ORDER Denying Defendant's Motion to Stay Pending Ruling on Rule 23(f) Petition (Dkt.… — Bofa Ca Unemployment (Dkt. 552)

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An order filed 08/15/25 as Document 552 in In re Bank of America California Unemployment Benefits Litigation, Case 3:21-md-02992-GPC-MSB, in the U.S. District Court for the Southern District of California. It denies Bank of America, N.A.'s motion to stay proceedings pending resolution of its Rule 23(f) petition for permission to appeal the order granting class certification. The background recounts that after a January 17, 2025 class certification hearing, the bank moved for a stay pending the Supreme Court's review of Lab’y Corp. of Am. Holdings v. Davis. On March 28, 2025, the court granted in part a stay pending that review, citing a circuit split on certifying classes that contain uninjured members.

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 Case 3:21-md-02992-GPC-MSB                Document 552   Filed 08/15/25    PageID.30361   Page
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 8                                UNITED STATES DISTRICT COURT
 9                               SOUTHERN DISTRICT OF CALIFORNIA
10
11   IN RE: BANK OF AMERICA                               Case No.: 21MD2992-GPC(MSB)
     CALIFORNIA UNEMPLOYMENT
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     BENEFITS LITIGATION,                                 ORDER DENYING DEFENDANT’S
13                                                        MOTION TO STAY PENDING
                                                          RULING ON RULE 23(F) PETITION
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15                                                        [Dkt. No. 513.]
16
17            Before the Court is Defendant’s motion to stay the proceedings pending resolution
18   of its Rule1 23(f) petition for permission to appeal the Court’s order granting Class
19   Plaintiffs’ motion for class certification. (Dkt. No. 513.) An opposition was filed by
20   Class Plaintiffs on July 31, 2025, and a reply was filed by Defendant on August 8, 2025.
21   (Dkt. Nos. 529, 541.) Based on the reasoning below, the Court DENIES Defendant’s
22   motion to stay proceedings pending resolution of the Rule 23(f) petition.
23                                               Background
24            This multidistrict litigation (“MDL”) arises from several class actions (“Class
25   Plaintiffs”) and a large number of individual actions (“Individual Plaintiffs”) brought
26   against Defendant Bank of America, N.A. (“BANA”) over its administration of the
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         Federal Rule of Civil Procedure

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 1   electronic benefits payment system for California’s Employment Development
 2   Department (“EDD”) during the COVID-19 pandemic. (See Dkt. No. 304, Second
 3   Amended Master Consolidated Complaint (“SAMCC”).) EDD, the administrator of
 4   unemployment benefits in California, entered into an exclusive contract with BANA, to
 5   distribute those benefits through Bank-issued and Bank-administered prepaid debit cards
 6   which are linked to individual Bank depository accounts. (Id. ¶¶ 1, 2, 39.)
 7         Class and Individual Plaintiffs, like other millions of Californians, lost their jobs
 8   during the COVID-19 pandemic and were found eligible by EDD for unemployment and
 9   other public benefits. (Id. ¶ 1.) The state’s unemployment rate skyrocketed from 3.9% in
10   January 2020 to 16.4% in April 2020 following Governor Gavin Newsom’s closure
11   orders. (Id. ¶ 74.) Since the start of the COVID-19 pandemic in March 2020, EDD
12   received at least 18.5 million claims for various unemployment benefits. (Id. ¶ 75.) For
13   example, in the first week of December 2020, EDD received 341,813 claims which was a
14   600% increase from December 2019. (Id.) Per the exclusive contract between EDD and
15   BANA, BANA issued benefit payments to individuals found eligible for unemployment
16   benefits through more than 9 million Bank-issued and Bank-administered prepaid debit
17   cards. (Id. ¶ 2.) These pre-paid debit cards were subject to rampant third-party fraud
18   during the COVID-19 pandemic and tens of millions of dollars have been stolen from
19   these bank accounts. (Id. ¶¶ 76-78.) All Plaintiffs similarly claim that BANA did not
20   safeguard and properly manage benefits during the pandemic and unlawfully froze or
21   denied access to unemployment funds in their debit card accounts.
22         After full briefing of Class Plaintiffs’ motion for class certification, (Dkt. Nos. 324,
23   349, 378), the Court held a hearing on January 17, 2025. (Dkt. No. 405.) Shortly
24   thereafter, on February 7, 2025, Defendant filed a motion to stay pending the United
25   States Supreme Court review of Lab’y Corp. of Am. Holdings v. Davis, No. 24-0304.
26   (Dkt. No. 415.) On March 28, 2025, the Court granted in part a stay of the case pending
27   the United States Supreme Court review. Recognizing there is a circuit split on the issues
28   of “1) whether Article III bars certification of a proposed Rule 23(b)(3) class that

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 1   contains uninjured members; and 2) whether Rule 23(b)(3) bars certification of a
 2   proposed class with an appreciable number of uninjured members”, (Dkt. No. 448 at 5-
 3   62), the Court granted a stay “because the Supreme Court will be addressing the identical
 4   issues raised in this case, [and] a decision will likely inform on the proper standard to
 5   apply.” (Id. at 6-7.)
 6            However, on June 5, 2025, the Supreme Court dismissed the case as
 7   “improvidently granted.” Lab’y Corp. of Am. Holdings v. Davis, 605 U.S. 327, 327
 8   (2025). As such, on the same day, the Court lifted the stay and confirmed that the case of
 9   Olean Wholesale Grocery Cooperative, Inc. v. Bumble Bee Foods LLC, 31 F. 4th 651
10   (2024) remains binding. (Dkt. No. 492 at 1-2.)
11            On June 24, 2025, the Court granted Class Plaintiffs’ motion for class certification,
12   appointed class representatives as well as co-lead class counsel.3 (Dkt. No. 499.) On
13   July 1, 2025, Defendant filed a petition for permission to appeal pursuant to Federal Rule
14   of Civil Procedure (“Rule”) 23(f) asking the Ninth Circuit to address “[w]hether this
15   Court should review a class-certification grant that puts hundreds of millions of dollar at
16   stake and allows criminals to share in a class recovery without proposing any mechanism
17   from removing these ineligible plaintiffs from the class.” (Dkt. No. 510; Dkt. No. 513-1
18   at 6.) Two days later, on July 3, 2025, Defendant filed a motion to stay pending
19   resolution of Rule 23(f) petition and the motion is fully briefed. (Dkt. Nos. 513, 529,
20   541.)
21                                                Discussion
22            Rule 23(f) permits a party to petition the court of appeals for permission to
23   immediately appeal a grant or denial of class certification and provides that “[a]n appeal
24   does not stay proceedings in the district court unless the district judge or the court of
25   appeals so orders.” Fed. R. Civ. P. 23(f). A federal district court possesses the inherent
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         Page numbers are based on the CM/ECF pagination.
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         The sealed order was filed by the Court on June 16, 2025. (Dkt. No. 494 (UNDER SEAL).)

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 1   power to “control the disposition of the causes on its docket with economy of time and
 2   effort for itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254
 3   (1936).
 4             Because the Ninth Circuit has not ruled on what stay standard applies to a stay
 5   pending a ruling of a Rule 23(f) petition, district courts have applied either the
 6   Nken4/Hilton5 standard or the Landis standard. See Romero v. Securus Techs., Inc., 383
 7   F. Supp. 3d 1069, 1072-73 (S.D. Cal. 2019) (“The Ninth Circuit has not articulated a
 8   specific standard for evaluating a proposed stay pending decision of a Rule 23(f)
 9   appeal.”). It is recognized that the majority of district courts in this circuit apply the
10   Nken/Hilton standard on a motion for a stay pending a decision of a Rule 23(f) petition.
11   Romero, 383 F. Supp. 3d at 1073; Evans v. Wal-Mart Stores, Inc., Case No. CV 17-
12   07641-AB (KK), 2019 WL 7169794, at * 2 (C.D. Cal. Oct. 23, 2019). The Nken/Hilton
13   standard considers “(1) whether the stay applicant has made a strong showing that he is
14   likely to succeed on the merits; (2) whether the applicant will be irreparably injured
15   absent a stay; (3) whether issuance of the stay will substantially injure the other parties
16   interested in the proceeding; and (4) where the public interest lies.” Nken v. Holder, 556
17   U.S 418, 434 (2009) (quoting Hilton v. Braunskill, 481 U.S. 770, 776 (1987)). It is also
18   acknowledged that a minority of courts apply the Landis stay standard. Romero, 383 F.
19   Supp. 3d at 1073 n.1. The Landis stay considers “[1] the possible damage which may
20   result from the granting of a stay, [2] the hardship or inequity which a party may suffer in
21   being required to go forward, and [3] the orderly course of justice measured in terms of
22   the simplifying or complicating of issues, proof, and questions of law which could be
23   expected to result from a stay.” Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9th Cir.
24   2005) (citing CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962)).
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         Nken v. Holder, 556 U.S. 418 (2009).
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         Hilton v. Braunskill, 481 U.S. 770 (1987).

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 1         Defendant applies both the Landis and the Nken standard in support of its motion
 2   for a stay. (Dkt. No. 513-1 at 11-17.) Class Plaintiffs argue that the Nken standard
 3   applies because the majority of the courts apply it. (Dkt. No. 529 at 11 & n. 1.)
 4   However, both agree that the result would be the same under both standards. (Dkt. No.
 5   513-1 at 13-14; Dkt. No. 529 at 11 n. 1.)
 6         After careful review of the caselaw, the Court agrees with the reasoning of the
 7   minority view that apply Landis to a stay pending a Rule 23(f) petition because
 8   Defendant seeks a stay of the court proceedings during an interlocutory appeal and not a
 9   stay of a court’s final order or judgment. The Nken and Hilton test applies “only when a
10   party seeks the stay of execution of a judgment or order that modifies the status quo
11   pending the resolution of the correctness of that order or judgment by the appellate
12   court.” Romero, 383 F. Supp. 3d at 1073 n.1 (citations omitted); Kuang v. U.S. Dep’t of
13   Defense, Case No. 18-cv-03698-JST, 2019 WL 1597495, at *3 (N.D. Cal. Apr. 15, 2019)
14   (Nken standard “is applicable when there is a request to stay a district court's judgment or
15   order pending an appeal of the same case”) (collecting cases). In Hilton, the Supreme
16   Court addressed a stay pending appeal of a district court order granting a writ of habeas
17   corpus and asserted that the stay factors it applied are ones “traditionally considered in
18   deciding whether to stay a judgment in a civil case.” Hilton, 481 U.S. at 777. In Nken,
19   the Supreme Court applied the traditional stay factors of Hilton to an alien’s removal
20   pending appeal. Nken, 556 U.S. at 436. In both Hilton and Nken, the moving party was
21   seeking to stay the judgments or orders of the court rather than a stay of the proceedings.
22   On the other hand, Landis involved “the power of a court to stay proceedings in one suit
23   until the decision of another,” 299 U.S. at 249, or “pending resolution of independent
24   proceedings which bear upon the case.” Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d
25   857, 863 (9th Cir. 1979). However, in Kuang, the district court noted that courts have
26   overwhelmingly concluded that the Landis test applies to a request “to stay proceedings,
27   regardless whether the stay is based on a direct appeal or an independent case.” Kuang,
28   2019 WL 1597495, at *3 (applying Landis to request for stay pending interlocutory

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 1   appeal of court’s preliminary injunction); Peck v. Cnty. of San Diego, 528 F. Supp. 3d
 2   1100, 1105 (C.D. Cal. 2021) (applying Landis to a stay pending interlocutory appeal).
 3         Further, the cases cited by Class Plaintiffs to support the Nken standard merely
 4   applied the standard and did not explain why it applied the standard in Nken rather than
 5   the Landis stay standard. (See Dkt. No. 529 at 11-12); see also Kuang, 2019 WL
 6   1597495, at *2 (“Critically, none of these decisions discussed the Landis test or offered a
 7   reasoned analysis as to why the Nken test applied.”); Andrade Rico v. Beard, No. 2:17-
 8   cv-1402 KJM DB P, 2019 WL 4127206, at *6 (E.D. Cal. Aug. 30, 2019) (noting courts
 9   applying Nken/Hilton do so without analysis).
10         A Rule 23(f) petition seeking permission to appeal an order on a class certification
11   order is an interlocutory appeal and not a final judgment. Microsoft Corp. v. Baker, 582
12   U.S. 23, (2017) (“Rule 23(f) authorizes ‘permissive interlocutory appeal’ from adverse
13   class-certification orders in the discretion of the court of appeal[s.]”). Therefore, because
14   Defendant seeks a stay of the proceedings and is seeking an interlocutory appeal, the
15   more appropriate standard to apply is Landis, and not Nken, which is reserved for a stay
16   of a judgment pending appeal. See Flores v. Bennett, 675 F. Supp. 3d 1052, 1057 (E.D.
17   Cal. 2023) (“Because the district courts that have addressed both tests have consistently
18   applied Nken only to stays of judgments and Landis to stays of proceedings, the Court
19   uses the Nken factors to evaluate Defendants’ request to stay enforcement of the
20   preliminary injunction and relies on the Landis test to evaluate the request to stay the
21   proceedings pending the interlocutory appeal.”).
22   A.    Landis Stay
23         A Landis stay requires an evaluation of the following factors:
24         [1] the possible damage which may result from the granting of a stay, [2] the
           hardship or inequity which a party may suffer in being required to go
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           forward, and [3] the orderly course of justice measured in terms of the
26         simplifying or complicating of issues, proof, and questions of law which
           could be expected to result from a stay.
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 1   Lockyer v. Mirant, 398 F.3d 1098, 1110 (9th Cir. 2005) (quoting CMAX, Inc. v. Hall, 300
 2   F.2d 265, 268 (9th Cir. 1962)). The party requesting a stay bears the burden of showing
 3   that the circumstances justify an exercise of that discretion. Clinton v. Jones, 520 U.S.
 4   681, 708 (1997). A district court has discretion whether to grant or deny a Landis stay.
 5   See Dependable Highway Express, Inc. v. Navigators Ins. Co., 498 F.3d 1059, 1066 (9th
 6   Cir. 2007).
 7         1.      Balance of Hardships
 8         The hardships raised by both parties mirror the arguments raised in the prior
 9   motion for a stay filed by Defendant. (See Dkt. Nos. 415, 427.) Defendant argues that
10   both parties will suffer hardship if a stay is not granted because they may be required to
11   engage in duplicative and unnecessary motion practice based on the Ninth Circuit’s
12   decision. (Dkt. No. 513-1 at 13.) Class Plaintiffs argue that a stay would prejudice both
13   them and the class members because as time passes, class members’ contact information
14   will become outdated and unlocatable and there is a likelihood that witness memories
15   may fade or become unavailable by the time of trial. (Dkt. No. 529 at 25, 28-9)
16         On this factor, “[i]f there is even a fair possibility that the stay . . . will work
17   damage to someone else,” the party seeking the stay “must make out a clear case of
18   hardship or inequity.” Landis, 299 U.S. at 255 (internal quotation marks omitted).
19   Courts “are generally unwilling to presume delay is harmful without specific supporting
20   evidence.” Aliphcom v. Fitbit, Inc., 154 F. Supp. 3d 933, 938 (N.D. Cal. Dec. 30, 2015).
21   A general claim of harm due to a delay in litigation is not sufficient. See id.
22         In the prior stay order, the Court concluded that the balance of hardships weighed
23   slightly in favor of Defendant because a decision by the Supreme Court resolving a
24   circuit split would impact the Rule 23(b)(3) analysis potentially causing unnecessary
25   motion practice and preparing for trial. (Dkt. No. 448 at 8-9.) However, on the Rule
26   23(f) petition, the Ninth Circuit will be looking at its own settled precedent. As such, any
27   generalized harm in the form of litigation costs does not constitute hardship in being
28   required to move forward in this more than four-year old case. See Lockyer v. Mirant

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 1   Corp., 398 F.3d 1098, 1112 (9th Cir. 2005) (“being required to defend suit, without more,
 2   does not constitute a ‘clear case of hardship or inequity’ within the meaning of Landis.”)
 3   On the other hand, in the prior order, the Court noted that a short three-month stay would
 4   not impose any hardships on Class Plaintiffs. (Dkt. No. 448 at 8.) But, at this time, the
 5   Court recognizes that the case is over four years old, the case was already stayed pending
 6   Supreme Court review of Davis, and the Individual Plaintiffs’ cases have all been stayed
 7   pending a ruling on the class certification motion. Notwithstanding any ruling on the
 8   Rule 23(f) petition, the case will still need to proceed on the merits as it relates to the
 9   Individual Plaintiffs. Further, a stay will only exacerbate the hardships on Class
10   Plaintiffs and Individual Plaintiffs in the form of witness memories’ fading, Bank
11   witnesses leaving Defendant’s employ, and likelihood that class members’ contact
12   information will become stale. Therefore, the Court concludes that the balance of
13   hardships tips in favor of Class Plaintiffs and against a stay.
14         2.      Judicial Economy and the Orderly Course of Justice
15         Next, the Court considers “the orderly course of justice measured in terms of the
16   simplifying or complicating of issues, proof, and questions of law which could be
17   expected to result from a stay.” Landis, 299 U.S. at 255.
18         Defendant argues that the orderly administration of justice supports a stay where a
19   stay would simplify the issues and avoid unnecessary time and resources on dispositive
20   and Daubert motions in the event the Ninth Circuit holds that class certification is not
21   appropriate. (Dkt. No. 513-1 at 13.) In support, Defendant relies on the Court’s order
22   granting a stay pending the Supreme Court’s review of the Davis case. But at that time,
23   the Supreme Court was considering a circuit split on the questions of “whether all
24   members of a proposed class must have Article III standing at class certification and/or
25   what standard to apply to assess predominance when there are an ‘appreciable’ number of
26   uninjured class members.” (Dkt. No. 448 at 7.) Ultimately, the Supreme Court did not
27   answer these questions and ruled that the petition for writ of certiorari was improvidently
28   granted. See Lab’y Corp., 605 U.S. at 327.

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 1         At this time, Defendant’s request for a stay involves an interlocutory appeal with
 2   the Ninth Circuit and will not be addressing a split of authority but the application of its
 3   own precedent. Relying on Olean and Van v. LLR, Inc., 61 F.4th 1053 (9th Cir. 2023),
 4   the Court concluded that Plaintiff had demonstrated that common issues will predominate
 5   under Rule 23(b)(3) and Defendant had failed to respond with evidence that individual
 6   issues will predominate. (See Dkt. No. 499.) Further, due to the age of the case, and
 7   Class Plaintiffs’ interest in having their day in court, the orderly course of justice and
 8   judicial economy does not support a stay at this stage.
 9         In conclusion, considering the Landis factors, the Court concludes that a stay is not
10   warranted and DENIES Defendant’s motion to stay the case pending its Rule 23(f)
11   petition.
12                                            Conclusion
13         Based on the reasoning above, the Court DENIES Defendant’s motion to stay the
14   proceedings pending its Rule 23(f) petition. The hearing set on September 16, 2025 shall
15   be vacated.
16         IT IS SO ORDERED.
17   Dated: August 15, 2025
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