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Beach Mart, Inc. v. L&L Wings, Inc.

United States District Court, E.D. North Carolina, Northern Division

September 15, 2014

BEACH MART, INC., Plaintiff,
v.
L&L WINGS, INC., Defendant. L&L WINGS, INC., Counterclaimant,
v.
BEACH MART, INC., Counter Defendant. L&L WINGS, INC., Plaintiff,
v.
SHEPARD MORROW, SUPER WINGS, LLC, and BEACH MART, INC., Defendants.

ORDER

JAMES C. FOX, Senior District Judge.

This matter is before the court on Plaintiff Beach Mart, Inc.'s Motion to Lift the Stay and for a Scheduling Conference [DE-213]. Also before the court, sua sponte, is whether to consolidate this action with L&L Wings, Inc. v. Morrow, 2:14-CV-52-F, which was transferred to this court from the Southern District of New York on August 28, 2014.

For the reasons more fully stated below, the court (1) orders that the stay entered by order [DE-211] on April 7, 2014, is hereby lifted; (2) orders that the instant action be consolidated with L&L Wings, Inc. v. Morrow, 2:14-CV-52-F; (3) directs the Clerk of Court to schedule and notice a scheduling conference for October 28, 2014, to determine the schedule for future proceedings on the limited issue outlined below; and (4) orders that Beach Mart, Super Wings, and Morrow file their answers to L&L Wings, Inc.'s Amended Complaint and Jury Demand by September 30, 2014.

I. THE STAY

Beach Mart moved to lift the stay in this case [DE-213], and L&L does not object to lifting the stay [DE-215]. This court previously stayed this action pending proceedings in the Southern District of New York. Those proceedings have now ended. Therefore, the court ORDERS that the stay entered by order [DE-211] on April 7, 2014, is hereby LIFTED.

II. CONSOLIDATION

Rule 42(a) of the Federal Rules of Civil Procedure states that "[i]factions before the court involve a common question of law or fact, the court may... consolidate the actions." Courts have "broad discretion" to consolidate cases under Rule 42(a). See A/S J. Ludwig Mowinckles Rederi v. Tidewater Constr. Corp., 559 F.2d 928, 933 (4th Cir. 1977). Where claims are brought against the same party, rely on the same witnesses, allege the same misconduct, and are answered with the same defenses, the requirements of Rule 42(a) are more than satisfied. See Harris v. L&L Wings, Inc., 132 F.3d 978, 981 n.2 (4th Cir. 1997).

The instant actions satisfy the requirements of Rule 42(a). The transferred action involves claims by L&L against Morrow, Beach Mart, and Super Wings. Beach Mart created Super Wings, an entity whose sole shareholder is also Beach Mart's principal, Israel Gosala. Shortly thereafter, Morrow and Super Wings executed an agreement whereby Morrow assigned all of his right, title, and interest in the Wings trademark to Super Wings. The common question of fact and law between the present action and the transferred action comprises the extent of those rights, whatever they might be. Indeed, a determination of Morrow's past rights (if any) in the Wings trademark will impact the parties' claims and defenses in both actions.

Although the two actions vary in minor respects, those differences do not impact whether to consolidate the actions. The common questions of law and fact, as well as the court's interest in judicial efficiency and managing its cases, weigh heavily in favor of consolidation. Accordingly, the court in its discretion CONSOLIDATES cases 2:11-CV-44-F and 2:14-CV-52-F. These two actions shall proceed under one consolidated case number, 2: 11-CV-44-F (Consolidated Action). Each filing shall continue to reflect case numbers 2:11-CV-44-F and 2:14-CV-52-F, but shall be filed only in the consolidated action. The Clerk of Court is DIRECTED to administratively close the case file for case 2:14-CV-52-F; the action shall be reopened at the appropriate time so that judgment or other proceedings may be entered therein.

III. SCHEDULING CONFERENCE

While Beach Mart and L&L both agree that the stay in this action should be lifted, they disagree on how to proceed thereafter. L&L suggests that this court first address the issues raised in the transferred action. However, as Beach Mart correctly notes, such a course of action would, in effect, impose an informal stay on the case. This would run counter to the court's order lifting the legal stay. Beach Mart instead wishes to pursue the original action.

Rule 42(b) of the Federal Rules of Civil Procedure allows a court to order separate trials "[f]or convenience... or to expedite and economize...." The decision to order separate trials lies within the discretion of the court. See Shetterly v. Raymark Indus., Inc., 117 F.3d 776, 782 (4th Cir. 1997). In this instance, the transferred and original actions both depend, in part, on the extent of Morrow's rights in the Wings trademark. Once the extent and duration of those rights are resolved, both actions can continue forward. The resolution of the entire transferred action, however, is not otherwise necessary before proceeding with the original action. Indeed, while the determination of Morrow's rights will be largely dispositive of the transferred action, only Counts I and II ofL&L's Amended Complaint [2:14-CV-52-F, DE-22] appear to be capable of full resolution upon a determination of Morrow's trademark rights. The other Counts in the transferred action will likely require some additional showing.

Therefore, the court will issue a scheduling order that is limited to first determining the extent and duration of Morrow's rights in the Wings trademark. In preparing for the conferences, meetings, and deadlines ...


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