United States of America v. Retsel Corporation et al

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
WESTERN DIVISION
UNITED STATES OF AMERICA,
Plaintiff 5:22-cv-5086
vs. MEMORANDUM
AND ORDER
RETSEL CORPORATION,
d^/a GRAND GATEWAY
HOTEL and d/b/a CHEERS
SPORTS LOUNGE AND
CASINO,
CONNIE UHRE,and
NICHOLAS UHRE,
Defendants
Pending before the Court is the joint motion ofthe parties to consolidate
United States v. Retsel Corp., 5:22-cv-5086, With. NDN Collective v. Retsel Corp.,
5:22-cv-5027, for discovery purposes only.(Doc. 17, 5:22-cv-5086). NDN
Collective has filed its Notice of No Opposition to Consolidate.(Doc. 32, 5:22-cv-
5027). The Court held a hearing on the motion on February 3, 2023, to consider
the arguments ofthe Parties in support of the motion. (Doc. 36, id.; Doc. 21, 5:22-
cv-5086). For the following reasons, the Court denies the motion.
Background
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In NDN Collective v. Retsel, 5:22-cv-5027, filed on March 23, 2022,
Plaintiffs alleged in their first amended complaint claims of discrimination by
employees of Retsel Corporation in violation of42 U.S.C. § 1981 (Doc. 4)seeking
class action status, declaratory and injunctive relief, compensatory and punitive
damages, and other appropriate relief. Plaintiffs' second amended complaint
repeats the claims and adds claims for assault and battery. (Doc. 17). All claims
arise out of Defendants' alleged discrimination against Plaintiffs on the basis of
race in connection with access to and the rental ofrooms from the Grand Gateway
Hotel and Cheers Bar, Rapid City, S.D. Defendants have denied Plaintiffs'
allegations and filed a counterclaim alleging intentional interference with business
relations, defamation, trespass, nuisance, and civil conspiracy against Plaintiff
NDN Collective.(Doc. 18).
United States v. Retsel Corp., 5:22-cv-5086, filed on October 19, 2022,
alleges discrimination in violation of42 U.S.C. §§ 2000a, et seq., and seeks
declaratory and injunctive relief and appropriate remedial action. The case arises
from many ofthe same incidents that are the subject ofthe NDN Collective
lawsuit, 5:22-cv-5027, discussed above.
Legal Standard
Pursuant to F.R.C.P. 42,the Court may "consolidate the actions" before it if
such actions "involve a common question oflaw or fact." Fed. R. Civ. P. 42(a). As
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the Eighth Circuit has stated, whether to consolidate actions is a matter witiiin tiie
discretion ofthe court. Horizon Asset Management, Inc. v. H& R Block, Inc., 580
F.3d 755, 768 (8th Cir. 2009)(noting court did not abuse discretion in
consolidating claims with "common parties, overlapping issues, and related factual
scenarios" and there was no unfaimess to the parties). See also Hell v. Belle Starr
Saloon & Casino,2013 WL 943754, *2-5(D.S.D. 2013)(consolidating cases
involving overlapping witnesses mid claims of sexual and physical harassment
against same decision-maker with same modus operandi); Suhn v. Berg, 2011 WL
1527263(D.S.D. 2011)(granting motion to consolidate given common questions
offact and common witnesses).
The Eighth Circuit has cautioned, however, that consolidation ofcases is
inappropriate if it leads to "inefficiency, inconvenience, or unfair prejudice to a
party." E.E.O.C. v. HBE Corp., 135 F.3d 543, 551 (8th Cir. 1998). Furthermore,
consolidation is not automatic even when requested, as the party seeking
consolidation bears the burden of establishing it would "promote judicial
convenience and economy." Powell v. National Football League,764 F. Supp.
1351,1359(D. Minn. 1991). Tn Powell, defendants sought to consolidate two cases
brought by individual professional football players against the National Football
League. The court denied the motion, contrasting the claims in each, and citing
possible undermining of one of the court's orders excluding certain issues and a
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possible decertification ofthe class of plaintiffs as its rationale. Id. See also
Ecolab, Inc. v. Schmidt., 2015 WL 12803640,*2(D.N.D. 2015)(denying
consolidation of cases alleging breach of employment agreements involving
different contracts).
Analysis
In this case, the parties have moved for consolidation of 5:22-cv-5086 and
5:22-cv-5027 with respect to discovery only. (Doc. 17). As was evident at the
motion hearing on February 3, 2023, the Parties know they can stipulate to the use
ofthe discovery gleaned in both cases for use in both cases. They do not require a
court order to enter such a stipulation. The Parties also acknowledge they can seek
a ruling from the Court if any issue with discovery arises.
The Court recognizes the similarities in the claims and that certain witnesses
are common to both cases. It is evident, however, that Plaintiffs in NDN Collective
have claims substantially more far-reaching than those ofthe United Stales. The
latter seeks declaratory and injunctive relief, while the former seeks similar relief
but also includes claims for actual and punitive damages resulting from the alleged
discrimination, as well as claims sounding in tort. The counterclaims by Retsel
Corporation against NDN Collective are not lodged against the United States and
the relief sought, therefore, far exceeds any relief that potentially is available
between the United States and Defendants. These distinctions in the cases will
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require the Parties to engage in discovery that likely will differ in length oftime
needed, avenues of inquiry and witnesses, resulting in differing time frames for
resolution ofthe claims at issue.
Therefore, because the Court finds consolidation of discovery pursuant to
this Court's order may not promote efficiency and economy, and in fact, may have
the opposite effect, the Court denies the Parties' motion to consolidate for
discovery (Doc. 17, 5:22-cv-5086), recognizing no opposition from NDN
Collective(Doc. 32, 5:22-cv-5086). Should the Parties choose to stipulate to the
use of discovery materials gleaned in one case for use in the other, the Court
encourages such actions.
Additional discussion during the motion hearing on February 3,2023,
centered on the common issues in the case and the schedule for resolving them.
The Court will consolidate the declaratory and injunctive portion ofthe two cases
for trial which will be scheduled for the week of June 10, 2024. The remaining
claims in NDN Collective v. Retsel will be tried in October or November,2024.
The Parties in each case will propose scheduling orders.
Accordingly,IT IS ORDERED that the motion ofthe United States and
Retsel Corporation (Doc. 17)to consolidate the cases for discovery, with no
opposition from NDN Collective(Doc. 36, 5:22-cv-5027), is denied.
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Dated this 15th day ofFebruary, 2023.
BY THE COURT:
ATTEST:
MATTHEW W.THELEN,CLERK
L. Piersol
United States District Judge
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