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

Filing 220

ORDER granting 213 Motion To Lift Stay and for Order Setting Scheduling Conference. Scheduling conference set for 10/28/2014 at 10:00 AM. It is hereby ORDERED that the cases 2:11-CV-44-F and 2:14-CV-52-F be CONSOLIDATED. These two actions shall proceed under one consolidated case number, 2:11-CV-44-F. Signed by Senior Judge James C. Fox on 9/15/2014. The parties should read the order in its entirety for additional deadlines. (Grady, B.)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NORTH CAROLINA
NORTHERN DIVISION

BEACH MART, INC.,
Plaintiff

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V.

L&L WINGS, INC.,
Defendant.

No. 2:11-CV-44-F
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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.

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No. 2:14-CV-52-F

ORDER
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 ofNew York on August 28,2014.
For the reasons more fully stated below, the court (1) orders that the stay entered by order

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[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 ofNew 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) ofthe 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.

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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-52F. 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
"[fJor 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
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(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 ofthe 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 of this scheduling order, the parties in both cases are
ORDERED to limit their preparation materials and proposals to the following issues:
( 1)

the duration of Morrow's right, title, and interest in the Wings trademark, if anyparticularly as to (a) when Morrow first acquired that right, title, and interest, and
(b) when, if ever, that right, title, and interest ended-; and

(2)

the extent of Morrow's right, title, and interest in the Wings trademark, if any-in
particular, the extent of that right, title and interest (a) when Morrow first
acquired his right, title, and interest; (b) during the time period lasting from the
time Morrow entered any agreement with L&L concerning the Wings trademark
until the end of that agreement; and (c) when Morrow transferred any remaining
right, title, and interest he possessed in the Wings trademark to Super Wings.

The court cautions the parties that they should avoid interjecting into this litigation any issue
outside the scope of Morrow's rights in the Wings trademark until that issue is resolved. The

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court further ORDERS
( 1)

that the Clerk of Court schedule and notice a scheduling conference for 10:00 AM
on October 28, 2014, before the undersigned, to determine the schedule for future
proceedings on the limited issue discussed herein;

(2)

that the parties meet and confer on or before October 14, 2014, concerning the
scope of discovery for the limited issue discussed herein and deadlines for all
remaining discovery and pre-trial activities; and

(3)

that the parties file a proposed scheduling plan on or before October 21, 2014,
concerning the scope of discovery for the limited issue discussed herein and
deadlines for all remaining discovery and pre-trial activities; in the alternative, if
no agreement can be reached, that the parties file separate proposals with the court
concerning these issues.

IV.

DEADLINE FOR FILING ANSWERS TO L&L WING'S AMENDED COMPLAINT
AND JURY DEMAND
In previous orders allowing an extension of time to file answers to L&L's Amended

Complaint and Jury Demand, the court stated that it would set a deadline for filing the answers
once the court ruled on the pending motion to lift the stay. That time having arrived, the court
hereby ORDERS that the Defendants in L&L Wings, Inc. v. Morrow, 2:14-CV-52-F, respond to
L&L's Amended Complaint and Jury Demand [DE-22] by no later than September 30, 2014.

V.

CONCLUSION

For the foregoing reasons, it is hereby ORDERED that
(1)

the stay entered by order [DE-211] on April 7, 2014, is hereby LIFTED;

(2)

the cases 2:11-CV-44-F and 2:14-CV-52-F be CONSOLIDATED. These two
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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;
(3)

the Clerk of Court schedule and notice a scheduling conference for 10:00 AM on

October 28, 2014, before the undersigned, to determine the schedule for future proceedings on
the limited issue discussed herein;
(4)

the parties meet and confer on or before October 14, 2014, concerning the scope

of discovery for the limited issue discussed herein and deadlines for all remaining discovery and
pre-trial activities;
(5)

the parties file a proposed scheduling plan on or before October 21, 2014,

concerning the scope of discovery for the limited issue discussed herein and deadlines for all
remaining discovery and pre-trial activities; in the alternative, if no agreement can be reached,
that the parties file separate proposals with the court concerning each of these issues; and
(6)

the Defendants in L&L Wings, Inc. v. Morrow, 2:14-CV-52-F, respond to L&L's

Amended Complaint and Jury Demand [DE-22] by September 30,2014.
SO ORDERED.
This the 15th day of September, 2014.

enior United States District Judge

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