United States District Court, D. Nebraska
Gossett, III United States Magistrate Judge
matter comes before the court on the Joint Motion to
Consolidate (Filing No. 31 in Case No. 8:16CV233; Filing No.
48 in Case No. 8:16CV351) filed by the plaintiffs in both
above-captioned cases, the United States of America and the
State of Nebraska. The court will grant the motion as to
discovery and pretrial management only.
the above-captioned cases arise out of the same general
underlying facts. The United States alleges that, beginning
in August 2006, defendant Leon Johnson, the owner of
defendant Stabl, Inc. (“Stabl”), was notified by
the Nebraska Department of Environmental Quality
(“NDEQ”) that Stabl was not in compliance with
the Clean Water Act. Between 2006 and 2010, the NDEQ and EPA
took steps to enforce Stabl's compliance with the Clean
Water Act and informed Johnson of penalties of noncompliance.
(Filing No. 1 in Case No. 8:16CV233). In July 2010, Stabl was
notified by the U.S. Department of Justice of a potential
civil enforcement action pursuant to the Clean Water Act,
including monetary penalties owed by Stabl in the amount of
$2, 883, 414. Five days later, on July 13, 2010, Stabl
allegedly transferred almost of all of its assets,
approximately $8 million, to defendants Leon and Ann Johnson,
via three wire transfers. On August 10, 2011, the United
States and the State of Nebraska filed an action against
Stabl in this Court alleging violations of the Clean Water
Act and Nebraska state law. On January 31, 2014, the Court
entered a judgment against Stabl in the amount of $2, 285,
874, to be divided equally between the State of Nebraska and
the United States.
United States filed the above-captioned case on May 26, 2015,
to recover its judgment against Stabl and alleges the July
13, 2010, wire transfers were fraudulent under the Federal
Debt Collection Practices Act, 28 U.S.C. §§
300-3308 (“FDCPA”). The State of Nebraska filed
the above-captioned action on July 15, 2015, to recover its
judgment against Stabl and similarly alleges the defendants
made fraudulent transfers under Nebraska law, including the
July 13, 2010, wire transfers.
Rule of Civil Procedure 42(a) provides: “If actions
before the court involve a common question of law or fact,
the court may: (1) join for hearing or trial any or all
matters at issue in the actions; (2) consolidate the actions;
or (3) issue any other orders to avoid unnecessary cost or
delay.” Fed.R.Civ.P. 42(a). “For convenience, to
avoid prejudice, or to expedite and economize, the court may
order a separate trial of one or more separate issues, [or]
claims[.]” Fed.R.Civ.P. 42(b). “The district
court is given broad discretion to decide whether
consolidation would be desirable and the decision inevitably
is contextual.” Cisler v. Paul A. Willsie Co.,
Case No. 8:09CV365, 2010 WL 3237222, *2 (D. Neb. Aug. 13,
2010). The consent of the parties is not required for
consolidation. Id. Whether to grant a motion to
consolidate is within the sound discretion of the court.
Id. When ruling on a motion to consolidate,
“[t]he court must weigh the saving of time and effort
that would result from consolidation against any
inconvenience, expense, or delay that it might cause.
Id. Lawsuits involving the same parties are
“apt candidates for consolidation.” Id.
(quotation and citation omitted). However, consolidation is
inappropriate “if it leads to inefficiency,
inconvenience, or unfair prejudice to a party.”
EEOC v. HBE Corp., 135 F.3d 543, 551 (8th Cir.
reviewed the matter, the court finds that consolidation for
purposes of discovery and pretrial management is appropriate
at this time. Both of the above-captioned cases arise out of
the same underlying factual scenario. Both plaintiffs in the
above-captioned cases were parties to the underlying case
against Stabl, wherein both plaintiffs received a money
judgment. Both plaintiffs allege Stabl has not paid any part
of the judgment, and both plaintiffs identify the July 13,
2010, wire transfers as fraudulent transfers. Defendants
oppose consolidation in part because each plaintiff is
proceeding under separate statutes and because they believe
there are jurisdictional differences between the cases.
However, due to the factual similarities between the cases,
at least some of the same witnesses and documents will be
part of discovery in both cases, and any minor differences in
the state and federal statutes relied on by the plaintiffs
will not cause confusion during discovery. Consolidation
during the discovery phase will avoid duplicative parallel
activities and will promote the goals of efficient use of
judicial resources without leading to inconvenience, delay,
unfair prejudice, or additional expense. Because both cases
are in the initial stages of progression, consolidation of
discovery and pretrial management will conserve judicial
resources, as well as the resources of the parties. At this
time, the court will not consolidate the cases for trial, but
will consider a renewed motion to consolidate after further
progression of the case. Accordingly, IT IS
Joint Motion to Consolidate (Filing No. 31 in Case No.
8:16CV233; Filing No. 48 in Case No. 8:16CV351) is granted,
in part. To the extent that the motion to consolidate asks
the cases be consolidated for trial, it is denied without
prejudice to reassertion at a later date.
two above-captioned cases are consolidated for purposes of
discovery and pretrial management only.
No. 8:16CV233 will be designated as the “Lead
Case” and Case No. 8:16CV351 will be designated as
court's CM/ECF System has the capacity for
“spreading” text among the consolidated cases. If
properly docketed, the documents filed in the Lead Case will
automatically be filed in the Member Case. The parties are
instructed to file documents related to discovery (except
those described in paragraph 5) in the Lead Case and to
select the option “yes” in response to the
System's question whether to spread the text.
parties may not use the spread text feature to file
complaints, amended complaints, and answers; to pay filing
fees electronically using pay.gov; or to file items related
to service of process.
6. If a
party believes an item in addition to those described in
paragraph 4 should not be filed in all the consolidated
cases, the party must move for permission to file the item in
one or more member cases. The motion must be filed in all the
consolidated cases using the spread text feature.
Rule 26(f) Report, currently due on or before March 15, 2017,