Prospect Street Energy, LLC et al v. Everest Energy Management, LLC et al

Filing 55

OPINION AND ORDER GRANTING PETITIONERS' MOTION TO CONSOLIDATE COMPANION CASES 39 . Signed by District Judge Gershwin A. Drain. (DPar)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

PROSPECT STREET ENERGY, LLC, and
PROSPECT STREET VENTURES I, LLC
Petitioners,
Case No. 16-cv-11376
v.
UNITED STATES DISTRICT COURT JUDGE
GERSHWIN A. DRAIN

EVEREST ENERGY MANAGEMENT, LLC,
ENERGY GROUP MANAGEMENT, LLC,
EE GROUP, LLC,
EVEREST ENERGY GROUP, LLC,
DART ENERGY CORPORATION ,

UNITED STATES MAGISTRATE JUDGE
MONA K. MAJZOUB

Respondents.
/
OPINION AND ORDER GRANTING PETITIONERS’ MOTION TO CONSOLIDATE
COMPANION CASES [39]
I. INTRODUCTION
Prospect Street Energy, LLC, and Prospect Street Ventures I, LLC
(“Petitioners” or “Prospect”) initiated this action pursuant to the Federal
Arbitration Act (“FAA”), 9 U.S.C. §§ 6 and 9, as a Petition to Confirm an
Arbitration Award, on April 15, 2016. See Dkt. No. 1. The case was docketed as
Case No. 16-cv-11376.
Before the Court is Petitioners’ Motion to Consolidate Case Nos. 16-cv11376, 16-cv-11377, and 16-cv-11590 into a single action. See Dkt. No. 39. The

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Motion is fully briefed. After reviewing the briefing, the Court concludes that oral
argument will not aid in the resolution of this matter. Accordingly, the Court will
resolve the Motion on the briefs as submitted. See E.D. Mich. L.R. 7.1(f)(2). For
the reasons discussed below, the Motion to Consolidate will be GRANTED.
II. BACKGROUND
Prospect seeks to confirm an arbitration award issued by a three-member
arbitral tribunal. The Arbitral Award was issued on April 7, 2016, against
Respondents Dart Energy Corporation (“Dart”), Everest Energy Management,
LLC, Energy Group Management, LLC, EE Group, LLC, and Everest Energy
Group, LLC (collectively “Everest”).
On April 11, 2016, Everest commenced an action in St. Clair County Circuit
Court, against Prospect (Case No. 16-000838-CB), seeking to vacate the Arbitral
Award (the “Everest action”). On April 14, 2016, Dart filed a motion to intervene
in the Everest Action.
On April 15, 2016, pursuant to its statutory right under Section 9 of the
Federal Arbitration Act, 9 U.S.C. § 9, Prospect filed its original petition to confirm
the Arbitral Award in this action. Dkt. No. 1. Also on April 15, 2016, Prospect
filed a motion to remove the Everest Action to Federal Court, where it was given
the Case No. 16-cv-11377.

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On April 19, 2016, Dart filed its own complaint in the St. Clair County
Circuit Court (Case No. 16-000899-CB). On May 3, 2016, Prospect removed
Dart’s complaint to this Court, where it was given Case No. 16-cv-11590. All
parties are in agreement that all three of the pending actions deal with the same
arbitral award.
III. LAW AND ANALYSIS
Federal Rule of Civil Procedure 42(a) provides as follows:
(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.
Fed. R. Civ. P. 42(a). It is within the discretion of the district court to determine
whether cases involving the same factual and legal questions should be
consolidated. Stemler v. Burke, 344 F.2d 393, 396 (6th Cir. 1965). Here all three
cases are based on the same sequence of events, and contain identical issues of fact
and law.
Respondents first argue that because the Everest action was filed in state
court first, it should be the controlling case, despite the fact that it was technically
removed to federal court after Prospect filed its petition to confirm the arbitration
award. See Dkt. No. 43 at 5 (Pg. ID No. 688); Dkt. No. 45 at 4–5 (Pg. ID No. 700–

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01). Therefore, the argument follows, if the cases are to be consolidated, they
should be consolidated under case no. 16-cv-11377. The Court disagrees.
The first-filed rule only applies to cases “filed in separate federal courts.”
AmSouth Bank v. Dale, 386 F.3d 763, 791 n.8 (6th Cir. 2004). “The rule provides
that when actions involving nearly identical parties and issues have been filed in
two different district courts, ‘the court in which the first suit was filed should
generally proceed to judgment.’ ” Zide Sport Shop of Ohio, Inc. v. Ed Tobergte
Associates, Inc., 16 F. App’x 433, 437 (6th Cir. 2001) (emphasis added) (quoting
In re Burley, 738 F.2d 981, 988 (9th Cir. 1984)). Here, all three of the actions are
in the same district. Therefore, the Court does not find it necessary to look to the
first-to-file rule in this matter.
Respondent Dart further argues that Prospect is merely trying to use “a
litigation strategy” to “defeat [Dart’s] motion to remand based on lack of subjectmatter jurisdiction,” filed under case no. 16-cv-11377. Dkt. No. 45 at 5 (Pg. ID No.
701). However, Respondent Dart provides no authority for the position that the
Court may not consolidate cases with pending motions. Whether the attempt to
consolidate is or is not a “strategy” to defeat Dart’s motion, the fact remains that
these duplicitous cases should be consolidated. Accordingly, the Motion will be
granted.

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IV. CONCLUSION
For the reasons discussed above,
IT IS HEREBY ORDERED that Petitioners’ Motion to Consolidate [39] is
GRANTED. Case numbers 16-cv-11376, 16-cv-11377 and 16-cv-11590 are
hereby CONSOLIDATED. The Clerk of the Court shall docket a copy of this
order in all three cases.
IT IS FURTHER ORDERED that cases 16-cv-11377 and 16-cv-11590 are
DISMISSED. All future documents shall be filed under case 16-cv-11376. The
parties may refile any necessary documents from the dismissed cases under case
16-cv-11376.
IT IS SO ORDERED.

Dated: June 22, 2016
Detroit, MI

s/ Gershwin A. Drain
HON. GERSHWIN A. DRAIN
United States District Court Judge

CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document was served upon counsel of record
and any unrepresented parties via the Court's ECF System to their respective email or First Class
U.S. mail addresses disclosed on the Notice of Electronic Filing on June 22, 2016.
s/Tanya R. Bankston
TANYA R.BANKSTON
Case Manager & Deputy Clerk

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