Jackson et al v. McKay-Davis Funeral Home Inc et al

Filing 242

ORDER signed by Judge Rudolph T. Randa on 11/6/2012 Denying 233 Motion to assign this matter back to Judge Gorence; Denying 229 Motion for Sanctions; and setting a Telephonic Status Conference for 12/4/2012 at 09:30 AM before Judge Rudolph T. Randa, the Court will initiate the call. (cc: all counsel) (nts)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN

MARLENEA JACKSON and
ERICA JACKSON (a minor),
Plaintiffs,

-vs-

Case No. 07-C-1037

MCKAY-DAVIS FUNERAL HOME,
TRAVELERS INSURANCE COMPANY, et al.,
Defendants.

DECISION AND ORDER

This lawsuit relates to the negligent mishandling and eventual loss of the cremains of
Eric Gerald Jackson. It was filed in 2007 and assigned to Magistrate Judge Patricia Gorence.
All of the parties in the initial complaint – Marlenea and Erica Jackson (husband and daughter),
McKay-Davis Funeral Home, Suhor Industries, Oklahoma Wilbert Vaults, and DHL Air
Express – agreed to proceed before Judge Gorence by filing this district’s standard “Consent
to Proceed Before a U.S. Magistrate Judge” form. See http://www.wied.uscourts.gov, Form
Repository. On May 29, 2008, the plaintiffs filed an amended complaint naming additional
defendants, including Travelers Insurance Company. The case then proceeded to the point
where the only remaining defendants were Travelers and McKay-Davis (Travelers’ insured).
On August 21, 2012, Judge Gorence’s office informed Travelers that it needed to file the
magistrate consent/refusal form. Travelers filed its form the next day, indicating that it was
“unwilling to consent” to proceed before a magistrate judge. The case was then reassigned due
to the non-consent of the parties. The plaintiffs move for relief from this order, asking the

Court to send the case back to Judge Gorence.
Plaintiffs move for relief under either Rule 59(e) or Rule 60(b), but these rules generally
govern postjudgment motions. Tillman v. Burge, 813 F. Supp. 2d 946, 982 (N.D. Ill. 2011).
Nonetheless, district judges have inherent authority to reconsider an interlocutory order1
because such orders are subject to revision at any time before the entry of judgment
adjudicating all the claims. Fed. R. Civ. P. 54(b); Zurich Capital Mkts. Inc. v. Coglianese, 383
F. Supp. 2d 1041, 1045 (N.D. Ill. 2005); Peirick v. Ind. Univ.-Purdue Univ. Indianapolis
Athletics Dep’t, 510 F.3d 681, 694 n.5 (7th Cir. 2007); Fisher v. Nat’l R.R. Passenger Corp.,
152 F.R.D. 145, 149 (S.D. Ind. 1993) (district courts have “practically unbridled discretion . .
. to reconsider a previous interlocutory order”). The standards which govern post-judgment
motions to reconsider are generally the same for interlocutory orders. Tillman, 813 F. Supp.
2d at 982-83. Reconsideration is appropriate to correct manifest errors of law or or fact or to
present newly discovered evidence. Bordelon v. Chi. Sch. Reform Bd. of Trustees, 233 F.3d
524, 529 (7th Cir. 2000).
The Federal Magistrate Act provides that “[u]pon the consent of the parties, a full-time
United States magistrate judge . . . may conduct any or all proceedings in a jury or nonjury civil
matter and order the entry of judgment in the case, when specially designated to exercise such
jurisdiction by the district court.” 28 U.S.C. § 636(c)(1). Congress gave magistrate judges
case-dispositive civil authority because it wanted to relieve the district courts’ “mounting queue
of civil cases” and “improve access to the courts for all groups.” Roell v. Withrow, 538 U.S.
580, 588 (2003). But Congress also “meant to preserve a litigant’s right to insist on trial before
1

By analogy to an order granting a motion to transfer venue, Judge Gorence’s order reassigning this case is an
interlocutory order. 15 W right & Miller, Fed. Practice & Proc. § 3855 (3d ed. 2007).

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an Article III district judge insulated from interference with his obligation to ignore everything
but the merits of a case.” Id. Thus, voluntary consent is required before a civil action may be
referred to a magistrate for a final decision. Id. at 589 (“concern about the possibility of
coercive referrals . . . prompted Congress to make it clear that ‘the voluntary consent of the
parties is required before a civil action may be referred to a magistrate for a final decision’”).
The issue of consent is addressed by statute, the Federal Rules of Civil Procedure, and the local
rules of this judicial district. § 636(c)(2); Fed. R. Civ. P. 73; General L.R. 73 (E.D. Wis.) (“The
magistrate judges in this District are designated to exercise the jurisdiction and authority
provided by [] § 636(c), when all parties consent to it, and may conduct any or all proceedings,
including a jury or nonjury trial, in a civil case”).
Consent is typically resolved by filing this district’s standard consent/refusal form. As
noted above, Travelers only recently filed this form, and up until that point, Travelers was never
reminded or given official notice that the form needed to be filed. Of course, up until that point,
Travelers voluntarily participated in extensive proceedings before Judge Gorence. In Roell, the
Supreme Court held that “although the specific referral procedures in [] § 636(c)(2) and Federal
Rule of Civil Procedure 73(b) are by no means just advisory, the text and structure of the
section as a whole suggest that a defect in the referral to a full-time magistrate judge under §
636(c)(2) does not eliminate that magistrate judge’s ‘civil jurisdiction’ under § 636(c)(1) so
long as the parties have in fact voluntarily consented.” 538 U.S. at 587. Accordingly, courts
may “accept implied consent” where “the litigant or counsel was made aware of the need for
consent and the right to refuse it, and still voluntarily appeared to try the case before the
Magistrate Judge.” Id. at 590.

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There can be little doubt that Travelers voluntarily appeared before Judge Gorence.
Travelers answered the amended complaint, filed a counterclaim against the plaintiffs, and filed
a crossclaim against the other defendants. Travelers also appeared at scheduling conferences
and filed several motions: to bifurcate, stay, reconsider, quash, for a protective order, for
declaratory judgment, and for partial summary judgment. “After Roell, litigants who have
knowingly proceeded without objection through lengthy discovery and summary judgment
proceedings with one or more magistrate judges are deemed to have impliedly consented to
section 636(c) jurisdiction.” Stevo v. Frasor, 662 F.3d 880, 884 (7th Cir. 2011). Further, there
is a plausible argument that Travelers was “made aware of the need for consent” on multiple
occasions because, as in Roell, Travelers “stood silent” on at least two occasions when Judge
Gorence “stated that they had consented to her authority.” Id. at 584 n.1.
Nonetheless, the Court must conclude that Roell is distinguishable because the issue of
consent in Roell was raised post-judgment. “Inferring consent in these circumstances thus
checks the risk of gamesmanship by depriving parties of the luxury of waiting for the outcome
before denying the magistrate judge’s authority. Judicial efficiency is served; the Article III
right is substantially honored.” Id. at 590 (emphasis added). Thus, the Supreme Court was
primarily concerned with “the risk of a full and complicated trial wasted at the option of an
undeserving and possibly opportunistic litigant.” Id. Here, Travelers raised the issue after
extensive proceedings, but only after being prompted to file the form and before the entry of
judgment. Therefore, Travelers cannot be accused of “sit[ting] back without a word about their
failure to file the form, with a right to vacate any judgment that turned out not to their liking.”
Id.

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To be sure, there are strong justifications for allowing this case to proceed before Judge
Gorence, who ably presided for almost five years until the eve of trial. On the other hand, there
is a sense of uncertainty over whether Travelers was adequately informed that an Article III
judge was available to hear this case, at least until the point where Travelers was prompted to
file the form. This uncertainty, which was clarified when Travelers filed its refusal, would cast
a pall over future proceedings, undermining or at least calling into question Judge Gorence’s
jurisdiction to enter judgment in this case. There is no need to subject this case to the risk of
a void final judgment. These are extraordinary circumstances which justify vacating the
reference to Judge Gorence. 28 U.S.C. § 636(c)(4); Fed. R. Civ. P. 73(b)(3).
Also before the Court is the plaintiffs’ motion for Rule 11 sanctions against McKayDavis for filing what it terms a “frivolous motion seeking reconsideration of the Court’s ruling
on Summary Judgment.” Pursuant to Rule 11’s safe harbor provision, Fed. R. Civ. P. 11(c)(2),
plaintiffs served McKay-Davis with a copy of their motion on January 3, 2012, but did not file
it until August 20, five days after Judge Gorence denied McKay Davis’s motion to reconsider.
The Rule 11 motion is untimely because a motion for sanctions should be filed “as soon as
practicable after discovery of a Rule 11 violation.” Sullivan v. Hunt, 350 F.3d 664, 666 (7th
Cir. 2003). That the plaintiffs waited eight months to file it and then only after an adverse
ruling strongly suggests that the motion was not sanctionable in the first instance. “If a party’s
action is ‘abusive’ as contemplated by Rule 11, the adversary should be able to realize
immediately that an offense has occurred. Seldom should it be necessary to wait for the district
court or the court of appeals to rule on the merits of an underlying question of law. If there is
doubt how the district court will rule on the challenged pleading or motion, the filing of the

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paper is unlikely to have violated Rule 11. . . . [M]ere failure to prevail does not trigger a Rule
11 sanction order.” Mary Ann Pensiero, Inc. v. Lingle, 847 F.2d 90, 99 (3d Cir. 1988).
Setting aside the issue of timeliness, McKay-Davis’s motion to reconsider did not run
afoul of Rule 11 in any respect. Plaintiffs argue that the motion was frivolous because it did
not meet the standard which justifies reconsideration – manifest error of law or fact. That is
why Judge Gorence denied the motion, but the arguments presented therein were not frivolous.
Fed. R. Civ. P. 11(b)(2). In fact, the motion to reconsider was filed in tandem with a
Daubert motion to exclude the testimony of Dr. Lamers (which Judge Gorence granted), and
the two motions were related in some respect. ECF No. 212, Brief in Support of Motion to
Reconsider at 6 (“based on recent case law and the accompanying Motion to Exclude Dr.
Lamers’ testimony and opinions, the two negligence claims should be re-analyzed”). Plaintiffs
also accuse McKay-Davis of “non-stop and evasive motion practice from the inception of this
case, delaying final resolution for years.” See Fed. R. Civ. P. 11(b)(1) (pleading must not be
“presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly
increase the cost of litigation”). The history of this case is extensive, but it is disingenuous for
the plaintiffs to blame this on McKay-Davis. McKay-Davis did not engage in any substantive
motion practice until it moved for summary judgment in January of 2011. Prior to that, Judge
Gorence was preoccupied with resolving DHL’s liability and the insurance coverage/duty to
defend issues related to Travelers.
If anything, the Court agrees with McKay-Davis that the motion for sanctions is
sanctionable in and of itself. The argument that McKay-Davis somehow violated Rule 11 by
offering reasonable arguments in relation to Judge Gorence’s ruling on summary judgment is

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simply frivolous, Rule 11(b)(2), and the fact that the plaintiffs waited until after Judge Gorence
issued her ruling suggests that it was brought for an improper purpose. Rule 11(b)(1). McKayDavis is entitled to an award of the costs and attorneys’ fees that it incurred in response to this
motion. E. Gluck Corp. v. Rothenhaus, 252 F.R.D. 175, 179 (S.D.N.Y. 2008) (“in cases where
the initial movant’s Rule 11 motion is denied, a court may issue sanctions against the movant
because ‘the filing of a motion for sanctions is itself subject to the requirements of the rule and
can lead to sanctions.’ The nonmoving party need not file a cross-motion to receive fees as the
court can award reasonable expenses to the prevailing party, including attorney’s fees, incurred
in presenting or opposing the motion”) (internal citations omitted); Fed. R. Civ. P. 11(c)(2).
NOW, THEREFORE, BASED ON THE FOREGOING, IT IS HEREBY
ORDERED THAT:
1.

Plaintiffs’ motion to assign this matter back to Judge Gorence [ECF No. 233] is

DENIED;
2.

Plaintiffs’ motion for Rule 11 sanctions [ECF No. 229] is DENIED. McKay-

Davis is entitled to its reasonable expenses and attorney’s fees incurred in opposing this motion;
and
3.

On December 4, 2012 at 9:30 a.m. (CST), Court will conduct a telephonic status

conference to discuss further scheduling in this case. The Court will initiate the call.
Dated at Milwaukee, Wisconsin, this 6th day of November, 2012.
BY THE COURT:

__________________________
HON. RUDOLPH T. RANDA
U.S. District Judge
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