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Case 2:17-cv-09158-GW-SK Document 22 Filed 03/08/18 Page 1 of 30 Page ID #:1612

1 John P. Blumberg - State Bar No. 70200


Ave Buchwald - State Bar No. 70305
2 BLUMBERG LAW CORPORATION
444 West Ocean Blvd., Suite 1500
3 Long Beach, California 90802
Tel No. (562) 437-0403; Fax No. (562) 432-0107
4 jblumberg@BlumbergLaw.com
abuchwald@BlumbergLaw.com
5
6 Attorney for Defendant
7
8 UNITED STATES DISTRICT COURT
9 CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION
10
11 CHURCH OF SCIENTOLOGY ) CASE NO: 2:17-cv-09158-GW-SK
INTERNATIONAL, )
12 ) MEMORANDUM OF POINTS
Plaintiff, ) AND AUTHORITIES IN
13 ) OPPOSITION TO MOTION FOR
vs. ) SUMMARY JUDGMENT
14 )
LAURA ANN DeCRESCENZO aka ) [Declaration of John P. Blumberg
15 LAURA A. DIECKMAN, ) and Defendant’s Statement of
) Genuine Disputes concurrently filed
16 Defendant. ) herein]
)
17 ) Date: March 29, 2018
) Time: 8:30 a.m.
18 ) Courtroom: 9D
)
19 ) Action Filed: December 21, 2017
) Trial Date: None
20 ) Judge: Hon. George H. Wu
)
21 ) Mag. Judge: Hon. Steve Kim
_________________________________ )
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MEMORANDUM IN OPPOSITION TO SUMMARY JUDGMENT MOTION
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1 TABLE OF CONTENTS
2
3 Table of Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4
5 I. ABSTRACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6
7 II. FACTUAL AND PROCEDURAL BACKGROUND . . . . . . . . . . . . . . . . . . 7
8
9 III. THE ALL WRITS ACT AND THE COURT’S JURISDICTION . . . . . . . . . 11
10
11 IV. THE ANTI-INJUNCTION ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12
13 V. THE RELITIGATION EXCEPTION TO
14 THE ANTI-INJUNCTION ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
15
16 A. The Court Is Not Empowered to Enjoin the Pending
17 State Action Because of the Preclusive Effect of the
18 California Court of Appeal’s Final Decision . . . . . . . . . . . . . . . . . . . . 13
19
20 B. If the Court is Empowered to Enjoin the Pending
21 State Court Action, It Nevertheless Should Refrain
22 From Doing So and Grant the Motion to Dismiss . . . . . . . . . . . . . . . 20
23
24
25
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MEMORANDUM IN OPPOSITION TO SUMMARY JUDGMENT MOTION
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1 TABLE OF AUTHORITIES
2
3 United States Supreme Court Cases
4
5 Atlantic Coast Line R.R. Co. v. Bhd. of Locomotice Eng’rs,
398 U.S. 281, 90 S.Ct. 1739, 26 L.Ed.2d 234 (1970) . . . . . . . . . . . . . . 12, 22
6
Brown v. Felson, 442 U.S. 127, 99 S.Ct. 2205, 60 L.Ed.2d 767 (1979) . . . . . . . . . 16
7
Chick Kam Choo v. Exxon Corp., 486 U.S. 140, 108 S.Ct. 1684,
8 100 L.Ed.2d 127 (1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 13, 20
9 Parsons Steel, Inc. v. First Ala. Bank, 474 U.S. 518,
106 S.Ct. 768, 88 L.Ed.2d 877 (1986) . . . . . . 14, 16, 18, 22, 23, 24, 26, 27, 28
10
Smith v Bayer Corp., 564 U.S. 299, 131 S.Ct. 2368,180 L.Ed.2d 341 . . . . . . . . 13, 14
11
Vendo Co. v. Lektro-Vend Corp., 433 U.S. 623,
12 97 S.Ct. 2881, 53 L.Ed.2d 1009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
13
Ninth Circuit Cases
14
15 Alton Box Bd. Co. v. Esprit de Corp., 682 F.2d 1267 (9th Cir.1982) . . . . . . . . . . . 12
16 Amwest Mortgage Corp. v. Grady, 925 F.2d 1162 (9th Cir.1991) . . . . . . . . . . . . . . 13
17 Bechtel Petroleum, Inc. v. Webster, 796 F.2d 252 (9th Cir.1986) . . . . . . . . . . . 12, 13
18 Bennett v. Medtronic, 285 F.3d 801 (9th Cir.2002) . . . . . . . . . . . . . . . . . . . . . . . . . 12
19 Blalock Eddy Ranch v. MCI Telecomm. Corp., 982 F.2d 371 (9th Cir.1992) . . . 13, 20
20 Brother thRecords , Inc. v. Jardine, 432 F.3d 939
(9 Cir.2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 15, 16, 18, 19, 23, 24, 28
21
California v. Randstron, 284 F.3d 969 (9th Cir.2002) . . . . . . . . . . . . . . . . . . . . . . . .11
22
Lou v. Belzberg, 834 F.2d 730 (9th Cir.1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
23
Merle Norman Cosmetics, Inc. v. Victa, 936 F.2d 466 (9th Cir.1991) . . . . . . . . 12, 24
24
Negrete v. Allianz Life Ins. Co., 523 F.3d 1091 (9th Cir.2008) . . . . . . . . . . . . . . . . 12
25
Quackenbush v. Allstate Ins. Co., 121 F.3d 1372 (9th Cir.1997) . . . . . . . . . 12, 13, 20
26
Sandpiper Village Condominium Ass’n., Inc. v. th
27 Louisiana-Pacific Corp., 428 F.3d 831 (9 Cir.2005) . . . . . . . . . . . 11, 21, 22
28 United States v. Cote, 51 F.3d 178 (9th Cir.1995) . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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1 Zhang v. Dept. of Labor & Immigration, 331 F.3d 1117 (9th Cir.2003) . . . . . . . . . 27
2
3 Other Circuit Cases
4
5 Bailey v. State Farm Fire and Cas. Co., 414 F.3d 1187 (10th Cir.2005) . . . . . 25, 27
6 Burr & Forman v. Blair, 470 F.3d 1019 (11th Cir.2006) . . . . . . . . . . . . . . . . . . . . . 11
7 CFE Group, LLC v. Firstmerit Bank, N.A., 809 F.3d 346 (7th Cir.2015) . . . . . . . . . 26
8 First Alabama Bank of Montgomery,th N.A. v. Parsons
Steel, Inc., 825 F.2d 1475 (11 Cir.1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
9
Ramsden v. AgriBank, FSB, 214 F.3d 865 (7th Cir.2000) . . 15, 22, 23, 24, 25, 26, 28
10
Southern California Petroleum Corp. v. Harper,
11 273 F.2d 715 (5th Cir.1960) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
12
13 Miscellaneous Cases
14
15 Baltazar v. Yates, No. EDCV 04-00274, 2010 WL 2195979
(C.D.Cal. April 28, 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
16
Blatty v. Warner Bros. Entertainment, Inc., No. CV 10-06611,
17 2011 WL 1327379 at *7 (C.D.Cal. April 21, 2011) . . . . . . . . . . . . . . . . . . . . 20
18 Connecticut General Life Ins. Co. v. Ramsey, No. S-07-0819,
2007 WL 2225797 (E.D.Cal.July 31, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . 24
19
Hernandez v. Gonzalez, 504 F.Supp.2d 825, 836 (C.D.Cal.2007) . . . . . . . . . . . . . 16
20
21 Kag West, LLC v. Malone, No. 15-cv-03827,
2016 WL 3951651 (N.D. Cal. July 22, 2016) . . . . . . . . . . . . . . . . . . . . . . 20, 24
22
Morris v. Parke, Davis & Co., 667 F.Supp. 1332 (C.D.Cal.1987) . . . . . . . . . . . . . 19
23
24
California Cases
25
26 Border Business Park, Inc. v. City of San Diego,
142 Cal.App.4th 1538, 49 Cal.Rptr.3d 259, 280 . . . . . . . . . . . . . . . . . . . 19, 20
27
City of West Hollywood v. Kihagi, 16 Cal.App.5th 739, 749,
28 224 Cal.Rptr.3d 577, 583 (2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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1 England v. Hosp. of the Good Samaritan, 14 Cal.2d 791 . . . . . . . . . . . . . . . . . . . . . 17


2 People v. Mitchell, 81 Cal.App.4th 132, 155, 96 Cal.Rptr.2d 401, 417 (2000) . . . 16
3 Producers Dairy Delivery Co. v. Sentry Ins. Co., 41 Cal.3d 903,
226 Cal.Rptr. 558 (1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4
Sandoval v. Super. Ct., 140 Cal.App.3d 932 (1983) . . . . . . . . . . . . . . . . . . . . . . 18, 19
5
Schultz v. Fulton Associates, Nos. B197266, 2007 WL 3334334,
6 (Cal. Ct. App. 2nd Dist. Nov. 9, 2007) (unpublished) . . . . . . . . . . . . . . . . . . 19
7 South Sutter, LLC v. LJ Sutter Partners, L.P.,
193 Cal.App.4th 634, 123 Cal.Rptr.3d 301 (2011) . . . . . . . . . . . . . . . . . . . . 20
8
Union Oil Co. of California v. Reconstruction Oil Co.,
9 58 Cal.App.2d 30, 35-36, 135 P.2d 621, 624 (1943) . . . . . . . . . . . . . . . . . . . 16
10
11 Federal Statutes
12
13 15 U.S.C. § 1589 (Human Trafficking) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
14 28 U.S.C. § 1657 (All Writs Act) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
15 28 U.S.C. § 1738 (Full Faith & Credit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
16 28 U.S.C. § 2883 (Anti-Injunction Act) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
17
18 Miscellaneous
19
20 Restatement (Second) of Judgments, § 13 . . . . . . . . . . . . . . . . . . . . . . . . . . 18, 19, 20
21 18 C. Wright, A. Miller, & E. Cooper, Federal Practice
and Procedure § 4405, p. 82 (2d ed.2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
22
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25
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27
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1 MEMORANDUM OF POINTS AND AUTHORITIES


2
3 I. ABSTRACT
4
5 Defendant Laura DeCrescenzo (“DeCrescenzo”) filed an action in state
6 court alleging a federal claim and numerous state claims. Plaintiff Church of
7 Scientology International (“CSI”) removed the action to the district court. In
8 2009, the district court dismissed the federal claim and remanded the state law
9 claims to the Los Angeles County Superior Court. CSI successfully moved to
10 bifurcate the statute of limitations/equitable estoppel issue at trial. Compl. ¶24.
11 Then, on January 31, 2017, CSI stipulated that the matter be tried in the state court
12 on October 2, 2017. Thereafter, CSI represented to the superior court that it was
13 ready for trial, executed a joint exhibit list, executed a joint witness list and filed
14 six motions in limine. Having so stipulated, represented and acted, CSI effectively
15 waived any objection to trial in the state court. Neverthe-less, CSI now seeks to
16 enjoin DeCrescenzo from further prosecuting her state court action, arguing that
17 there is preclusive effect of the district court’s prior order dismissing the federal
18 claim based on the statute of limitations. But in 2011, the California Court of
19 Appeal ruled that the district court’s order did not have preclusive effect.
20 Thereafter, CSI continued to actively defend the action in the state court, including
21 deposing DeCrescenzo and 16 witnesses, propounding numerous interrogatories
22 and requests for production of documents and seeking appellate relief from state
23 court orders (a) denying its two motions for summary judgment and (b)
24 compelling its production of documents. Based on these circumstances, and the
25 Ninth Circuit’s limitations on the res judicata effect of a dismissal based on the
26 statute of limitations, the Court should deny CSI’s motion for summary judgment
27 and grant DeCrescenzo’s pending 12(b)(6) motion to dismiss the action.
28 ///
6
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1 II. FACTUAL AND PROCEDURAL BACKGROUND


2
3 On April 2, 2009, DeCrescenzo filed an action in the Los Angeles County
4 Superior Court. UF 1. She filed a First Amended Complaint on May 19, 2009,
5 alleging a federal forced labor and human trafficking claim under 15 U.S.C. §
6 1589 and numerous state law claims. UF 1; Ex. A. Based on the federal claim,
7 CSI removed the action to this Court. UF 4; Ex. B. CSI then moved to dismiss
8 the federal and all state claims. UF 5; Ex. C. On November 5, 2009, the District
9 Court dismissed the federal claim without leave to amend and remanded the action
10 back to the Los Angeles County Superior Court. UF 7; Ex. E. The Court held that
11 the federal claim was time-barred under the applicable federal statute of
12 limitations because, under the facts alleged, equitable tolling and equitable
13 estoppel were inapplicable as a matter of law. Ex. E . The Court granted the
14 motion to dismiss the federal claim without leave to amend, but “decline[d] to
15 entertain the remaining state law claims” and remanded them back to the Los
16 Angeles County Superior Court. Ex. E. In other words, the District Court left it to
17 the Los Angeles County Superior Court to determine whether DeCrescenzo should
18 be given leave to amend her state law claims to state further facts in support her
19 contention that CSI was equitably estopped from asserting its statute of limitations
20 defense and, if she did so, whether such facts were sufficient under California law.
21 DeCrescenzo did not appeal the District Court’s judgment of dismissal. UF 9; Ex.
22 F; Ex. G.
23
24 When the case returned to the Los Angeles County Superior Court, CSI
25 demurred to the remaining claims on the grounds that they were time-barred and
26 that DeCrescenzo was collaterally estopped from prosecuting them by the District
27 Court’s order. UF 10; Ex. H. The Superior Court sustained the demurrer on the
28 first ground with leave to amend and did not comment on CSI’s collateral estoppel
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1 argument. UF 11; Ex. I. DeCrescenzo filed a second amended complaint on


2 February 2, 2010, UF 12; Ex. J. CSI demurred on the same two grounds. UF 15;
3 Ex. L. On March 18, 2010, the Superior Court sustained CSI’s demurrer without
4 leave to amend. UF 16; Ex. M. The court explained that it rejected CSI’s
5 collateral estoppel argument but sustained the demurrers on the ground that they
6 were time-barred. UF 17; Compl. ¶ 17; Ex. N. DeCrescenzo appealed. UF 18.
7
8 On appeal, CSI argued in part that the judgment should be affirmed on the
9 basis of the preclusive effect of the federal court’s order. UF 18; Ex. O and Ex. S:
10 Respondents’ Brief; Ex. T: Respondents’ Supplemental Post-Argument; ¶s 7 and
11 8, Blumberg Dec. The California Court of Appeal disagreed, concluding that the
12 doctrine of collateral estoppel was not applicable. UF 19; Ex. P: Court of Appeal
13 Opinion. CSI petitioned for rehearing, contending in part that the doctrine did
14 apply. Compl. ¶ 22. The opinion was slightly modified, but the petition for
15 rehearing was denied. Ex. U; Order Modifying Opinion and Denying Rehearing;
16 Blumberg Dec. ¶9. CSI then petitioned the California Supreme Court to review
17 the matter, again contending that the doctrine of collateral estoppel applied. UF
18 26; Ex. V: Petition for Review; Blumberg Dec. ¶10. The petition was denied on
19 September 14, 2011. Ex. Q; Ex. W; Blumberg Dec. ¶11. CSI did not petition the
20 United States Supreme Court for review. Blumberg Dec. ¶12.
21
22 On October 25, 2012, CSI moved for summary judgment on the basis that
23 DeCrescenzo’s claims were barred by the statutes of limitations. Ex. X; Blumberg
24 Dec. ¶13. The motion was denied. Ex. Y; Blumberg Dec. ¶14.
25
26 On February 8, 2013, DeCrescenzo moved to compel CSI to produce certain
27 documents. Ex. Z; Blumberg Dec. ¶15. CSI opposed the motion, contending that
28 the documents were protected from discovery by California’s penitent-clergy
8
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1 privilege and the Free Exercise Clause of the United States Constitution. Ex. AA;
2 Blumberg Dec. ¶15. The motion was granted on March 6, 2013. Ex. BB;
3 Blumberg Dec. ¶15. CSI petitioned the Court of Appeal for relief. Blumberg Dec.
4 ¶15. The petition was summarily denied. Ex. CC; Blumberg Dec. ¶15. CSI’s
5 petition to California’s Supreme Court for review was also summarily denied. Ex.
6 DD; Blumberg Dec. ¶15. CSI then petitioned the United States Supreme Court
7 for a Writ of Certiorari and sought a stay of the state court action pending
8 resolution of its petition. Ex. U; Blumberg Dec. ¶15. The United States Supreme
9 Court denied CSI’s application for a stay on June 16, 2013 and CSI’s petition for
10 Writ of Certiorari on October 7, 2013. Ex. EE; Blumberg Dec. ¶15.
11
12 On October 27, 2015, CSI moved for summary judgment on the ground that
13 every cause of action of DeCrescenzo’s second amended complaint was barred by
14 the protections for freedom of religion found in the First Amendment to the United
15 States Constitution and Article I of the California Constitution. Ex. FF; Blumberg
16 Dec. ¶16. The motion was denied. Ex. GG; Blumberg Dec. ¶16. CSI petitioned
17 the Court of Appeal for relief. Ex. HH; Blumberg Dec. ¶16. When the petition
18 was summarily denied, CSI petitioned California’s Supreme Court for review.
19 Ex. II; Ex. JJ; Blumberg Dec. ¶16. The California Supreme Court summarily
20 denied the petition for review on September 14, 2016. Ex. KK; Blumberg Dec.
21 ¶16. Throughout this time, CSI engaged in discovery, including taking numerous
22 depositions and serving multiple sets of interrogatories and requests to produce
23 documents. Blumberg Dec. ¶s 2-4. And CSI brought five discovery-related
24 motions. Blumberg Dec. ¶5.
25
26 CSI contends that it brought its two motions for summary judgment “in an
27 attempt to avoid the necessity asking this court to intervene in the state court
28 proceedings.” UF 27, citing Deixler Dec.; Moving Memo. at p. 7, lines 16-18.
9
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1 But in his declaration, Mr. Deixler does not address the point; he simply
2 authenticates documents. In other words, there is no evidence to support the
3 factual assertion that CSI’s intent in moving for summary judgment was to avoid
4 the necessity of having to ask this court to intervene. CSI also contends that after
5 it brought its two motions for summary judgment, “[t]he case was ‘then’ delayed
6 for ‘several years’ by the retirement of the original trial judge and the appointment
7 and recusal of a series of Superior Curt judges.” UF 27. Not quite. The assigned
8 judge retired on February 20, 2014 and the appointment and recusal of the series
9 of judges ended seven months later on September 17, 2014. Blumberg Dec. ¶17.
10
11 And CSI contends that after its second motion for summary judgment was
12 denied, the case was assigned to the Superior Court’s “long cause” department.
13 UF 27. That is not accurate because it omits the previous date the case was set for
14 trial. On January 31, 2017, pursuant to stipulation, the superior court set a trial
15 date of October 2, 2017. Ex. LL; Blumberg Dec. ¶17. Thereafter, CSI represented
16 to the superior court that it was ready for trial, executed a joint exhibit list,
17 executed a joint witness list and filed six motions in limine. Blumberg Dec. ¶18.
18 Having been presented with all required “trial-ready” documents, the court then
19 determined that the case should be “long cause” and the case was reassigned to
20 another department that set the trial date of August 13, 2018. Blumberg Dec. ¶19.
21
22 Nearly eleven months after CSI stipulated to the trial date, almost three
23 months after the date that the trial was to commence, and after it announced ready
24 for trial and filed joint exhibit and witness lists and six motions in limine, CSI
25 returned to this court by filing a complaint to enjoin further proceedings in the
26 state court. DeCrescenzo responded to the complaint by filing a 12(b)(6) motion
27 to dismiss set to be heard on April 2, 2018. CSI then immediately moved for
28 summary judgment, setting the hearing on March 29, 2018.
10
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1 III. THE ALL WRITS ACT AND THE COURT’S JURISDICTION


2
3 CSI is seeking to enjoin DeCrescenzo from further prosecuting her state
4 court action under the All Writs Act, 28 U.S.C. § 1657. The Act provides that
5 federal courts “may issue all writs necessary or appropriate in aid of their
6 respective jurisdictions and agreeable to the usages and principles of law.”
7 Although, by its terms, the All Writs Act refers only to “writs,” it codifies the
8 long-recognized powers of courts of equity to effectuate their decrees by
9 injunction. Burr & Forman v. Blair, 470 F.3d 1019, 1026 (11th Cir.2006). Thus,
10 the court has subject matter jurisdiction under the All Writs Act. California v.
11 Randstron, 284 F.3d 969, 974 (9th Cir.2002).
12
13 IV. THE ANTI-INJUNCTION ACT
14
15 “The All Writs Act is limited by the Anti-Injunction Act, which prevents a
16 federal court from enjoining the ‘proceedings in a State court except as authorized
17 by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or
18 effectuate its judgments.’ 28 U.S.C. § 2883.” Sandpiper Village Condominium
19 Ass’n., Inc. v. Louisiana-Pacific Corp., 428 F.3d 831, 842 (9th Cir.2005). “The
20 Act, which has existed in some form since 1793 . . . is a necessary concomitant of
21 the Framers’ decision to authorize, and Congress’ decision to implement, a dual
22 system of federal and state courts. It represents Congress’ considered judgment as
23 to how to balance the tensions inherent in such a system. Prevention of frequent
24 federal court intervention is important to make the dual system work effectively.
25 By generally barring such intervention, the Act forestalls ‘the inevitable friction
26 between the state and federal courts that ensues from the injunction of state
27 judicial proceedings by a federal court.’ Vendo Co. v. Lektro-Vend Corp., 433
28 U.S. 623, 630-631, 97 S.Ct. 2881, 2887, 53 L.Ed.2d 1009 (1977) (plurality
11
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1 opinion). Due in no small part to the fundamental constitutional independence of


2 the States, Congress adopted a general policy under which state proceedings
3 ‘should normally be allowed to continue unimpaired by intervention of the lower
4 federal courts, with relief from error, if any, through the state appellate courts and
5 ultimately this Court.’ Atlantic Coast Line R. Co. v. Locomotive Engineers, 398
6 U.S. 281, 287, 90 S.Ct. 1739, 1743, 26 L.Ed.2d 234 (1970).” Chick Kam Choo v.
7 Exxon Corp., 486, U.S. 140, 146, 108 S.Ct. 1684, 1689, 100 L.Ed.2d 127 (1988).
8
9 Because the Anti-Injunction Act is designed to prevent friction between
10 federal and state courts, federal intervention is barred in all but the narrowest
11 circumstances. See Alton Box Bd. Co. v. Esprit de Corp., 682 F.2d 1267, 1271 (9th
12 Cir.1982); Bennett v. Medtronic, 285 F.3d 801, 805 (9th Cir.2002). Accordingly,
13 the limited three exceptions of the Anti-Injunction Act will not be enlarged by
14 loose statutory construction. Atlantic Coast Line, 398 U.S. at 287, 90 S.Ct. 1739,
15 1743, 26 L.Ed.2d 234. Rather, any doubts as to the propriety of a federal
16 injunction against state court proceedings must be resolved in favor of permitting
17 the state court to proceed. Id., at 297, 90 S.Ct. 1739, 26 L.Ed.2d 234. Thus, an
18 injunction will be upheld only on “a strong and unequivocal showing” that such
19 relief is necessary. Bechtel Petroleum, Inc. v. Webster, 796 F.2d 252, 253-54 (9th
20 Cir.1986) quoting Judge Wisdom in Southern California Petroleum Corp. v.
21 Harper, 273 F.2d 715, 719 (5th Cir.1960). In other words, the Anti-Injunction Act
22 establishes “the general rule that courts in the United States shall not enjoin
23 proceedings in state courts.” Merle Norman Cosmetics, Inc. v. Victa, 936 F.2d
24 466, 468 (9th Cir. 1991). “Unless one of the three statutory exceptions applies, a
25 federal injunction restraining prosecution of a state court is absolutely prohibited.”
26 Lou v. Belzberg, 834 F.2d 730, 739-40 (9th Cir.1987). Whether an injunction is
27 absolutely prohibited under the Anti-Injunction Act is a question of law. Negrete
28 v. Allianz Life Ins. Co., 523 F.3d 1091, 1096 (9th Cir.2008); Quackenbush v.
12
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1 Allstate Ins. Co., 121 F.3d 1372, 1377 (9th Cir.1997). Furthermore, “the fact that
2 an injunction may issue does not mean that it must issue.” Chick Kam Choo, 466
3 U.S. 140, 151, 108 S.Ct. 1684, 1692, 100 L.Ed.2d 127; see also Quackenbush, 121
4 F.3d at 1377; Blalock Eddy Ranch v. MCI Telecomm. Corp., 982 F.2d 371, 375
5 (9th Cir.1992). In that instance, whether to enjoin a state proceeding is committed
6 to the sound discretion of the district court. Bechtel Petroleum, Inc. at 253.
7
8 V. THE RELITIGATION EXCEPTION TO THE ANTI-
9 INJUNCTION ACT
10
11 A. The Court Is Not Empowered to Enjoin the Ongoing State Action
12 Because of the Preclusive Effect of the California Court of Appeal’s Final
13 Decision.
14
15 CSI contends that the third exception to the Anti-Injunctive Act, which
16 permits a federal court to enjoin state proceedings when necessary to protect or
17 effectuate its judgments, applies. Compl. ¶ 33; Moving Memo. at p. 8, line 24: “It
18 is the third exception . . . that is at issue here.” “This third exception to the Anti-
19 Injunction Act is commonly referred as the relitigation exception.” Amwest
20 Mortgage Corp. v. Grady, 925 F.2d 1162, 1164 (9th Cir.1991); see also Smith v.
21 Bayer Corp., 564 U.S. 299, 306, 131 S.Ct. 2368, 2375, 180 L.Ed2d 341. “It is
22 founded in the well-recognized concepts of res judicata and collateral estoppel.”
23 Chick Kam Choo, 486 U.S., at 147, 108 S.Ct. 1684. But the relitigation exception
24 permits a federal court to enjoin a state proceeding “only in rare cases.” Smith, at
25 302, 131 S.Ct. 2368. “After all, a court does not usually ‘get to dictate to other
26 courts the preclusion consequences of its own judgment.’ 18 C. Wright, A. Miller,
27 & E. Cooper, Federal Practice and Procedure § 4405, p. 82 (2d ed. 2002) . . . .
28 Deciding whether and how prior litigation has preclusive effect is usually the
13
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1 bailiwick of the second court (here, the one in [California]). So issuing an


2 injunction under the relitigation exception is resorting to heavy artillery. For that
3 reason, every benefit of the doubt goes toward the state court, see Atlantic Coast
4 Line, 398 U.S., at 287, 297, 90 S.Ct. 1739; an injunction can issue only if
5 preclusion is clear beyond peradventure.” Smith, 564 U.S., at 307, 131 S.Ct. 2368.
6
7 And, when the state court (here California) has already ruled that the state
8 action is not barred by the res judicata effect of the federal judgment, “the situation
9 is drastically changed.” Brother Records, Inc. v. Jardine, 432 F.3d 939, 943 (9th
10 Cir.2005, citing Parsons Steel, Inc. v. First Ala. Bank, 474 U.S. 518, 524, 106
11 S.Ct. 768, 88 L.Ed.2d 877 (1986). The state ruling itself may be binding on the
12 federal court under the Full Faith and Credit Act, 28 U.S.C. § 1738. That Act
13 provides that state court proceedings ‘shall have the same full faith and credit in
14 every court within the United States . . . as they have by law and usage in the
15 courts of such State . . . from which they are taken.’ 28 U.S.C. § 1738.” Brother
16 Records, at 943. As the Supreme Court reasoned: “[T]he Anti-Injunction Act and
17 the Full Faith and Credit Act can be construed consistently, simply by limiting the
18 relitigation exception of the Anti-Injunction Act to those situations in which the
19 state court has not yet ruled on the merits of the res judicata issue. Once the state
20 court has finally rejected a claim of res judicata, then the Full Faith and Credit Act
21 becomes applicable and federal courts must turn to state law to determine the
22 preclusive effect of the state court’s decision.” Parsons, 474 U.S., at 525, 106
23 S.Ct. 768. Even the state court’s mistaken rejection of the claim of res judicata
24 “does not justify the highly intrusive remedy of a federal-court injunction against
25 the enforcement of the state-court judgment.” Parsons, at 525, 106 S.Ct. 768.
26
27 The next question, then, is whether in ruling, the state appellate court “has
28 finally rejected [the] claim of res judicata.” Parsons, 474 U.S. 518, 525; see also
14
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1 Brother Records, 432 F.3d 939, 943. If so, the district court is required to follow
2 it and thus dismiss the action. Id. at 944. The issue has arisen when the state trial
3 court has denied a motion for summary judgment, ruling that the federal action has
4 no preclusive effect. In First Alabama Bank of Montgomery, N.A. v. Parsons
5 Steel, Inc., 825 F.2d 1475 (11th Cir.1987), the Eleventh Circuit held that under the
6 law of Alabama, the issue was whether the ruling became the law of the case. Id.,
7 at 1480. Because Alabama equates finality for purposes of issue preclusion with
8 appealability, and the trial court’s ruling denying the motion for summary
9 judgment was not appealable, it did not become the law of the case and, therefore,
10 was not final for purposes of issue preclusion. Id. Accordingly, the district court
11 was empowered to exercise its discretion and determine whether to issue the
12 injunction. See also Ramsden v. AgriBank, 214 F.3d 865, 869 (7th Cir.2000)
13 holding under Wisconsin law, an order denying a motion for summary judgment
14 did not bar the district court from exercising discretion.
15
16 But the issue at bar, as exemplified by this case, is whether the state
17 appellate court’s conclusion that the previous federal order does not have
18 preclusive effect is sufficiently “final” when the matter is remanded back to the
19 trial court for further proceedings. This situation has arisen once, coincidentally in
20 the Ninth Circuit. In Brother Records, 432 F.3d 939, Jardine was sued by Brother
21 Records, Inc. (“BRI”) in federal court for trademark infringement. Jardine brought
22 an action against BRI in the California Superior Court. BRI brought a motion for
23 summary judgment in federal court, which the district court partially granted, and
24 BRI then demurred in the superior court on the ground that res judicata barred the
25 claims. The superior court sustained the demurrer and Jardine appealed. The
26 California Court of Appeal reversed on the ground that Jardine’s claims were not
27 barred by res judicata or collateral estoppel. BRI then moved to enjoin the state
28 court proceeding under the All Writs Act. The United Stated District Court for the
15
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1 Central District of California, the Honorable Harry Hupp, judge presiding, held
2 that it had the power to enjoin the state court action; and exercised its discretion
3 by denying the motion. The Ninth Circuit noted that it did not have to answer the
4 question of whether the Court of Appeal’s res judicata ruling was sufficiently final
5 under California law: “If the Court of Appeal’s decision is final and preclusive
6 under state law, then the district court was required to follow it and thus acted
7 properly in denying the injunction. See Parsons, 474 U.S. at 525, 106 S.Ct. 768.
8 Even if the decision is not final and preclusive, we conclude that the district court
9 did not abuse its discretion in giving it effect.” Brother Records at 944.
10
11 In dicta, the Ninth Circuit indicated that the issue should be resolved under
12 res judicata principles. Brother Records, 432 F.3d 939, 943-944. The Ninth
13 Circuit made no mention of the law of the case doctrine. But “[t]he doctrine is
14 closely related to res judicata, or claim preclusion, which ‘ensures the finality of
15 decisions. . . .’ Brown v. Felsen, 442 U.S. 127, 131, 99 S.Ct. 2205, 60 L.Ed.2d 767
16 (1979).” Hernandez v. Gonzalez, 504 F.Supp.2d 825, 836 (C.D.Cal.2007).
17 “‘[F]inality is a cornerstone of both the res judicata and the law of the case
18 doctrines.” People v. Mitchell, 81 Cal.App.4th 132, 155, 96 Cal.Rptr.2d 401, 417
19 (2000); see also Union Oil Co. of California v. Reconstruction Oil Co., 58
20 Cal.App.2d 30, 35-36, 135 P.2d 621, 624 (1943): the “law of the case” doctrine
21 dictates that an appellate court’s holding on a rule of law that is necessary to the
22 appellate court’s opinion “is a final determination thereof, and, like the final
23 judgment in any other case, estops the parties thereto from afterwards questioning
24 its correctness.” “To promote finality, the ‘law of the case’ doctrine holds that ‘the
25 decision of an appellate court on a legal issue must be followed in all subsequent
26 proceedings in the same case.’ United States v. Cote, 51 F.3d 178, 181 (9th
27 Cir.1995). . . .” Hernandez, at 836; see also City of West Hollywood v. Kihagi, 16
28 Cal.App.5th 739, 749, 224 Cal.Rptr.3d 577, 583 (2017): appellate rulings “must
16
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1 be adhered to throughout the case’s subsequent progress in the trial court and on
2 subsequent appeal.”
3
4 CSI contends that the California “Court of Appeal gave only passing
5 mention to the collateral estoppel issue.” Moving Memo. at p. 6, lines 12-13. Not
6 so. The Court of Appeal devoted an entire section of its opinion – entitled “The
7 Federal Judgment Does Not Establish Collateral Estoppel” – to the issue. See Ex.
8 P at pp. 507-511.
9
10 CSI further contends that the Court of Appeal did not decide the same issue
11 being raised here because it analyzed the issue under the state, rather than federal,
12 law of collateral estoppel. Moving Memo. at p. 22, line 13 to p. 23, line 17. But
13 the Court of Appeal cited federal case law. And, in any case, the same issue was
14 decided by the Court of Appeal, i.e., “The Federal Judgment Does Not Establish
15 Collateral Estoppel.” Ex. P at p. 507.
16
17 CSI also contends that the California Court of Appeal opinion is not final
18 because such an opinion can be reversed in a subsequent appellate proceeding if
19 there has been “an interim change in the law,” quoting England v. Hosp. of the
20 Good Samaritan, 14 Cal.2d 791, 795 (1939). See Moving Memo. at p. 20, lines 1-
21 10. But CSI does not claim that there has been a change in the law since the Court
22 of Appeal rendered its opinion. To the contrary, CSI argues that under the
23 established law as it existed at the time, the Court of Appeal got it wrong when it
24 concluded that this Court’s prior order did not have preclusive effect. As it
25 admits: “CSI extensively explained and provided compelling authority to the
26 California Court of Appeal showing that it was required to apply federal law of
27 judgments and preclusion to the federal judgment of this court.” Moving Memo.
28 at p. 25, lines 3-6; see also Ex. S; Ex. T and Ex. V. Therefore, under the law of the
17
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1 case doctrine, the California Court of Appeal’s holding (that DeCrescenzo’s state
2 claims are not precluded by this district court’s previous ruling dismissing her
3 federal claim), is sufficiently final and preclusive to be given full faith and credit,
4 thus prohibiting this court from entertaining whether an injunction should issue.
5 See Parsons, 474 U.S. at 525,106 S.Ct. 768. The same conclusion is reached
6 when applying the doctrine of res judicata, as indicated in Brother Records, 432
7 F.3d 939, 943, rather than the doctrine of the law of the case.
8
9 In Brother Records, 432 F.3d 939, 943, the Ninth Circuit indicated that it “is
10 not entirely clear” under California law whether the Court of Appeal’s opinion is
11 sufficiently final and preclusive. Id., at 943. The court noted that some California
12 cases have held that a judgment is final when it terminates the litigation between
13 the parties, while other cases, such as Sandoval v. Super. Ct., 140 Cal.App.3d 932,
14 190 Cal.Rptr. 29 (1983), have followed the Restatement (Second) of Judgments §
15 13 that for issue preclusion purposes, “final judgment” includes any prior
16 adjudication in another action that is determined to be sufficiently firm to be
17 accorded conclusive effect. Under the Restatement (Second) Judgments §13, the
18 decision is final for purpose of issue preclusion if (a) the parties were fully heard
19 and (b) the trial court’s decision was either subject to appeal or was in fact
20 reviewed on appeal. Sandoval at 936, 190 Cal.Rptr. 29. In the case at bar, the
21 preclusive effect of the district court’s order dismissing DeCrescenzo’s federal
22 claim and remanding the remaining claims back to the Superior Court was fully
23 litigated. The parties were fully heard and the California Court of Appeal
24 rendered a reasoned opinion. Thus, if California follows Sandoval and the
25 Restatement (Second) Judgments § 13, then the effect is the same as applying the
26 law of the case doctrine, i.e., the court is not empowered to exercise its discretion.
27 ///
28 ///
18
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1 Since Brother Records was decided, a series of cases indicate that


2 California follows the Sandoval analysis, i.e., the Restatement (Second)
3 Judgments §13. In Border Business Park, Inc. v. City of San Diego, 142
4 Cal.App.4th 1538, 1564, 49 Cal.Rptr.3d 259, 280 (2006), the California Court of
5 Appeal adopted Sandoval and Restatement (Second) Judgments, §13: “[F]or
6 purposes of issue preclusion, as opposed to res judicata, ‘“final judgment”
7 includes any prior adjudication of an issue in another action that is determined to
8 be sufficiently firm to be accorded conclusive effect.’ (Rest.2d, § 13, italics added;
9 see . . . Sandoval . . . 140 Cal.App.3d 932, 936, 190 Cal.Rptr. 29.)” The court
10 then stated that whether a prior adjudication of an issue was “sufficiently firm” is
11 based on the factors listed in Restatement (Second) Judgments § 13, again citing
12 Sandoval. Border Business Park at 1565, 49 Cal.Rptr.3d 259.
13
14 The California Court of Appeal revisited the issue and applied the
15 Restatement in Schultz v. Fulton Associates, Nos. B197266, B197270, 2007
16 WL3334334, (Cal. Ct. App. 2nd Dist. Nov. 9, 2007) (unpublished) 1 In doing so, it
17 stated at *3: “The Supreme Court and Courts of Appeal have followed the view of
18 the Restatement Second of Judgments. (. . . Producers Dairy Delivery Co. v.
19 Sentry Ins. Co. (1986) 41 Cal.3d 903, 911 [226 Cal.Rptr. 558, 562]; Border
20 Business Park, Inc. v. City of San Diego (2006) 142 Cal.App.4th 1538, 1564. . . .)”
21 In Producers Dairy Delivery Co., the California Supreme Court stated at p. 911,
22 226 Cal.Rptr. at 562: “[W]e agree with the analysis set forth in Sandoval . . .
23
24
1. “Unpublished opinions from the California courts do not have formal
25 precedential effect and are not binding on this Court. See Morris v. Parke, Davis
26 & Co., 667 F.Supp. 1332, 1347, fn. 12 (C.D. Cal. 1987).” Baltazar v. Yates, No.
EDCV 04-00274, 2010 WL 2195979 at fn. 8 (C.D.Cal. April 28, 2010). While
27 California Rule of Court 8.115 provides that an unpublished case may not be cited
28 except in certain circumstances not applicable here, the rule is not binding on this
federal court. Id.
19
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1 (relying on Rest.2d Judgments, §13.)” And in South Sutter, LLC v. LJ Sutter


2 Partners, L.P., 193 Cal.App.4th 634, 663, 123 Cal.Rptr.3d 301, 324 (2011), the
3 Court of Appeal cited Border Business Park on this point as precedent. This
4 Court did likewise in Blatty v. Warner Bros. Entertainment, Inc., No. CV 10-
5 06611, 2011 WL 13217379 at *7 (C.D.Cal. April 21, 2011). Accordingly, it is
6 now settled that California follows § 13 of the Restatement Second of Judgments.
7 As explained above, under that analysis, the California Court of Appeal’s decision
8 (that this Court’s order dismissing DeCrescenzo’s federal cause of action and
9 remanding the state claims back to the Los Angeles County Superior Court did not
10 have any preclusive effect) is deemed to be final because the parties had the
11 opportunity to be heard and the appellate court supported its decision with a
12 reasoned opinion. These factors are undisputable. Thus, the Court of Appeal’s
13 opinion should be deemed final, whether analyzed under the doctrine of res
14 judiciata or the doctrine of law of the case. Consequently, this Court is not
15 empowered to enjoin the ongoing state court proceeding.
16
17 B. If the Court is Empowered To Enjoin the Pending State Court Action, It
18 Nevertheless Should Refrain From Doing So, Deny the Motion for Summary
19 Judgment and Grant the Motion to Dismiss.
20
21 As mentioned above, “the fact that an injunction may issue under the Anti-
22 Injunction Act does not mean that it must issue.” Chick Kam Choo, 486 U.S. at
23 151, 108 S.Ct. 1684; see also Quakenbush, 121 F.3d at 1377; Blalock, 982 F.2d at
24 375; Merle, 936 F.2d at 486. Stated differently, “it is within this Court’s
25 discretion to refrain from issuing the requested injunction.” Kag West, LLC v.
26 Malone, No. 15-cv-03827, 2016 WL 3951651 (N.D. Cal. July 22, 2016) at *2. As
27 discussed below, the Court should refrain from issuing an injunction based on
28 concerns of comity and federalism, strengthened by CSI’s seven-year delay, CSI’s
20
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1 failure to seek review by the United States Supreme Court, CSI having
2 successfully moved to bifurcate the statute of limitations/equitable estoppel
3 bifurcation of issue at trial and its subsequent stipulation that the matter be tried in
4 the state court, representation that it was ready for trial and execution of joint
5 exhibit and witness lists and motions in limine and, finally, the conclusion that the
6 California Court of Appeal got it right.
7
8 In Sandpiper, 428 F.3d 831, the Ninth Circuit reversed a district court’s
9 order enjoining the defendant’s further prosecution of a state court action. Owners
10 of structures on which Inner-Seal Siding had been installed brought a class action
11 against the manufacturer, Louisiana-Pacific Corporation (“L-P”), in the District
12 Court for the District of Oregon. The suit settled and the district court approved
13 and adopted the settlement agreement and entered an order and final judgment.
14 Lester, a Minnesota corporation, purchased Inner-Seal Siding which it
15 incorporated into buildings that it constructed and sold to its customers. As a
16 distributor, Lester was not a class member and was not a party to the settlement
17 agreement. However, class member claims against Lester were released by the
18 settlement. Lester sued L-P in Minnesota state court. L-P’s motion for summary
19 judgment was denied on the basis that the res judicata effect of the settlement
20 agreement and federal court order barred Lester’s suit, the matter was tried and a
21 jury rendered a verdict in Lester’s favor. L-P then immediately filed a motion in
22 the Oregon federal district court to enjoin the state court from entering judgment.
23 The federal court issued the injunction. Lester appealed. The Ninth Circuit
24 reversed for two reasons. First, Lester was not collaterally estopped from
25 prosecuting L-P because “Lester was not named as a party to the class action and
26 was not a member of the nationwide class.” Id. at 848. Second, “[t]he district
27 court’s invocation of the relitigation exception was improper for the additional
28 reason that any potential for relitigation of covered claims was addressed [in the
21
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1 Minnesota state court action]. . . . The proper recourse for L-P was to appeal
2 through the state court system and, if necessary, to petition the Unites States
3 Supreme Court for review. See Parsons . . . 474 U.S. 518, 525-26, 106 S.Ct. 768 .
4 . . ; Atlantic Coast Line, 398 U.S. at 296, 90 S.Ct. 1739. . . . ‘[L]ower courts
5 possess no power whatsoever to sit in direct review of state court decisions.’
6 Atlantic Coast Line, 398 U.S. at 296, 90 S.Ct. 1739. Indeed, ‘the highly intrusive
7 remedy of a federal-court injunction against the enforcement of [a] state court
8 judgment’ is not justified even where a state court mistakenly rejects the res
9 judicata effect of a prior federal judgment. Parsons, 474 U.S. at 525, 106 S.Ct.
10 768. . . .” Id. at 850.
11
12 In his concurring opinion, Judge Silverman agreed that the district court had
13 abused its discretion because the interests of comity outweighed potential
14 relitigation: “When Lester sued L-P in Minnesota state court, L-P immediately
15 could have moved for an injunction in the district court. Instead, it asserted res
16 judicata in the state court. . . . [¶] Then things went sour for L-P. The jury
17 awarded $13.2 million. . . . L-P [then] ran to district court and sought to enjoin the
18 state court proceeding. At that point, however, it was too late. In my view, once
19 L-P raised its res judicata defense in state court and that court ruled on it, the
20 interests of comity outweighed the district court’s perceived need to prevent
21 possible relitigation of its judgment.” Sandpiper at 853-54. Judge Silverman
22 continued: “Ramsden v. AgriBank, 214 F.3d 865 (7th Cir.2000), dealt with a
23 similar issue: the propriety of enjoining state court proceedings where the state
24 court rules that a prior federal judgment does not bar the claim at issue, but state
25 law would not give preclusive effect to that ruling. . . . Agribank . . . obtained an
26 injunction that barred the state court from further considering any issues between
27 the parties. . . . [¶] The Seventh Circuit vacated the injunction. . . . [I]n light of
28 the comity concerns in Parsons, the Seventh Circuit held that:
22
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1 ‘Once a state court considers a res judicata defense and rules that
2 a prior federal judgment does not actually bar a claim, the affront of
3 federal court intervention stripping the state court of power to continue
4 is greatly magnified. After such a ruling, the interests in preventing
5 possible relitigation are therefore generally outweighed by the
6 heightened comity concerns except in the most extraordinary
7 circumstances.’ Id. at 870-871” Sandpiper at 854-55.
8
9 Two months later, the Ninth Circuit decided Brother Records, 432 F.3d 939.
10 As discussed above, in that case, the California Court of Appeal – rather than the
11 trial court – held that the federal court’s order did not have preclusive effect and
12 remanded the matter back to the trial court for further proceedings. The defendant
13 then filed suit in federal court and moved for an injunction. The district court
14 denied the motion. On appeal, the Ninth Circuit affirmed:
15
16 “Even if the decision [of the California Court of Appeal] is not final and
17 preclusive, we conclude that the district court did not abuse its
18 discretion in giving it effect. Absent a preclusive final judgment, the
19 district court could still determine ‘the propriety of a federal-court
20 injunction under the general principles of equity, comity, and federalism
21 . . . .’ Parsons, 474 U.S. at 526, 106 S.Ct. 768. The Court of Appeal’s
22 decision on res judicata was sufficiently definitive that all three of these
23 principles are satisfied by according great weight to that state court’s
24 ruling. . . . We agree with the Seventh Circuit’s observation that once
25 the state court has considered and decided the state court issue, ‘the
26 affront of federal court intervention stripping the state court of power to
27 continue is greatly magnified.’ Ramsden v. AgriBank, FCB, 214 F.3d
28 865, 870 (7th Cir.2000). By adhering to the state court’s decision, the
23
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1 district court furthered the purpose of Parsons and the Anti-Injunction


2 Act., which is to ‘prevent friction between federal and state courts by
3 barring federal intervention in all but the narrowest of circumstances.’
4 Sandpiper . . . 428 F.3d [at] 842. . . .” Brother Records, 432 F.3d at 944.
5
6 The affront of federal court intervention stripping the state court of power in
7 the case at bar is similarly magnified. Not only did the trial court find CSI’s res
8 judicata defense to be inapplicable, so did the Court of Appeal in a reasoned
9 opinion. CSI then sought a rehearing by the Court of Appeal on that basis and
10 when that was denied, filed a petition for review with the California Supreme
11 Court that was also denied. It then ignored the holding in Sandpiper that its
12 remedy was to petition the United States Supreme Court for review because the
13 district court’s discretion is necessarily restricted to “prevent the relitigation
14 exception from simply being turned into a vehicle for seeking appellate review of
15 a state court decision in federal court.” Ramsden, 214 F.3d 865, 872.
16
17 Similarly, in Merle, 936 F.2d 466, the Ninth Circuit affirmed the district
18 court’s dismissal of appellant’s suit to enjoin the respondent’s state court
19 proceeding. The court held: “In considering whether to exercise their power to
20 enjoin state court proceedings under the relitigation exception of the Anti-
21 Injunctive Act, district courts must be guided by ‘general principles of equity,
22 comity, and federalism.’ Parsons . . . 474 U.S. 518, 526, 106 S.Ct. 768, 773, 88
23 L.Ed.2d 877. . . . In applying these principles, the district court acted entirely
24 within its discretion when it determined that because nothing prevented Merle
25 Norman from raising its defenses of res judicata and collateral estoppel in the
26 California courts, it would not issue an injunction.” Merle, at 468; see also Kag
27 West, LLC, 2016 WL 3951651 denying motion to enjoin; Connecticut General
28 ///
24
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1 Life Ins. Co. v. Ramsey, No. S-07-0819, 2007 WL 2225797 (N.D.Cal.July 22,
2 2016) granting motion to dismiss.
3
4 Equity principles also weigh in favor of denying CSI’s motion for summary
5 judgment and dismissing the action. First, CSI successfully moved to bifurcate the
6 statute of limitations/equitable estoppel issue at trial. Compl. ¶24. Then, on
7 January 31, 2017, CSI stipulated that the matter be tried in the state court on
8 October 2, 2017. Ex. LL; Blumberg Dec. ¶17. Thereafter, CSI represented to the
9 superior court that it was ready for trial, executed a joint exhibit list, executed a
10 joint witness list and filed six motions in limine. Blumberg Dec. ¶s 18-19. Thus,
11 CSI is either estopped from prosecuting this action seeking to enjoin the state
12 court action, or it has waived any right that it might have had to seek an
13 injunction.
14
15 Second, delay in seeking the injunction while litigating in the state court can
16 be a ground for a district court refraining from enjoining a state court action. In
17 Bailey v. State Farm Fire and Cas. Co., 414 F.3d 1187 (10th Cir.2005), the Tenth
18 Circuit affirmed the district court’s denial of defendants’ request to enjoin a state
19 court action based on delay: “[T]he district court acted out of respect for the work
20 already performed by the state court. . . . [¶] Defendants occupied a significant
21 amount of the state court’s time in litigation before seeking relief from the federal
22 system. Defendants continued litigating in the state court for more than a year
23 before returning to the federal system to request an injunction. This amount of
24 time is not insignificant. See Ramsden, 214 F.3d at 868 (‘Because the relitigation
25 exception bears on the delicate relationship between state and federal courts, strict
26 timing requirements cabin its invocation.’).” Bailey at 1190-1191.
27 ///
28 ///
25
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1 Similarly in the case at bar, if CSI wanted to seek an injunction, it should


2 have returned to this Court much earlier than it did. After the California Supreme
3 Court denied review of the Court of Appeal’s decision, CSI initiated and engaged
4 in significant litigation for the next six years. Blumberg Dec. ¶s 2-5, 15-17. And,
5 CSI returned to this court eleven months after it stipulated that the trial should
6 commence on October 2, 2017, and three months after the date that the trial was
7 set to commence. Blumberg Dec. ¶17.
8
9 CSI cites a few cases for the proposition that its delay is of no consequence
10 because the federal court is empowered to enjoin state court at any point in time
11 until its final conclusion. Moving Memo. at p. 23, line 18 to p. 24, line 21. That
12 is not so. As the Supreme Court has explained, the power to enjoin at any point in
13 time is limited “to those situations in which the state court has not yet ruled on the
14 merits of the res judicata issue.” Parsons, 474 U.S. at 524, 106 S.Ct. 768.
15
16 In the case at bar, CSI raised its preclusion defense in the state court and
17 lost there. After the Court of Appeal held the defense was unavailing, CSI
18 petitioned for rehearing and when the petition was denied, it petitioned the
19 California Supreme Court for review. When its petition for review was denied in
20 2011, CSI was required to seek review by the Supreme Court of the United States.
21 See CFE Group, LLC v. Firstmerit Bank, N.A., 809 F.3d 346, 352-53 (7th
22 Cir.2015) citing Ramsden, 214 F.3d at 872, quoting Parsons, 474 U.S. at 525, 106
23 S.Ct. 768: “Challenges to the correctness of a state court’s determination as to the
24 conclusive effect of a federal judgment must be pursued by way of appeal through
25 the state-court system and certiorari from this Court.” Even if CSI did not have to
26 petition for certiorari, it should then have filed its complaint in this Court seeking
27 an injunction. Instead, CSI continued litigating in the state court, including after
28 September 14, 2016, when the California Supreme Court denied its petition for
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MEMORANDUM IN OPPOSITION TO SUMMARY JUDGMENT MOTION
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1 review of the superior court’s denial of its second motion for summary judgment.
2 For example, after that date, CSI deposed seven more witnesses, served four sets
3 of interrogatories and brought three discovery motions. See Blumberg Dec. ¶s 3-
4 5. CSI’s delay dwarfs that of the defendants in Bailey, 414 F.3d 1187.
5
6 Even the state court’s mistaken rejection of the claim of res judicata
7 “does not justify the highly intrusive remedy of a federal-court injunction against
8 the enforcement of the state-court judgment.” Parsons, at 525, 106 S.Ct. 768.
9 Nevertheless, as discussed in DeCrescenzo’s pending 12(b)(6) motion to dismiss,
10 the California courts did not err in their determination that the doctrine of res
11 judicata does not bar DeCrescenzo’s state court claims. In its appellate briefs, CSI
12 relied on and cited cases for the proposition that federal law determines the
13 preclusive effect of a prior federal court judgment and that a dismissal based on
14 the statute of limitations is a judgment on the merits. See Ex. S; Ex. T and Ex. V.
15 But CSI ignored two applicable exceptions: “A dismissal on statute of limitations
16 grounds generally does not bar a subsequent action in a different forum when the
17 limitations period in the second forum is longer than the first, and has not yet
18 expired. . . . [¶] Additionally, . . . res judicata should not apply to a previous
19 dismissal that was based on the statute of limitations if the effect of the bar would
20 be unfair. . . .” Zhang v. Dept. of Labor & Immigration, 331 F.3d 1117, 1118-19
21 (9th Cir.2003). The California Court of Appeal impliedly found either or both of
22 these exceptions apply because it limited the federal court’s ruling to the federal
23 claim and held that the state claims were not barred by the applicable California
24 statutes of limitations if DeCrescenzo proved the facts she alleged in her second
25 amended complaint.
26
27 CSI contends that “this case is a prototypical one for the court to exercise its
28 [injunctive] powers” and “[n]o basis exists for this court to abstain from issuing
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1 an injunction on the basis of comity.” Moving Memo. at p. 10, lines 3-4 and 15-
2 16. The case is not prototypical; it is unique because the state appellate court has
3 ruled that the federal judgment does not preclude prosecution of the state claims.
4 Other than in the case at bar, this situation has arisen only one other time, in
5 Brother Records, 432 F.3d 939, coincidentally in the Ninth Circuit. Therefore, it
6 bears repeating the Ninth Circuit’s reasoning in that case:
7
8 Even if the decision [of the California Court of Appeal] is not final and
9 preclusive, we conclude that the district court did not abuse its
10 discretion in giving it effect. Absent a preclusive final judgment, the
11 district court could still determine ‘the propriety of a federal-court
12 injunction under the general principles of equity, comity, and federalism
13 . . . .’ Parsons, 474 U.S. at 526, 106 S.Ct. 768. The Court of Appeal’s
14 decision on res judicata was sufficiently definitive that all three of these
15 principles are satisfied by according great weight to that state court’s
16 ruling. . . . We agree with the Seventh Circuit’s observation that once
17 the state court has considered and decided the state court issue, ‘the
18 affront of federal court intervention stripping the state court of power to
19 continue is greatly magnified.’ Ramsden v. AgriBank, FCB, 214 F.3d
20 865, 870 (7th Cir.2000). By adhering to the state court’s decision, the
21 district court furthered the purpose of Parsons and the Anti-Injunction
22 Act., which is to ‘prevent friction between federal and state courts by
23 barring federal intervention in all but the narrowest of circumstances.’
24 Sandpiper . . . 428 F.3d [at] 842. . . .” Brother Records, 432 F.3d at 944.
25
26 ///
27 ///
28 ///
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MEMORANDUM IN OPPOSITION TO SUMMARY JUDGMENT MOTION
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1 For the reasons discussed, the Court should refrain from enjoining
2 DeCrescenzo’s state court action, deny CSI’s motion for summary judgment and
3 grant DeCrescenzo’s 12(b)(6) motion to dismiss.
4
5 Dated: March 8, 2018 s/ John P. Blumberg
6 JOHN P. BLUMBERG
7 s/ Ave Buchwald
8 AVE BUCHWALD
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MEMORANDUM IN OPPOSITION TO SUMMARY JUDGMENT MOTION
Case 2:17-cv-09158-GW-SK Document 22 Filed 03/08/18 Page 30 of 30 Page ID #:1641

1 CERTIFICATE OF SERVICE
2
3 I, the undersigned, declare that I am over the age of 18 and am not a [arty to
this action. I am in the City of Long Beach, California; my business address is
4 Blumberg Law Corporation at 444 West Ocean Boulevard, Suite 1500, Long
Beach, California 90802.
5
6 On the date below, I served a copy of the foregoing document entitled:
7 MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO
MOTION FOR SUMMARY JUDGMENT
8
on the interested parties in said case as follows:
9
Served Electronically
10 Via the Court’s CM/ECF System
11
Counsel for the Plaintiff :
12
13 Eric M. Lieberman, Esq.
Rabinowitz, Boudin, Standard, Krinsky & Lieberman, LLP
14 61 Broadway, Suite 1800
New York, NY 10006
15 Telephone: (212) 254-1111
Facsimile: (212) 674-4614
16
Email: elieberman@rbskl.com
17
Bert H. Dexler, Esq.
18 Kendall Brill & Kelly, LLP
10100 Santa Monica Blvd., Suite 1725
19 Los Angeles, California 90067
Telephone: (310) 556-2700
20 Facsimile: (310) 556-2705
21 Email: bdeixler@kbkfirm.com
22
I declare under penalty of perjury under the laws of the United States of
23 America that the foregoing is true and correct. I declare that I am employed in the
office of a member of the Bar of this Court, at whose direction the service was
24 made. This declaration is executed in Long Beach, California on March 8, 2018.
25 Kelly Lasorsa /s/ Kelly Lasorsa
26 (Type or Print Name) (Signature of Declarant)
27
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MEMORANDUM IN OPPOSITION TO SUMMARY JUDGMENT MOTION