Esguerra-Aguilar, Inc. v. Shapes Franchising, LLC
- Beth Freeman
- 5:20-cv-00574
- U.S. District Court · Northern District of California
- 3
In Esguerra-Aguilar v. Shapes Franchising, Judge Freeman denied defendants’ request to delay deadlines and reset the case-management conference.
The defendants’ requested schedule change was denied, while the court reset the initial case-management conference and set a deadline for the parties’ joint statement.
What happened
In Esguerra-Aguilar, Inc. v. Shapes Franchising, LLC, the plaintiffs sued their former franchisors. The defendants asked to extend case deadlines until at least 21 days after the court ruled on their request to send the dispute to arbitration.
The defendants argued that continuing the case would cause unnecessary expense and might risk giving up their right to arbitration. The plaintiffs responded that the defendants had not shown substantial harm and that delaying the case would cause unnecessary delay. The court found the defendants’ claimed harm generic, unpersuasive, and speculative.
Judge Beth Labson Freeman denied the defendants’ motion to continue the initial deadlines. The court separately reset the initial case-management conference from May 14 to May 28, 2020, immediately after the hearing on the motion to stay, and required a joint case-management statement by May 21, 2020.
The detailed version
- Esguerra-Aguilar, Inc. v. Shapes Franchising, LLC · No. 5:20-cv-00574
- Beth Freeman
- May 1, 2020
Background
Plaintiffs Esguerra-Aguilar, Inc. and Avi Minkoff filed this lawsuit against their former franchisors. Defendants later filed a motion to stay the proceedings pending arbitration, scheduled for hearing on May 28, 2020. Defendants then filed a motion under Civil Local Rule 6-3 to continue several initial case deadlines, including their deadline to respond to the complaint, until no earlier than 21 days after the court ruled on the motion to stay.
Arguments
Civil Local Rule 6-3 requires a party seeking to change a deadline to identify substantial harm or prejudice that would occur if the deadline were not changed. Defendants argued that, without a stay or continuance, they would incur substantial litigation expenses and might be forced to raise substantive defenses in court, which they believed could allow plaintiffs to argue that defendants had waived their right to arbitrate. Plaintiffs argued that defendants had not shown substantial harm or prejudice and that a continuance would significantly delay the case.
Court’s Analysis
The court found defendants’ explanation of substantial harm generic and unpersuasive. It said defendants had not distinguished this case from an ordinary case in which litigation costs are incurred. The court also declined to impose a categorical stay before deciding whether the dispute was arbitrable. Relying on Ninth Circuit precedent and decisions stating that ordinary litigation expenses generally do not constitute irreparable harm, the court found no support for defendants’ speculative concern that further litigation might waive their arbitration rights.
Disposition
The court denied Defendants’ Motion to Continue Initial Case Deadlines Pending Ruling on the Motion to Stay at ECF 15. Separately, it reset the Initial Case Management Conference from May 14, 2020, to May 28, 2020, immediately after the hearing on the motion to stay. The court set May 21, 2020, as the deadline for the parties’ joint case-management statement. The opinion did not decide the motion to stay or whether the dispute was arbitrable.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.