Goldman Sachs Group, Inc. v. Montana Second Judicial District Court

2002 MT 83, 46 P.3d 606, 309 Mont. 289, 2002 Mont. LEXIS 187
CourtMontana Supreme Court
DecidedMay 2, 2002
Docket02-055
StatusPublished
Cited by13 cases

This text of 2002 MT 83 (Goldman Sachs Group, Inc. v. Montana Second Judicial District Court) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Goldman Sachs Group, Inc. v. Montana Second Judicial District Court, 2002 MT 83, 46 P.3d 606, 309 Mont. 289, 2002 Mont. LEXIS 187 (Mo. 2002).

Opinions

[290]*290OPINION AND ORDER

¶1 The Goldman Sachs Group, Inc. (Goldman Sachs), has filed an application for writ of supervisory control alleging that the Second Judicial District Court’s order denying its motion for substitution of judge was an erroneous interpretation of § 3-1-804, MCA, and, therefore, the District Court is proceeding under a mistake of law. Co-defendants in the underlying District Court cause, Montana Power Company (MPC) and MPC Outside Directors, have filed briefs in support of Goldman Sachs’ right of substitution. Plaintiffs in the underlying District Court cause have filed a brief in opposition to substitution. None of the parties dispute that this an extraordinary case warranting an exercise of supervisory control under Rule 17(a), M.R.App.P. However, they do dispute the District Court’s interpretation of § 3-1-804, MCA, governing the substitution of district court judges.

¶2 Plaintiffs in the District Court action filed their original Complaint on August 16, 2001. In this original complaint, Plaintiffs named several Defendants and John Does 1-2, but not Goldman Sachs. Only Defendant PPL Montana (PPLM) was served with the original Complaint, and on September 4, 2001, it entered its first appearance. Plaintiffs filed their Amended Complaint on September 14, 2001, [291]*291substituting Goldman Sachs for one of the advisor John Does. Soon thereafter, on September 21, 2001, PPLM moved for substitution of District Court Judge Krueger. Approximately one month later, on October 22,2001, Defendant MPC and all individual MPC Defendants acknowledged service and receipt of the Amended Complaint. Judge McKittrick assumed jurisdiction of this action on October 26, 2001.

¶3 Plaintiffs did not serve Goldman Sachs with the Amended Complaint until September 28,2001, or approximately one week after PPLM moved for substitution of the first judge assigned in this action. Goldman Sachs acknowledged service and receipt of the Amended Complaint on November 16, 2001. Seven days later, on November 23, 2001, Goldman Sachs moved to substitute Judge McKittrick.

¶4 The District Court denied Goldman Sachs’ motion to substitute. It held that since Goldman Sachs failed to show that hostility existed between it and the other Defendants, it could not substitute the district court judge under § 3-1-804(1), MCA. The District Court noted that the Defendants, rather than being hostile, had engaged in coordinated efforts thus far in the litigation.

¶5 The District Court also held that Goldman Sachs’ motion was untimely under § 3-1-804(1)(c), MCA. It calculated that the latest date for any of the original parties to exercise their right of substitution was November 21, 2001, or 30 days after the date on which all of the original Defendants had acknowledged service. The court reasoned that Goldman Sachs was not an original party because it was not named in the original Complaint, and, thus, it had no right of substitution under § 3-1-804(1)(c), MCA. In any event, the court concluded that had Goldman Sachs been an original party, its motion to substitute filed on November 23, 2001, was untimely.

¶6 We will assume supervisory control over a district court, as authorized by Article VII, Section 2(2) of the Montana Constitution and Rule 17(a), M.R.App.P., to control the course of litigation where the district court is proceeding under a mistake of law, and in so doing is causing significant injustice, and where the remedy by appeal is inadequate. Our determination of whether supervisory control is appropriate is a case-by-case decision, based on the presence of extraordinary circumstances and a particular need to prevent an injustice from occurring. Park v. Montana Sixth Jud. Dist. Court, 1998 MT 164, ¶ 13, 289 Mont. 367, ¶ 13, 961 P.2d 1267, ¶ 13 (citing Plumb v. Fourth Jud. Dist. Court (1996), 279 Mont. 363, 368, 369, 927 P.2d 1011, 1014-15; Mazurek v. District Court (1996), 277 Mont. 349, 352-53, 922 P.2d 474, 476-77).

¶7 Having reviewed the briefs submitted in support of and in opposition to the Goldman Sachs’ application, we conclude this is an [292]*292extraordinary case and supervisory control is proper. The case presents the purely legal issue of whether the District Court properly interpreted § 3-1-804, MCA, to require a defendant to demonstrate its “adversity to another defendant which had already exercised its right of substitution in order to invoke an independent right of substitution. This is an issue of both first impression and statewide importance. In addition, the legal question of timeliness under § 3-l-804(1)(c), MCA, is presented.

¶8 Additionally, and most importantly, the substitution of judge issue presented here occurs in the context of pending litigation which is potentially complex and which involves numerous parties. Requiring litigation of the matter as it stands now risks wasting significant resources and may cause uncertainty as to the validity of the District Court judge’s involvement and decisions in this matter. Under these circumstances, due appeal of the issue following final judgment would come too late. Accordingly, the Court will exercise its authority under Rule 17(a), M.R.App.P., and issue an appropriate order addressing the issues presented.

¶9 Having determined that this is a proper case for supervisory control, we turn to the issue of whether substitution is appropriate in this case. A motion for substitution of a district court judge may be made by any party to a proceeding only in the manner provided for in § 3-1-804, MCA. “[E]ach adverse party, including the state, is entitled to one substitution of a district judge.” At issue here is what constitutes “each adverse party” for purposes of the statute. Simply stated, in cases involving multiple defendants, must a defendant be adverse only to the plaintiff or also to the other defendants?

¶10 Goldman Sachs maintains that its adversity to the Plaintiffs is sufficient to invoke its right of substitution under § 3-1-804, MCA. It claims that, under the plain language of § 3-1-804, MCA, Goldman Sachs and PPLM are “each” an “adverse party” with independent rights of substitution. As such, Goldman Sachs insists that it need not demonstrate that its interests are adverse to PPLM’s interests in order to substitute Judge McKLttrick.

¶11 Goldman Sachs’ reasoning flows from the language of § 3-1-804(1)(c), MCA. It argues that this provision expressly contemplates multiple defendants making separate motions for substitution:

When a judge is assigned to a cause for 30 consecutive days after service of a summons ... and no motion for substitution of judge has been filed within said time period, the plaintiff... and the party upon whom service has been made shall no longer have a right of substitution. Any party named in a summons who is subsequently served shall have 30 consecutive days after such [293]*293service in which to move for a substitution of judge.

¶12 Focusing on the language “any party ... subsequently served,” Goldman Sachs argues that the right of substitution is not restricted to only those subsequently served defendants which are adverse to other defendants or those previously served.

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Bluebook (online)
2002 MT 83, 46 P.3d 606, 309 Mont. 289, 2002 Mont. LEXIS 187, Counsel Stack Legal Research, https://law.counselstack.com/opinion/goldman-sachs-group-inc-v-montana-second-judicial-district-court-mont-2002.