ALLIED INDUSTRIAL WORKERS OF AMERICA (AIW), Complainant
JOHNSON CONTROLS, INC., Respondent
An Administrative Law Judge (ALJ) for the Equal Rights Division (ERD) of the Department of Industry, Labor and Human Relations issued a decision in the above-captioned matter on July 19, 1991. The ALJ's decision ordered that the Complainant's complaint be dismissed based on the doctrine of res judicata. Complainant filed a timely petition for Commission review of the matter. Both parties have submitted written arguments to the Commission.
Based upon a review of the record in its entirety, the Labor and Industry Review Commission hereby issues the following:
The decision of the Administrative Law Judge (copy attached) is affirmed and shall stand as the FINAL ORDER herein.
Dated and mailed March 30, 1992
/s/ Pamela I. Anderson, Chairman
/s/ Richard T. Kreul, Commissioner
James R. Meier, Commissioner
On appeal, AIW argues that a January 10, 1990 Order Removing Case From Abeyance issued by Richard Moriarty, the Equal Rights Division's former Director of Legal Services (in which Moriarty denied requests to retain AIW 's state complaint in abeyance in part on the ground that "Wisconsin law apparently differed from federal law") and then ALJ Pamela Rasche's subsequent May 30, 1990 order denying the Respondent's motion to dismiss AIW's complaint on the ground of res judicata, constituted a ruling on the merits of Respondent's res judicata argument and thus represents the "law of the case."
Under the law of the case doctrine a decision on an issue of law made at one stage of a case becomes a binding precedent to be followed in successive stages of the same litigation. State v. Brady, 130 Wis. 2d 443, 388 N.W.2d 151 (1986). AIW argues that in finding that its state complaint of discrimination was barred by the doctrine of res judicata ALJ DeLaO ignored the law of the case doctrine. The law of the case doctrine is not applicable here, however. This doctrine requires that there first have been an adjudication of a legal issue. There had been no adjudication of the res judicata issue prior to DeLaO's decision on that issue. The issue of res judicata was never before Moriarty so he could not have decided that issue. The only question before Moriarty was whether the Division should continue to hold AIW's ERD complaint in abeyance. Indeed, it was not until March 16, 1990 (after both the decision in UAW, et al. v. Johnson Controls, 886 F.2d 871 (7th Cir. 1989) (en banc) and the federal district court's decision in Civil Action 85-C-409 (1/24/90) dismissing AIW's original Title VII action since Respondent relied on both of these cases to support its res judicata argument), that the Respondent first filed a motion with the Department seeking dismissal of AIW's state complaint based on the doctrine of res judicata. Further, it is abundantly clear that then ALJ Rasche never adjudicated Respondent's res judicata argument. A review of Rasche's May 30, 1990 order clearly reveals that when she denied Respondent's motion for res judicata, it was simply out of deference to Moriarty, then Director of the Legal Services Bureau. This is evident because in Rasche's 5/30/90 decision denying Respondent's motion to dismiss, Rasche relied solely on Moriarty's 1/10/90 order, twice stating that she felt "compelled" to abide by Moriarty's order even while recognizing that Respondent had not even raised the res judicata issue before Moriarty. (1) Accordingly, the law of the case doctrine did not preclude DeLaO from deciding whether AIW's state complaint was barred on grounds of res judicata.
A second argument made by AIW is that DeLaO failed to properly apply the doctrine of res judicata. The Commission disagrees. The doctrine of res judicata operates to bar relitigation of the same cause of action between the same parties, or their privies, where the first litigation resulted in a valid, final judgment on the merits. Juneau Square Corporation v. First Wisconsin National Bank, 122 Wis. 2d 673, 682, 364 N.W.2d 164 (Ct. App. 1985). The doctrine of res judicata makes a final judgment conclusive in all subsequent actions between the same parties as to all matters which were litigated or which might have been litigated in the former proceeding. DePratt v. West Bend Mutual Insurance Co., 113 Wis. 2d 306, 310, 334 N.W.2d 883 (1983). The purpose of the doctrine is to prevent repetitive litigation and it is based on the assumption that fairness to the defendant and sound judicial administration require that at some point litigation over the particular controversy must come to an end. Id. at 311.
In order for the doctrine of res judicata to apply, the following three elements must be present: (1) a final judgment on the merits; (2) an identity of the parties; and (3) an identity of causes of actions. DePratt, 113 Wis. 2d at 310-311.
DeLaO determined that all three criteria for res judicata having been met, AIW's complaint under the Wisconsin Fair Employment Act (WFEA) against Johnson Controls was barred under the doctrine of res judicata.
AIW's appeal focuses on DeLaO's determination regarding the existence of the third element of res judicata -- the requirement that there be an identity of causes of action. AIW argues that the requisite identity of causes of action is absent between its federal Title VII claim of discrimination and its claim of discrimination under the Wisconsin Fair Employment Act. However, the trend in the law is to treat all claims arising out of one transaction or factual situation as being part of a single cause of action and to require them all to be litigated together. Juneau Square Corporation, 122 Wis. 2d at 682. Wisconsin has adopted the transactional view of claims or cause of action for purposes of res judicata. DePratt, 113 Wis. 2d at 311.
It is clear that AIW's federal and state claims involve only a single cause of action: AIW has filed the identical charge of discrimination with both the EEOC and the ERD; further, in requesting a stay of the ERD proceedings in 1989, AIW recognized as much stating, that "The identical Fetal Protection Policy that is an issue in the proceedings before the Seventh Circuit is at issue in these proceedings."
AIW argues, however, that res judicata cannot bar its state complaint because AIW could not have had its claim under the WFEA decided in federal court, citing Reed v. Johnson Controls, 704 F. Supp. 170 (E.D. Wis. 1989) and Mursch v. Van Dorn Company, 627 F. Supp. 1310 (W.D. Wis. 1986), aff'd., 851 F.2d 990 (7th Cir. 1988). AIW argues that DeLaO has in substance ruled that because Respondent's fetal protection policy was found by the district court and court of appeals in the UAW case to not have violated Title VII that therefore Respondent's fetal protection policy could not violate Wisconsin's Fair Employment Practices Act (FEPA), and that this is not the case. In support, AIW cites Goodyear Tire and Rubber Co. v. DILHR, 87 Wis. 2d 56 (Ct. App. 1978), where the court refused to construe Wisconsin's ban against sex discrimination consistent with the construction given Title VII's ban on sex discrimination. Also, citing Rubenstein v. LIRC, Dane County Circuit Court (8/15/80), AIW argues that a decision reached by a federal court in a Title VII suit is not res judicata in a complaint under Wisconsin's FEPA because Title VII's provisions express an intent to accord parallel or overlapping remedies and because the identity of issues necessary for res judicata is absent when the two laws have not been similarly interpreted.
First of all, in asserting that res judicata does not apply because AIW could not have had its state claim decided in federal court, AIW fails to understand the res judicata doctrine. For purposes of res judicata, a basic factual situation generally gives rise to only one cause of action, no matter how many different theories of relief may apply. Juneau Square Corporation, 122 Wis. 2d at 684. As noted by the Respondent, in Weatherall v. Personnel Commission, #84-0047-PC-ER (10/7/87), aff'd., Ozaukee County Circuit Court, Case No. 87-CV-481 B1 (9/15/88), the Personnel Commission applied the res judicata doctrine to bar proceedings under the WFEA after a federal judgment on the same claim, flatly rejecting the same argument that AIW now makes stating:
"Once it has been determined that both proceedings involve the same cause of action, the operation of res judicata serves to foreclose relitigation of the same matter in a different forum under a different legal theory. It is not material whether that legal theory could have been litigated in the first forum. See Patzer v. Board of Regents, 37 FEP Cases 1847, 1850 (7th Cir. 1985)
'Patzer argues that his Title VII claim is not a matter that might have been litigated in the state court proceeding, because he could not have introduced it in the administrative proceeding or in the state court review; consequently, it is not barred. The fallacy in this argument is that the claim he makes in his Title VII suit is identical for purposes of res judicata to the claim he made in the administrative proceedings; that claim has therefore already been litigated. The "might have been litigated" provision comes into play only for claims or causes of action distinct from the one actually litigated."'
Weatherall, #84-0047-PC-ER, slip op. at 6-7 (quoting Patzer v. Board of Regents of the University of Wisconsin System, 763 F.2d 851, 855 (7th Cir. 1985)) (emphasis added)
Case law also refutes AIW's further argument that res judicata does not apply because of an alleged difference in the federal and state laws prohibiting sex discrimination. res judicata will not be defeated regardless of the number of primary rights that have been invaded and regardless of the variations in the evidence needed to support the theories or rights. DePratt, 113 Wis. 2d at 311. See also, Schaeffer v. State Personnel Commission, 150 Wis. 2d 132, 441 N.W. 2d 292 (1989). At issue there was whether the trial court erred as a matter of law when it rule that a federal court judgment on Schaeffer's complaint of alleged constitutional violations was res judicata on Schaeffer's handicap discrimination and retaliation claims under the WFEA. Noting that Schaeffer's state claim arose out of the same events and the same conduct of Guard personnel as did the federal action, and that the Restatement (Second) of Judgments indicated that neither the details of the claim nor the facts, evidence or theories of recovery need be identical in order for the former action to bar the latter, the court of appeals concluded that the trial court correctly decided the issue and affirmed the order of dismissal by the trial court.
AIW contends that Schaeffer does not support the position that AIW's WFEA claim was barred by res judicata because Schaeffer involves the issue of collateral estoppel (or issue preclusion) not res judicata. (As previously discussed, res judicata makes a final judgment on the merits in a prior action conclusive in a subsequent action between the same parties. Collateral estoppel precludes relitigation of an issue of ultimate fact previously determined by a valid final judgment.) AIW is in error. As noted by Respondent, the Personnel Commission stated at the outset of its decision in Schaeffer that "This matter is before the Commission on Respondent's motion to dismiss on the grounds 'that the claims before the Personnel Commission are barred because they have been finally adjudicated adversely to the Complainant in a prior federal court judgment.' " Schaeffer (Personnel Commission, Case No. 82-PC-ER-30, at p. 1). Moreover, in affirming the Personnel commission's dismissal of the state discrimination complaint, the Wisconsin Court of Appeals based its decision only on the res judicata doctrine, never even mentioning collateral estoppel. The court stated:
"The sole issue is whether the trial court erred as a matter of law when it rule that a federal court judgment was res judicata on Schaeffer's handicap discrimination claim before the Commission. We conclude that the trial court correctly decided the issue and affirm the order."
Schaeffer, 150 Wis. 2d at 135. (emphasis added)
Similarly, Juneau Square Corporation refutes AIW's argument that res judicata does not apply because of the alleged difference between the federal and state discrimination laws. There, the court found that a prior judgment against Juneau Square in its federal antitrust action was res judicata for purposes of its state action alleging, among other things, unfair competition and tortious interference with business, despite Juneau Square's contention that there were differences in the essential elements of proof in the two actions. Relying on Harper Plastics, Inc. v. Amoco Chemicals Corporation, 657 F.2d 939 (7th Cir. 1981), the court stated that Harper Plastics plainly refutes the theory that, for purposes of res judicata, causes of action are not the same if one cause requires proof of an element that another cause does not.
Moreover, as found by ALJ DeLaO, while Goodyear Tire and Rubber Co. v. DILHR may stand for the proposition that in construing Wisconsin statutes Wisconsin is not bound by federal court interpretation of equivalent federal statutes, that case does not address the issue of whether parties who have fully litigated their discrimination complaints before a federal court should be barred by the doctrine of res judicata from proceeding with their state discrimination claims.
Finally, with respect to AIW's assertion that res judicata does not apply because of the relationship between Title VII and a state's fair employment laws such as Wisconsin, this argument was also rejected in Schaeffer. Responding to the contention that application of res judicata violated the policy underlying Title VII (i.e., 42 U.S.C. 2000(e) § 708) that nothing in the federal Act shall be deemed to exempt or relieve any person from liability provided by any law of any state, Judge Eich, writing for the court, stated:
". . . Imposing res judicata as a bar to resumption of the Commission proceedings after the adverse federal decision does no violence to the 'independent action' principles underlying Title VII where, as here, all of the elements of the doctrine are met -- identity of parties and issues, and most importantly, the opportunity to litigate them in the former proceeding."
Judge Eich was the same judge who authored Rubenstein v. LIRC. When Judge Eich stated in Rubenstein that Title VII had been held to express the intent to accord parallel or overlapping remedies against employment discrimination, the case of Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 S.Ct. 1011 (1974), was cited. Gardner-Denver held that a private arbitration decision concerning an employment discrimination claim did not bind the federal courts. However, since Gardner-Denver the U.S. Supreme Court has held in Kremer v. Chemical Construction Corp., 456 U.S. 461, 28 FEP Cases 1412 (1982), that litigation of a state discrimination claim which has been reviewed by state court may bar subsequent litigation of the same claim under Title VII. In so ruling, the Court noted that its decision in Gardner-Denver had been misinterpreted and was not intended to mean that a state court judgment concerning discrimination is not res judicata in a subsequent Title VII action involving the same claim. In this regard, the court pointed out that Gardner-Denver had rested, in part, on the fact that arbitration hearings were not explicitly made part of the Title VII enforcement scheme like state fair employment practice laws and due to the inappropriateness of arbitration as a forum for the resolution of Title VII issues. (2) Granted, Kremer involves a state court judgment on a discrimination claim as barring a subsequent federal court discrimination action, there does not appear to be any valid reason that the reverse situation -- a federal court judgment on a discrimination claim barring a subsequent state discrimination action. This is especially true in situations as the case here, where both forums involved are specifically designed to decide discrimination claims, AIW itself had elected to pursue its federal claim and all of the elements of the res judicata doctrine have been met, including the opportunity for AIW to litigate the issue of sex discrimination with respect to Johnson Controls' fetal protection policy in the former proceedings. Local 322, Allied Industrial Workers, 921 F.2d at 734-735.
AIW also maintains that DeLaO committed error in dismissing its state complaint because the judgment in UAW, et al. v. Johnson Controls, Inc., 886 F. 2d 871 (7th Cir. 1989) (en banc), which had found Respondent's fetal protection policy lawful and was cited by Respondent as barring on res judicata grounds AIW's state discrimination complaint, had been reversed by the U.S. Supreme Court prior to her dismissal of AIW's complaint. In this regard, AIW stresses that Rasche had placed AIW's state complaint in abeyance on 11/8/90, pending a decision by the U.S. Supreme Court because it was believed that litigation of Respondent's fetal protection policy under federal law would be helpful in determining whether such policy violated the WFEA but that DeLaO has completely ignored the U.S. Supreme Court's decision. AIW then further argues that: (1) DeLaO "reintroduced the question of res judicata which had long been put to rest," because in light of the Supreme Court's decision in Johnson Controls and the fact that Respondent had admitted to having introduced a Fetal Protection Policy at its plant in Milwaukee, there was really no need for any evidentiary hearing as to the issue of whether Respondent was liable for violating Wisconsin FEPA; and (2) there is sufficient evidence in the record to infer that DeLaO did this (reintroduced the question of res judicata) because her supervisor (Rasche) did not want the Complainant's case to succeed and was bias and prejudiced against Complainant. In this same vein, AIW has additionally alleged that because it "had in the past had to object to the ex parte contacts that Ms. Pamela Rasche had with Respondent's counsel . . .", "to her three postponements of hearings . . . none of which postponements was even remotely in conformity with Ind 88.16(4)" and because Rasche, as Chief of the Hearing Section, was in charge of ALJ DeLaO, there is reason to believe that Rasche had used DeLaO as part of a "scheme to deprive and prejudice the Complainant in the exercise of its rights under Wisconsin's FEPA and has shown the Respondent such favored treatment as to constitute a denial of due process."
Guthrie v. WERC, 111 Wis. 2d 447, 331 N.W.2d 331 (1983), holds that due process requires a hearing examiner to be fair and impartial and, moreover, that actual bias or unfairness need not be shown. The test to be applied is whether the circumstances are such that the risk of partiality or unfairness on the part of the examiner is too high to be constitutionally tolerable.
Contrary to AIW 's assertions, the commission does not find evidence of actual bias or unfairness on the part of Rasche or DeLaO, nor does it find any circumstances which demonstrate a risk of partiality or unfairness too high to be constitutionally tolerable. First, a comment must be made regarding AIW's contention that in dismissing its complaint DeLaO had totally ignored the Supreme Court's decision in the UAW case despite the Chief of Hearings Section's assertion in her 11/8/90 order placing the case in abeyance that such case would be useful in determining whether Johnson Controls' fetal protection policy violated the WFEA. The U.S. Supreme Court's reversal of the UAW case was not ignored by DeLaO. DeLaO simply recognized that the Seventh Circuit's decision in the UAW case was a final and binding judgment on the merits against AIW since AIW had failed to seek review of the Seventh Circuit's decision by the Supreme Court. Rather than petitioning the U.S. Supreme Court for a writ of certiorari, as the UAW had done, AIW returned to district court to reopen its own original action against Respondent. The district court did so and then dismissed the case under the doctrine of res judicata based on AIW's participation as a party in the UAW case. This district court's decision was in turn affirmed by the Seventh Circuit. Local 322, AIW v. Johnson Controls, 921 F.2d 732 (7th Cir. 1991). The U.S. Supreme Court then denied certiorari on May 28, 1991. 59 U.S.L.W. 3794 (#90-1537). As noted by Respondent, the U.S. Supreme Court has held in Federated Department Stores. Inc. v. Moitie, 452 U.S. 394 (1981), that non-appealing parties cannot benefit from a later reversal of a decision with regard to parties who did seek review. Id. at 398-402. Herein lies the crux of the problem in which AIW now finds itself. AIW made the strategic choice to intervene as a full party in UAW's appeal to the Seventh Circuit, but then failed to appeal that court's adverse decision, opting instead to return to federal district. court to pursue its own federal action challenging Respondent's Fetal Protection Policy.
Although AIW conceded in its initial brief to the Commission that it "did not appeal the Seventh Circuit's judgment in the UAW case but instead sought to prosecute its original Title VII claim . . ." (AIW Initial Brief, p. 36), in its reply brief AIW cites the U.S. Supreme Court Rule 12.4 (3) and the fact that it received a Seventh Circuit Rule 54 notice (4) as establishing that it was a party to the Supreme Court proceedings. However, both the Seventh Circuit's order on remand from the Supreme Court, #88-1308 (June 19, 1991), and the district court decision (#85-C-409, July 11, 1991) regarding AIW's motion under Federal Rule of Civil Procedure 60(b) (5) seeking relief from that court's 1/24/90 judgment based on the U.S. Supreme Court's reversal of the Seventh Circuit's judgment in the UAW case, flatly contradict AIW's assertion that it was a party to the Supreme Court proceedings.
In its order, the Seventh Circuit denied AIW's request that the court vacate the district court's original judgment (85-C-409), stating "We reject the AIW's requests for relief, since it failed to appeal our previous adverse judgments. See Federated Department Stores. Inc. v. Moitie, 452 U.S. 394, 398-402, 101 S.Ct. 2424, 2428- 29 (1981)." Case #88-1308 (7th Cir. 6/19/91) (emphasis added) The district court denied AIW's Rule 60(b) motion stating:
"The Seventh Circuit expressly rejected the plaintiff's request that the Seventh Circuit order this Court to grant the plaintiff's Rule 60 (b) motion, because the plaintiff 'failed to appeal our previous adverse judgments.' (citing Moitie, 452 U.S. at 398-402). This Court agrees with the Seventh Circuit's reasoning and recognition of Moitie as controlling precedent. Accordingly this Court will deny plaintiff's motion."
Case #85-C-409, pp. 8-9.
AIW's further contentions that DeLaO "reintroduced the question of res judicata" because of a realization that there was no need for any evidentiary hearing in view of the U.S. Supreme Court's decision and Respondent's admission about having introduced a Fetal Protection Policy at its Milwaukee plant, and because Rasche did not want AIW's case to succeed and was biased and prejudiced against AIW, simply lacks record support. In fact, what the record (of which DeLaO has commented she extensively reviewed prior to issuance of her decision herein) does show is that the Respondent had repeatedly argued that its res judicata defense had never been decided by the Department (see, for example, Respondent's March 30, 1990 reply brief to Rasche at p. 8; Respondent's June 4, 1990 letter brief to Rasche at p. 1; and Respondent's December 18, 1990 brief to the Commission at p. 7, n. 1) and this is what prompted DeLaO to address the res judicata issue. Furthermore, as found by DeLaO and discussed above, neither Moriarty's 1/10/90 order nor Rasche's 5/30/90 order had in fact adjudicated the res judicata issue so as to constitute the law of the case. Thus, it was entirely appropriate for DeLaO to determine the res judicata issue.
The record similarly fails to support AIW's assertions against Rasche. First, there is absolutely nothing in the record to suggest that Rasche had used DeLaO as part of a "scheme to deprive and prejudice AIW in the exercise of its rights under Wisconsin's FEPA." AIW apparently argues in part that Rasche was biased against AIW and that because Rasche was DeLaO's supervisor, Rasche therefore must have caused DeLaO to "reintroduce" the res judicata issue. However, DeLaO's and Rasche's diametrically opposite views on the res judicata question hardly suggests Rasche had caused DeLaO to consider the res judicata issue. Rasche and DeLaO were at complete odds on the question of whether the doctrine of res judicata could or should be applied to AIW's state claim, with Rasche steadfastly maintaining that it should not be applied to bar AIW's state complaint and that the hearing on AIW's complaint before the ERD would be a hearing de novo. DeLaO, of course, disagreed. Further, as noted above, the record indicates that DeLaO was prompted to address the res judicata issue because her review of the record showed this case had not previously been decided. AIW also argues that alleged ex parte contacts by Rasche with Respondent's counsel and her three postponements of scheduled hearings "not in conformity with sec. Ind 88.16(4)" constitute reason to believe Rasche had used DeLaO as part of a scheme to deprive and prejudice AIW in the exercise of its rights under the WFEA. These are arguments are also unconvincing. With respect to postponements of hearings, sec. 227.46(e), Wis. Stats., specifically provides that the ALJ is responsible for regulating the course of the hearing, while sec. Ind 88.16(4) is not relevant since it pertains to the granting of a party's request for a postponement. (6) There is no indication that Rasche exhibited an abuse of discretion in her postponements of the scheduled hearings. While the matter involving the alleged ex parte contacts by Rasche with Respondent's counsel leading up to the postponing of the April 5 hearing could possibly, if true, suggest a degree of imprudence on her part, the Commission is not persuaded that this single incident suggests a high probability of bias or unfairness against AIW. The totality of the circumstances presented in this case simply does not reasonably lead one to conclude that Rasche was attempting to deprive AIW of its rights under the WFEA, especially since Rasche had at all times asserted that AIW was entitled to a hearing. Granted, a postponement of the hearing did result in a delay of the case. However, as previously noted, there is no indication that Rasche's postponement of the hearing constituted an abuse of discretion. Finally, AIW has failed to identify how Rasche had shown the Respondent "such favored treatment so as to constitute a denial of due process," and there is nothing which suggests that Rasche harbored any actual bias or prejudice against AIW. Under the circumstances, the commission finds that neither DeLaO nor Rasche has denied AIW due process in the pursuit of its complaint before the ERD.
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(1)( Back ) Likewise, DeLaO's decision herein correctly states that the Commission's 4/18/91 letter remanding this case to the ERD to "proceed to hearing" was not an order directing ERD to hold a hearing but simply notice that the matter was remanded for further proceedings.
(2)( Back ) A further consideration was the Court's determination that Title VII did not repeal the requirement that federal courts accord full faith and credit to state court judgments as provided under 28 U.S.C. §1738.
(3)( Back ) Rule 12.4 provides that all parties to the proceeding in the court where judgment is sought to be reviewed shall be deemed parties in this Court, unless the petitioner notifies the clerk of this court in writing of the petitioner's belief that one or more of the parties below has no interest in the outcome of the petition. A copy of the notice shall be served as required by Rule 29 on all parties to the proceeding. A party noted as no longer interested may remain a party by promptly notifying the clerk with service on all the other parties, of an intention to remain a party.
(4)( Back ) Rule 54 of the Seventh Circuit provides that "when the, Supreme Court remands a case to this court for further proceedings, counsel for the parties shall, within 21 days after the issuance of a certified copy of the Supreme Court's judgment pursuant to its Rule 52.3, file statements of their positions as to the action which ought to be taken by this court on remand."
(5)( Back ) Under Fed. R. Civ. P. 60(b) the court may relieve a party from a final judgment under certain circumstances.
(6)( Back ) Ind 88.16(4) provides as follows: All requests for postponements shall be filed with the administrative law judge or with the director within ten days after the date of the notice of hearing, except where emergency circumstances arise thereafter and prior to hearing. Postponements and continuances shall be granted only for good cause shown and not for the mere convenience of the parties, their attorneys or their representatives.