LOWE ELECTRIC SUPPLY COMPANY et al v. REXEL INC et al
Filing
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ORDER denying 52 Motion to Consolidate Cases. The parties are further DIRECTED to notify the Court within fourteen (14) days of this Order on how they intend to proceed with their respective cases. Ordered by U.S. District Judge C ASHLEY ROYAL on 2/12/15 (lap)
IN THE UNITED STATES DISTRICT COURT FOR THE
MIDDLE DISTRICT OF GEORGIA
MACON DIVISION
LOWE ELECTRIC SUPPLY
:
COMPANY and EDWARD SPELL,
:
:
Plaintiffs,
:
:
v.
:
:
REXEL, INC., f/k/a Summers
No. 5:14‐CV‐335 (CAR)
:
Group, Inc. and REXEL HOLDINGS
:
USA CORP.,
:
:
Defendants.
:
___________________________________ :
ORDER ON MOTION TO CONSOLIDATE
Currently before the Court is Plaintiffsʹ Motion to Consolidate [Doc. 52] Case No.
5:14‐cv‐335 (hereinafter “the Georgia case”) and Case No. 5:14‐cv‐396 (hereinafter “the
Florida case”). Plaintiffs request that the Court consolidate these two cases and apply
“old” Georgia law exclusively in both actions. The Defendants object to the application
of “old” Georgia law in the Florida case. The Court, having considered the Motion,
responsive briefs, and having conducted a hearing on the issue, concludes that the
Motion to Consolidate should be DENIED.1
1 Because the Court denies the Motion, it finds the identical motion in the Florida case [Doc. 31]
MOOT.
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BACKGROUND
Both the Georgia case and the Florida case are before this Court on the issue of
the enforceability of restrictive covenants in an ex‐employee’s contract. In the Georgia
case, Plaintiffs sought an injunction to prevent the enforcement of Defendants’
restrictive covenants, arguing that the non‐compete, non‐solicitation, and non‐recruit
provisions were overbroad. On November 3, 2014, the Court granted Plaintiffs’ motion
for preliminary injunction (“Injunction”),2 and enjoined Defendants “from enforcing the
restrictive covenants in Georgia, including the non‐compete, and non‐solicitation
provisions” that it found to be overly broad according to “old” Georgia law; the
Defendants appealed. 3
After the Court entered its Injunction, Judge Hinkle of the Northern District of
Florida transferred the Florida case to this Court. The Florida District Court found
transfer was properly effectuated under the “First Filed Rule.”4 With both cases
pending before this Court, Plaintiffs now motion the court to consolidate. Defendants
oppose that Motion. For the reasons enumerated below, consolidation of the Georgia
and Florida case is denied.
2 The Court found that the non‐recruit provision was enforceable against Plaintiffs. For a
detailed recitation of the background of this case and the Court’s complete analysis and
findings, see the Court’s November 3, 2014 Order (“Injunction”), [Doc 29].
3 See [Doc. 29] at 29.
4 See Order of Transfer in Case No 5:14‐cv‐396 [Doc. 14].
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LEGAL STANDARD
Federal Rule of Civil Procedure 42(a)5 confers upon district courts broad
discretionary authority to order consolidation when separate lawsuits involve a
common question of law or fact and are pending in the same court.6 “[I]n order to
expedite the trial and eliminate unnecessary repetition and confusion,” district judges
are “urged to make good use of Rule 42(a) ... where there is involved a common
question of fact and law….”7 At the same time, however, “the trial judge should be most
cautious not to abuse his judicial discretion and to make sure that the rights of the
parties are not prejudiced by the order of consolidation under the facts and
circumstances of the particular case.”8 To this effect, the district court is encouraged to
weigh:
whether the specific risks of prejudice and possible confusion [are]
overborne by the risk of inconsistent adjudications of common factual and
legal issues, the burden on parties, witnesses and available judicial
resources posed by multiple lawsuits, the length of time required to
5 FED. R. CIV. P. 42 (a) (“Consolidation. When actions involving a common question of law or
fact are pending before the court, it may order a joint hearing or trial of any or all the matters in
issue in the actions; it may order all the actions consolidated; and it may make such orders
concerning proceedings therein as may tend to avoid unnecessary costs or delay.”)
6 See Hendrix v. Raybestos‐Manhattan, Inc., 776 F.2d 1492, 1495 (11th Cir. 1985) (observing a
district courtʹs “purely discretionary” authority under Fed. R. Civ. P. 42(a)); Gentry v. Smith, 487
F.2d 571, 581 (5th Cir. 1973) (holding that district courtʹs decision to consolidate “is entirely
within the discretion of the district court as it seeks to promote the administration of justice”).
7 Dupont v. Southern Pac. Co., 366 F.2d 193, 195 (5th Cir. 1966) (The Eleventh Circuit, in the en
banc decision Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981), adopted as
precedent decisions of the former Fifth Circuit rendered prior to October 1, 1981.).
8 Id. at 196.
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conclude multiple suits as against a single one, and the relative expense to
all concerned of the single‐trial, multiple‐trial alternatives. 9
However, Rule 42 is permissive and just because cases involve a common question of
fact or law, does not mean that consolidation is mandatory.10
DISCUSSION
As grounds for their Motion to Consolidate, Plaintiffs assert that the Georgia and
Florida cases “involve the same material facts, the same, parties, the same issues, [and]
the same legal theories.”11 It is true that these cases on the surface seem almost mirror
images of each other; they involve the same material facts, the same parties, the same
witnesses, the same attorneys, the same contract, and even the same issues. However,
there is one critical and substantive difference between the cases—they do not involve
the same law.
The public policies driving “old” Georgia and Florida law on restrictive
covenants in employment contracts are incongruous. To this effect, the Eleventh Circuit
has made clear that although Georgia’s “old” law should be upheld in Georgia where a
9 Hendrix, 776 F.2d at 1495.
10 See Young v. City of Augusta, Ga., 59 F.3d 1160, 1168 (11th Cir. 1995); Hargett v. Valley Federal
Sav. Bank, 60 F.3d 754, 765 (11th Cir. 1995) (“A trial court may consolidate cases when actions
involving a common question of law or fact are pending before the court”) (emphasis added);
Walker v. H. Councill Trenholm State Technical Coll., 2007 WL 1140423, at *2 (M.D. Ala. 2007)
(citing Kelly v. Kelly, 911 F. Supp. 66, 69 (N.D.N.Y. 1996) (“Although such common issues are a
prerequisite to consolidation, the mere existence of these issues does not require a joint trial as a
matter of course”)).
11 [Doc. 53] at 2.
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restrictive covenant is found to be overbroad, Georgia cannot extend the arms of its
policy beyond its borders: “the public policy of Georgia is not that of everywhere.”12
In Keener v. Convergys, the Eleventh Circuit held that the district court erred in
penning an injunction on restrictive covenants that was “beyond a reasonable scope,” in
that the court “did not tailor the injunction to include Georgia only.”13 The plaintiff in
Keener was employed by an Ohio corporation, and signed a non‐compete agreement in
Ohio, but then subsequently went to work for a competitor in Georgia. After the
plaintiff brought suit in Georgia, the district court found that “old” Georgia law would
invalidate the contract because Ohio law was contrary to Georgia public policy. The
district court went on to permanently enjoin the defendant from attempting to enforce
the agreement “in any court worldwide.”14 After certifying the question to the Georgia
Supreme Court, the Eleventh Circuit affirmed that Georgia public policy would
invalidate the non‐compete in Georgia. However, the Eleventh Circuit held that the
district court abused its discretion by not tailoring the injunction to Georgia.
Recognizing this Circuit’s precedent in Keener, this Court tailored its injunction
accordingly when it enjoined Defendants from enforcing the restrictive covenants in
12 Keener v. Convergys, 342 F.3d 1264, 1269 (2003).
13 Id. at. 1269, 1270. Although the court recognizes that Keener involved a permanent injunction,
the Court sees no reason why the same precedent of tailoring should not apply to a preliminary
injunction. See Palmer & Cay, Inc. v. Marsh & McLennan Companies, Inc., 404 F. 3d 1297, 1310
(2005) (affirming that Keener is controlling in regards to injunctions, but not to declaratory
judgments that have preclusive effect).
14 Id. at 1269.
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Georgia.15 Additionally, as both parties have conceded, and this Court found in its
injunctive order, although the disputed covenants would be enforced in Georgia under
the “old” law, they would be enforced in Florida, or at least be blue‐penciled
accordingly.16 Therefore, despite the fact that there are significant facts in common in
these cases, the Court finds that the potential of confusion and prejudice to the parties
in applying two states’ contradictory laws in the same case are outweighed by any
claim of judicial efficiency or party convenience. Accordingly, to the extent Plaintiffs
seek to enjoin the enforcement of the restrictive covenants in Georgia, Georgia law
applies. Likewise, to the extent Plaintiffs seek to enjoin the enforcement of the restrictive
covenants in Florida, Florida law applies. Therefore, the Court will not consolidate.
CONCLUSION
For the aforementioned reasons, the Plaintiffs’ Motion to Consolidate [Doc. 52] is
DENIED. 17 The parties are further DIRECTED to notify the Court within fourteen (14)
days of this Order on how they intend to proceed with their respective cases.
SO ORDERED, this 12th day of February, 2015.
S/ C. Ashley Royal
C. ASHLEY ROYAL,
DISTRICT COURT JUDGE
JRF
15 [Doc. 29] at 29.
16 See Pl. Comp. [Doc. 1] at para. 26; Def. Br. on Consolidation [Doc 51] at 4; [Doc. 29] at 25.
17 Plaintiffs assert that if the cases were consolidated that this Court would be precluded from
applying Florida law under Georgia’s conflicts of law analysis; however, since the Court denies
consolidation, the Court need not address the merits of this argument.
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