Judge: Anne Richardson, Case: 19STCV37948, Date: 2023-04-18 Tentative Ruling
DEPARTMENT 40 - JUDGE ANNE RICHARDSON - LAW AND MOTION RULINGS
The Court issues tentative rulings on certain motions. The tentative ruling will not become the
final ruling until the hearing [see CRC 3.1308(a)(2)]. If the parties wish to
submit on the tentative ruling and avoid a court appearance, all counsel must
agree and choose which counsel will give notice. That counsel must 1) call
Dept 40 by 8:30 a.m. on the day of the hearing (213/633-0160) and state
that all parties will submit on the tentative ruling, and 2) serve notice of
the ruling on all parties. If any party declines to submit on the tentative
ruling, then no telephone call is necessary and all parties should appear at
the hearing in person or by Court Call.
Case Number: 19STCV37948 Hearing Date: April 18, 2023 Dept: 40
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SAMUEL KIM, an individual; CHONGSIK PARK, an individual; and
CALI BLUE SKY INVESTMENT, INC., a California corporation; DION FATAFEHI, an
individual; URO, LLC, a California limited liability company; SEAN WONG, an
individual; and YUQI HUANG, an individual, Plaintiff, v. JAFAR RASHID, an individual; RASHID & SONS, INC., a
California Corporation (dba CHEVRON #359517 and CHEVRON #309226); S&E 786
ENTERPRISE, LLC, a California limited liability company; RD 786 ENTERPRISES,
INC. a California corporation; Z&R OIL CORPORATION, a California
corporation; JRJS, LLC, an Alaska limited liability company; JRJS HOLDING,
LLC, an Alaska limited liability company; MOHAMMED KHALID; an individual; and
DOES 1 through 100 inclusive, Defendants. ______________________________________ JAFAR RASHID, an individual; RASHID & SONS, INC.; S&E
786 ENTERPRISE, LLC; RD 786 ENTERPRISES, INC.; Z&R OIL CORPORATION; JRJS,
LLC; MOHAMMED KHALID, Cross-Complainants, v. SYED HUSSAIN; SAMUEL KIM; DION FATAFEHI; SEAN WONG; and ROES
1-25, Inclusive, Cross-Defendants. ______________________________________ SYED HUSSAIN, an individual, Cross-Complainants, v. JAFAR RASHID, an individual; RASHID & SONS, INC., a California
Corporation (dba CHEVRON #359517 and CHEVRON #309226); S&E 786
ENTERPRISE, LLC, a California limited liability company; RD 786 ENTERPRISES,
INC. a California corporation; Z&R OIL CORPORATION, a California
corporation; JRJS, LLC, an Alaska limited liability company; JRJS HOLDING,
LLC, an Alaska limited liability company; MOHAMMED KHALID; an individual; and
ZOES 1 through 100 inclusive, Cross-Defendants. |
Case No.: 19STCV37948 [Consolidated with 19STCV38036 and
19STCV38066] Hearing Date: 4/18/23 Trial Date: 9/5/23 [TENTATIVE] RULING RE: Defendants Jafar
Rashid, Rashid & Sons, Inc., S&E 786 Enterprise, LC, RD 786
Enterprises, Inc., Z&R Oil Corporation, JRJS, LLC, JRJS Holding, LLC and
Mohammed Khalid’s Motion to Consolidate Case No. 19STCV37948 with Related
Case No. 20STCV47489. |
Defendants Jafar Rashid, Rashid
& Sons, Inc., S&E 786 Enterprise, LC, RD 786 Enterprises, Inc., Z&R
Oil Corporation, JRJS, LLC, JRJS Holding, LLC, and Mohammed Khalid (Defendants)
bring a motion to consolidate this action—comprised of LASC Action Nos.
19STCV37948, 19STCV38036, and 19STCV38066—with LASC Action No. 20STCV47489.
All actions are pending before
Department 40.
The 19STCV38036 action was
initiated on October 22, 2019, with Plaintiffs Sean Wong and Yuqi Huang and
alleges (1) Breach of Contract, (2) Fraud, (3) Negligent Misrepresentation, (4)
Breach of Fiduciary Duty, (5) Conversion, (6) Accounting, and (7) Unjust
Enrichment against Defendants Jafar
Rashid, Rashid & Sons, Inc., S&E 786 Enterprise, LC, RD 786
Enterprises, Inc., Z&R Oil Corporation, JRJS, LLC, JRJS Holding, LLC,
Mohammed Khalid, and Does 1 through 100. The claims arise from allegations that
Defendants solicited and secured investments of cash, equipment, material,
and/or labor from Wong and Huang in connection to cannabis business ventures operated
out of Huntington Park and Adelanto, California facilities—as well as a
short-lived venture in Oakland, California—only for Defendants to, among other
things, (1) divest investments from the cannabis ventures into Defendants’
personal ventures, such as Rashid & Sons, Z&R, RD 786, S&E 786, two
gas stations, and two properties, (2) fail to invest $5 million into the
cannabis ventures, as previously promised to Wong and Huang, and (3) ban Wong
and Huang from access to and the operation of the Huntington Park facility,
thus causing Wong and Huang damages.
The 19STCV38036 action was
initiated on October 22, 2019, with Plaintiffs Dion Fatafehi and URO, LLC alleging
(1) Breach of Contract, (2) Fraud, (3) Negligent Misrepresentation, (4) Breach
of Fiduciary Duty, (5) Conversion, (6) Accounting, and (7) Unjust Enrichment
against Defendants Jafar Rashid, Rashid
& Sons, Inc., S&E 786 Enterprise, LC, RD 786 Enterprises, Inc., Z&R
Oil Corporation, JRJS, LLC, JRJS Holding, LLC, Mohammed Khalid, and Does 1
through 100. The claims arise from allegations that Defendants hired Plaintiff
Fatafehi to provide labor and services related to cannabis oil distillation and
distribution for the Huntington Park facility, specifically promising Fatafehi that
he and URO, LLC would be well compensated for buying crude cannabis oil, to be
processed by Defendant JRJS at the Huntington facility and sold by Plaintiffs
Fatafehi and URO, LLC, therethrough inducing Fatafehi and URO, LLC to invest more than $300,000 into such
venture, only for Defendants to later process the crude cannabis oil, rescind
Fatafehi’s and URO’s access to the Huntington Park facility, and divest
investments from the cannabis ventures into Defendants’ personal ventures, such
as Rashid & Sons, Z&R, RD 786, S&E 786, two gas stations, and two
properties, thus causing harm to Fatafehi and URO, LLC.
The 19STCV37948 action was
initiated on October 23, 2019 by Plaintiffs Samuel Kim, Chongsik Park, and Cali
Blue Sky Investment, Inc. (CBSI). (This Complaint included claims for Common
Law Trademark Infringement and Trademark Dilution that were dismissed pursuant to
a September 17, 2020 stipulation to consolidate by the parties, discussed below.)
Kim, Park, and CBSI’s operative October 16, 2020 First Amended Complaint (FAC)—which
combines the allegations from the 19STCV37948,
19STCV38036, and 19STCV38066 actions—alleges (1) Breach of Written
Contract, (2) Breach of Oral Contract, (3) Fraud, (4) Negligent Misrepresentation,
(5) Breach of Fiduciary Duty, (6) Conversion, (7) Accounting, and (8) Unjust
Enrichment against Defendants Jafar
Rashid, Rashid & Sons, Inc., S&E 786 Enterprise, LC, RD 786
Enterprises, Inc., Z&R Oil Corporation, JRJS, LLC, JRJS Holding, LLC, Mohammed
Khalid, and Does 1 through 100. The claims arise from allegations that Defendants
solicited and secured investments of cash, materials, and/or equipment from
Kim, Park, and CBSI in connection to cannabis business ventures operated out of
California City and Huntington Park, California—and later, the Adelanto and
Oakland facilities—only for Defendants to, among other things, (1) divest
investments from the cannabis ventures into Defendants’ personal ventures, such
as Rashid & Sons, Z&R, RD 786, S&E 786, two gas stations, and two
properties, (2) fail to invest $5 million into the cannabis ventures, as
previously promised to Plaintiffs, and (3) ban Kim and Park from access to and
the operation of the Huntington Park facility, thus causing Kim, Park, and CBSI
damages.
On December 20, 2019, Defendants Jafar Rashid, Rashid & Sons, Inc.,
S&E 786 Enterprise, LC, RD 786 Enterprises, Inc., Z&R Oil Corporation,
JRJS, LLC, and Mohammed Khalid filed Cross-Complaints against the Complaints in
the 19STCV37948, 19STCV38036, and 19STCV38066 actions. These Defendants’
operative December 14, 2020 First Amended Cross-Complaint alleges claims of (1)
Equitable Indemnity, (2) Equitable Contribution, (3) Declaratory Relief, (4)
Breach of Fiduciary Duty, (5) Aiding and Abetting Breach of Fiduciary Duty, (6)
Conversion, and (7) Tortious Interference with Economic Prospective against
Syed Hussain, Samuel Kim, Dion Fatafehi, Sean Wong, and Roes 1-25. The claims
arise from allegations that, among other things, while participating in the
cannabis ventures described above, Hussain embezzled from JRJS, with Kim,
Fatafehi, and Wong providing material assistance to Hussain in Hussain’s
breaches of fiduciary duty, involving conversion of, at a minimum, $328,452.50
in assets belonging to JRJS.
On March 23, 2020, the Court related the three above actions pursuant to
a request by Defendants Rashid, et al., with LASC Action No. 19STCV37948 as the
lead case.
Then, on September 17, 2020, per stipulation of the parties, the Court
consolidated the three above actions. (Hereafter, the Court refers to the 19STCV37948,
19STCV38036, and 19STCV38066 actions as the 2019 Consolidated Cases.) Importantly,
the stipulation also dismissed without prejudice claims in the original October
23, 2019 19STCV37948 Complaint alleging claims of Common Law Trademark and
Trademark Dilution, and permitted Kim, Park, and CBSI to bring these claims
again in state or federal court.
On December 11, 2020, Plaintiff Kim and CBSI initiated LASC Action No. 20STCV47489,
therein alleging claims of (1) Statutory Trademark
Infringement/Counterfeiting, (2) Dilution of Famous Mark, (3) Common Law
Trademark Infringement, (4) Unfair Competition, and (5) Deceptive Business
Practices against United Health and Care Center (UHCC), JRJS, LLC, Chango Club,
Inc., Jafar Rashid, Vikram Sood, Vibha Patel, Sanjiv Patel, Lorraine Lugo,
Mohammed Khalid, Zahid Butt, and Does 1-50. The claims arise from allegations
that Samuel Kim owns the trademarks for five ‘Big Chief Marks’ registered with
the State of California for pre-filled vaporizer cartridges, disposable pens
containing cannabis extract, cannabis flower, and related products, and that in
December 2018, Kim granted UHCC and JRJS the nonexclusive right to manufacture
and distribute cannabis vape cartridges bearing the Big Chief Marks, with Kim revoking the license on June 23,
2019 amid a fallout between the parties, only for Defendants to continue using
the marks thereafter without authorization from Kim or Kim’s new licensee,
CBSI.
On January 15, 2021, Syed Hussain
filed a Cross-Complaint in the 2019 Consolidated Cases, with the operative
August 30, 2021 First Amended Cross-Complaint (FAXC) alleging (1) Breach of
Written Contract, (2) Fraud, (3) Negligent Misrepresentation and Deceit, (4)
Breach of Fiduciary Duty, (5) Accounting, and (6) Unjust Enrichment against Jafar Rashid, Rashid & Sons, Inc.,
S&E 786 Enterprise, LC, RD 786 Enterprises, Inc., Z&R Oil Corporation,
JRJS, LLC, JRJS Holding, LLC, Mohammed Khalid, and Zoes 1 through 100. The
claims arise from allegations that Hussain was an equity owner and Director in
the Huntington Park facility, entitled to compensation of at least $85,000 per
year, and that Hussain had helped obtain and spend investments secured for Defendants,
but that, on June 24, 2019, Rashid, Khalid, JRJS, and JRJS Holding locked
Hussain out of the Huntington Park facility, instructing security not to permit
Hussain to enter the facility despite Hussain’s owner and Director status, and with
Rashid, Khalid, JRJS, and JRJS Holding diverting over $1 million of investments
from the cannabis ventures into their personal ventures, including Rashid &
Sons, Z&R, RD 786, S&E 786, two gas stations, and two properties.
On February 5, 2021, JRJS, LLC
filed a Cross-Complaint in LASC Action No. 20STCV47489, with the operative July 28, 2021 First Amended
Cross-Complaint (“FAXC”) alleging claims of (1) Declaratory Relief, (2)
Trademark Infringement, (3) Cancellation of Registration for Trademark
[Assignment], and (4) Cancellation of Registration for Trademark [Abandonment]
against Samuel Kim, CBSI, and Roes 1 through 10. The claims arise from allegations
that JRJS became the rightful owner of the common law Big Chief Marks with
respect to cannabis products following Kim’s oral assignment of those rights to
JRJS, and that it is Kim and CBSI who have infringed on JRJS’s rights by
continuing their use of the Big Chief Marks, entitling JRJS to a cancellation
of the Big Chief Marks’ registrations with the State of California, either on
assignment or abandonment grounds.
On March 15, 2023, the defendants
in the 2019 Consolidated Cases—Jafar Rashid, Rashid & Sons, Inc., S&E
786 Enterprise, LC, RD 786 Enterprises, Inc., Z&R Oil Corporation, JRJS,
LLC, JRJS Holding, LLC, and Mohammed Khalid—brought a motion to consolidate the
2019 Consolidated Cases with the 20STCV47489
action brought by Samuel Kim and CBSI, hereafter referred to as the 2020 Action.
On April 3, 2023, the 19STCV37948 Plaintiffs—Dion Fatafehi, URO,
LLC, Sean Wong, Yuqi Huang, Samuel Kim, Chongsik Park, and CBSI filed an
opposition to the March 15th motion.
On April 11, 2023, the 19STCV37948
Defendants replied to the April 3rd opposition.
The motion to consolidate is now
before the Court.
For ease of reference, the Court
refers to the movants as Defendants and the opposing parties as Plaintiffs.
Legal Standard
When cases involving a common
question of law or fact are pending in the same superior court, i.e., in the
same county, the cases can be consolidated on a party’s motion or on the
court’s own motion under Code of Civil Procedure section 1048, subdivision (a).
Cases can be consolidated for (1)
all purposes (Hamilton v. Asbestos Corp. (200) 22 Cal.4th 1127, 1147;
see Code Civ. Proc., § 1048, subd. (a)), (2) for trial (Stubblefield Constr.
Co. v. City of San Bernardino (1995) 32 Cal.App.4th 687, 701; see Code Civ.
Proc., § 1048, subd. (a)), or (3) for limited purposes, e.g., discovery or
pretrial matters (see Code Civ. Proc., § 1048, subd. (a); see, e.g., State
v. Altus Fin., S.A. (2005) 36 Cal.4th 1284, 1293 [cases consolidated for
discovery and pretrial matters]; Austin B. v. Escondido Un. Sch. Dist.
(2007) 149 Cal.App.4th 860, 870 [cases consolidated for discovery and trial]; Frieman
v. San Rafael Rock Quarry, Inc. (2004) 116 Cal.App.4th 29, 33 [cases
consolidated for discovery and pretrial determinations]).
To prevail on a motion to
consolidate, a movant must establish that (1) the cases are pending before the
same court, (2) the cases share a common question of law or fact, and (3) the
benefits of consolidation outweigh the burdens. (See Code Civ. Proc., § 1048,
subd. (a).)
Analysis
I. Case Pending
Before Same Court
A movant for consolidation must
establish that the cases being consolidated are pending in the same superior
court, i.e., in the same county. (Code Civ. Proc., § 1048, subd. (a).) Cases
are pending in the same superior court even if they are pending in different
departments. (See, e.g., Estate of Bliss (1962) 199 Cal.App.2d 630, 640-641
[court consolidated probate case with case in equity to set aside inter vivos
gift]; contra. Sup. Ct., Los Angeles Cty. Loc. R., rule 3.3, subd. (g)(1)
[“Cases may not be consolidated unless they are in the same department”].) A
case is considered to be pending from the time it is filed until its final
determination on appeal or until the time for appeal has passed, unless
judgment is satisfied sooner. (Code Civ. Proc., § 1049; see, e.g., Sosnick
v. Sosnick (1999) 71 Cal.App.4th 1335, 1339-1340 [court exceeded its
jurisdiction when it consolidated pending tort action with dissolution action
because dissolution action was no longer pending].)
While not expressly argued in the
motion to consolidate, the Court notes that the cases Defendants seek to
consolidate are all pending before the same Court and Department: Los Angeles Superior
Court, Department 40. Further, the 2019 Consolidated Cases were related on
January 25, 2021. The motion therefore satisfies the first element of Code of
Civil Procedure section 1048, subdivision (a)—cases pending in the same court—as
well as Los Angeles County Rule, rule 3.3, subdivision (g)(1).
II. Common Questions
of Law or Fact
The movant for consolidation must
establish that the cases sought to be consolidated involve a common question of
fact or law. (See Code Civ. Proc., § 1048, subd. (a).) Common questions of law
or fact can arise in cases that share common parties and involve a common
transaction (e.g., contract) or incident (e.g., automobile accident). (See,
e.g., Code Civ. Proc., § 377.62, subd. (b) [wrongful death action and survivor
action can be consolidated under section 1048 when actions arise from same
wrongful act or neglect]; Martin-Bragg v. Moore (2013) 219 Cal.App.4th
367, 385 [trial court has power to consolidate unlawful-detainer proceeding
with quiet title action involving same property because successful claim of
title by tenant would defeat landlord’s right to possession]; Sanchez v.
Superior Court (1988) 203 Cal.App.3d 1391, 1395 [cases arising from same
car accident were ordered consolidated for trial].) The more predominant and
significant the common questions are to the litigation, the more likely the
motion will be granted. (Cf. Code Civ. Proc., § 404.1 [factors considered for
coordination].)
In their motion, Defendants argue
that the 2019 Consolidated Cases and the 2020 Action involve common questions
of law and fact for several reasons. First, Defendants argue that little
differentiates the claims made in the 2019 Consolidated Cases and the 2020
Action. Second, Defendants argue that questions of law and fact overlap in the
2020 Action’s FAC and the Rashid FAXC in the 2019 Consolidated Cases. Third,
Defendants argue that trial in the 2019 Consolidated Cases and the 2020 Action
will share overlapping issues. Fourth, Defendants argue that separate trials
could result in inconsistencies as to whether Syed Hussain made agreements for
JRJS. Fifth, Defendants argue that the 2019 Consolidated Cases involve
questions of theft by Kim that affect recovery in the 2020 Action. Last,
Defendants argue that Samuel Kim’s involvement with JRJS, as alleged in the
2019 Consolidated Cases, is intertwined with Kim’s allegations related to
trademark claims. (Mot., p. 4.)
In opposition, Plaintiffs argue several
points. First, Plaintiffs argue that consolidation is not proper because the
Court severed the Trademark Infringement and Dilution claims from the 2019
Consolidated Cases, permitting their filing in a separate action in state or
federal court. (Opp’n, pp. 8-9, Coons Decl., Ex. 1 [September 17, 2020
stipulation].) Second, Plaintiffs argue that consolidation is not proper
because the 2019 Consolidated Cases and the 2020 Action do not involve common
questions of law and fact where Defendants’ assertions of common ground between
the actions is mere conjecture and where trademark liability in the 2020 Action
involves legal elements, arguments and defenses vastly different than the those
related to the Plaintiffs’ claims in the 2019 Consolidated Cases, i.e., breach
of contract, fraud, breach of fiduciary duty, conversion, accounting, and
unjust enrichment. (Opp’n, pp. 9-13.) Third, Plaintiffs argue that
consolidation is not proper because the two actions involve different evidence where
evidence as to the business agreements and financials in the 2019 Consolidated
Cases does not relate to evidence regarding the Big Chief Marks and their
counterfeit use in the State of California. (Opp’n, pp. 13-14.) Last,
Plaintiffs argue that consolidation is not proper because the actions
contemplate different damages where the 2019 Consolidated Cases seek recovery
on investment monies and corresponding interest, costs, and punitive damages
and the 2020 Action seeks damages related to infringement, injunctive relief,
forfeitures, and fees and costs. (Opp’n, pp. 14-15.)
In reply, Defendants argue several
points. First, Defendants argue that they did not sever the trademark claim and
the Court did not effect a severance. (Reply, pp. 1-2.) Second, Defendants
argue that the 2019 Consolidated Cases and 2020 Action are inextricably linked
through, among other things, (a) the overlap of parties, witnesses, and counsel
in the actions, (b) discovery being conducted as if the matters were already
consolidated, and (c) the relations between Plaintiffs weaving through both
actions. (Reply, pp. 2-4.)
The Court finds that the 2019
Consolidated Cases and 2020 Action do not involve common questions of fact and
law.
While many of the parties,
witnesses, and counsel will overlap between the two actions, the actions
involve separate evidentiary showings, and thus, differing questions of law and
fact. The 2019 Consolidated Cases will delve into the agreements between Plaintiffs
and Defendants related to investments in Defendants’ cannabis ventures, the
injuries that Plaintiffs suffered when Defendants forced Plaintiffs out of the
business ventures, and cross claims by Defendants related to indemnity, as well
as harms to JRJS through conversion of its assets by Plaintiffs. The
evidentiary showings that must be made for these issues will flow evenly
through the three consolidated actions because, for example, if Plaintiffs can
show that Defendants acted with fraudulent intent in soliciting investments for
their cannabis business ventures only to defraud their investors, all
Plaintiffs in the 2019 Consolidated Actions may be able to recover not only
damages, but punitive damages based on Defendants’ egregious misconduct. By contrast,
the evidentiary showings that need to be made for the 2020 Action involve
evidence relating to whether Kim in fact owns the Big Chief Marks and whether
Kim owned the Big Chief Marks within the context of use on cannabis products, when
and how the parties used the Big Chief Marks in the marketplace, whether the
use of the marks by Defendants diluted Kim’s use of the marks, whether actions by
Kim and CBSI resulted in an abandonment of the marks, and whether Kim’s
original assignment of the marks to JRJS resulted in complete divestiture of
the marks to JRJS. Because the Court finds a clear contrast in questions of
fact and law, the overlapping parties, witnesses, and counsel are of little
account for the purpose of consolidation.
Further, the Court finds it
relevant that Plaintiffs’ and Defendants’ September 17, 2020 stipulation to
consolidate the 2019 Consolidated Cases dismissed without prejudice the
trademark infringement and dilution claims originally pleaded in Kim, Park, and
CBSI’s October 23, 2019 Complaint in the 19STCV37948 action, claims now pleaded
in the 2020 Action’s FAC. (See Opp’n, Coons Decl., Ex. 1.) Indeed, the
stipulation permits Plaintiff Kim to reassert the trademark claims in state or
federal court. (See Opp’n, Coons Decl., Ex. 1, p. 1.) If the stipulation
explicitly provides that the trademark claims could be filed in federal court,
then it is reasonable to conclude that the parties contemplated that the 2019
Consolidated Cases would be adjudicated separately from the trademark claims
now advanced in the 2020 Action.
Based on these grounds, the Court
finds that the motion to consolidate fails to meet establish the second element
needed for consolidation: common questions of law and fact.
III. Benefits
Outweigh Burdens
The movant for consolidation should
establish that the benefits of consolidation outweigh the burdens. (See Code
Civ. Proc., § 1048, subd. (a).) To establish this, the movant should argue that
consolidation will:
(1) Save time (i.e., length of time
to conclude one suit versus multiple suits) (see Code Civ. Proc., § 1048, subd.
(a) [“costs”]);
(2) Save money (see Code Civ.
Proc., § 1048, subd. (a) [“delay”]);
(3) Help prevent the inconsistent
adjudication of common and factual legal issues (see Sunrise Fin., LLC v.
Superior Court (2019) 32 Cal.App.5th 114, 121; cf. Code Civ. Proc., § 404.1
[factors considered for coordination]);
(4) Lessen the burden on judicial
resources (Code Civ. Proc., § 404.1 [factors considered for coordination]);
(5) Promote the convenience of the
parties, witnesses, and attorneys (see Sunrise Fin., LLC v. Superior Court,
supra, 32 Cal.App.5th at p. 121; cf. Code Civ. Proc., § 404.1 [factors
considered for coordination]);
(6) Encourage settlement (cf. Code
Civ. Proc., § 404.1 [factors considered for coordination]); and
(7) Avoid prejudice (see, e.g., Martin-Bragg
v. Moore, supra, 219 Cal.App.4th at pp. 370-371 [trial court’s
refusal to consolidate cases prejudiced defendant by denying opportunity for
discovery and forcing litigation of complex issue in summary proceeding].)
In their motion, Defendants argue
that the benefits of consolidation outweigh its burdens for several reasons.
First, they argue substantial prejudice to Defendants will arise from a lack of
consolidation where a failure to consolidate may result in inconsistent
verdicts as to the investments in the 2019 Consolidated Cases and the trademark
questions in the 2020 Action. Second, they argue that Kim’s bringing of the
2020 Action is mere sham pleading. Third, they argue that no other party will
be prejudiced by consolidation where consolidation would give the parties an
opportunity to present their alleged damages in the same action and eliminate the
risk of potentially confusing a jury or forcing the parties to take
inconsistent positions. Fourth, they argue that if these cases are not
consolidated, the parties are at risk of severe prejudice insofar as they will
be forced to participate in duplicative trials and incur unnecessary costs and
fees to litigate both actions. Last, Defendants generally argue that
consolidation would not adversely affect either case, and would only avoid
unnecessary costs, duplication of law and motion, and potentially inconsistent
findings, where judicial resources will be efficiently utilized if the cases
are consolidated into one lawsuit and one trial. (Reply, pp. 4–5.)
In opposition, Plaintiffs argue
that the benefits of consolidation do not outweigh its burdens for several
reasons. First, they argue that consolidation would require Plaintiffs
Fatafehi, URO LLC, Wong, Huan, and Park to needlessly participate in and sit
through a prolonged trial involving evidence and witnesses unrelated to their
claims, causing waste of their time and unnecessary fees and expenses. Second, Plaintiff
Kim and CBSI would be prejudiced by consolidation where consolidation will
prolong a final determination as to the trademark claims and result in
additional fees and costs based on participation in issues solely related to
Fatafehi, URO LLC, Wong, Huang, and Park. Third, trial has recently been
continued in the 2019 Consolidated Cases, further prejudicing adjudication of
the trademark claims. Fourth, any argument that Defendants will be prejudiced
is unfounded because verdicts in the 2019 Consolidated Cases and the 2020
Action cannot result in inconsistencies where the claims and damages arising
therefrom are wholly different. Last, the benefits of consolidation do not
outweigh its burdens because a jury could confuse liability between the claims
raised in the 2019 Consolidated Cases and the 2020 Action and because the
damages prayed for in one action could unfairly offset damages in the other
action. (Opp’n, pp. 15-17.)
In reply, Defendants argue that no
parties will be prejudiced by consolidation. (Reply, p. 4.)
The Court finds that the burdens of
consolidation outweigh its benefits.
Consolidation will hardly save time
and money where the Court has determined that the 2019 Consolidated Cases and
the 2020 Action will require different evidentiary showings. Further, and
contrary to Defendants’ prejudice arguments, because the Court has already
concluded that different questions of fact and law are triggered by the two
actions, consolidation will not help prevent inconsistent legal determinations,
or even lessen the burden on judicial resources. Admittedly, consolidation
could promote the convenience of the parties, witnesses, and attorneys and
encourage settlement. On the other end, however, prejudice could result from
consolidation. The Court is concerned of the risk of confusing the jury by
allowing its determination of liability and damages in the 2019 Consolidated
Cases to influence the 2020 Action’s liability and damages and vice versa,
particularly where the actions do not share common questions of law and fact.
Based on these grounds, the Court
finds that the motion to consolidate fails to meet establish the third element
needed for consolidation: benefits of consolidation outweighing its burdens.
IV. Consolidation Conclusion
Having failed to establish the
second and third elements for consolidation, Defendants’ motion is DENIED.
The Court therefore need not reach
Plaintiffs’ argument that the Court should deny this motion as procedurally
defective (Opp’n, pp. 17-18; Reply, p. 4), an argument the Court notes is made
on the sixteenth page of the opposition’s points and authorities, in
contravention of California Rules of Court, rule 3.1113, subdivision (d),
limiting points and authorities for oppositions not involving summary judgment
or adjudication to fifteen pages.
Defendants Jafar Rashid, Rashid & Sons, Inc., S&E 786 Enterprise, LC, RD 786 Enterprises, Inc., Z&R Oil Corporation, JRJS, LLC, JRJS Holding, LLC and Mohammed Khalid’s Motion to Consolidate Case No. 19STCV37948 with Related Case No. 20STCV47489 is DENIED because the motion failed to show that the 2019 Consolidated Cases and the 2020 Action involve common questions of law and fact or that the benefits of consolidation outweigh its burdens.