NorthStar Gas Ventures v. Dernick Do not docket in this case. Case is consolidated under 4:17cv1230.
4:17-cv-01266
S.D. Tex.Mar 7, 2018Background
- Two nearly identical lawsuits filed in the Southern District of Texas: Russell v. Dernicks (4:17-CV-01230) and Northstar v. Dernicks (4:17-CV-01266), each alleging the Dernicks breached promissory notes/agreement obligations by failing to pay.
- Both cases involve the same defendants (Stephen H. Dernick and David D. Dernick) and substantially similar operative documents (nearly identical notes and related agreements).
- Procedurally, the two cases were assigned to different judges, had different scheduling orders, and both plaintiffs filed near-identical summary judgment motions; defendants filed near-identical responses and cross-motions.
- The Dernicks moved to consolidate the two actions; Russell supported consolidation, Northstar opposed consolidation and sought additional discovery time.
- Court evaluated consolidation under Federal Rule of Civil Procedure 42(a) and the relevant Fifth Circuit factors (common questions, parties, risk of prejudice, judicial economy, and stage of proceedings).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the two actions should be consolidated | Northstar: oppose consolidation — not a necessary party; discovery deadline passed; consolidation could enable asset depletion. Russell: supports consolidation for efficiency. | Dernicks: consolidate — common defendant, common facts and law, overlapping motions and discovery, consolidation conserves resources. | Granted. Cases consolidated under 4:17-CV-01230. |
| Whether consolidation would cause prejudice or confusion | Northstar: consolidation risks delay and asset depletion; scheduling differences matter. | Dernicks: no risk of confusion; summary judgment motions should resolve issues quickly. | Court found no undue prejudice or confusion; efficiencies outweigh asserted harms. |
| Effect on existing scheduling orders and discovery requests | Northstar: argued scheduling/deadline concerns weigh against consolidation. | Dernicks: consolidation appropriate; scheduling orders can be adjusted. | Court vacated existing scheduling orders pending resolution of summary judgment motions; Northstar’s extension motion denied as moot. |
| Whether consolidation requires one plaintiff to be a "necessary" party to the other suit | Northstar: argued consolidation inappropriate because it is not a necessary party. | Dernicks: consolidation permissible under Rule 42(a) without necessity requirement. | Court rejected necessity requirement; consolidation may proceed despite Northstar not being a necessary party. |
Key Cases Cited
- Mills v. Beech Aircraft Corp., 886 F.2d 758 (5th Cir. 1989) (district court has wide discretion to consolidate cases that share common questions of law or fact)
- Frazier v. Garrison I.S.D., 980 F.2d 1514 (5th Cir. 1993) (consolidation does not merge suits or change parties' rights)
- McKenzie v. United States, 678 F.2d 571 (5th Cir. 1982) (consolidation does not cause two actions to merge into one)
- Miller v. U.S. Postal Serv., 729 F.2d 1033 (5th Cir. 1984) (consolidated cases retain separate identities and require separate judgments)
- In re Air Crash Disaster at Fla. Everglades on Dec. 19, 1972, 549 F.2d 1006 (5th Cir. 1977) (court may order consolidation over parties' objections when appropriate)
