1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9

SCOTT JOHNSON,

10 Case No. 22-cv-01456-RS Plaintiff, 11 v. ORDER GRANTING MOTION TO 12 DISMISS, DENYING MOTION TO CONSTANTIA CAPITAL LIMITED, et al., STAY, AND ORDER TO SHOW CAUSE 13 Defendants. 14

15 16 Plaintiff Scott Johnson is a person with disabilities who requires the use of a wheelchair. 17 Johnson filed this suit under the Americans with Disabilities Act (“ADA”) and California’s Unruh 18 Civil Rights Act (“Unruh Act”) against the owners of King Chuan Restaurant. Defendants now 19 move to dismiss Plaintiff’s Unruh Act claim pursuant to Rule 12(b)(1) of the Federal Rules of 20 Civil Procedure, asking this Court to deny the exercise of supplemental jurisdiction. Defendants 21 further move to stay proceedings on any surviving claims pending an ongoing civil lawsuit against 22 Plaintiff’s counsel filed by several California district attorneys. These motions are suitable for 23 determination without oral argument. Civ. L.R. 7-1(b). The motion to dismiss Plaintiff’s Unruh 24 Act claim is granted, and the motion to stay proceedings on the surviving ADA claim is denied. 25 Plaintiff is further ordered to show cause why his ADA claim should not be dismissed for lack of 26 standing. 27 I. BACKGROUND 1 separate occasions over the span of seven months in 2021. During both visits, Plaintiff avers that 2 he encountered a lack of ADA-compliant accommodations inside the restaurant — in particular, 3 the absence of wheelchair-accessible dining surfaces, sales counters, paths of travel, and 4 restrooms. Plaintiff subsequently brought this suit, with the operative, first amended complaint 5 seeking both an injunction under the ADA and damages under the Unruh Act. 6 II. LEGAL STANDARD 7 Where a federal court has original jurisdiction over a claim, the court may exercise 8 supplemental jurisdiction over “all other claims that are so related to claims in the action within 9 such original jurisdiction that they form part of the same case or controversy.” 28 U.S.C. 10 § 1367(a). A claim is considered part of the same “case or controversy” as a federal claim when 11 the claims “derive from a common nucleus of operative fact and are such that a plaintiff would 12 ordinarily be expected to try them in one judicial proceeding.” Trs. of the Constr. Indus. & 13 Laborers Health & Welfare Tr. v. Desert Valley Landscape & Maint., Inc., 333 F.3d 923, 925 (9th 14 Cir. 2003) (citations and internal quotation marks omitted). There are four statutory circumstances 15 in which a district court may decline supplemental jurisdiction over a claim: 16 (1) the claim raises a novel or complex issue of State law, (2) the claim 17 substantially predominates over the claim or claims over which the district court 18 has original jurisdiction, (3) the district court has dismissed all claims over which 19 it has original jurisdiction, or (4) in exceptional circumstances, there are 20 underlying reasons for declining jurisdiction. 21 28 U.S.C. § 1367(c). Declining supplemental jurisdiction due to “exceptional circumstances” 22 under § 1367(c)(4) should occur “only if the circumstances are quite unusual.” Exec. Software N. 23 Am., Inc. v. U.S. Dist. Ct. for the Cent. Dist. of Cal., 24 F.3d 1545, 1558 (9th Cir. 1994), overruled 24 on other grounds by Cal. Dep’t of Water Res. v. Powerex Corp., 533 F.3d 1087 (9th Cir. 2008). 25 This decision is also informed by the underlying values of “economy, convenience, fairness, and 26 comity.” City of Chicago v. Int’l Coll. of Surgeons, 522 U.S. 156, 172–73 (1997). 27 Federal courts have broad discretion to grant stays of proceedings. In considering whether 1 a stay is appropriate, a court may consider the possible damage to the nonmoving party if a stay is 2 granted, the hardship or inequity to the moving party if a stay is denied, and “the orderly course of 3 justice measured in terms of the simplifying or complicating of issues, proof, and questions of law 4 which could be expected to result from a stay.” CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962) (citing Landis v. N. Am. Co., 299 U.S. 248, 254–55 (1936)). Federal courts may grant a stay 5 in light of parallel civil or criminal proceedings, see Herrera v. City of Palmdale, 918 F.3d 1037 (9th 6 Cir. 2019), but “[a] stay should not be granted unless it appears likely the other proceedings will be 7 concluded within a reasonable time in relation to the urgency of the claims presented to the court.” 8 Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 864 (9th Cir. 1979). 9

II. DISCUSSION

10 A. Unruh Act Claim 11 Defendants move to dismiss Plaintiff’s Unruh Act claim by applying the logic of Arroyo v. 12 Rosas, 19 F.4th 1202 (9th Cir. 2021). In Arroyo, the Ninth Circuit addressed a district court’s 13 ability, under 28 U.S.C. § 1367(c)(4), to deny the exercise of supplemental jurisdiction over Unruh 14 Act claims brought by “high-frequency litigants.” The panel concluded that California’s 15 heightened pleading standards for Unruh Act claims brought by such plaintiffs — rules that were 16 enacted to “balance [the State’s] objectives of allowing monetary relief, avoiding undue burdens 17 on businesses, and realigning undesirable incentives for plaintiffs,” Arroyo, 19 F.4th at 1213 — 18 created an “exceptional circumstance” for the purpose of supplemental jurisdiction. In particular, 19 the panel reasoned that allowing high-frequency plaintiffs to pursue Unruh Act claims in federal 20 court had “created an end-run around California’s requirements, thereby allowing a wholesale 21 evasion of th[e] critical limitations on damages relief under the Unruh Act.” Id. (internal quotation 22 marks omitted). Plaintiffs seeking to avoid these requirements have, in turn, undoubtedly 23 contributed to the avalanche of new ADA cases in California federal courts in recent years. This 24 “unique confluence of California rules . . . presents ‘exceptional circumstances’ that authorize 25 consideration, on a case-by-case basis, of whether the ‘principles of economy, convenience, 26 fairness, and comity . . . warrant declining supplemental jurisdiction.” Id. at 1205. 27 1 Such “exceptional circumstances” are present here, as they have been in several cases in 2 this District brought by such high-frequency litigants in the months since Arroyo was decided. 3 See, e.g., Garcia v. Maciel, 21-cv-03743-JCS, 2022 WL 395316 (N.D. Cal. Feb. 9, 2022); Arroyo 4 v. Quach, Inc., 21-cv-08778-JST (N.D. Cal. Apr. 12, 2022); Garcia v. Chul Shik An, 21-cv-04906- 5 VC (N.D. Cal. June 21, 2022); Johnson v. DK Hawaiian BBQ, Inc., 21-cv-09272-YGR (N.D. Cal. 6 June 24, 2022). Defendants assert, and Plaintiff does not deny, that Plaintiff is a “high-frequency 7 litigant” who would otherwise be subject to California’s heightened procedural requirements had 8 this suit been filed in state court. Unlike in Arroyo, where the district court had already granted 9 summary judgment to the plaintiff on their ADA claim, the merits of the present case have not yet 10 been litigated. Given the identical comity concerns at play here, and in line with the dispositions 11 of similar cases in this Court, supplemental jurisdiction will not be exercised in this case. 12 Plaintiff attempts to cabin Arroyo to the Central District of California, arguing it is “governed 13 by fundamentally different procedures” than this Court, where General Order 56 governs the resolution 14 of ADA claims. Dkt. 26. There is simply no reason to believe Arroyo’s logic is so confined. While 15 General Order 56 prescribes, among other things, additional discovery requirements of litigants in 16 ADA cases, it is not designed to (and, indeed, does not) address the particular concerns that motivated 17 the California legislature to adopt heightened pleading standards for “high-frequency litigants.” See 18 also Maciel, 2022 WL 395316, at *4–5 (“[C]omity does not permit this Court to substitute its 19 judgment for that of the California legislature in determining how best to achieve the legislature’s 20 goals.”). Plaintiff also overstates the concern that such continued dismissals from this Court will make 21 it “functionally impossible for a plaintiff to ever obtain a decision on the merits due to the relative ease 22 with which a defendant can simply claim mootness and evade the consequences of breaking [the 23 ADA].” Dkt. 26. First, ADA defendants must still overcome the bar of “voluntary cessation” in order 24 to argue that a claim has been mooted, see, e.g., Moore v. Saniefar, No. 14-cv-01067-SKO, 2017 WL 25 1197407, at *6 (E.D. Cal. Mar. 9, 2017); and second, Plaintiff is still free to seek redress in state court. 26 B. ADA Claim 27 In addition to their motion to dismiss, Defendants move that any remaining claims be 1 stayed pending the resolution of People of the State of California v. Potter Handy LLP, No. CGC- 2 22-599079 (Cal. Super. Ct. Apr. 11, 2022).1 That case, brought by the San Francisco and Los 3 Angeles District Attorneys, alleges that Potter Handy, LLP, has filed thousands of ADA/Unruh 4 Act claims against small businesses in order to extract quick financial settlements, in violation of 5 California law. While the Potter Handy firm represents Plaintiff in this action, and Plaintiff 6 himself is mentioned throughout the Potter Handy complaint, Plaintiff is not a defendant in that 7 action. Potter Handy, Defendants argue, “necessarily will affect the viability of [Plaintiff’s] claims 8 here” and will affect his ability to participate in the present case. Dkt. 25. Defendants further argue 9 that the principle of judicial economy “strongly favors a stay.” Id. 10 Defendants have not met their burden for showing why a stay should be granted in this 11 case. First (and perhaps dispositively), Defendants have provided no basis for determining that 12 Potter Handy will be concluded within “a reasonable time.” See Leyva, 593 F.2d at 864. The 13 complaint in that case was filed only in April 2022, and the case remains in its early stages. There 14 is no practical way to assess when it will be concluded. Second, Defendants do not address the 15 hardship, if any, that may befall Plaintiff as the result of a stay. Plaintiff, after all, seeks injunctive 16 relief, and Defendants have not proven why he would not be prejudiced by a stay. Finally, even to 17 the extent Plaintiff may be required to testify in the Potter Handy case, Defendants have not 18 sufficiently shown that he will thereby be unable to prosecute his remaining ADA claim. Indeed, 19 the fact Plaintiff filed an amended complaint after the filing of the Potter Handy action suggests 20 his willingness to litigate this claim, despite the potential burden. 21 III. CONCLUSION 22 For the foregoing reasons, the motion to dismiss Plaintiff’s Unruh Act claim is 23 GRANTED, and the claim is dismissed without prejudice to refiling the case in state court. 24 Defendant’s motion to stay Plaintiff’s remaining ADA claim is DENIED. 25

26 1 For the purposes of assessing their motion to stay, and given that the request is unopposed, 27 Defendant’s request for the Court to take judicial notice of the Potter Handy action is GRANTED. 1 Furthermore, given Plaintiff’s vague averments included in the first amended complaint 2 || concerning his plan to return to King Chuan Restaurant, Plaintiff is ordered to show cause why his 3 remaining ADA claim should not be dismissed under Rule 12(b)(1) due to lack of standing. 4 || Plaintiff and counsel must respond within 21 days of this order. Failure to respond will result in a 5 dismissal of this action with prejudice. 6 7 || ITISSO ORDERED. 8 9 Dated: August 30, 2022 10 /

RICHARD SEEBORG

Chief United States District Judge 12

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19 20 21 22 23 24 25 26 27 98 ORDER ON MOTION TO DISMISS, STAY, AND SHOW CAUSE CASE No. 22-cv-01456-RS