Opinion
CIVIL ACTION No. 03-2664-CM
April 19, 2004
MEMORANDUM AND ORDER
On December 31, 2003, plaintiff Chaparral Steel Midlothian, L.P. (Midlothian) filed a Petition for Order Confirming Arbitration Award (Doc. 1). Midlothian contends that the instant case should be consolidated with a case pending in this district before Judge Julie Robinson captioned B-S Steel of Kansas, Inc. v. Texas Industries, Inc., et al, Case No. 01-2140-JAR. This matter comes before the court on Midlothian's Motion to Consolidate (Doc. 5).
I. Background Facts
On August 15, 2001, defendant in this matter, B-S Steel of Kansas, Inc. (B-S Steel) filed the above referenced lawsuit, Case No. 01-2410, naming as defendants Texas Industries, Inc. and Chaparral Steel Company. B-S Steel filed an amended complaint on December 6, 2001, naming as additional defendants Chaparral Steel Texas, Inc. and Midlothian. In Case No. 01-2410, B-S Steel alleged various antitrust and tort violations.
Midlothian moved to stay the case pending arbitration pursuant to an arbitration provision contained in a 1997 contract between Midlothian and B-S Steel. Also at issue was a 2001 contract between the two parties, which did not contain an arbitration provision and which granted exclusive jurisdiction over disputes under that contract to Texas courts. Accordingly, Midlothian moved to dismiss any non-arbitrable claims that arose under the 2001 contract.
On September 3, 2002, Judge Robinson granted Midlothian's motion to stay the proceedings and referred all claims under the 1997 contract to arbitration. B-S Steel of Kan., Inc. v. Texas Indus., Inc., 229 F. Supp.2d 1209, 1227 (D. Kan. 2002). Judge Robinson also dismissed for improper venue those claims against Midlothian arising out of transactions under the 2001 contract. With respect to the three remaining defendants, each moved to dismiss for lack of personal jurisdiction, which Judge Robinson denied, finding that "they are so interrelated operationally and functionally with [Midlothian], that the contacts of [Midlothian] with [B-S Steel] in this forum are reasonably attributable to them." Id. at 1213.
On September 17, 2002, B-S Steel voluntarily dismissed its claims against Midlothian. B-S Steel and Midlothian arbitrated their claims in Ellis County, Texas. On November 20, 2003, an arbitration panel entered an arbitration award in favor of Midlothian. On November 24, 2003, the three remaining defendants in Case No. 01-2410 moved for summary judgment, alleging res judicata based upon the outcome of the arbitration. Specifically, the three remaining defendants argue that the arbitration award bars recovery by B-S Steel against them as well. Those summary judgment motions are fully briefed and ripe for review.
On December 31, 2003, Midlothian filed the above-referenced petition to confirm the arbitration award. That same day, B-S Steel filed in the Northern District of Texas a motion to vacate the arbitration aw;
II. Discussion
Federal Rule of Civil Procedure 42(a) allows a court to consolidate "any or all the matters in issue in the actions" if the actions involve a "common question of law or fact." The decision whether to consolidate such actions is left to the sound discretion of the trial court. Shump v. Balka, 574 F.2d 1341, 1344 (10th Cir. 1978). In exercising its discretion, the court should take into consideration whether judicial efficiency is best served by consolidation. Johnson v. Unified Gov't, No. 99-2407-JWL, 1999 WL 1096038, at *1 (D. Kan. Nov. 16, 1999).
B-S Steel originally filed suit against Midlothian in Case No. 01-2410. As it stands now, both cases in effect involve the same parties, in that the remaining defendants in Case No. 01-2410 are so "operationally and functionally" interrelated with Midlothian that Judge Robinson attributed Midlothian's forum contacts to them. Moreover, Judge Robinson originally referred B-S Steel and Midlothian to the very arbitration at issue in this case, and the claims asserted in the underlying arbitration are those same claims asserted against the three remaining defendants in Case No. 01-2410. More importantly, the issues relating to the validity of the arbitration award are common to both cases and, in fact, favor consolidation of this case with Judge Robinson's. Pending before Judge Robinson are three fully briefed summary judgment motions, the results of which depend on whether the arbitration award is confirmed. The court finds that the two cases involve common issues of law and fact and concludes that judicial economy is best served by consolidation. IT IS THEREFORE ORDERED that Midlothian's Motion to Consolidate (Doc. 5) is granted. Case Nos. 01-2410 and 03-2664 are hereby ordered consolidated.