Confluent, Inc. v. Slower, LLC

Background

Confluent filed a motion to dismiss Slower’s counterclaims. Instead of opposing that motion at that time, Slower asked the court to pause the case because its corporate powers had been suspended by the California Franchise Tax Board. Slower stated that its counsel discovered the suspension on June 18, 2025, and that Slower was taking steps to restore its corporate status.

Confluent opposed the request. It argued that Slower had been suspended since May 1, 2025, waited until July 16 to seek a stay, and would receive approximately 45 days to research and prepare its opposition to the motion to dismiss. Confluent argued that this delay would prejudice it.

Court’s reasoning

The court explained that a district court has broad discretion to pause a case while a related administrative matter is resolved. It also explained that, under California law, a corporation whose powers are suspended for failure to pay taxes generally cannot prosecute or defend an action or appeal an adverse judgment. The usual practice is to give the corporation a brief continuance to pursue restoration of its powers.

The court considered Slower’s diligence, whether additional time would help Slower regain its status, inconvenience to the court and the parties, and potential prejudice. Although the court said Slower should have requested a stay promptly after learning about the suspension, it credited counsel’s explanation that the suspension was discovered on June 18 and noted that the parties immediately began discussing a possible continuance. The court also recognized potential prejudice to Confluent but concluded that the circumstances were not severe enough to deny the request. It noted that any prejudice could potentially be addressed by allowing Confluent to supplement its motion or giving it more time to file a reply.

Order

Judge Susan Van Keulen granted Slower’s request for a stay and continuance. The case was stayed until August 22, 2025. The August 19, 2025 hearing was vacated, to be reset if necessary after briefing on the motion to dismiss was completed.

The parties were ordered to file a joint status report by August 22. The report must describe Slower’s efforts to regain its corporate status, including an estimated completion timeline if it had not yet been revived. If Slower remained suspended, the parties had to submit either a joint request for a further stay or arguments—limited to one page per party—about whether the stay should be extended. If Slower had been revived, the parties had to propose a briefing schedule for Confluent’s motion to dismiss and address any prejudice caused by the stay.