Unreported / Non-Citable
Background
This consolidated shareholder derivative action is brought on behalf of nominal defendant Dexcom, Inc. against certain of its current and former directors and officers. On December 16, 2024, the Court stayed the case pending resolution of any motions to dismiss in the related securities class action, In re Dexcom, Inc. Class Action Securities Litigation, Lead Case No. 24-cv-01485-RSH-VET. It found that a stay would serve the parties' interests, avoid potentially divergent litigation strategies, and promote judicial efficiency given the overlap between the cases, and it later extended the stay more than once.
Judgment was entered in the class action on August 27, 2026, and the lead plaintiff there filed a notice of appeal on September 25, 2026, docketed in the Ninth Circuit as No. 26-6400. On October 5, 2026, the parties jointly moved to continue the stay of the derivative case until that appeal is resolved. The Court treated the request as a Landis stay, a discretionary stay of one case pending a related proceeding in another court, and decided the motion without oral argument under Local Civil Rule 7.1(d)(1).
This is an unpublished district court order on a docket-management request. It does not address the merits of the derivative claims, and the descriptions of Dexcom's alleged misconduct below are allegations, not findings.
The Court’s Holding
The Court granted the motion. It stated that a stay is not a matter of right, that its propriety depends on the circumstances of the case, and that the party requesting it bears the burden of showing the circumstances justify it. It weighed the three non-exclusive Ninth Circuit factors: possible damage from a stay, hardship or inequity from being required to go forward, and the orderly course of justice measured by the simplifying or complicating of issues, proof, and questions of law. On the first, it noted that the parties again jointly requested the stay and identified no harm from continuing it. On hardship, it concluded that the earlier recognized risk that Dexcom would face the practical difficulty of pursuing potentially divergent litigation strategies was not eliminated by the appeal.
On the orderly course of justice, the Court found the derivative claims substantially predicated on the same alleged corporate misconduct and public statements as the class action. As the order describes the pleadings, both actions allege that Dexcom and its officers made false and misleading statements about Dexcom's 2024 growth prospects and that its stock price declined 40.66% in a single day after second-quarter results were announced. Because of that overlap, the Court reasoned that the Ninth Circuit's resolution of the appeal is likely to inform, if not substantially narrow, the issues here, and that proceeding in the interim would risk spending party and court resources on issues later revisited in light of an appellate decision.
The relief is a stay, not a dismissal or a ruling on any claim. The case is stayed pending a decision by the Ninth Circuit in the class action appeal, and the stay does not extend to subsequent proceedings on a petition for a writ of certiorari. Within fourteen days of the appeal's resolution, the parties must file a joint status report. Whether the derivative claims will proceed, narrow, or end after the appeal remains open.
Key Takeaways
- The Court granted a discretionary Landis stay of a derivative action pending appeal in a related securities class action, relying on its inherent authority to manage its docket.
- The party seeking a stay bears the burden, but here the parties jointly asked for it and identified no harm from continuing it.
- Overlap in the alleged misstatements and the alleged 40.66% one-day stock drop drove the finding that the Ninth Circuit's decision may inform or narrow the derivative claims.
- The stay ends with the Ninth Circuit's decision and does not cover any later certiorari proceedings, and a joint status report is due within fourteen days of that decision.
- As an unpublished order that grants a stay, it resolves no claims and carries little precedential weight.
Why It Matters
The order shows how a court may keep a derivative case stayed through the appellate stage of a related securities case when the derivative claims rest on the same alleged statements and stock decline. It draws on Ninth Circuit authority such as Leyva and Ernest Bock and on district court decisions holding that proceeding without an appellate decision risks wasting judicial resources.
Its weight is limited. It is an unpublished, fact-specific docket-management ruling, it rests on the parties' joint request, and it expressly excludes certiorari proceedings from the stay. Practitioners in similar parallel cases should expect a court to examine the degree of overlap and any identified prejudice, and should note that the order does not resolve the merits of the derivative claims.