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Tuesday, March 27, 2018

SCOTUS: Hall v. Hall and the limits of all-purpose consolidation

SCOTUS decided Hall v. Hall, unanimously (in a most-Robertsian opinion) holding that consolidated cases, even those consolidated for "all purposes," retain their independent identities for finality purposes, so judgment on one set of claims is final and appealable, even if other sets of claims remain in the district court. I called this one wrong, before and after argument. My SCOTUSBlog recap is here.

What I did not expect was the Court's seeming rejection of any distinction between limited and all-purpose consolidation, at least for appealability purposes. (The Court never discussed the scope of consolidation in the case, because it did not matter). Consolidation for all purposes should create a single action--as if separate sets of claims and parties had been joined in a single action in the first instance under FRCP 18 and 20.* In a single action, even complete resolution of some claims or some parties does not produce a final-and-appealable order (absent FRCP 54(b) certification). The Hall Court disclaimed any suggestion that all-purpose consolidation was not allowed. But it pulled finality and appealability out as issues affected by all-purpose consolidation; in other words, all-purpose consolidation does not create a single action for purposes of finality and appealability, although it may create a single action for other purposes. But that takes much of the force from all-purpose consolidation, which no longer produces the same procedural effect (in at least one respect) as if joined in the first instance. And without the finality benefit, it is not clear why else parties or courts would consolidate for all purposes, as all other benefits are available with limited-purpose consolidation.

[*] I teach that consolidation for all purposes is permissible only if the claims and parties could have been joined in the first place--not only because of a common question of law or fact (required in both Rule 20 and Rule 42(a)), but also where the claims arising out of the same transaction or occurrence.

Posted by Howard Wasserman on March 27, 2018 at 02:48 PM in Civil Procedure, Howard Wasserman, Law and Politics | Permalink

Comments

Responding to Mr. Dodson: I am not arguing that consolidation of cases that should have been brought as one is prohibited. Rule 42(a) is certainly broad enough to allow such consolidation. The effect of such a consolidation, though, is that a final judgment dismissing one of the two cases in its entirety will be immediately appealable. Although I argued for that result (because consolidated cases are not merged and there is a need for a bright line—a final judgment— to define when to appeal), I still feel that philospohically, there should not be such an appeal in the types of cases that could have been brought as one claim. (The two cases in Hall v. Hall could not have been brought as one claim.)

Thus, what I am asserting is that courts and litigants should be far more vigilant and thoughtful in how they deal with these types of cases. Yes, the court can consolidate them, but that will allow “piecemeal appeals” in cases that if filed as one could not be appealed on such a piecemeal basis. Instead of consolidating, courts should instead exercise their considerable discretion and power to manage cases to require parties to bring their actions as a single action.

In Mr. Dodson’s example where D has a permissive counterclaim, the result is different. There, I would argue that the district court does not have the discretion to require D to file his separate action against P as a counterclaim to P’s claim against D (to require someone to file a claim that is, by rule, permissive would seem to be a perfect example of an abuse of discretion).. If D files it as a separate action and it goes to final judgment, he has a right of appeal. Similarly, if the court consolidates the two cases under Rule 42(a), D will still have an appeal from the final judgment in its case even if P’s case is not final. If, however, D does file his claim as a permissive counterclaim, then there will only be a final judgment when the entire case is over even if the court grants summary judgment to D on its claim before P’s claim is fully adjudicated. F

Of course, the other solution is an amendment to Rule 42 that provides that when two cases that should have been filed as one case under Rules 13, 14, or 17-25 are consolidated for all purposes, they are deemed merged into the first filed action. (The rule should probably also specify that the court shall dismiss all actions but the consolidated action without prejudice.). (This conceivably raises issues for statute of limitations purposes but could be addressed by specifying the circumstances under which the date of the latter-filed case(s) is deemed to relate back to the date of the filing of the first case.)

Posted by: Andrew C. Simpson | Mar 27, 2018 9:10:55 PM

@scott dodson

I think you misread Simpson's point. He is not claiming that "consolidation is prohibited for claims that could have been asserted in the same lawsuit." Rather, he is making a case management point. The court can consolidate the cases if it wishes it just that it will now have to contend with piecemeal appeals if it does so. And if the court doesn't want piecemeal appeals in has tools other than consolidation to prevent it.

Posted by: James | Mar 27, 2018 8:03:16 PM

The court has explained very well the issue . The issue in fact , is one of " inherent power " . Such consolidation , is typically done for better a management , and is clearly functional and ad hoc one . That is to say , not meant for really consolidating , but consolidating cases , for functional treatment , yet , guarding distinct traits of each case if needed , here I quote :

We explained once more that “consolidation is permitted as a matter of convenience and economy in administration, but does not merge the suits into a single cause, or change the rights of the parties, or make those who are parties in one suit parties in another….

End of quotation :

That is the traditional meaning also , it is very well explained , and the current meaning ( in the new rules ( 42(a)) supports it in fact , here I quote :

Rule 42. Consolidation; Separate Trials

(a) Consolidation. 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.
(b) Separate Trials. For convenience, to avoid prejudice, or to expedite and economize, the court may order a separate trial of one or more separate issues, claims, cross claims, counterclaims, or third-party claims. When ordering a separate trial, the court must preserve any federal right to a jury trial.

End of quotation :

So we read in subsection (3 ) : " issue any other orders to avoid unnecessary cost or delay " The same goes for separate trials in fact . And in fact , it is prescribed : " The court may …" as it does find fit !! It is not obliged , but " may " .

Thanks

Posted by: El roam | Mar 27, 2018 4:55:17 PM

Say D has a claim against P that could be brought either as a permissive counterclaim under 13(b) or as a separate lawsuit. It's hard to see the functional difference between the joinder of D's claim if asserted as a permissive counterclaim and the consolidation of D's claim if filed as a separate lawsuit.

I don't think Simpson's comment above can be right that consolidation is prohibited for claims that could have been asserted in the same lawsuit. There's too much efficiency gain to consolidating claims that could have been--but weren't--joined permissively under 13, 14, 18, and 23. Indeed, it seems to me that his definition would preclude consolidation of any two cases brought by the same plaintiff against the same defendant simply because they could have been joined in the same case under Rule 18(a).

Posted by: Scott Dodson | Mar 27, 2018 4:19:17 PM

I appreciate your comments. And congratulations on an overwhelming win.

Posted by: Howard Wasserman | Mar 27, 2018 4:05:15 PM

I disagree that "consolidation for all purposes should create a single action." You are correct that there is a need to deal with claims and parties that could have been brought in a single action in the first instance; but, as I argued to the Court in Hall v. Hall, the solution for that is not Rule 42(a) consolidation. Instead, the solution is for the courts to be more aggressive in requiring litigants to replead their cases properly. Rules 13, 14, and 17 through 25 of the FRCP are all tools that allow the court to manage cases so that they are properly before the court as one action.

For example, A sues B and B counter-sues A for a claim that is a compulsory counterclaim under Rule 13(a). The solution is not for the district court to consolidate the two cases; rather, it is to dismiss B's counter-suit against A with leave to refile it as a counterclaim in the lawsuit filed by A. Similar result if B files a suit against C that could have been brought as a third party complaint under Rule 14(a).

I submit that Rule 42(a) was not designed for cases that could have been brought as single judicial unit through the application of Rules 13, 14, 17-25. The "need" for all purpose consolidation of cases that could have been brought in a single suit arises because parties and courts have taken the shortcut of "all purpose" consolidation. Rule 42's placement in the FRCP under "Trials" rather than under "Pleadings" or "Parties" suggests that it was not intended for cases that could have been brought as a single suit.

So consider the classic breach of contract race to the courthouse between A and B. A sues B for breach and five minutes later, B's lawyer files a suit against A for breach of the same contract. In the future, if the court consolidates those two cases and concludes that A's claim fails as a matter of law (and dismisses it) but B's claim contains factual issues that must go to a jury, A will have a right of immediate appeal, even as B's case is proceeding to a jury trial. On the other hand, if, instead of consolidating the two cases, the court orders B to reassert its claim as a counterclaim to A's claim, then dismisses B's case, there will be no piecemeal appeal situation.

Posted by: Andrew C. Simpson | Mar 27, 2018 4:02:18 PM

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