MATTHEWS v. LEMONADE INSURANCE CO (2025)

ORDER DENYING MOTION TO STAY CASE

(ECF No. 5)

Presently before the Court is Defendant Lemonade Insurance Co.’s Motion to Stay Case (“Mot.,” ECF No. 5). Also before the Court is Plaintiff Darcy Matthews’ Opposition to Motion to Stay (“Opp'n,” ECF No. 12), and Defendant's Reply in Support of Motion to Stay Case (“Reply,” ECF No. 19). After reviewing the Parties’ arguments and the law, the Court DENIES Defendant's Motion to Stay Case (ECF No. 5).

BACKGROUND

On January 24, 2025, Plaintiff, individually and on behalf of all others similarly situated, filed this action in the Superior Court of the State of California for the County of San Diego. Mot. at 5.¹ On March 7, 2025, Defendant removed this action pursuant to 28 U.S.C. § 1446(a) to the United States District Court for the Southern District of California. Id. Plaintiff alleges claims against Defendant for sex and age discrimination in violation of the Unruh Civil Rights Act (Cal. Civ. Code §§ 51, 52(a)) and in violation of Cal. Civ. Code §§ 51.5, 52(a). Id. Plaintiff brings this action on behalf of:

a California class of all persons who from three years prior to the filing of the Complaint through the date of judgment (1) were Facebook users; (2) were in California; (3) were at least 40 years old or were women of any ages; and (4) were allegedly excluded or will be excluded due to their age and/or gender from the audience selection of at least one Lemonade advertisement related to insurance.

Id.

On April 3, 2020, Samantha Liapes filed a class action complaint in Superior Court of the State of California for the County of San Mateo, Samantha Liapes v. Facebook, Inc., No. 20-CIV-01712 (Cal. Super. Ct. San Mateo Cnty. Apr. 3, 2020) (“Facebook”). Opp'n at 7. In this action, Liapes alleges that Facebook “did not provide women and older people with equal access to insurance ads on its online platform in violation of the Unruh Civil Rights Act and Civil Code section 51.5.” Mot. at 6. The proposed Facebook class is defined as:

all Facebook users who, from three years before the October 31, 2019 filing of Opiotennione v. Facebook, Inc., No. 19 Civ. 07185 (N.D. Cal.) through the date of judgment in that action (1) were California citizens; (2) were at least 40 years old or were women of any age; (3) did not inform Facebook that they were uninterested in receiving advertisements about “Insurance,” “Life Insurance,” “Vehicle Insurance,” “Home Insurance” or “Travel Insurance”; and (4) were excluded or will be excluded due to their age or gender from the audience selection of one or more advertisements related to insurance.

Opp'n at 8. Facebook's successful demurrer to the complaint was overturned by the California Court of Appeal for the First District. Mot. at 6. This case is now pending class certification. Id.

Defendant brings the present motion seeking a stay, “including all deadlines and all discovery,” pending a decision in Facebook by the California Superior Court of San Mateo County. Mot. at 5. Defendant argues that Facebook “presents substantially similar legal and factual issues,” was filed five years before the present action, covers a class also represented by Plaintiff's counsel, and has a significantly more developed procedural posture. Id. at 5–7. Defendant opines that staying the present action and allowing Facebook to proceed will narrow or resolve the issues before the Court, promote judicial efficiency, and avoid unnecessary discovery burdens. Id. at 7. Plaintiff argues that there are members of the proposed Facebook class who would not be parties to this case (“individuals who used Facebook from 2019 to 2022, but not after 2022”), and that members of the present proposed class would be excluded from Facebook (“individuals who informed Facebook that they were uninterested in receiving certain ads”). Opp'n at 8. Plaintiff further argues that Facebook is still in its early stages, without a date set for trial, completion of pre-class certification discovery, and briefing of class certification. Id. Additionally, discovery in Facebook concerns Facebook's policies and practices of ad categorization and focuses solely on Facebook's own ad and user data. Id. In comparison, the present suit is against a singular advertiser, Defendant, seeking “to hold it liable for its own actions in choosing to create and disseminate discriminatory ads to sell its products.” Id.

Defendant filed the current Motion on March 13, 2025, arguing first, that a stay is justified under Landis v. N. Am. Co., 299 U.S. 248, 57 S.Ct. 163, 81 L.Ed. 153 (1936), and second, that the first-to-file rule favors a stay. See generally Mot.

LEGAL STANDARD

The courts 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, 299 U.S. at 254, 57 S.Ct. 163; see also Lockyer v. Mirant Corp., 398 F.3d 1098, 1109 (9th Cir. 2005) (“A district court has discretionary power to stay proceedings in its own court under [Landis].”). The court must consider three factors in determining whether to issue a stay: “(1) the possible damage which may result from granting a stay; (2) the hardship or inequity which a party may suffer in being required to go forward; and (3) 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.” E.A.R.R. v. U.S. Dep't of Homeland Sec., No. 20-cv-2146 TWR (BGS), 2021 WL 4933264, at *1 (S.D. Cal. Feb. 19, 2021) (citing CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962)). “The proponent of a stay bears the burden of establishing its need.” Clinton v. Jones, 520 U.S. 681, 708, 117 S.Ct. 1636, 137 L.Ed.2d 945 (1997) (citation omitted). “If the opposing party can show ‘even a fair possibility’ of harm due to the stay, the party requesting the stay ‘must make out a clear case of hardship or inequity.’ ” E.A.R.R., 2021 WL 4933264, at *1 (quoting Lockyer, 398 F.3d at 1112). A court may “find it is efficient for its own docket and the fairest course for the parties” to stay the case before it “pending resolution of independent proceedings which bear upon the case” even if the issues in such proceedings are not “necessarily controlling of the action before the court.” Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 863–64 (9th Cir. 1979).

ANALYSIS

As Defendant is the proponent of a stay, it “bears the burden of establishing its need.” Clinton, 520 U.S. at 708, 117 S.Ct. 1636. The Court considers each factor in turn.²

I. Judicial Economy

The Court must consider whether a stay would promote “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.” CMAX, Inc., 300 F.2d at 268. This factor addresses judicial economy, which “is the primary basis courts consider when ruling on motions to stay.” Vance v. Google LLC, 20-CV-4696-BLF, 2021 WL 534363, at *6 (N.D. Cal. Feb. 12, 2021) (citation omitted). Defendant argues that allowing this case to continue while Facebook is pending, would result in “wasteful, duplicative litigation and risk inconsistent rulings on substantially similar legal issues.” Mot. at 8. Defendant further asserts that “[b]oth suits allege that Facebook's advertisement tools resulted in systemic discrimination against women and individuals over the age of forty in violation of California's civil rights statutes.” Reply at 2–3. The key similarity, Defendant argues, is that Plaintiff's claims are premised on Defendant's alleged use of those same Facebook tools to deliver insurance ads. Id. at 3. Defendant concedes that Facebook will not resolve all claims in the present matter, but it “will help clarify key legal questions, such as whether the Unruh Act applies to the use of advertisement algorithms, and whether claims based on audience composition data on Facebook are viable under California civil rights law.” Id. Further, the resolution of those issues “has the potential to shape discovery” and allow the Court to “benefit from rulings” in Facebook as the case is “quickly progressing towards class certification.” Id.

Plaintiff argues that the present case and Facebook would not conserve judicial resources because they are different cases against different defendants. Opp'n at 10. Plaintiff seeks to hold Defendant liable for its own “age- and gender-restricted ads.” Id. at 10–11. Whereas in Facebook, different plaintiffs seek to hold Facebook itself, not the individual advertisers, liable for “developing and applying a discriminatory system that targets ads on the basis of age and gender.” Id. at 11. Plaintiff asserts that, while there may be superficial similarities between the two cases (the same counsel), “a resolution in Facebook will not have a preclusive effect” in the present case, and Plaintiff's claims against Defendant “will still need to be resolved on their own merits.” Id. To further emphasize the difference, Plaintiff asserts that Facebook has attempted to avoid liability “by arguing that it is actually the advertisers that should be held responsible for discrimination, not Facebook.” Id. at 11 n.2.

The Court agrees with Plaintiff that this factor weighs in favor of denying a stay. The Court is not persuaded that continuing with the present case would risk “wasteful, duplicative litigation and risk inconsistent rulings on substantially similar legal issues.” See Mot. at 8. First, the cases involve different defendants for different conduct: (1) Facebook for creating and using the allegedly discriminatory tool, and (2) Defendant for choosing to create and disseminate discriminatory advertising. See Turnbull v. Off. of Disciplinary Couns., No. 23-cv-1619-RAJ, 2024 WL 2091976, at *3 (W.D. Wash. May 7, 2024) (denying a motion to stay because the lawsuits related to different defendants and different rules of professional conduct).

Second, Defendant does not demonstrate how a ruling in Facebook would impact its own liability in the present case. Beyond stating that it could “clarify key legal questions,” Reply at 3, Defendant has not demonstrated that the state court case would have any preclusive effect upon the present action. See, e.g., It's My Seat, Inc. v. Hartford Capital, LLC, No. 22-cv-2192-ODW (AFMx), 2022 WL 2392027, at *3 (C.D. Cal. July 1, 2022) (denying a motion to stay because defendant failed to demonstrate how resolution of a separate case against other defendants would impact their liability in the case at issue); E.A.R.R., 2021 WL 4933264, at *5 (“Courts have typically granted a stay where a ruling from a higher court could affect how they rule on a specific legal issue that is also present in their case.”) (emphasis added) (citation omitted); cf. Vance, 2021 WL 534363, at *6 (finding judicial efficiency served where there were overlapping and significant factual and constitutional questions).

Third, it is contested how quickly the Facebook matter is progressing. See Yong v. I.N.S., 208 F.3d 1116, 1119 (9th Cir. 2000) (“If a stay is especially long or its term is indefinite, [courts] require a greater showing to justify it.”). Defendant argues that it is “quickly” progressing, Reply at 3, where Plaintiff argues that the case has already been ongoing for five years, “and it will likely be several more years before any merits determination is reached,” Opp'n at 15. It is unclear how long a stay could result in this case, as demonstrated by Defendant hypothesizing, without any evidence, that Facebook could settle “as early as the class certification stage.” Mot. at 8. As the underlying Facebook action has already undergone appeals and has been pending for over five years, Opp'n at 15, a stay in this action would last for an indeterminable amount of time, and Defendant does not propose a limited period for a stay. See Vance, 2021 WL 534363, at *5 (granting a stay where the movant proposed a one-year limit); Landis, 299 U.S. at 254, 57 S.Ct. 163 (discussing how the power to stay is “incidental to the power inherent in every court to control the disposition of the causes on its docket with the economy of time”).

Therefore, because Defendant has not met its burden to demonstrate that staying the present action would promote judicial economy, this factor weighs against issuing a stay.

II. Defendant's Hardship in Moving Forward

The Court must consider “the hardship or inequity which a party may suffer in being required to go forward.” CMAX, Inc., 300 F.2d at 268. “[B]eing required to defend a suit, without more, does not constitute a ‘clear case of hardship or inequity’ within the meaning of Landis.” Lockyer, 398 F.3d at 1112. However, “[w]here a denial of stay would cause both parties to incur significant expenses on litigation that may be rendered moot, ‘the potential hardship from denying the stay weighs slightly in favor of granting it.’ ” Vance, 2021 WL 534363, at *5 (quoting Lal v. Cap. One Fin. Corp., No. 16-CV-674-BLF, 2017 WL 282895, at *3 (N.D. Cal. Jan 23, 2017)).

Defendant argues that it “would face significant prejudice if required to engage in costly and time-consuming class action discovery.” Mot. at 9. Defendant asserts that class action discovery is expensive and burdensome and “that burden typically falls disproportionately on defendant[s].” Id. The discovery Defendant alleges would be required is “highly technical” and requires analysis of its “advertising practices, audience targeting parameters, and potentially extensive internal data systems.” Reply at 3. Defendant further opines that class-wide discovery in this manner is “not routine and would involve significant expert involvement, data extraction, and review of sophisticated digital marketing tools.” Id. Defendant concludes that if it is required to move forward “prematurely” with this suit, before “key legal issues” are resolved in Facebook, this would be inefficient and prejudicial to Defendant as it may undertake discovery that proves to be unnecessary. Id.

Plaintiff correctly argues that “[a]dditional litigation expense is generally not enough (by itself) to warrant a stay.” Opp'n at 13 (quoting Nat. Res. Def. Council, Inc. v. Cnty. of L.A., No. 08–1467 BRO (PLAx), 2015 WL 13385916, at *5 (C.D. Cal. May 14, 2015)). Plaintiff further argues that Defendant is not subject to duplicative discovery because it is not a party to the Facebook action, and the Facebook plaintiffs’ discovery has “focused on Facebook's own proprietary data reflecting ads sent on its platform.” Opp'n at 14. Further, Plaintiff argues that Defendant's contention that it is subject to burdensome litigation due to this being a class action is inapposite because it is usual for defendants in a class action to bear more of the weight of discovery. Id. (citing Fed. R. Civ. P. 26 Advisory Committee Note).

Again, the Court agrees with Plaintiff. Defendant's sole argument of prejudice is that it will have to engage in costly discovery. While in some cases discovery can factor into this analysis, most courts find that discovery costs are an insufficient hardship to warrant a stay. See, e.g., Lathrop v. Uber Techs., Inc., No. 14-cv-5678-JST, 2016 WL 97511, at *4–5 (N.D. Cal. 2016) (denying a stay where discovery would be required regardless of the outcome of the other case and “additional discovery” was insufficient hardship to warrant a stay); Reed v. Autonation, Inc., No. CV 16-8916-BRO (AGRx), 2017 WL 10592157, at *5 (C.D. Cal. Mar. 6, 2017) (finding that, while there was a possibility plaintiff's class claims would be mooted, defendant failed to meet their burden when their “clear case of hardship or inequity” was only costly discovery); Intex Recreation Corp. v. Bestway USA, Inc., No. LA CV19-8596 JAK, 2024 WL 4404982, at *6 (C.D. Cal. 2024) (denying a stay where there would be no duplicative discovery); It's My Seat, Inc., 2022 WL 2392027, at *2–3 (finding no harm from discovery or inconsistent pretrial rulings because the moving party was not a party to the related case and thus was not required to produce discovery in the other case or be bound by its pretrial rulings); cf. Vance, 2021 WL 534363, at *6 (granting a stay where there were significant overlaps in factual and constitutional issues and discovery in both cases, creating additional expenses for both parties).

Regardless of the outcome of Facebook, Defendant will still have to produce discovery regarding its “advertising practices, audience targeting parameters, and potentially extensive internal data systems,” Reply at 3, as this information is likely directly relevant to Plaintiff's claims. Defendant has not demonstrated how the outcome in Facebook would narrow the issues, mitigate discovery costs, or otherwise reduce the complexity of discovery required in this case. As Plaintiff points out, the discovery in Facebook will be centered around Facebook's internal systems, completely unrelated from Defendant's advertising software and policies.

Therefore, Defendant has also failed to demonstrate that it would be unduly harmed by moving forward. This factor weighs against issuing a stay.

III. Plaintiff's Damage from Granting a Stay

The Court next must consider “the possible damage which may result from the granting of a stay.” CMAX, Inc., 300 F.2d at 268. “[I]f there is even a fair possibility that the stay ․ will work damage to [someone] else, the party seeking the stay must make out a clear case of hardship or inequity.” Lockyer, 398 F.3d at 1112 (quoting Landis, 299 U.S. at 255, 57 S.Ct. 163) (internal quotation marks omitted). “Harm may occur when a court asks one litigant, ‘to stand aside while a litigant in another court settles the rule of law that will define the rights of both.’ ” Vance, 2021 WL 534363, at *4 (quoting Landis, 299 U.S. at 255, 57 S.Ct. 163). Courts are generally unwilling to presume delay is harmful absent specific evidence, such as the continued infringement of a patent in a suit for injunctive relief. Aliphcom v. Fitbit, Inc., 154 F. Supp. 3d 933, 938 (N.D. Cal. 2015) (citing LG Elecs., Inc. v. Eastman Kodak Co., No. 9-CV-344H (BLM), 2009 WL 1468703, at *2 (S.D. Cal. May 26, 2009)). “[C]ourts have found persuasive the [argument] that a delay will result in the loss of documentary or testimonial evidence.” Id.

Defendant argues that Plaintiff will not be prejudiced “because any stay of discovery would only last until [Facebook] is settled, which could be as early as the class certification stage.” Mot. at 8. Defendant then cites to cases discussing stays of discovery—not a motion to stay the entire case. See id. For example, Defendant cites In re Nexus 6p Prods. Liab. Litig., No. 17-cv-2185-BLF, 2017 WL 3581188, at *2 (N.D. Cal. Aug. 18, 2017) for the proposition that a stay of discovery would only last until a hypothetical time when Facebook would settle, and therefore, would cause no harm to Plaintiff. Id. However, Defendant is not seeking a stay of discovery “pending resolution of a dispositive motion,” In re Nexus 6p, 2017 WL 3581188, at *2, but rather seeks a stay of “all deadlines and all discovery,” Mot. at 5. A motion to stay discovery is a separate motion using a separate test than the Landis factors that Defendant applies.³ See Divine Wellness, LLP v. NFP Prop. & Cas. Servs., No. 23-cv-1828-JCM-NJK, 2024 WL 2880285, at *1 (D. Nev. May 17, 2024) (“The instant filing seeks different forms of relief (to stay discovery and to stay the case).”). Therefore, Defendant's argument that Plaintiff will not be prejudiced from a temporary stay of discovery is inapposite for determining Plaintiff's prejudice from a stay of the entire action.

Plaintiff argues that she would be prejudiced by a stay because it would hinder her ability to collect “the necessary discovery to prosecute her claims,” due to more time for evidence to become lost or memories fading. Opp'n at 15. Further, as discussed above, there is no identifiable end to the stay that Defendant proposes, and the Facebook case has already been pending for five years. Id. Plaintiff also argues that it is harmful to allow Defendant to continue its discriminatory conduct unchecked, and if the stay were issued, “millions of women and older people will continue to be denied access to information about [Defendant's] insurance opportunities.” Id. at 16.

The Court again agrees with Plaintiff. Plaintiff has alleged individual harms by Defendant that are separate from those in Facebook. As discussed above, there is little to be gained in the present litigation from waiting for the resolution of Facebook, and Plaintiff would be prejudiced by a potential indefinite delay to adjudicate their case. There is no evidence that Facebook will be concluded within a reasonable time, and Defendant does not propose a shortened time frame for the stay. See Leyva, 593 F.2d at 864 (“A stay should not be granted unless it appears likely the other [related] proceedings will be concluded within a reasonable time in relation to the urgency of the claims presented to the court.”); cf. Vance, 2021 WL 534363, at *5 (finding no prejudice to plaintiff where the movant limited the scope of their request to one year, made assurances that they would preserve evidence, the related case was progressing quickly, and plaintiff was a member of the related class).

Further, while Plaintiff has not presented any specific evidence that is at risk of degradation, the Court agrees that a delay of an unknown time presents at least a “fair possibility” that Plaintiffs will be harmed by a stay because of potential loss of evidence. However, this factor does not weigh heavily in favor of denying a stay as some courts have found that “generalized harm such as the potential loss of evidence and availability of witnesses” is insufficient to find prejudice. See, e.g., PersonalWeb Techs., LLC v. Apple Inc., 69 F. Supp. 3d 1022, 1029 (N.D. Cal. 2014) (finding no prejudice where the parties had already “completed a substantial amount of fact discovery”); Topia Tech., Inc. v. Dropbox Inc., No. 23-CV-62-JSC, 2023 WL 3437823, at *7 (N.D. Cal. May 12, 2023) (finding no prejudice where the non-moving party failed to identify evidence at risk).

Additionally, if Plaintiff's claim has merit, granting a stay could harm the public interest in allowing discriminatory conduct to continue. See, e.g., DOT Operating Auth., Inc. v. LAV Permit, Inc., No. 24-cv-3183-SPG-AS, 2025 WL 1090929, at *2 (C.D. Cal. Mar. 20, 2025) (finding prejudice where further damage to plaintiff could continue if a stay was granted); Bradberry v. T-Mobile USA, Inc., No. C 06-6567 CW, 2007 WL 2221076, at *5 (N.D. Cal. Aug. 2, 2007) (finding that other potential members of the class who did not have knowledge of the harm defendant's actions were allegedly causing them would be harmed by a stay). Therefore, this factor weighs slightly in favor of denying the stay.

Overall, the Court finds that the Landis factors favor DENYING the Motion to Stay. The Court will also address Defendant's argument that the first-to-file rule favors a stay.

IV. First-to-File Rule

Defendant also argues that the first-to-file rule favors a stay of this action. Mot. at 9. The Court must first determine whether the first-to-file rule applies where the underlying action is filed in state court. The Court concludes it does not.

“The first-to-file rule allows a district court to stay proceedings if a similar case with substantially similar issues and parties was previously filed in another district court.” Kohn Law Grp., Inc. v. Auto Parts Mfg. Miss., Inc., 787 F.3d 1237, 1239 (9th Cir. 2015). It “is intended to ‘serve[ ] the purpose of promoting efficiency well and should not be disregarded lightly.’ ” Id. (quoting Alltrade, Inc. v. Uniweld Prods., Inc., 946 F.2d 622, 625 (9th Cir. 1991)). “The first-to-file rule may be applied ‘when a complaint involving the same parties and issues has already been filed in another district.’ ” Id. at 1240 (quoting Alltrade, 946 F.2d at 625). “Thus, a court analyzes three factors: chronology of the lawsuits, similarity of the parties, and similarity of the issues.” Id. (citing Alltrade, 946 F.2d at 625).

Defendant recognizes that the first-to-file rule is usually applied between two federal cases but argues that “its principles are equally applicable where the earlier-filed case is in state court, particularly when resolution of the earlier-filed case could moot or significantly narrow issues in the federal case.” Id. at 8–9 (citing Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 95 (9th Cir. 1982)). Plaintiff correctly points out that the case Defendant relies on for this assertion, Pacesetter, “considered two parallel patent actions in Florida and California federal district courts and not state court.” Opp'n at 17 n.5. Therefore, Defendant's argument on this ground is unpersuasive.

However, both Parties neglect to recognize that “[t]he Supreme Court has been clear that the Colorado River abstention doctrine, rather than the first-to-file rule, governs a federal court's decision whether to defer to a state court and abstain from exercising jurisdiction and that abstention under Colorado River should be much rarer than abstention under the first-to-file rule.” Black Rock Coffee Bar, LLC v. BR Coffee, LLC, No. 20-cv-976-SI, 2020 WL 4728877, at *3 (D. Or. Aug. 14, 2020) (citing Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976)). Courts routinely apply Colorado River when determining whether to stay a federal district case based on an underlying state court matter. See, e.g., Travelers Indem. Co. v. Madonna, 914 F.2d 1364, 1372 (9th Cir. 1990) (“To determine whether a stay is warranted [under Colorado River], the relevant factors must be balanced, ‘with the balance heavily weighted in favor of the exercise of jurisdiction.’ ”) (citation omitted); Nakash v. Marciano, 882 F.2d 1411, 1415 (9th Cir. 1989) (applying Colorado River and finding that “a federal court may stay its proceedings in deference to pending state proceedings”); Murphy v. Viad Corp., No. 21-7839 PSG (MARx), 2022 WL 3137720, at *6 (C.D. Cal. May 13, 2022) (denying defendant's motion to stay the action under the Colorado River doctrine); Dodge v. QualTek Wireless LLC, No. 25-cv-43-DAD-AC, 2025 WL 2105992, at *2 (E.D. Cal. July 28, 2025) (“In the Ninth Circuit, eight factors are to be considered by the court in determining the appropriateness of a stay under Colorado River․”). Because of this, most courts have routinely found the first-to-file rule inapplicable when an earlier-filed case is in state court.⁴ See, e.g., Murphy, 2022 WL 3137720 at *4 (collecting cases); Tinnin v. Sutter Valley Med. Found., 647 F. Supp. 3d 864, 871–72 (E.D. Cal. 2022) (“[The first-to-file rule] does not enable federal courts to dismiss, stay, or transfer a case based on an earlier-filed suit pending in state court.”) (collecting cases).

Therefore, the Court DENIES Defendant's Motion to Stay based on the first-to-file rule. The Court will briefly address Colorado River. 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976).

V. Colorado River

“Under Colorado River, a federal court may stay a case in favor of a parallel state court action where doing so would give ‘regard to conservation of judicial resources and comprehensive disposition of litigation.’ ” Franco v. Cent. Transp. LLC, No. EDCV 19-1464 JGB (SPx), 2020 WL 11626531, at *1 (C.D. Cal. Oct. 22, 2020) (first citing Colorado River, 424 U.S. at 817, 96 S.Ct. 1236; then citing Nakash, 882 F.2d at 1415). However, “the Colorado River doctrine is a narrow exception to ‘the virtually unflagging obligation of the federal courts to exercise the jurisdiction given [to] them’ ” and, in general, “the pendency of an action in the state court is no bar to proceedings concerning the same matter in the Federal court having jurisdiction.” Holder v. Holder, 305 F.3d 854, 867 (9th Cir. 2002) (quoting Colorado River, 424 U.S. at 817, 96 S.Ct. 1236). To stay federal proceedings under Colorado River, “exceptional circumstances” must be present. See Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 14–16, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). The Ninth Circuit recognizes eight factors that courts must weigh when considering a stay under Colorado River:

(1) which court first assumed jurisdiction over any property at stake; (2) the inconvenience of the federal forum; (3) the desire to avoid piecemeal litigation; (4) the order in which the forums obtained jurisdiction; (5) whether federal law or state law provides the rule of decision on the merits; (6) whether the state court proceedings can adequately protect the rights of the federal litigants; (7) the desire to avoid forum shopping; and (8) whether the state court proceedings will resolve all issues before the federal court.

Franco, 2020 WL 11626531, at *1 (citing R.R. St. & Co. Inc. v. Transp. Ins. Co., 656 F.3d 966, 979–80 (9th Cir. 2011)). “These factors are to be applied in a pragmatic and flexible way, as part of a balancing process rather than as a mechanical checklist.” Nakash, 882 F.2d at 1415. The weight “given to any one factor may greatly vary from case to case, depending on the particular setting of the case.” AGCS Marine Ins. Co. v. Am. Truck & Trailer Body Co., No. CIV S–12–1044 KJM JFM, 2013 WL 211196, at *3 (E.D. Cal. Jan. 9, 2013) (citing Moses H. Cone Mem'l Hosp., 460 U.S. at 16, 103 S.Ct. 927). “Any doubt as to whether a factor exists should be resolved against a stay, not in favor of one.” Travelers Indem. Co., 914 F.2d at 1369.

The eighth factor—the parallelism factor—is a “necessary precondition to Colorado River abstention.” Seneca Ins. Co., Inc. v. Strange Land, Inc., 862 F.3d 835, 845 (9th Cir. 2017). “As part of this analysis, the court must determine whether the state and federal proceedings are ‘substantially similar.’ ” Murphy, 2022 WL 3137720, at *5 (quoting Nakash, 882 F.2d at 1416). “Exact parallelism” is not required. Nakash, 882 F.2d at 1416 (citing Interstate Material Corp. v. City of Chicago, 847 F.2d 1285, 1288 (7th Cir. 1988)). The court, to enter a Colorado River stay order, must have “full confidence that the parallel state proceeding will end the litigation.” Intel. Corp. v. Adv. Micro Devices, Inc., 12 F.3d 908, 913 (9th Cir. 1993) (citing Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 277, 108 S.Ct. 1133, 99 L.Ed.2d 296 (1988)). “[T]he existence of a substantial doubt as to whether the state proceedings will resolve the federal action precludes a Colorado River stay․” R.R. St. & Co. Inc., 656 F.3d at 982 (internal quotation marks and citation omitted). If a substantial doubt exists, the court need not weigh the other factors. United States v. State Water Res. Control Bd., 988 F.3d 1194, 1208 (9th Cir. 2021) (citing Intel. Corp., 12 F.3d at 913 n.7).

Here, the Colorado River doctrine also does not warrant a stay in this action. As discussed above, the Facebook action will not resolve all the issues in the underlying action as the defendants in both actions are different, the class of plaintiffs are different, and the underlying defenses and liabilities are different. See Murphy, 2022 WL 3137720, at *5–6 (denying a stay under Colorado River because, while the plaintiff was a party to both cases, the defendants were different, and the underlying action would not resolve all claims). Since parallelism is not met, the Court need not address the other factors. State Water Res. Control Bd., 988 F.3d at 1208. Therefore, a stay is also not warranted under Colorado River.

VI. Defendant's Failure to File a Responsive Pleading

Both Parties address in their responses to the Motion to Stay that Defendant has not answered or otherwise responded to the Complaint. See generally Docket; Opp'n at 13 n.4; Reply at 5–6. “While a motion to stay is generally considered to be outside of the ambit of the Rule 12(b) motions that suffice as responsive pleadings, they are often considered by courts prior to the filing of an answer.” Sorensen v. Head USA, Inc., No. 06cv1434 BTM (CAB), 2006 WL 6584166, at *1 (S.D. Cal. Oct. 13, 2006) (denying default judgment where, “[w]hile [d]efendant failed to file a responsive pleading, its motion to stay was a timely and proper filing”) (collecting cases); see also G.T.G. Const. Co., Inc. v. Goel Servs., Inc., No. 12-1129(JEB), 2012 WL 3860590, at *2 (D.D.C. Sept. 5, 2012) (denying default judgment treating a motion to stay as a responsive pleading); Dixon v. Falcon Heights Condo. Ass'n, No. 12-CV-439-CL, 2012 WL 13047783, at *1 (D. Or. Apr. 5, 2012) (denying entry of default).

Therefore, to further avoid delay in this action, the Court finds that Defendant may still file a responsive pleading. See Sorensen, 2006 WL 6584166 at *1 (noting that even if the court entered default judgment “that default would almost certainly be vacated because [d]efendant appeared to be acting under the good-faith, but mistaken, belief that its motion to stay qualified as a defense under Rule 12(b). Thus, its failure to file a timely responsive pleading would be excusable.”).

CONCLUSION

Based on the foregoing, the Court DENIES Defendant's Motion to Stay Case (ECF No. 5). As Defendant has not filed a responsive pleading in this case, the Court ORDERS Defendant to file an answer or other responsive pleading within fourteen (14) days of the electronic docketing of this order.

IT IS SO ORDERED.

FOOTNOTES

1.   All citations refer to the blue page numbers affixed to the top right corner of each page in the Court's CM/ECF system.

2.   The Court will address the factors in the order addressed by the parties: (1) judicial economy, (2) Defendant's prejudice if required to move forward, and (3) Plaintiff's damage if a stay is granted. See generally Mot.; Opp'n.

3.   A stay of discovery pending a dispositive motion requires the Court to find “(1) there is a pending motion that is potentially dispositive in scope and effect; (2) the potentially dispositive motion can be decided without additional discovery; and (3) the [c]ourt has taken a ‘preliminary peek’ at the merits of the underlying motion and is convinced that [p]laintiff will be unable [to succeed].” Divine Wellness, LLP, 2024 WL 2880285, at *1 (citation omitted); In re Nexus 6p, 2017 WL 3581188, at *2.

4.   A minority of courts have applied the first-to-file doctrine in the state-federal context because the Ninth Circuit has not definitively ruled that Colorado River is the only basis to allow a federal court to dismiss or stay an action based on a parallel state court action. See, e.g., Gens v. SEZ Am., Inc., No. C 05-01009 JF (PVT), 2007 WL 832050, at *4 (N.D. Cal. Mar. 19, 2007); Mangoba v. Monsanto Co., No. 23-00248 HG-RT, 2025 WL 2108798, at *3 (D. Haw. July 28, 2025) (applying the first-to-file rule because the court “need not resolve the apparent conflict because it finds that a stay is warranted pursuant to the Colorado River doctrine alone”); but see Murphy, 2022 WL 3137720, at *4 (referring to Gens as an “anomaly among a range of other cases finding that the first-to-file rule does not apply to state court proceedings”). The Court follows the majority of courts and declines to apply the first-to-file rule to underlying state court proceedings.

Janis L. Sammartino, United States District Judge