RECEIVED MAY 16 2018

1 KENDALL BRILL & KELLY LLP

Bert H. Deixler (70614)
2 bdeixler@kbkfirm. com
Nicholas F. Daum (236155)
3 ndaum@kbkfirm. com
10100 Santa Monica Blvd., Suite 1725
4 Los Angeles, California 90067
Telephone: 310.556.2700
5 Facsimile: 310.556.2705

6 RABINOWITZ, BOUDIN, STANDARD,

KRINSKY & LIEBERMAN, LLP
7 Eric M. Lieberman (pro hoc vice)
elieberman@rbskl. com
8 14 Wall Street, Suite 3002
New York, NY 10006
9 Telephone: 212.254.1111
Facsimile: 212.674.4614
10
Attorneys for Defendant Church of Scientology
11 International

12 SUPERIOR COURT OF THE STATE OF CALIFORNIA

13 COUNTY OF LOS ANGELES, CENTRAL DISTRICT

14
LAURA ANN DeCRESCENZO, Case No. BC411018
15
Plaintiff, Assigned for All Purposes to the
16 Hon. Mark V. Mooney, Dept. 068
v.

17 NOTICE OF MOTION AND MOTION OF

CHURCH OF SCIENTOLOGY DEFENDANT CHURCH OF
18 INTERNATIONAL, a corporate entity, SCIENTOLOGY INTERNATIONAL TO
RELIGIOUS TECHNOLOGY CENTER, STAY PROCEEDINGS PENDING
19 previously sued herein as Doe No. 1, a RESOLUTION OF RELATED FEDERAL
California Corporation, and DOES 2-20, ACTION; MEMORANDUM OF POINTS
20 AND AUTHORITIES
Defendants.
21 Filed concurrently with Declaration ofBert H.
Deixler
22
Date: June 8, 2018
23 Time: 8:30 A.M.

24 Action Filed: April 2,2009

FSC: July 13,2018
25
Trial Date: August 13, 2018

26 RES ID: 180503311562

27

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 1 TO ALL PARTIES AND TO THEIR COUNSEL OF RECORD:

2 PLEASE TAKE NOTICE THAT on June 8,2018, at 8:30 A.M.. or as soon thereafter as

3 counsel may be heard, in Department 068 of the above-captioned Court, located at 111 North Hill

4 Street, Los Angeles, CA 90012, Defendant Church of Scientology International ("CSI") will and

5 hereby does move this Court to Stay Proceedings pending resolution of its appeal of a related

6 federal action.

7 This Motion is made upon the following grounds: CSI has filed a notice of appeal of an

8 order granting a Motion to Dismiss in a related federal case in the Central District of California,

9 Church ofScientology International v. Laura DeCrescenzo, 17-CV-9l58-GW(SKx), 18-55620 in

10 the Ninth Circuit. The federal case seeks to enjoin this action as collaterally estopped by a prior

11 judgment of a federal court. If the United States Court of Appeals for the Ninth Circuit reverses

12 the federal District Court's order of dismissal, then this action will not proceed. Accordingly, this

13 Court should not proceed to trial in the matter when there is a real possibility that trial will be

14 unnecessary or, worse, that trial would go forward in a case later enjoined by the federal courts,

15 thus wasting both the parties' and the Court's resources.

16 In granting the Motion to Dismiss, the federal District Court acknowledged the importance

17 and legitimacy of the collateral estoppel issue. The federal District Court, however, failed to

18 consider significant points of law—most notably, the fact that federal, not California, law has

19 always controlled resolution of the collateral estoppel issue in this case. On appeal before the

20 Ninth Circuit, CSI will address these issues, and CSI expects the Ninth Circuit to resolve the

21 appeal in its favor.

22 This Motion is based on this Notice of Motion, the attached Memorandum of Points and

23 Authorities, the Declaration of Bert H. Deixler filed concurrently herewith, all of the pleadings,

24 files, and records in this proceeding, all other matters of which the Court may take judicial notice,

25 and any argument or evidence that may be presented to or considered by the Court prior to its

26 ruling.

27

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 1 DATED: May 16, 2018 KENDALL BRILL & KELLY LLP

3
By:

4 Bert H. Deixler
Attorneys for Defendant Church of Scientology
5 International

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 TABLE OF CONTENTS
Page
2

3 I. INTRODUCTION 1

4 II. BACKGROUND 1

5 A. A Federal District Court Holds That DeCrescenzo's Claims Are Time-

Barred 1
6
B. CSI Brings A Separate Action In Federal Court To Enforce The Collateral
7 Estoppel Effect Of The Prior Federal Judgment 3

8 C. CSI Is Likely to Prevail on Appeal And The Ninth Circuit Will Enforce The
Prior Federal Court Judgment 4
9
1. Under Federal Law, Judge King's Final Judgment Is Preclusive 5
10
2. Judge Wu Granted A Motion To Dismiss Because Of Prior
11 California Court Rulings On The Collateral Estoppel Issue, But
Failed To Recognize That Those Prior Rulings Erroneously Applied
12 Only California, Not Federal, Law 6

13 III. ARGUMENT 7

14 A. Parallel Litigation Would Result in Unnecessary, Duplicative Litigation 8

15 B. A Stay Will Prevent Inconsistent Judgments and Promote the Principle of

Comity 9
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C. CSI's Appeal Can Only Be Heard in Federal Court 10
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D. No Prejudice Will Result From a Stay 10
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IV. CONCLUSION 11
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 1 TABLE OF AUTHORITIES

2 Page(s)

3 Cases

4
Allen v. Ferguson,
791 F.2d 611 (7th Cir. 1986) 6
5

6 Am. Home Assur. Co. v. Vecco Const. Co., Inc. o/Va.,

629 F.2d 961 (1980) 9
7
Bergv. MTC Elec. Techs. Co.,
8 61 Cal. App. 4th 349 (1998) 9

9 Caiafa Prof. Law Corp. v. State Farm,

15 Cal. App. 4th 800 (1993) 9
10

Carlson v. Arrowhead Concrete Works, Inc.,

11
445 F.3d 1046 (8th Cir. 2006) 5
12
Chick Kam Choo v. Exxon Corp.,
13 486 U.S. 140(1985) 5

14 City & County ofSan Francisco v. Fair Emp. & Hous. Comm 'n,
191 Cal. App. 3d. 976 (1987), abrogated on other grounds by Richards v.
15
CH2MHUI, Inc., 26 Cal. 4th 798 (2001) 10
16
City of Waco v. United States Fidelity & Guaranty Co.,
17 293 U.S. 140(1934) 5,6

18 Deposit Bank v. Frankfort,

191 U.S. 499 (1903) 5
19
Landis v. N. Am. Co.,
20
299 U.S. 248(1939) 7

21
Pelleport Investors, Inc. v. Budco Quality Theatres, Inc.,

22 741 F.2d 273 (9th Cir. 1984) 6

23 Plaut v. Spendthrift Farm, Inc.,

514 U.S. 211(1995) 5
24
Schneider v. Vennard,
25 183 Cal. App. 3d 1340 (1986) 8

26
Simmons v. Superior Court,
96 Cal. App. 2d 119 (1950) 9, 10
27

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 1 Stevens v. Brink's Home Security, Inc.,
378 F.3d 944 (9th Cir. 2004) 6
2
Stall v. Gottlieb,
3
305 U.S. 165(1938) 5

4
Tahoe Sierra Preservation Council v. Tahoe Regional Planning Agency,
5 322 F.3d 1064 (9th Cir. 2003) 5

6 Thomson v. Continental Ins. Co.,

66 Cal.2d 738 (1967) 7, 8,9
7
Statutes
8
18U.S.C.
9
§ 1589 1
§1593 1
10
§1595 1
11
Rules
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Federal Rule of Civil Procedure Rule 12(b)(6) 3
13
Treatises
14
18 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure, § 4468
15
(2002) 4

16
Restatement (Second) of Judgments § 82 (1982) 4
17
Other Authorities
18
Degnan, Federalized Res Judicata, 85 Yale L.J. 741, 749 (1976) 4
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2 I. INTRODUCTION

3 There is a pending federal appeal which could entirely resolve this case. If the appeal is

4 resolved in favor of Defendant Church of Scientology International ("CSI"), this action will be

5 enjoined. It makes little sense to expend the considerable judicial and party resources necessary

6 for a trial in this matter when the federal appeal could (and likely will) make trial before this Court

7 a dead letter.

8 Accordingly, CSI asks this Court to stay trial in the matter pending resolution of the

9 federal appeal. CSI is preparing and will seek forthwith expedited resolution of the federal appeal.

10 As it concerns this Court, trial in this long-cause matter will be a major undertaking. Plaintiff has

11 asserted that the trial—in a first phase alone—will occupy 137 hours of this Court's time. A

12 second-phase trial (if necessary) could occupy months more of this Court's time. Before this

13 Court and the parties embark on that path, it makes sense for the parties to wait until it is clear

14 whether there will be federal-court intervention that would make the parties' and the Court's work

15 on this case moot. Meanwhile, little or no prejudice would result from such a stay—discovery in

16 the case has long since closed, and all applicable pre-trial briefing has already been submitted to

17 the Court.

18 Thus, the Court should stay trial in this matter pending the related federal appeal.

19 II. BACKGROUND

20 A. A Federal District Court Holds That DeCreseenzo's Claims Are Time-Barred

21 DeCrescenzo filed her lawsuit in this Court long after, as DeCresccenzo admits, each of

22 her claims became barred by the statute of limitations. Declaration of Bert H. Deixler ("Deixler

23 Decl.") Ex. K, ECF No. 35, Order Granting Motion to Dismiss at 2. Even though her causes of

24 action were all time-barred, DeCrescenzo amended her complaint to assert a new claim under 18

25 U.S.C. §§ 1589, 1593, 1595 ("the Federal Claim"). Id. CSI then removed this case to federal

26 court, where it was assigned in the Central District of California to then Chief Judge George H.

27 King. Id.; see also Deixler Decl. Ex. B. CSI then moved to dismiss all of DeCrescenzo's claims

28 as time-barred. Deixler Decl. Ex. K. at 2.

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 1 In response, DeCrescenzo claimed the doctrine of equitable estoppel applied, and she

2 alleged that she was prevented from asserting her claims because of a variety of alleged acts that

3 occurred while she performed services for CSI and before her claims accrued.. She also asserted

4 that CSI told her (and she believed) that she had waived her legal rights by signing various

5 releases when she left her position. Id.

6 In federal District Court, Chief Judge King granted CSFs Motion to Dismiss the Federal

7 Claim, holding that the Federal Claim was barred by the statute of limitations and rejecting

8 DeCrescenzo's equitable estoppel argument.1 Id.; see also Deixler Decl. Ex. C. Judge King

9 declined to rule on the remaining state law claims, each of which was time-barred unless equitable

10 estoppel applied, instead remanding the case to state court. Id. Once the case returned to Los

11 Angeles Superior Court, CSI demurred to DeCrescenzo's complaint, arguing that the causes of

12 action were time-barred, and, regardless, that she was collaterally estopped by Judge King's final

13 judgment to assert her equitable estoppel argument. Deixler Decl. Ex. K at 2. The demurrer was

14 sustained with leave to amend, as DeCrescenzo had failed to explain why equitable estoppel

15 applied. Id. at 2-3. She amended her complaint on February 2, 2010. Id. at 3; see also Deixler

16 Decl. Ex. D..

17 CSI demurred to the second amended complaint, arguing again that all causes of action

18 were barred by the statute of limitations, and that all claims were barred by collateral estoppel

19 pursuant to Judge King's final judgment. Deixler Decl. Ex. K at 3. The Superior Court sustained

20 the demurrer, finding that the statute of limitations had run on DeCrescenzo's causes of action. Id.

21 The Superior Court also rejected the collateral estoppel argument as, under California law, a

22 federal court dismissal based on the statute of limitations was not considered a decision on the

23 merits under state law (although it is under federal law, which was the law applicable to the final

24 federal court judgment of Judge King), and therefore, did not have any preclusive effect. See id.

25 DeCrescenzo appealed, and the California Court of Appeal reversed and remanded, holding that

26 1 Whether the doctrine of equitable estoppel should apply, and whether the statute of
limitations has run, is the subject of the first phase of the bifurcated trial in front of this Court,
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scheduled to begin August 13,2018. Deixler Decl. Ex. H.
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 1 "intimidation and threats of banishment and harassment, if true, may preclude defendants, in

2 equity, from asserting the statute of limitations as a defense." Id.

3 The California Court of Appeal, in so doing, improperly applied California law to the

4 question of the federal court judgment. It declined to discuss thefederal arguments under the

5 federal law of collateral estoppel raised by CSI, including that (1) federal preclusion law and

6 federal preclusion law alone applies to a federal court judgment (2) a party cannot escape the

7 preclusive consequences of a federal court judgment merely by alleging new arguments or

8 "additional" facts that she already knew and could have raised in the original federal court

9 proceeding that concluded in the federal court judgment; and (3) a federal court judgment

10 dismissing a federal claim under Federal Rule of Civil Procedure Rule 12(b)(6) is a final judgment

11 with both claim and issue preclusive effect. Deixler Decl. Exs. E-G.

12 B. CSI Brings A Separate Action In Federal Court To Enforce The Collateral Estoppel

13 Effect Of The Prior Federal Judgment

14 On December 21, 2017, CSI filed a complaint in federal court to protect the integrity of

15 Judge King's final judgment under the Full Faith and Credit and Supremacy Clauses of the federal

16 Constitution. Deixler Decl. Ex. I.. CSI sought an order under the All Writs Act and the

17 relitigation exception to the Anti-Injunction Act to prevent DeCrescenzo from relitigating the

18 equitable estoppel/statute of limitations arguments that she had already lost. Id. In so doing, CSI

19 sought to avoid the unnecessary and considerable expenditure of time (months) and money

20 (millions of dollars) it would take to re-try in this Court the dispositive issue on which CSI already

21 obtained a final judgment from Judge King. Id.

22 On February 20, 2018, DeCrescenzo filed a Motion to Dismiss CSI's federal complaint.

23 CSI cross-moved for summary judgment. On May 3, 2018, the Honorable George H. Wu, of the

24 Central District of California, granted DeCrescenzo's Motion to Dismiss in a detailed order, and

25 on May 9,2018, entered a judgment against CSI. Deixler Decl. Ex. K.

26 Judge Wu's detailed order recognized the significance and complexity of the federal

27 procedural issue before the Court. Id. Nonetheless, Judge Wu ignored CSI's argument that the

28 California Court of Appeal incorrectly applied California collateral estoppel law, instead of
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 1 federal collateral estoppel law, when it reached its decision. See generally, id. Judge Wu then

2 held that the California Court of Appeal's interlocutory opinion itself precluded CSI from

3 asserting the preclusive effect of Judge King's federal court judgment. Judge Wu did not address

4 CSI's argument that by deciding the issue under California law, the California Court of Appeal

5 applied a different rule of law than that (properly) urged by CSI, and that therefore the California

6 interlocutory opinion could not preclude CSI from raising the issue. Judge Wu also rejected CSI's

7 argument that since the California Court of Appeal's decision was merely interlocutory in nature,

8 it could not have collateral estoppel effect. While recognizing case law to the contrary, Judge Wu

9 found that more recent cases in California had abandoned the requirement of a final judgment to

10 apply collateral estoppel. CSI is appealing these errors to the Ninth Circuit.2

11 On May 14,2018, less than five days after judgment entered in the federal case, CSI filed a

12 notice of appeal to the Ninth Circuit. Deixler Decl. Ex. M.

13 C. CSI Is Likely to Prevail on Appeal And The Ninth Circuit Will Enforce The Prior

14 Federal Court Judgment

15 Federal law exclusively governs the question of the preclusive effect of a federal court

16 judgment on a federal claim. See Restatement (Second) of Judgments § 82 (1982) ("Federal law

17 determines the effects under the rules of resjudicata of a judgment of a federal court."); see also

18 Deixler Declaration, Ex. J. The California state courts which confronted this issue following

19 remand were required to apply federal preclusion law to the question of whether Judge King's

20 final judgment rejecting DeCrescenzo's attempt to interpose the doctrine of equitable estoppel

21 precluded her from later pursuing her state law claims in state court. See 18 C. Wright, A. Miller

22 & E. Cooper, Federal Practice and Procedure, § 4468 at 53 (2002): Degnan, Federalized Res

23

24 2 Judge Wu, in the alternative, also found that he would not exercise his discretion to avoid
enjoining this case. Deixler Decl. Ex. K. As he did not examine the key issue that the California
25 Court of Appeal had never applied the correct legal standard, he misunderstood the scope of his
discretion. There is no comity or other interest that could be served by allowing California to
26 apply its own collateral estoppel law when federal law applies. Had Judge Wu realized that the
California Court of Appeal had failed to apply the correct standard, there is no doubt that his
27
comity analysis would be different. CSI plans to appeal this portion of the Court's order as well.
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 1 Judicata, 85 YALE L.J. 741, 749 (1976); see a/.vo, e.g., C/j/c/t ATa/w CAoo v. Exxon Corp., 486 U.S.

2 140, 147 (1985); Stall v. Gottlieb, 305 U.S. 165 (1938); Deposit Bank v. Frankfort, 191 U.S. 499

3 (1903). Instead of following well-established law and applying federal law, the California courts

4 incorrectly applied California law and found that collateral estoppel does not apply to an order

5 granting a demurrer if a plaintiff later alleges "additional facts" that she failed to allege in the first

6 proceeding. Deixler Decl. Exs. E-G. Had the California courts correctly followed federal law, the

7 result would be completely different.

8 1. Under Federal Law, Judge King's Final Judgment Is Preclusive

9 Under federal law (which should have been applied), Judge King's final judgment

10 dismissing the federal claim was a final judgment on the merits. "The Supreme Court has

11 unambiguously stated that a dismissal on statute of limitations grounds is a judgment on the

12 merits." Tahoe Sierra Preservation Council v. Tahoe Regional Planning Agency, 322 F.3d 1064,

13 1081 (9th Cir. 2003) (citing Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 228 (1995)). It also

14 unquestionably was appealable as a final judgment: "if a district court remands a case after the

15 federal claims have been resolved and it has chosen not to exercise supplemental jurisdiction, [as

16 here] its order is reviewable." Carlson v. Arrowhead Concrete Works, Inc., 445 F.3d 1046, 1050

17 n.5 (8th Cir. 2006) (citing cases).

18 The Supreme Court held, in City of Waco v. United States Fidelity & Guaranty Co., 293

19 U.S. 140 (1934), that a federal court's decision has preclusive effect on remand to the state court

20 when it reaches any substantive decision on the merits. In Waco, the state court defendant City

21 filed a cross-complaint against a third party, which then removed the entire action to federal

22 district court on the basis of diversity jurisdiction. After the district court dismissed the cross-

23 complaint, it remanded the original action to the state court. The City appealed the dismissal of

24 the cross-complaint to the Fifth Circuit, which dismissed for lack of appellate jurisdiction on the

25 ground that the case had been remanded to the state court. The Supreme Court reversed, holding

26 that appeal was proper because the district court's judgment against the City, unless reversed on

27 appeal, would have preclusive effect on the remand: "[i]ndisputably this order is the subject of an

28 appeal; and, if not reversed or set aside, is conclusive upon the petitioner. " 293 U.S. at 143.
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 1 Since Waco, courts uniformly recognize that when, in a removed action, a federal court

2 "reached a substantive decision on the merits apart from any jurisdictional decision," that decision

3 may have preclusive effect on remand to the state court, pursuant to generally applicable

4 preclusion doctrine. Pelleport Investors, Inc. v. Budco Quality Theatres, Inc., 741 F.2d 273,276

5 (9th Cir. 1984) ("Like the dismissal in Waco, the court's decision that the contract clause is

6 enforceable, if not reversed or set aside, is conclusive upon Budco, and, therefore, must be

7 reviewed"); Stevens v. Brink's Home Security, Inc., 378 F.3d 944, 946 (9th Cir. 2004) (quoting

8 Waco); Allen v. Ferguson, 791 F.2d 611, 613-14 (7th Cir. 1986) (reversing district court order

9 dismissing a defendant for lack of personal jurisdiction, destroying diversity jurisdiction, and

10 remanding: "If not reversed or set aside, [the order dismissing the defendant] is conclusive upon

II the petitioner... Following the reasoning of Waco and its progeny, we hold that we have

12 jurisdiction to consider the propriety of the district court's order dismissing Ferguson").

13 As Judge King's decision was a final judgment on the merits, it was entitled to preclusive

14 effect under federal law. The California courts which considered this issue erroneously failed to

15 ascribe the judgment its preclusive effect, precisely because they decided the question on the basis

16 of an inapplicable rule of law. By doing so, the California Court did not decide the question raised

17 by CSI's federal lawsuit, and Judge Wu therefore improperly applied collateral estoppel to that

18 court's interlocutory opinion.

19 2. Judge Wu Granted A Motion To Dismiss Because Of Prior California Court

20 Rulings On The Collateral Estoppel Issue, But Failed To Recognize That

21 Those Prior Rulings Erroneously Applied Only California, Not Federal, Law

22 In granting the Motion to Dismiss, Judge Wu relied on the fact that California state courts

23 had, in this action, previously considered the equitable estoppel issue. See, generally, Deixler

24 Decl. Ex. K. Judge Wu believed that these state court rulings, in turn, bound his discretion as a

25 federal judge to enjoin this state-court proceeding. Id. But Judge Wu failed to recognize the

26 importance of the rule that federal, not California, law governs the application of equitable

27 estoppel. No California court, at any time, ever addressed the core legal question that CSI's

28 federal action raises—whetherfederal law gives Judge King's prior ruling collateral estoppel
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 1 effect. That, in turn, means that prior decisions of the California courts cannot have a preclusive

2 (or even persuasive) effect on the ability of a federal court to stay the proceedings, because they

3 simply addressed a different issue.

4 It is hornbook law that collateral estoppel or issue preclusion applies only when the issues

5 decided by the first court are identical to the issues sought to be presented in the second action.

6 Not only must the basic facts at issue be the same, but so too must be the applicable rule of law.

7 [T]here are several factors that should be considered in deciding whether for
purposes of the rule of this Section the "issue" in the two proceedings is the same,
8 for example: Is there a substantial overlap between the evidence or argument to be
advanced in the second proceeding and that advanced in the first? Does the new
9 evidence or argument involve application ofthe same rule of law as that involved
in the prior proceeding? [emphasis added.]
10
Restatement (Second) of Judgments. Section 27, Comment C (2017). Here, the prior California
11
judgments plainly did not "involve application of the same rule of law," and neither could nor
12
should limit Judge Wu's ability to enjoin this state-court action.
13
Judge Wu missed this key point, and did not address it at all. Instead, he applied the
14
California standard, without determining if that was appropriate, and then conducted a thorough
15
analysis of this legal issue under California law. See id. at 8-11. Given Judge Wu's error, CSI
16
believes its appeal to the Ninth Circuit of this issue will be successful.
17
III. ARGUMENT
18
This Court has the inherent authority, as a matter of sound discretion, to stay an action
19
before it in favor of another pending court action when principles of comity and judicial economy
20
make it appropriate to do so. Thomson v. Continental Ins. Co., 66 Cal.2d 738, 748 (1967); Landis
21
v. N. Am. Co., 299 U.S. 248, 254 (1939) ("The power to stay proceedings is incidental to the
22
power inherent in every court to control the disposition of the causes on its docket with economy
23
of time and effort for itself, for counsel and for litigants"). The California Supreme Court
24
instructs that in determining whether to grant a stay, a court should consider the importance of
25
avoiding unseemly conflicts with courts in other jurisdictions, whether the federal action is
26
pending in California, as well as "whether the rights of the parties can best be determined by the
27

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 1 court of the other jurisdiction because of the nature of the subject matter...." Thomson, 66 Cal.

2 2d at 746-48.

3 Here, these factors all favor a stay. Staying this case would (1) avoid unnecessary,

4 duplicative litigation; (2) prevent inconsistent judgments on the estoppel issue; and (3) allow

5 CSI's federal arguments to proceed in the only forum, California federal court, in which they can

6 be litigated. Moreover, no prejudice would result if this action was stayed.

7 As all of these factors weigh in favor of staying this case, CSI requests this Court stay the

8 trial, pending the outcome of the related federal appeal.

9 A. Parallel Litigation Would Result in Unnecessary, Duplicative Litigation.

10 CSI will request that the Ninth Circuit, in deciding the federal appeal, reconsider the

11 collateral estoppel arguments, which should result in a finding that that collateral estoppel should

12 bar this litigation. If the Ninth Circuit finds that the California Court of Appeal should have

13 applied federal preclusion law, then it necessarily follows that Judge King's final judgment, which

14 held that DeCrescenzo's claims were time-barred and that the doctrine of equitable estoppel

15 should not apply, will collaterally estop DeCrescenzo from further asserting her causes of action.

16 A ruling from the Ninth Circuit would entirely end the case before this Court. And, it

17 deals with precisely the same issue before this Court in the first-phase trial: whether the doctrine

18 of equitable estoppel bars CSI from asserting an otherwise-valid statute of limitations defense.

19 The first phase of trial concerns whether DeCrescenzo's claims are time-barred, and whether the

20 doctrine of equitable estoppel should apply. Deixler Decl. 19, Ex. H. As the appeal raises a

21 related issue, the result would be duplicative and potentially unnecessary. Before this Court

22 devotes months of its resources to this matter, this Court (and the parties) should be confident that

23 no other court will disturb its judgment. If both were to proceed concurrently, then a substantial

24 amount of resources ultimately could be wasted. See Schneider v. Vennard, 183 Cal. App. 3d

25 1340, 1350 (1986) ("[D]uplicative litigation ... does not serve the public interest.").

26 Permitting the state and federal actions to proceed in two separate courts would

27 unnecessarily drain the parties' and the state's resources. According to the parties' joint estimate

28 for the first-phase trial alone, Plaintiffs case is expected to occupy 99 hours of court time, and
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 1 Defendants' 38, for a total of 137 Court hours for the first-phase trial alone, or approximately a

2 full month of trial. Deixler Decl. Ex. N. The second phase of trial could last longer still. With

3 that in mind, it is clear that if the trial were to proceed unnecessarily, the burden would be

4 extraordinary. This Court would devote a substantial amount of time and a substantial amount of

5 resources preparing for the lengthy trial, diverting resources from other cases on its docket,

6 hearing witness testimony and argument, and issuing a decision in the first phase of the trial. If

7 this case were to proceed to the second phase of trial (which it should not), this Court would have

8 to impanel a jury, with the jurors selected taking a significant amount of time away from their

9 lives to serve on the jury. This drain on resources is completely unwarranted when the federal

10 appeal could resolve this case in its entirety.

11 B. A Stay Will Prevent Inconsistent Judgments and Promote the Principle of Comity.

12 Beyond its importance for conservation ofjudicial resources, a stay is important for other

13 reasons. A stay could prevent this Court from reaching a decision (after months of trial) on the

14 equitable estoppel/statute of limitations argument which could conflict with Judge King's final

15 judgment. When there is a possibility that two courts could reach decisions that necessarily

16 conflict with each other, courts routinely stay one of the pending actions. See, e.g., Am. Home

17 Assur. Co. v. Vecco Const. Co., Inc. ofVa., 629 F.2d 961, 964 (1980) (reversing a denial of a

18 motion to stay when an arbitration was proceeding simultaneously with a state court action);

19 Thomson v. Con. Ins. Co., 66 Cal. 2d 738, 746 (1967) (holding a court may stay a case where

20 parallel proceedings are substantially similar); Berg v. MTC Elec. Techs. Co., 61 Cal. App. 4th

21 349, 355-56 (1998) (affirming stay of state court case in light of pending federal case asserting

22 similar claims).

23 In such situations, "[t]he potential for 'unseemly conflict' is great, unless both forums

24 should reach the exact same resolution of the issues." Caiafa Prof. Law Corp. v. State Farm, 15

25 Cal. App. 4th 800, 807 (1993). The principle of comity between the courts calls for the refusal of

26 this court to proceed before the appeal, which goes to the merits of the first phase of the trial, is

27 resolved. Simmons v. Superior Court, 96 Cal. App. 2d 119, 125 (1950) (holding the court abused

28 its discretion in not staying, as a matter of comity, the California state court action until the
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 1 resolution of a federal case, which involved a similar issue); City & County ofSan Francisco v.

2 Fair Emp. & Hous. Comm 'n, 191 Cal. App. 3d. 976,992 (1987) (staying case to prevent creation

3 of'state' and 'federal' authorities), abrogated on other grounds by Richards v. CH2M Hill, Inc.,

4 26 Cal. 4th 798, 813-14 (2001). The multiplicity of actions creates the possibility of conflicting

5 judgments, confusion and ultimately a "unseemly" controversy between the litigants and the

6 courts. Simmons, 96 Cal. App. 2d at 125. A stay of this action permits the federal case to proceed

7 to conclusion in an efficient and effective manner, without the possibility of reaching a decision

8 which may ultimately conflict with this Court's decision on the equitable estoppel/statute of

9 limitations arguments.

10 C. CSI's Appeal Can Only Be Heard in Federal Court

11 Procedurally, at this stage in litigation, this argument can only be heard by the Ninth

12 Circuit. CSI previously sought relief by petitioning for rehearing in front of the California Court

13 of Appeal and the California Supreme Court. See, supra section II. A. Both petitions were denied.

14 Accordingly, before this Court and the parties devote months of time and significant amounts of

15 resources to this trial, CSI should be heard on this argument in front of the Ninth Circuit.

16 As this argument can only be heard in front of the Ninth Circuit—and as CSI is likely to be

17 successful, obviating the need for a trial in its entirety—this weighs in favor of a limited stay in

18 this case until the appeal has been heard in front of the Ninth Circuit.

19 D. No Prejudice Will Result From a Stay

20 DeCrescenzo will suffer no prejudice if this action is stayed. The requested stay is for a

21 limited period, and it will only be in place until the Ninth Circuit has ruled on the appeal. Beyond

22 this, CSI will seek an expedited briefing and argument schedule in the Ninth Circuit. Deixler

23 Decl. lj 16. Given that this action has been repeatedly delayed, one additional limited stay will not

24 prejudice the parties substantially.

25 On the other hand, if the Ninth Circuit reverses Judge Wu's order (which CSI expects it

26 will), CSI (and DeCrescenzo) will have wasted months of time and extensive resources trying a

27 case unnecessarily. If the Ninth Circuit does not reverse, however, the parties can set a new trial

28
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 1 date, based upon the availability of this Court and proceed to trial. As no prejudice will result, a

2 limited stay is appropriate here.

3 IV. CONCLUSION

4 For the foregoing reasons, this Court should grant the Motion to Stay pending the appeal of

5 the related, federal action.

7 DATED: May 16,2018 KENDALL BRILL & KELLY LLP

9
By:

10 Bert H. Deixler
Attorneys for Defendant Church of Scientology
11 International

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