NORFOLK SOUTHERN RAILWAY COMPANY v. NEW YORK TERMINALS, LLC et al
OPINION. Signed by Judge William J. Martini on 12/19/16. (gh, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
NORFOLK SOUTHERN RAILWAY CO.,
Civ. No. 2:14-07664 (WJM)
NEW YORK TERMINALS, LCC and NEW
YORK TERMINALS II, LLC,
NJ ASPHALT TERMINALS, LLC d/b/a/ CL
ASPHALT, and ABC CORPS. 1-10
WILLIAM J. MARTINI, U.S.D.J.:
This matter comes before this Court upon a motion by Third-Party Defendant New
Jersey Asphalt Terminals (“NJAT”) to consolidate this action (the “NJAT action”) with
another pending action in this district, Norfolk Southern Railway Co. v. C.L. Consulting
and Management Corp., No. 15-cv-2548 (the “CLCM Action”). For the reasons that
follow, NJAT’s motion to consolidate will be DENIED.
A. The NJAT Action
In December 2014, Plaintiff Norfolk Southern Railway (“Norfolk”) filed a
Complaint against Defendants New York Terminals and New York Terminals II (“NY
Terminals”). Plaintiff alleges that, from November 2013 to May 2014, NY Terminals
failed to pay demurrage charges on rail cars, accruing damages of at least $294,360.
NY Terminals answered the Complaint and also filed a Third Party Complaint
against NJ Asphalt Terminals (NJAT), alleging that NJAT, as a tenant of NY Terminals,
is liable for any demurrage costs. Discovery closed in September 2016. After discovery
closed, NJAT attempted to file a belated expert report, which the Court did not accept.
B. The CLCM Action
In April 2015, Plaintiff Norfolk filed a Complaint against Defendant C.L.
Consulting and Management Corp. (“CLCM”). Plaintiff alleges that, from October 2013
to May 2014, CLCM, as consignee, failed to pay demurrage charges on rail cars, accruing
damages of at least $284,960.
CLCM moved to refer the case to the Surface Transportation Board (“STB”),
which the Court denied. However, CLCM filed a new and separate action with the STB
which is presently pending before the Board. In April 2016, CLCM answered the
Complaint and also filed a Third Party Complaint against NY Terminals, alleging that
NY Terminals is liable for any demurrage costs, pursuant to a contract between CLCM
and NY Terminals. Discovery in this action is set to conclude in March 2017.
C. NJAT’s Motion to Consolidate Both Actions
In November 2016, NJAT moved to consolidate the NJAT action with the CLCM
action. NJAT claims that CLCM is its “sister company,” and that consolidation should
be granted because the two cases present the same underlying question of who must pay
an identical demurrage charge.
Plaintiff Norfolk opposes the motion, arguing that consolidation will serve little
benefit at this stage, will prejudice Norfolk, and likely cause confusion of issues.
Rule 42(a) of the Federal Rules of Civil Procedure provides:
When actions involving a common question of law or fact are pending
before the court, 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). Rule 42(a) gives the district court “broad power to consolidate
cases that share common questions of law or fact.” A.S. ex rel. Miller v. SmithKline
Beecham Corp., 769 F.3d 204, 212 (3d Cir. 2014).
“The purpose of consolidation is to streamline and economize pretrial proceedings
so as to avoid duplication of effort, and to prevent conflicting outcomes in cases
involving similar legal and factual issues.” In Re TMI Litig., 193 F.3d 613, 724 (3d Cir.
1999) (citation omitted). “The mere existence of common issues, however, does not
require consolidation.” ACR Energy Partners, LLC v. Polo N. Country Club, Inc., 309
F.R.D. 193, 194 (D.N.J. 2015) (citation omitted). The savings of time and effort gained
through consolidation must be balanced against the inconvenience, delay or expense that
might result from simultaneous disposition of the separate actions. Liberty Lincoln
Mercury, Inc. v. Ford Mktg. Corp., 149 F.RD. 65, 81 (D.N.J. 1993) (citation omitted).
The Court finds that consolidation is inappropriate in this case for several reasons.
First, the Court notes that there is no overlap here between actual named parties.
In each action, the named Defendants are different. NJAT claims that CLCM (the named
Defendant in the CLCM action) is its “sister” company, but even if this is so, NJAT is a
Third-Party Defendant in the NJAT action, not a primary party. And while both actions
may be for similar demurrage charges, it is not clear that they are for an identical charge,
as NJAT claims: the time period for each charge is slightly different, and the damages
amounts are close, but not identical. If the demurrage charges are, indeed, distinct, then
there is no reason to consolidate. And in any case, the “common question” shared by
both actions involves the peripheral issue of indemnification by a third party, and not the
central issue of whether each named Defendant is liable to Plaintiff Norfolk. Moreover,
CLCM can also move to dismiss the CLCM action as duplicative of the NJAT action, if it
believes that the action seeks to collect an identical charge.
Second, while in the CLCM action, discovery is ongoing and will be continuing at
least until March 2017, discovery has been closed in the NJAT action since September
2016. In this case, the central purpose of consolidation, “to streamline and economize
pretrial proceedings so as to avoid duplication of effort,” In Re TMI Litig., 193 F.3d at
724, will be largely thwarted by the fact that discovery is already over in one of the cases.
Moreover, “[i]t is within a district court’s broad discretion to deny a motion to
consolidate if it would cause delay in one of the cases, or if one of the cases is further into
discovery than the other case.” Borough of Olyphant v. PPL Corp., 153 F. App'x 80, 82
(3d Cir. 2005) (finding that district court did not abuse its discretion in denying motion to
consolidate where discovery was closed in one case, but had just begun in the other).
Moreover, while NJAT has been barred from filing its belated expert report in the NJAT
action, expert reports have not yet been served in the CLCM action; consolidation of the
two actions could allow NJAT to gain an unfair tactical advantage in this action, resulting
in prejudice to Norfolk.
Third, there is a possibility of the CLCM action being delayed by CLCM’s own
initiation of a separate administrative proceeding before the STB. If the STB accepts that
case and institutes a parallel administrative proceeding, and these actions are
consolidated, that will cause delay in both the NJAT and the CLCM actions, instead of
only in the CLCM action alone. See Borough, 153 F. App’x at 82. This will cause undue
prejudice to Plaintiff, who has an interest in a swift resolution of its claims.
For the foregoing reasons, NJAT’s motion to consolidate is DENIED.
appropriate order follows.
/s/ William J. Martini
WILLIAM J. MARTINI, U.S.D.J.
Date: December 19, 2016
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