thus, the Court will apply the Landis test, which counsels courts to 26 consider “the competing interests which will be affected by the granting or refusal to 27 grant a stay,” including “the possible damage which may result from the granting of a 28 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.” Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9th Cir. 2005).
4 DISCUSSION 5 “[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.” Landis v. North American Co., 299 U.S. 8 248, 254 (1936). A court may issue a stay of proceedings in the interests of efficiency and fairness when a “pending resolution of independent proceedings [] bear[s] upon 10 the case.” Leyva v. Certified Grocers of Cal. Ltd., 593 F.2d 857, 863 (9th Cir. 1979). “A 11 stay should not be granted unless it appears likely the other proceedings will be 12 concluded within a reasonable time in relation to the urgency of the claims presented 13 to the court.” Id. at 864. The Landis factors guide the analysis of when a stay is 14 appropriate and include: (1) the possible damage of granting the stay; (2) the 15 hardship or inequity on the movant by not granting the stay; (3) the orderly course of 16 justice. Lockyer, 398 F.3d at 1110.
17 I. Possible Damage from Granting a Stay and Hardship or Inequity 18 from Denial of a Stay 19 Plaintiff argues no damage will result from granting the requested stay because 20 (1) given that the preliminary injunction was denied, Defendants have not been 21 required to discontinue use of their ALIENLABS and AREA 41 marks; (2) this case is 22 still at its infancy and the pleadings have not yet been set; and (3) the stay will be 23 relatively short as the Ninth Circuit has set oral argument for May 16, 2025, which 24 indicates a decision should issue sometime in the summer of 2025. (Mot. Stay at 3–4; 25 Reply Mot. Stay (ECF No. 84) at 1–2.) Plaintiff also argues that, if no stay is imposed, he 26 will be required to engage in possibly unnecessary discovery and motion practice 27 based on this Court’s purportedly incorrect analysis and evaluation of the Sleekcraft 28 factors. (Mot. Stay at 4.)
1 The Court is unpersuaded by Plaintiff’s position. Defendants argue in opposition that a stay will hinder their ability to obtain timely relief for their trademark counterfeiting, copyright infringement, and unfair competition counterclaims, which are unrelated to the issues raised by Plaintiff on appeal. (Opp’n Mot. Stay (ECF No. 82) at 8–9.) In particular, Defendants argue they recently amended their counterclaims to assert these claims based on a website, www.alienvapestore.com, discovered during their ongoing investigation of Plaintiff’s claims. (Id. at 3.)
8 Defendants allege the website purports to offer Defendants’ ALIENLABS products for sale without authorization in connection with Plaintiff’s ALIEN VAPE mark. (Id.) 10 Defendants further allege the website was registered on September 28, 2024, just 11 nine days after this Court’s order denying Plaintiff’s request for injunctive relief for 12 failing to demonstrate a likelihood of confusion of the Parties’ marks. (Id. at 3–4.)
13 Defendants argue that, “[o]n information and belief Plaintiff, Alien Vape LLC or 14 someone associated with them created and/or controls the Infringing Website in a 15 bad faith attempt to manufacture evidence of confusion.” (Id. at 4.) Plaintiff does not 16 address or rebut this alleged harm in his Reply. (See Reply at 1–4.) Thus, the Court 17 finds that imposing a stay may risk prolonging any harm Defendants will suffer from 18 the unlawful use of their marks.
19 Further, the Court must weigh the possibility of damage to Defendants against 20 Plaintiff’s claim of undue hardship. See CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 21 1962) (“Where it is proposed that a pending proceeding be stayed, the competing 22 interests which will be affected by the granting or refusal to grant a stay must be 23 weighed.”). Given that Defendants have argued they will suffer damage from the 24 imposition of a stay, Plaintiff has a more difficult road to establishing undue hardship.
25 Lockyer, 398 F.3d at 1112 (“’[I]f there is even a fair possibility that the stay . . . will work 26 damage to someone else,’ the party seeking the stay ‘must make out a clear case of 27 hardship or inequity.’” (quoting Landis, 299 U.S. at 255)). The Ninth Circuit has 28 determined that simply “being required to defend a suit does not constitute a ‘clear case of hardship or inequity’ within the meaning of Landis.” Id.; Fed. Trade Comm'n v. Cardiff, No. EDCV 18-2104-DMG (PLAx), 2020 WL 5417125, at *4 (C.D. Cal. Sept. 9, 2020). Plaintiff therefore cannot point to the ordinary burdens of the litigation process, which he has undertaken himself, as evidence of hardship or inequity.
5 Conducting “’substantial, unrecoverable, and wasteful’ discovery and pretrial motions practice on matters that could be mooted by a pending appeal may amount to hardship or inequity sufficient to justify a stay.” Finder v. Leprino Foods Co., No. 1:13- CV-02059-AWI-BAM, 2017 WL 1355104, at *4 (E.D. Cal. Jan. 20, 2017) (quoting Pena v. Taylor Farms Pac., Inc., No. 2:13-cv-01282-KJM-AC, 2015 WL 5103157, at *4 (E.D.
10 Cal. Aug. 31, 2015)). However, Plaintiff has not shown that the Ninth Circuit’s ruling 11 could possibly moot any key issues in the underlying litigation. Rather, Plaintiff argues 12 the Ninth Circuit’s ruling will provide helpful guidance the litigation moving forward, 13 as it will clarify the interpretation and determination of the Sleekcraft likelihood of 14 confusion factors that are at the heart of this case. (See Mot. Stay at 4; Reply Mot. Stay 15 at 1.) While this may be true, it is insufficient to outweigh the possible harm facing 16 Defendants from a stay.
17 Thus, the Court finds the first two Landis factors weigh against imposing a stay.
18 II. Orderly Course of Justice 19 The third Landis factor considers the “orderly course of justice measured in 20 terms of the simplifying or complicating of issues, proof, and questions of law which 21 could be expected to result from a stay.” CMAX, 300 F.2d at 268. “[W]hile it is the 22 prerogative of the district court to manage its workload, case management standing 23 alone is not necessarily a sufficient ground to stay proceedings.” Dependable 24 Highway Express, Inc. v. Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir. 2007). A 25 Landis stay is inappropriate if another proceeding is “unlikely to decide, or to 26 contribute to the decision of, the factual and legal issues before the district court.”
27 Lockyer, 398 F.3d at 1113. “[C]ourts typically stay cases when the outcome of another 28 proceeding will have preclusive effect on the pending issues.” Flores, 675 F. Supp. 3d 1 at 1063; see also, e.g., Safari Club Int’l v. Bonta, No. 2:22-cv-01395-DAD-JDP, 2023 WL 2 3505373, at *1 (E.D. Cal. May 17, 2023) (granting stay where the interlocutory appeal of the court’s denial of the preliminary injunction “contained all of the substantive legal issues in dispute in this litigation”); Andrade Rico, No. 2:17-cv-1402-KJM-DB, 2019 WL 4127206, at *5, 8 (E.D. Cal. Aug. 30, 2019) (staying proceedings pending interlocutory appeal where the merits of plaintiffs’ claims were intertwined with the questions of qualified immunity on appeal because a grant of qualified immunity would result in dismissal of the claims).
9 Here, Plaintiff argues the Court should stay these proceedings as “the Ninth 10 Circuit’s decision on Plaintiff’s interlocutory appeal will facilitate the orderly course of 11 justice by simplifying the issues, proof, and questions of law,” namely application of 12 the Sleekcraft likelihood of confusion factors. (Mot. Stay at 5.) Plaintiff argues that the 13 “Ninth Circuit’s view on these factual and legal issues will be important in informing 14 the case moving forward,” in particular when the Parties reach the summary judgment 15 stage. (Id.) Plaintiff also argues the Ninth Circuit’s decision may motivate the Parties 16 to settle. (Id. at 5–6.)
17 While the Ninth Circuit’s guidance will certainly be helpful, Plaintiff has not 18 demonstrated it will have preclusive effect on the issues in dispute here. As 19 Defendants argue, “Plaintiff’s appeal does not involve a certified or unsettled question 20 of law, but rather addresses denial of injunctive relief in a trademark matter analyzed 21 under the abuse of discretion standard.” (Opp’n Mot. Stay at 10.) This is insufficient to 22 justify a stay here. Cf. Safari Club Int’l, 2023 WL 3505373, at *1 (“Because this case 23 primarily involves questions of law that are pending on appeal, a stay of the 24 proceedings until those questions are resolved will conserve judicial and party 25 resources.”); Wilhoite v. Xiaodi Hou, No.: 3:23-cv-02333-BEN-MSB, 2024 WL 2869986, 26 at *4 (S.D. Cal. June 6, 2024) (staying case under Landis where “where the Ninth 27 Circuit’s decision regarding either the forum selection clause issue or the derivative 28 standing issue would effectively dismiss the case from this Court”). In particular, the | Court is mindful of the Ninth Circuit's repeated admonition in the context of a stay | pending appeal of a preliminary injunction “not to delay trial preparation to await an | interim ruling ona preliminary injunction” because preliminary injunctions often | involve a limited review of the factual record and “may provide little guidance as to | the appropriate disposition on the merits.” California v. Azar, 911 F.3d 558, 583-84 | (9th Cir. 2018).
7 Thus, the third Landis factor also weighs counter to granting a stay.
8 CONCLUSION 9 In accordance with the above, it is hereby ORDERED that Plaintiff's Motion to | Stay (ECF No. 77) is DENIED.
12 IT 1S SO ORDERED.
13 | Dated: _March 28, 2025 “Daal J CoO □□□□ Hon. Daniel alabretta 14 UNITED STATES DISTRICT JUDGE | DJC4 - Sarieddine22cv2168.MotStay
Case-law data current through December 31, 2025. Source: CourtListener bulk data.