JOHN W. SEDWICK, District Judge.
At docket 22 defendants Mark 0'Brien, James Cantor, and Richard Welsh (collectively "Defendants") move to stay further proceedings in this case pending resolution of certain litigation in the courts of the State of Alaska. Plaintiffs David E. Olson and Absolute Environmental Services, Inc. (collectively "Plaintiffs") oppose the motion at docket 30. Defendants' reply is at docket 36. Oral argument has not been requested, and it would not assist the court.
From the parties' papers the court discerns that the following facts are not in dispute. David Olson is the owner of Absolute Environmental Services, an Alaska corporation ("Absolute"). North Pacific Erectors, Inc. ("NPE") contracted with the State of Alaska to perform work on the State Office Building ("SOB") in Juneau. Among other things, NPE's contract with the State required removal of asbestos from the SOB. NPE subcontracted with Absolute to accomplish the asbestos removal. Absolute encountered what it believed to be conditions different from the conditions assumed in bidding the work. In Absolute's view, the conditions encountered rendered removing the asbestos more costly.
Absolute called upon NPE to present a claim for additional compensation for the asbestos work under a state review procedure calling for a decision by the Commissioner of the Alaska Department of Transportation and Public Facilities (DOTPF). A hearing was held before a hearing officer who eventually recommended a decision in favor of NPE. After his initial review, the Commissioner remanded the matter to the hearing officer for further consideration. The hearing officer responded with a modified recommendation in favor of NPE. Chief Assistant Attorney General Cantor then assigned Assistant Attorney General Welsh to review the second recommendation. Welsh did so with the aide of DOTPF Contract Manager O'Brien. At some point responsibility for rendering a final decision was delegated by DOTPF Commissioner von Scheben to DOTPF Deputy Commissioner Richards. After consultation with Welsh, Richards ultimately rejected the recommendation from the hearing officer and adopted Welsh's alternative recommendation denying relief to NPE.
NPE appealed to the Superior Court contending, among other things, that Welsh and O'Brien had wrongfully participated in the decision-making process such that NPE was denied due process of law. After conducting a hearing into the actions of Cantor, Welsh, and O'Brien, the Superior Court rejected the denial of due process claim and affirmed Richards' decision. NPE appealed to the Alaska Supreme Court in February of 2012. Rather than await resolution in the state court system, Absolute filed this lawsuit which advances a claim pursuant to 42 U.S.C. § 1983 that Defendants denied Plaintiffs due process of law in the handling of the claim for additional compensation, a claim pursuant to 42 U.S.C. § 1981 that Defendants denied Absolute's contract rights, a claim of conspiracy to deny constitutional rights pursuant to 42 U.S.C. § 1985, a claim pursuant to 42 U.S.C. § 1986 for failing to prevent the violation of constitutional rights, a civil RICO claim brought pursuant to 18 U.S.C. § 1964 based on the allegation that Defendants' actions violated 18 U.S.C. § 1962, and state law tort claims based on the actions of Defendants. The exclusive focus for liability purposes in Plaintiffs' complaint is on the actions of Cantor, Welsh, and O'Brien. Although Plaintiffs' prayer for relief in the case at bar is multifaceted, it is clear that Plaintiffs' primary goal is the recovery of compensatory and punitive damages.
In the motion at docket 22, Defendants ask the court to stay this lawsuit, pending resolution of NPE's appeal. In Landis v. North American Co.,
In Leyva v. Certified Grocers of California, Ltd.,
The Leyva court cautioned that a stay should only be granted where, "it appears likely the other proceedings will be concluded within a reasonable time in relation to the urgency of the claims presented to the court."
In the context of staying civil proceedings to await the outcome of related criminal cases, the Ninth Circuit has identified five factors which should be considered in addition to the extent to which a litigant's Fifth Amendment rights are implicated:
With some modification, the five-factor "Keating test" provides guidance in the context of competing civil proceedings.
Where, as here, there has actually been a decision that but for the fact that it is on appeal might have collateral estoppel implications, it is useful to keep in mind principles relating to the doctrine of issue preclusion. For issue preclusion to apply, four elements must be met: (1) the party against whom preclusion would apply must have been a party to or in privity with a party to the earlier litigation; (2) the issue to be precluded must be identical to one decided in prior litigation; (3) the issue must have been resolved in the earlier action by a final judgment on the merits; and (4) determination of the issue must have been essential to the final judgment.
With the preceding in mind, the court now evaluates the motion for a stay. To begin with it is clear that what is principally at stake in this litigation is money. If Plaintiffs prevail, they will recover money which might compensate them for the myriad losses attributed to defendants' conduct in plaintiff Olson's declaration.
Given the number and nature of claims included in the complaint-particularly the conspiracy and RICO claims, the burden on both sides in terms of litigation costs if this case proceeds will be sizable. Litigating such complex claims would place an unusually heavy burden on defendants, so this consideration provides support for granting a stay.
If a stay is granted and the Superior Court is affirmed on appeal, the case at bar would be largely-probably entirely-foreclosed by issue preclusion, because the criteria for use of issue preclusion set out above would be met.
In this case, other persons who might be affected by the granting or denial of a stay appear to be other persons participating in the public contracting process in the State of Alaska. The interests of those persons and the Alaska public as a whole favor a stay. The reason is that a stay will eliminate the risk of inconsistent outcomes which would arise if this court's judgment turned out to be at odds with the final decision of the NPE case by the Alaska Supreme Court on any point not clearly controlled entirely by state law.
Next, it is the court's belief that a decision from the Alaska Supreme Court will be forthcoming no later than early —. That time frame is reasonable in relation to the urgency of Plaintiffs' claims. Finally, the concern that Plaintiffs are being asked to step aside while another party's efforts resolve the dispute has no significant impact here. NPE has ample incentive to prosecute Absolute's claim arising from the contractor-subcontractor relationship.
For the reasons set forth above, the motion to stay at docket 22 is