Free Order on Motion for More Definite Statement - District Court of Federal Claims - federal

Case 1:07-cv-00698-LMB

Document 22

Filed 07/21/2008

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In the United States Court of Federal Claims
Case Nos. 07-698T and 07-704T (Consolidated) (Filed: July 21, 2008)
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GENE H. YAMAGATA, et al., Plaintiffs,
v.

THE UNITED STATES OF AMERICA, Defendant.
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ORDER TO CONSOLIDATE On September 27, 2007, a complaint was filed in this Court captioned, Yamagata v. United States, No. 07-698T. Mr. Yamagata seeks refunds for tax years 1991, 1992, 1993, 1994, and 1996. Mr. Yamagata contends that he is due refunds for these tax years based upon the corrected entity classification, from a corporation to a partnership, of an entity in which he is an investor (Forever Living Products Japan, Inc.). On September 28, 2007, Plaintiffs Rex and Ruth Maughan filed a separate complaint captioned Rex and Ruth Maughan v. United States, Case No. 07-704T, seeking refunds for tax years 1991, 1992, 1993, 1994, 1995, and 1996. The Maughans also contend that they are due refunds for these tax years based upon the corrected entity classification of Forever Living Products Japan, Inc. The parties believe that these cases may be appropriately consolidated pursuant to Rules of the Court of Federal Claims (RCFC) 42. RCFC 42 authorizes the Court to order "a joint hearing or trial of any or all the matters in issue in the actions" when the actions "involv[e] a common question of law or fact." RCFC 42. The Rule further provides that consolidation should be ordered "as may tend to avoid unnecessary costs or delay." Id. In determining whether consolidation is appropriate, the

Case 1:07-cv-00698-LMB

Document 22

Filed 07/21/2008

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Court must weigh the interest of judicial economy against the potential for delay, confusion, and prejudice that may result from consolidation. Cienega Gardens v. United States, 62 Fed. Cl. 28, 31 (2004). We agree that these two cases should be consolidated. The cases rely on many of the same factual and legal issues. Consolidation will therefore promote judicial economy and is in the best interest of the parties. Therefore, the Court hereby ORDERS the Clerk of the Court to consolidate Case Nos. 07-698T and 07-704T, with Case No. 07-698T being the lead case, captioned Gene H. Yamagata, et al. A copy of this Order should be filed in both cases. In addition, the Court hereby GRANTS Plaintiffs' Motions for a More Definite Statement which were filed on February 13, 2008, and Defendant's Cross-Motions for Leave to an File Amended Answer which were filed on February 27, 2008. Accordingly, the Defendant shall plead its offset/set-off claim with specificity and/or as a compulsory counterclaim in the Amended Answer. The Amended Answer shall be filed, forthwith. The parties shall file the Joint Preliminary Status Report no later than 30 days after the Amended Answer is received. IT IS SO ORDERED. s/ Lawrence M. Baskir LAWRENCE M. BASKIR Judge

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