Application to Stay Proceedings and Approval of Class Notification Proposal (Judge Peter Kirwan)

Case Name: ?? Plata v. City of San Jose?

Case No.: ?????? 2014-1-CV-258879

This is a class action.? Plaintiffs Raymond and Michelle Plata (collectively, ?Plaintiffs?) allege that defendant City of San Jose (?Defendant? or ?San Jose?) owns and operates the San Jose Municipal Water System (?Muni Water?).? (Amended and Supplemental Complaint for Refund, Declaratory Relief, and Injunctive Relief (?FAC?), ??1.)? Muni Water is the exclusive water utility for approximately 10 percent of the population of San Jose.? (FAC, ??7.)? Plaintiffs allege that, since 1997, Defendant has used and transferred Muni Water funds for purposes other than those for which the funds were collected, in violation of Proposition 218.? (FAC, ???10, 13.)? The FAC sets forth the following causes of action: [1] Violation of Article XIII D of the California Constitution; and [2] Declaratory Relief.

On February 1, 2016, the Court denied Defendant?s motion for summary adjudication, which asked the Court to dismiss Plaintiffs? causes of action for refund that pre-date November 2012 as time-barred under the Government Claims Act.? Defendant also requested that the Court grant the motion for summary adjudication based on the same time limitation as to Plaintiffs? claims regarding allegedly improper transfers from the Muni Water Fund.? On February 19, 2016, Defendant filed a petition for writ on mandate seeking review of the denial of the motion for summary adjudication.

Defendant has requested that Plaintiffs stipulate to a stay of the proceedings while the petition for writ is pending.? Plaintiffs have not agreed to stipulate.

There are now two motions before the Court: (1) Ex Parte Application for Stay of Proceedings by Defendant City of San Jose; and (2) Plaintiffs? Motion for Approval of Class Notification Proposal.

With regard to the first motion, Defendant argues that a stay is appropriate because the Court of Appeal?s ruling on the petition for writ could have a significant impact on the notice to class members and the scope of the class itself.? If the Court of Appeal reverses this Court?s ruling on the motion for summary judgment, then the time period encompassed by the class could be reduced to a large extent.

Although Plaintiffs contend in their reply papers filed in connection with the motion for approval of class notification proposal that there should not be a stay, Plaintiffs have not filed any opposition papers to the application for stay of proceedings, a separate motion before the Court.

While the Court does not believe its ruling will be reversed, the potential exists given the filing of the petition for writ.? A change in the time period covered by the class will likely have a great impact on the number of class members and the costs of notice.? Therefore, it makes sense to wait until the class definition and size are final and not subject to a large potential reduction.

Moreover, the petition for writ of mandate was filed on February 19, close to three months ago.? Generally, rulings on petitions for writ are issued much faster than rulings on full appeals.? Therefore, it is anticipated that a ruling on the petition will be forthcoming soon and any stay in this action will be short.? On balance, the harm of a short stay is much less than the harm and expense of sending two notices if the Court?s summary adjudication order is reversed or modified.

Accordingly, the Court exercises its discretion to grant a stay in this action pending a ruling on Defendant?s petition for writ.? The application for stay of proceedings is GRANTED.? The parties are ordered to appear on September 9, 2016 at 10:00 a.m. in Department 1 for a case management conference to update the Court on the status of the petition.

In light of the above ruling, Plaintiffs? Motion for Approval of Class Notification Proposal is stayed and no ruling will be issued on that motion at this time.