ROACH, et al. vs CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM (CALSTRS), et al.

23CV004850: ROACH, et al. vs CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM (CALSTRS), et al. 06/27/2025 Hearing on Motion for Stay of Proceedings (renewed motion) in Department 23

Tentative Ruling

*Due to the Court's unavailability on June 27, 2025, if oral argument is requested, argument will be heard on July 11, 2025, at 9:00 a.m. in this department.

NO APPEARANCE REQUIRED

Defendant California State Teachers’ Retirement System’s (“Defendant”) renewed motion for stay is GRANTED as follows.

Overview

This is a consolidated putative class action brought against CalSTRS by Plaintiffs who are pensioners and beneficiaries of CalSTRs. This case involves a data breach. On or around May 23, 2023, unauthorized third-parties were able to access certain files that CalSTRS shared with PBI Research Services/Berwyn Group (“PBI”). (Consolidated Complaint (“Complaint”) ¶ 3.) Plaintiffs and the putative class members’ private information was stored or transferred by CalSTRs using MOVEit software. (Id. at ¶ 6.)

MOVEit software contained a vulnerability in its code which led to numerous exposures of private data following a series of cyber-attacks against companies and government entities who used MOVEit to secure highly sensitive data. (Id. at ¶ 8.) Plaintiffs allege that CalSTRS negligently used MOVEit without industry-standard safeguards to transfer the highly sensitive data of CalSTRS members. (Ibid.) Plaintiffs further allege: “this case is not about MOVEit; this case is about CalSTRS.” (Id. at ¶ 9.)

Plaintiffs plead that CalSTRS had non-delegable duties to safeguard private information entrusted to it by Plaintiffs and the putative class members, including “a duty to transfer any Private Information to vendors according to cybersecurity industry standards and protocols and a duty to supervise and audit its vendors and the means by which those vendors store and transfer the Private Information.” (Ibid.) Plaintiffs allege CalSTRS breached these duties. (Id. at ¶ 19.) Plaintiffs assert the following causes of action in their consolidated complaint: (1) negligence; (2) negligence per se; (3) breach of implied contract; (4) breach of contract; (5) invasion of privacy; (6) violation of California’s Unfair Competition Law; (7) breach of confidence; (8) breach of implied or express covenant of good faith and fair dealing; (9) violation of California Consumer Privacy Act; (10) violation of the Customer Records Act; and (11) declaratory and injunctive relief.

On November 15, 2024, this Court granted a stay of this action until June 1, 2025. The Court found this case has a “significant factual overlap” with the MDL cases proceeding in the United States District Court for the District of Massachusetts. (Minute Order filed November 15, 2024.) In the MDL, Rule 12 motions were set to be briefed by March 28, 2025, and then oral argument would be determined during a March status conference. (Ibid.) The Court concluded that the MDL proceedings constitute bellwether proceedings. (Ibid.) Accordingly, the purpose of the stay

23CV004850: ROACH, et al. vs CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM (CALSTRS), et al. 06/27/2025 Hearing on Motion for Stay of Proceedings (renewed motion) in Department 23

was to allow resolution of the Rule 12 motions and for some discovery to take place in the MDL proceedings. (Ibid.) In this motion, Defendant asks for a renewed three-month stay.

Discussion

The Court has the inherent authority to control the litigation before it to avoid conflicting rulings and unnecessary waste of parties’ and judicial resources. (Code Civ. Proc. § 128(a)(2), (8).) This authority includes the power “to stay an action when appropriate.” (Jordache Enters., Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 758.) Courts consider the following factors when deciding whether to grant a stay: (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 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.” (CMAX, Inc. v.

Hall (9th Cir. 1962) 300 F.2d 265, 268.) Courts have stayed actions in favor of a bellwether case because it can “winnow and sharpen not only discovery, but claims, defenses, calendaring decisions, motion practice, arguments, hearings or trial, adjudication, indeed every aspect of the litigation process – to the benefit of the parties, the court, and the public alike.” (See St. Paul Fire and Marine Ins. Co. v. AmerisourceBergen Co. (2022) 80 Cal.App.5th 1, 17.) A stay in favor of a bellwether case provides a benefit because that case can “educate the parties (whether or not the same) and the trial court about the issues and how to streamline the litigation here.” (Ibid.)

Defendant argues a three-month stay is necessary because the MDL court has not yet ruled on Rule 12(b)(6) motions to dismiss for failure to state a claim that has been brought by several similarly situated defendants to Defendant on grounds equally applicable to it. (Brown Decl. Exs. H & K.) While the federal court heard oral arguments for the 12(b)(6) motions on May 12, 2025, the court had not issued a ruling on the motions by the time this renewed motion was filed. Moreover, discovery is still in a very early stage and no framework has been established in the MDL to address whether and how documents produced are able to be used in state court actions.

In the PBI bellwether, substantive and custodial discovery has yet to occur. (Id. at Ex. L.) Consequently, Defendant argues the issues supporting the initial stay are still present. Defendant contends the three-month stay would not prejudice Plaintiffs because it is a modest extension.

Plaintiffs argue that a three-month stay is excessive. Plaintiffs argue that since the 12(b)(6) motions were argued, a decision should issue imminently. Plaintiffs contend that substantial discovery has occurred. Plaintiffs propose a more nuanced approach for the Court’s consideration: (1) that the stay, which expired on June 1, 2025, remain lifted; (2) that discovery begins, during which Defendant may seek discovery from PBI or Progress, should they choose to do so, and if coordination is required with PBI’s counsel on an appropriate timeline in the MDL, that it occur; that Plaintiffs be permitted to file an amended complaint within 30 days of the issuance of the MDL court’s order on the PBI bellwether defendants’ 12(b)(6) motion,

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV004850: ROACH, et al. vs CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM (CALSTRS), et al. 06/27/2025 Hearing on Motion for Stay of Proceedings (renewed motion) in Department 23

considering the substantial information that has emerged about these issues, including in the MDL, during the stay; and (4) that Defendant be permitted to file a demurer within 30 days of Plaintiffs filing their amended complaint. Plaintiffs contend this would allow this action to proceed with guidance from the MDL proceedings. Plaintiffs argue a further stay would prejudice them because they have already been waiting 24 months to begin litigating this action.

Defendant rejects Plaintiffs’ alternative proposal. Defendants argue the proposal is “vague, illogical, unworkable, and flies in the face of relevant authority and the Court’s prior ruling.” (Reply 1: 11-12.) Defendant notes Plaintiffs cite no support for their contention that substantial discovery has occurred in the MDL proceeding. Nor can Plaintiffs predict when the federal court will issue rulings on the 12(b)(6) motions. Defendant contends its proposal for a three-month stay is more concrete and allows for the Parties to check in with the Court again in three months to assess the status of the related MDL.

The Court agrees with Defendant that the circumstances – that the federal court has not ruled on the 12(b)(6) motions and that minimal discovery has occurred – warrant an additional threemonth stay. The three-month stay is more reasonable compared to Plaintiffs’ proposed alternative at this time in light of the status of the MDL bellwether proceedings. Finally, because it is brief, the three-month stay will not prejudice Plaintiffs. However, the Court is sympathetic to Plaintiffs desire to begin litigating this case. The Court encourages the Parties to stipulate to a scheduling plan similar to Plaintiffs’ alternative proposal if necessary after the three-month stay ends.

Disposition

For the reasons stated above, CalSTRS’ motion to stay is GRANTED. This Action is STAYED until September 25, 2025.

To request oral argument on this matter, you must call Department 23 at 916-874-5754 by 4:00 p.m. on Thursday, June 26, 2025 and notification of oral argument must be made to the opposing party/counsel. If no call is made, the tentative ruling becomes the order of the court. (Local Rule 1.06.)

Please check your tentative ruling prior to the next Court date at www.saccourt.ca.gov prior to the above referenced hearing date.

If oral argument is requested, the parties may and are encouraged to appear by Zoom with the links below:

To join by Zoom Link - https://saccourt-ca-gov.zoomgov.com/my/sscdept23 To join by phone dial (833) 568-8864 ID 16108301121

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV004850: ROACH, et al. vs CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM (CALSTRS), et al. 06/27/2025 Hearing on Motion for Stay of Proceedings (renewed motion) in Department 23

Parties requesting services of a court reporter will need to arrange for private court reporter services at their own expense, pursuant to Government code section 68086 and California Rules of Court, Rule 2.956. Requirements for requesting a court reporter are listed in the Policy for Official Reporter Pro Tempore available on the Sacramento Superior Court website at https://www.saccourt.ca.gov/court-reporters/docs/crtrp-6a.pdf. Parties may contact Court- Approved Official Reporters Pro Tempore by utilizing the list of Court Approved Official Reporters Pro Tempore available at https://www.saccourt.ca.gov/court-reporters/docs/crtrp- 13.Pdf

A Stipulation and Appointment of Official Reporter Pro Tempore (CV/E-206) is required to be signed by each party, the private court reporter, and the Judge prior to the hearing, if not using a reporter from the Court’s Approved Official Reporter Pro Tempore list. Once the form is signed it must be filed with the clerk.

If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk will be forward the form to the Court Reporter’s Office and an official reporter will be provided.

Pursuant to California Rules of Court, rule 3.1312(a), no further written order is necessary. Counsel for CalSTRS is directed to notice all parties of this order.