Last month, Johnson & Johnson’s DePuy division issued a massive hip replacement recall of 93,000 hip implants.  The recalled hip implants have a failure rate of at least 13%, which means that more than 12,000 people will have to undergo a surgery to remove an replace the defective devices.

Who will pay for these surgeries, each which can cost $50,000 or more?  Government programs (Medicaid and Medicare)already have paid substantial costs to surgically remove the recalled hip replacement parts, and assuming $50,000 for each surgery, the total medical costs of the recall could exceed $600 million.  DePuy tells patients that these costs should be submitted to the patient’s insurance company for payment.  In some cases, this could be California’s overextended Medicaid system.

DePuy says that it will reimburse insurers for “out of pocket reasonable and customary expenses,” but it does not define what it considers “reasonable and customary.”  DePuy also has not disclosed the procedure for reimbursements or the criteria that will be used to deny reimbursements.  But DePuy’s recent arguments show that it might vigorously fight responsibility for reimbursements.  For example, DePuy recently accused patients who had to undergo a surgery to remove their recalled hip implant of being “negligent, careless, and at fault” and it argued that these patients’ “negligence, carelessness and fault” may bar them from recovering their damages from DePuy.

Last month, DePuy’s lawyer wrote a letter to me and demanded that I stop telling the public that “both the insurance carriers and the government could end up paying for product liability expenses that would otherwise accrue to the manufacturer.”

In a letter to DePuy, I called on Johnson & Johnson and DePuy to “unconditionally guarantee that they will pay directly to hospitals and doctors all costs associated with every surgery to remove and replace the recalled ASR and ASR XL hip implants.”  DePuy has not accepted this pledge, leaving open the possibility that MediCal, Medicare and private insurers could end up being stuck paying costs associated with DePuy’s recall.

Disclosure: I represent victims of the Johnson & Johnson hip recall.

As a team effort with my husband, Brian Leubitz, we will attempt to provide some initial legal analysis of the Opening Brief filed by the Proponents of Prop. 8.  I am writing about the issues of standing and jurisdiction.  Brian Leubitz will provide an analysis of the Proponents’ arguments about the merits of Judge Walker’s decision.

Standing

The Ninth Circuit specifically ordered the Proponents to show why they have standing to maintain this appeal.  (See a detailed discussion of standing here.  But in short, it means “What gives you the right to maintain this appeal?”)  Specifically, the Court ordered the Proponents to address the case of Arizonans for Official English, the Supreme Court case that held that ballot initiative proponents do not have standing to defend the constitutionality of the law passed by their initiative.

The Proponents begin their argument by ignoring Arizonans for Official English and instead focusing on Karcher v. May, a 1987 US Supreme Court case (484 U.S. 72).  In Karcher, a New Jersey statute expressly gave the Speaker of the Assembly the right to defend the constitutionality of a law when the state’s Attorney General refused.  California has no such law, and California certainly has no law authorizing the proponents of a proposition to defend the constitutionality of a law.  Nevertheless, Proponents argue that they have been appointed by the State of California to defend Prop 8 because the California Supreme Court, in Strauss v. Horton, allowed them to intervene in the state-court challenge to Prop 8.

This argument is laugh-out-loud ridiculous.  In Strauss v. Horton, standing for the appeal was already established because Karen Strauss and the other plaintiffs were directly injured by being denied the right to marry the person of their choosing.  The Proponents did not have to show that they had the authority to maintain an appeal for one very simple reason: they were not maintaining an appeal.  So it’s wrong for the Proponents to now argue that the Court allowing them to intervene in a case in which standing was already established is the same as the New Jersey statute in Karcher that expressly allowed the Assembly Speaker to defend the constitutionality of a statute on appeal.

The fact remains that no law exists that gives the Proponents any legal right to defend the constitutionality of Prop 8.  That’s why the Ninth Circuit specifically ordered the Proponents to address the Arizonans for Official English case.

Arizonans for Official English involved a constitutional challenge to an Arizona ballot initiative that declared English the official language of Arizona.  The District Court held that the statute was unconstitutional, and the State of Arizona did not appeal.  AOE, the official proponents of the ballot initiative, attempted to step in and defend the constitutionality of the law by pursuing an appeal of the District Court’s decision.  Sound familiar?  The Court’s decision that AOE did not have standing to appeal the District Court’s decision is short and simple:

Petitioners’ primary argument–that, as initiative proponents, they have a quasi legislative interest in defending the measure they successfully sponsored–is dubious because they are not elected state legislators, authorized by state law to represent the State’s interests. Furthermore, this Court has never identified initiative proponents as Article III qualified defenders. Their assertion of representational or associational standing is also problematic, absent the concrete injury that would confer standing upon AOE members in their own right, and absent anything in Article XXVIII’s state court citizen suit provision that could support standing for Arizona residents in general, or AOE in particular, to defend the Article’s constitutionality in federal court. . . .  (Citations omitted.)

In the end, we can think of the standing issue like this: the Proponents are a square peg that the Ninth Circuit has to fit somewhere.  The Ninth Circuit may, as the Proponents argue, try to shove that square peg into the round hole that is Karcher by finding that the Proponents are similar to the Speaker of the New Jersey Assembly who was expressly authorized by a New Jersey statute to defend the constitutionality of a law.  Alternatively, they could easily slide the square peg into the square hole that is Arizonans for Official English by reaffirming the long-held doctrine that proponents do not have standing to defend the constitutionality of a ballot initiative that they sponsor.

The Court already has expressed its concern that the Arizonans for Official English case prohibits them from having standing.  The Proponents’ arguments about Karcher likely will do nothing to convince the Court otherwise.

Follow me to the flip for a discussion of Jurisdiction . . .

Jurisdiction

Be sure to have a big bucket of popcorn for the oral argument on this issue.  Their argument could be easily ripped to shreds by anyone who’s taken a high school Government class, so Ted Olson and the three judge panel will positively cream the Proponents here.

They argue that Judge Walker exceeded his jurisdiction by issuing an injunction that affects people other than the Plaintiffs who filed the lawsuit.  They claim that the only way an injunction could apply to others is if a class was certified.  In other words, they argue that in deciding Brown v. Education (in which a class was never certified), the Court did not have the authority to broadly strike down all laws that segregated schools based on race; instead, it only had the jurisdiction to narrowly order that the 20 children who brought that case be admitted to the Topeka school.  They argue that in Loving v. Virginia (in which a class was never certified), the could did not have the authority to broadly strike down laws prohibiting interracial marriage; instead, it only had jurisdiction to allow Richard Loving to marry Mildred Jeter.  All other interracial couples were on their own and had to file their own lawsuits.

In making this argument, Proponents attack the principle of judicial review, something that every high school student learns is the bedrock principle of the judicial system and one of the key “checks and balances” that makes our constitutional government work.  Since the Supreme Court decided Marbury v. Madison in 1801, courts have been empowered to declare that a statute violates the Constitution.  And they almost always do this without ever certifying a class.

So if the Proponents are taking aim at the bedrock principle of our judicial system, they must have marshaled a vast body of cases that support this radical argument, right?  Well, they rely entirely on one case.  And, uh, the Ninth Circuit has already said that that one case doesn’t apply to this situation.  The Proponents rely on  Zepeda v. INS, a case in which the Ninth Circuit held that when issuing a preliminary injunction that applies to parties not before the Court, it must certify a class first.  But Judge Walker did not issue a preliminary injunction; he issued a permanent injunction.  (Without digging too far into this, preliminary injunctions are subject to a heightened standard because at the time it issues, the case has not yet been decided on its merits.)  The Ninth Circuit has held that, without question, Zepeda doesn’t apply in the case of a permanent injunction like the one Judge Walker issued.  (Bresgal v. Brock, 843 F.2d 1163)  Instead, Judge Walker has full authority to strike down a law in its entirety and without ever certifying a class, just like in Brown v. Board of Education and Loving v. Virginia, and every other case where a court has exercised its power of judicial review.

Nothing destroys credibility quicker than making a frivolous and poorly researched argument like this.

The Ninth Circuit just issued the following order:

Appellants’ motion for a stay of the district court’s order of August 4, 2010 pending appeal is GRANTED.

The court sua sponte orders that this appeal be expedited pursuant to Federal Rule of Appellate Procedure 2. The provisions of Ninth Circuit Rule 31-2.2(a) (pertaining to grants of time extensions) shall not apply to this appeal. This appeal shall be calendared during the week of December 6, 2010, at The James R. Browning Courthouse in San Francisco, California.

The previously established briefing schedule is vacated. The opening brief is now due September 17, 2010. The answering brief is due October 18, 2010. The reply brief is due November 1, 2010. In addition to any issues appellants wish to raise on appeal, appellants are directed to include in their opening brief a discussion of why this appeal should not be dismissed for lack of Article III standing. See Arizonans For Official English v. Arizona, 520 U.S. 43, 66 (1997).

Three things:

First, and drastically most importantly, the Court granted the stay.  Consequently the thousands of couples who were waiting for the day of equality will have to wait at least a few more months until December.  It's interesting that the panel does not at all discuss the reasons for their decision on the motion to stay.  That's because if they went through the factors, there's no way they could rationalize the stay.  They themselves raise the issue of standing and express an inclination that the case should be dismissed on that basis.  How, then, could they possibly determine that the Appellants have a “high likelihood of success on the merits”?  And how can they show that the Appellants will suffer any harm if loving couples in California are allowed to marry each other?

Second, the Court wants this case to be resolved quickly.  Appellants' opening brief is due in just a month and the hearing will happen on December 6th.  This is lightning quick for a Federal Court of Appeals, and it's a very good sign.  The Court understands that this case is important, and it doesn't want it to linger.

Third, the Court specifically orders the Prop 8 proponents to show why this case should not be dismissed for lack of standing.  Here's a discussion of the standing issue.  This is very good news for us.  It shows that the Court has serious doubts about whether the Appellants have standing.  Even better, the Court is expressing an opinion that its inclination is that the case should be dismissed. That being said, the panel that issued this Order (the motions panel) is not the same panel that will hear that case on the merits.  The merits panel will be selected shortly before December 6th and we don't know the three judges who will be on the merits panel.  But this is a very good sign that the appeal could be dismissed on the ground of standing alone.  

UPDATE (8/17): The Ninth Circuit issued the same Scheduling Order in Imperial County's appeal which challenges Judge Walker's denial of its motion to intervene.

This is an update on the Emergency Motion to Stay that the Prop 8 supporters filed with the Ninth Circuit last night.

The Ninth Circuit just issued an Order stating that the Plaintiffs' response to the Motion to Stay is due by 11:00 p.m. tonight. The Prop 8 supporters' reply, not to exceed 15 pages, is due by 9:00 a.m. on Monday, August 16, 2010. This suggests that the Ninth Circuit is preparing to rule on the Motion to Stay before Judge Walker's temporary stay expires on August 18th at 5:00 p.m.

It's surprising that the Court only gave the Plaintiffs about 9 hours to file their brief, and gave the Appellants until Monday to Reply.  But I wouldn't read too much into this.  They know that everyone anticipated the Motion and that everyone's briefs are essentially written already.

UPDATE: Imperial County filed a joinder in the Prop 8 supporter's Emergency Motion to Stay.

In a totally expected move, the proponents of Prop 8 filed their Emergency Motion for Stay Pending Appeal.

Here is the Motion.

The Local Rules require that they make a statement certifying that “to avoid irreparable harm relief is needed in less than 21-days.”  Here's what they argue:

 It is thus imperative that a stay pending appeal be entered on or before August 18, 2010 at 5 p.m. to avoid the confusion and irreparable injury that would flow from the creation of a class of purported same-sex marriages. See, e.g., Advisory: If Judge Walker Says It’s OK to Get Married, GLTNN.com, Aug. 11, 2010, available at http://gltnewsnow.com/2010/08/11/advisory-if-judge-walker-says-it’s-ok-to-get-married/ (reporting that West Hollywood stands ready to marry gay couples “[a]s soon as the federal judge lifts the stay,” and that Los Angeles County “is prepared to take immediate action to implement the court’s orders if the stay is lifted”) quotation marks omitted).

(Hey, at least we know they're reading our friends over at gltnewsnow.com)

As for their arguments on the merits of the stay, there does not seem to be any new arguments that Judge Walker has not already rejected.  I'm running out the door but will try to have some analysis tomorrow.

This Emergency Motion will be referred to the lead judge of the Motions Panel.  If the lead judge is unavailable, the Emergency Motion is referred to the second judge and then the third judge of the Motions Panel. The judge to whom it is referred may either grant temporary relief or convene the Motions Panel (usually by telephone) to decide the motion.  My guess is that in a case as newsworthy as this, the lead judge would prefer to convene the entire panel rather than make the decision himself.  In any event, there could be a decision on the Emergency Motion within hours after the motion is filed, but it's more likely that it will take a day or two for the Judge(s) to rule.

I'll let you know if i get word of any ruling,

Disclosure: I practice law and sometimes have cases before the Ninth Circuit, including cases involving DePuy and Johnson & Johnson's recent hip replacement recall.

Judge Walker just issued his order denying the motion to stay his decision overturning Prop 8.  But at the same time he also issued a temporary stay until August 18th to allow the Ninth Circuit time to decide whether or not it wants to stay the case pending the appeal.  This is not surprising, and it is done out of respect for the Ninth Circuit.  Judge Walker is simply making the call that is his (that a stay should be denied) but giving the Ninth Circuit some breathing room to make the call on its own.  If the Ninth Circuit does not issue a stay by August 18th, Judge Walker's decision will take effect and marriages may resume in California.  Until then, however, we remain in a holding pattern.

(Several news outlets are reporting only the first half of this story–the denial of the stay–and are saying that marriages may resume immediately.  Sadly, that's not that case.)

Read the decision here.

A quick recap for anyone tuning in to this show already in progress.  Last Wednesday, August 4th, District Court Judge Vaughn Walker issued a decision declaring that Proposition 8 violates the Due Process Clause and the equal protection rights in the U.S. Constitution.  Even before Judge Walker issued his decision, the proponents of Prop 8 filed a motion asking the Court to put a hold on–or to “stay”–its decision while the Prop 8 proponents try to appeal the decision to the Ninth Circuit Court of Appeals.  Judge Walker decided that he would issue a temporary stay for just a few days until he ruled on the Motion to Stay.  All of the actual parties to the case–the Plaintiffs who want to get married, the Attorney General, and the Governor–filed papers telling the Court they they did not want a stay; that they wanted marriages to resume immediately.  The only one asking for the stay is the proponent of Prop 8, and it is not a party and it may not even have standing to pursue an appeal.

Now that Judge Walker has denied the stay, the Prop 8 supporters may (and will) file a Motion to Stay with the Ninth Circuit.  Although the arguments and the applicable law are the same as Judge Walker addressed, the Ninth Circuit will make its own determination and it is not bound by Judge Walker's decision. 

A few words about the procedures we'll see at the Ninth Circuit: 

• Once the Prop 8 Proponents file their Motion to Stay with the Ninth Circuit, opposition papers are due ten days later and a response to the opposition is due seven days after that.  That being said, the Court has the power to shorten time for the opposition and the reply papers to be filed. 
• After the motion is fully briefed, the Court usually makes it decision based on the papers alone, without having a hearing.  But the Court may schedule a hearing if it so desires.  The Motion to Stay must be decided by a three-judge “Motions Panel,” but as I will discuss below, a single judge on the Motions Panel may decide to issue a temporary stay while the full panel makes its decision on the Motion.
• For August, the Ninth Circuit Motions Panel is composed of Judge Edward Leavey (a Reagan Appointee from Oregon), Judge Michael Hawkins (a Clinton Appointee from Arizona), and Judge Sidney Thomas (a Clinton Appointee from Montana).  For what it's worth, Judge Thomas interviewed with President Obama and VP Biden to replace Justice Stevens on the Supreme Court and he was rumored to be on the “short list” for the appointment; he may still be on the list for future vacancies.
• The Motions Panel decides only the Motion to Stay, not the merits of the appeal.  The merits of the appeal will be decided by a panel of three judges who will be assigned shortly before the hearing (months away).
• In addition to filing an ordinary Motion to Stay with the Ninth Circuit, the Prop 8 Proponents also will file an Emergency Motion requesting a temporary stay.  To do this, they must show that “to avoid irreparable harm relief is needed in less than 21-days.” 
• When an Emergency Motion is filed, it is immediately referred to the lead judge of the Motions Panel.  If the lead judge is unavailable, the Emergency Motion is referred to the second judge and then the third judge of the Motions Panel. The judge to whom it is referred may either grant temporary relief or convene the Motions Panel (usually by telephone) to decide the motion.  My guess is that in a case as newsworthy as this, the lead judge would prefer to convene the entire panel rather than make the decision himself.  In any event, there could be a decision on the Emergency Motion within hours after the motion is filed, but it's more likley that it will take a day or two for the Judge(s) to rule. 

So we're now in the same place we were before.  Waiting until August 18th to see what the Ninth Circuit does.

Judge Walker just issued his order denying the Prop 8 supporters' motion to stay judgment pending appeal. Unfortunately, however, Judge Walker ordered the Clerk to wait until ____ before entering the Judgment.  This gives the Prop 8 Proponents time to go to the Ninth Circuit Court of Appeal and ask it to stay Judge Walkers ruling.

Read the decision here.

The Recorders in several California counties were prepared for this, and they are ready to begin issuing marriage licenses to all couples. Some–like San Francisco's Phil Ting–have arranged to keep their offices open late and on weekends to ensure all couples have the chance to get their license.

A quick recap for anyone tuning in to this show already in progress.  Last Wednesday, August 4th, District Court Judge Vaughn Walker issued a decision declaring that Proposition 8 violates the Due Process Clause and the equal protection rights in the U.S. Constitution.  Even before Judge Walker issued his decision, the proponents of Prop 8 filed a motion asking the Court to put a hold on–or to “stay”–its decision while the Prop 8 proponents try to appeal the decision to the Ninth Circuit Court of Appeals.  Judge Walker decided that he would issue a temporary stay for just a few days until he ruled on the Motion to Stay.  All of the actual parties to the case–the Plaintiffs who want to get married, the Attorney General, and the Governor–filed papers telling the Court they they did not want a stay; that they wanted marriages to resume immediately.  The only person asking is the Proponent of Prop 8, and they are not a party and may not even have standing to pursue an appeal.

Unfortunately the window on equal marriages may close quickly. The Prop 8 supporters will be asking the Ninth Circuit to issue a stay. Although the arguments and the applicable law are the same as Judge Walker addressed, the Ninth Circuit will make its own determination and it is not bound by Judge Walker's decision.

At least for now–for the first time since November 2008–gay and lesbian couples are treated equally by the State of California. Mazel tov to all the couples who get married!

John C. Eastman, a law professor at the Christian-affiliated Chapman School of Law, wrote an editorial today for the San Francisco Chronicle in which he concludes that a gay judge is not fit to decide whether Proposition 8 violates the U.S. Constitution:

If Judge Walker is indeed in a long-term, same-sex relationship, he certainly has an “interest that could be affected substantially by the outcome of the proceeding” – he and his partner are now permitted to marry! – and that, according to Judge Walker's own finding, has financial benefits as well. Such conflicts would have required recusal, and cannot be waived by the parties.

There is no logic to this argument at all, and its embarassing coming from a law professor.

Not surprisingly, Mr. Eastman's thoughts on recusal are malluable depending on the circumstances.  In 2004, for example, he farcibly argued that Justice Scalia should not recuse himself from deciding a case against Scalia's close friend, Dick Cheney.  

It would be a dangerous precedent

“They're trying to get him to recuse himself to change the outcome of the case, and that is an inappropriate use of this and it is a dangerous trend . . .”  He called the Sierra Club's request asking Judtice Scalia recuse himself  “politically motivated to try to alter the outcome of the cas, having nothing to do with Justice Scalisa's relationship with Dick Cheney.”

Sound familiar?

When asked about the appearance of 

When protecting rights under the Constitution, a Judge is always going to personally benefit from the decision.  After all, we're all better off when our rights are protected.  Take the right to privacy as an example.  When deciding constitutional issues, Judges decide cases that could personally affect them all the time. Let's look at just a few examples:

• In Griswold v. Conneticut, the US Supreme Court struck down a law that prohibited contraceptives, holding that the When a Judge enjoins a polluter from spewing toxic pollution into the air, she benefits from that ruling by having clean air to breathe. When enjoining a company under the Clean Air Act As part of these ruling, the Judgexx

Imperial County just filed a Notice of Appeal of Judge Walker's ruling striking down Prop 8. Here's a copy of its Notice of Appeal.

Imperial County decided to wait until the eve of trial before it filed a request to intervene in the case.  Judge Walker denied the County's request to intervene, finding that the request was not timely and that the County does not have standing.  Here's a detailed discussion of the concept of “standing.”  Judge Walker held:

Imperial County does not have a significant protectible interest in the outcome of plaintiffs' constitutional challenge to Proposition 8. Moreover, even if Imperial County did have an interest in the subject matter of this litigation, state law provides adequate procedures for Imperial County to protect that interest, and, in addition, the current state defendants adequately represent Imperial County's interest as a matter of law. Accordingly, Imperial County is not entitled to intervene. . . 

* * *

Imperial County's status as a local government  does not provide it with an interest in the constitutionality of Proposition 8 or standing to defend Proposition 8 on appeal. Accordingly, Imperial County's motion to intervene as a defendant in this action . . . is DENIED.

It's not all that surprising that Imperial County filed a Notice of Appeal.  It is asking the Ninth Circuit Court of Appeal to decide for itself whether or not the County has standing to appeal.  As I discussed earlier, there's a decent chance that Judge Walker and the Ninth Circuit will find that the official proponents of Prop 8 do not have standing to appeal Judge Walker's decision.  While the arguments are different, I also think it's unlikely that Imperial County has standing.  But from the anti-equality perspective, it gives them one more argument to make before the Ninth Circuit, so it's important to them.

This is a minor development.  Stay tuned for the more significant ruling on the pending motion to stay, which hopefully will come out today. . . 

I predict we'll have Judge Walker's ruling on the Motion to Stay either today or tomorrow.  And I predict he'll deny the stay, allowing same-sex couples full marriage equality for the first time since that bittersweet night in November 2008.

While we wait, let's take a look the issue of “standing” and what it means to the stay and the appeal of Judge Walker's opinion.

What's “Standing”

Article III of the US Constitution gives Federal Courts the limited jurisdiction to decide actual cases or controversies. This is referred to as “Article III standing.” To have standing to bring a lawsuit or to pursue an appeal, a party must show that he or she has suffered an: “injury in fact —— an invasion of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical.” 

To appeal a decision, the Prop 8 supporters must show that allowing same-sex couples the right to get married somehow invades their rights and causes them harm.  Remember, though, that Judge Walker already ruled that “Proposition 8 does not affect the rights of those opposed to homosexuality or to marriage for couples of the same sex.” In other words, if Prop 8 did not exist, the rights of those people who support Prop 8 would not be affected.  Consistent with this holding, Judge Walker should find that the Prop 8 supporters do not have standing because they will not suffer any “concrete and particularized” harm if Prop 8 is not enforced.

The best argument that Prop 8 supporters can make is that they would be injured by the simple fact that California is not enforcing a law passed by the People.  But the Supreme Court has held that “[an] asserted right to have the Government act in accordance with law is not sufficient, standing alone, to confer jurisdiction on a federal court.” (Allen v. Wright, 468 U.S. 737, 754 (1984))

I think there's a good chance Judge Walker will find that the Prop 8 supporters lack standing.  The only parties in the case who do have standing (the Plaintiffs and the State) have not appealed and have affirmatively said that they do not want a stay.  This means that if Judge Walker finds that the Prop 8 supporters do not have standing, he also will deny the motion to stay.

More on the flip . . .

Didn't Judge Walker Already Rule That The Prop 8 Supporters Have Standing?

No.  Judge Walker decided that the Prop 8 Backers could intervene, not that they have Article III standing.  To intervene in a case, a party does not need to show that they have standing. That's because a “case or controversy” already exists.  (The Plaintiffs had standing to bring the case because they were being denied their constitutional right to get married.)  Since both the Plaintiffs and the Defendants already had standing, the Court had jurisdication over the “case.” From there, deciding that the Prop 8 supporters could intervene in the case was an easy call.  The law of the Ninth Circuit holds that a “public interest group may have a protectable interest in defending the legality of a measure it had supported.” 

But this does not mean that it has standing. To the contrary, on several occasions the Supreme Court has recognized that a party who was allowed to intervene in litigation does not necessarily have standing.  For example, the Supreme Court said:

[I]f the original party on whose side a party intervened drops out of the litigation, the intervenor will then have to establish its own standing to continue pursuing litigation. (Diamond v. Charles, 476 U.S. 54, 64, (1986))

Could This End Here And Now?

Maybe at the Ninth Circuit.  While the popular spin is that this case “is certain to be resolved at the Supreme Court,” that's not entirely clear.  If Judge Walker rules that the Prop 8 supporters do not have standing, that does not necessarily mean they can't appeal.  The Ninth Circuit will independently decide the issue of standing.  But if the Ninth Circuit decides that the supporters of Prop 8 do not have standing, it will reach only the issue of standing, not the much harder question of deciding whether Prop 8 is constitutional.

If A Stay Is Granted, Can The State Still Issue Marriage Licenses?

Yes.  All a stay does is prevent the Court Clerk from entering judgment.  It does not erase Judge Walker's decision, and it does not prohibit the defendant (the State) from voluntarily complying with the decision by issuing marriage licenses to all couples, regardless of gender.  A Federal District Judge has declared that Prop 8 is unconstitutional.  Even if judgment in the case is stayed pending appeal, it would be perfectly reasonable for the State to decide that it will stop enforcing Prop 8 until and unless Judge Walker's decision is reversed by another Court. 

If the State began enforcing Judge Walker's opinion on its own, I would expect the Prop 8 supporters to file a new lawsuit (in State Court) seeking an injunction requiring the State to enforce Prop 8. This might bring back memories of 2004 when the Supreme Court held that the City and County of San Francisco did not have the authority to issue marriage licenses to same-sex couples.  However, that case (Lockyer v. City and County of San Francisco) was based on California Constitution Article III, section 3.5 which prohibits administrative agencies from deciding on their own to not enforce laws based on their belief that the law is unconstitutional.  However, if the Governor or the Attorney General made that decision, section 3.5 does not apply.  I haven't researched it, but I don't know that anything would prohibit the Governor or the Attorney General from deciding to enforce a District Court's order declaring Prop 8 invalid, even if that judgment were stayed pending appeal.

So with that, we now wait for Judge Walker order on the Motion to Stay. . .  Stay tuned . . .