X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Federal rule of Civil Procedure 42(b) allows a court to order “a separate trial” of any claim or issues “in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition or economy,” as long as no party’s right to jury trial is infringed. Indeed, Judge Richard Posner of the 7th U.S. Circuit Court of Appeals has opined that a “judge can bifurcate (or for that matter trifurcate, or slice even more finely) a case at whatever point will minimize the overlap in evidence between the segmented phases or otherwise promote economy and accuracy in adjudication.” Hydrite Chem. Co.. v. Calumet Lubricants Co., 47 F.3d 887, 891 (7th Cir. 1995). Bifurcation is the severing of one or more issues for resolution while staying the remaining issues. Jerry Custis, “Initial Investigation and Handling of Litigation,” Litigation Management Handbook � 1:23, II & n. 2 (2005). Although Rule 42 addresses only the bifurcation of “trials,” courts have recognized that one purpose of the rule is to eliminate expensive discovery “pending resolution of potentially dispositive preliminary issues” by bifurcating trial, discovery or both. Ellingson Timber Co. v. Great Northern Railway Co., 424 F.2d 497, 499 (9th Cir. 1970). Deciding whether to seek bifurcation of trial or discovery should be informed by legal research and strategic concerns. The decision should be made at the outset, as it will be expeditious to address it with the other parties at the Rule 26(f) meeting and with the court at the Rule 16(b) conference. Despite Rule 42′s approval of bifurcation, convincing the court may be difficult. The party moving for bifurcation bears the burden of proof. See White v. E-Loan Inc., No. 05-02080, 2006 WL 2850041, at 1 (N.D. Calif. Oct. 5, 2006). Moreover, although the Advisory Committee Notes to Rule 42 encourage bifurcation when merited, they warn that “separation of issues for trial is not to be routinely ordered.” Bifurcation is routinely sought in class actions, mass tort cases, patent actions, antitrust cases, insurance coverage actions, actions against governmental entities and actions in which evidence of damages is complicated or inflammatory. Steven S. Gensler, “Bifurcation Unbound,” 75 Wash. L. Rev. 705, 708, 725-26 (2000) (discussing bifurcation’s history and future under Rule 42). Bifurcation may be used to efficiently dispose of other cases, too, by defendants but also by plaintiffs, who can use success on threshold issues to get a good settlement. Gensler, supra at 779. See also Bates v. United Parcel Serv., 204 F.R.D. 440 (N.D. Calif. 2001). To determine whether bifurcation is appropriate, counsel should first determine whether the resolution of a specific issue or issues will effectively end the litigation. Custis, supra at II & n.3. To do this, counsel must analyze the elements of each claim (see Geraldine Alexis and Andrea Deshazo, “Punitive Damages: Is Bifurcation Right for Your Case?” 16 Antitrust 82, 86 (2002)) and identify affirmative defenses. Counsel should explore whether evidence needed to adjudicate the specific issue overlaps with evidence needed to adjudicate the other issues and, if so, whether that overlap renders bifurcation uneconomical. Id. Finally, counsel must determine whether probative evidence as to one issue might be prejudicial when heard by the fact-finder in adjudicating other issues. See id. In performing this analysis, counsel should look for issues whose resolution will end the case through trial, dispositive motion, mediation or settlement. Finding a case-ending issue In Jinro America Inc. v. Secure Investments Inc., 266 F.3d 993 (9th Cir. 2001), for example, the plaintiffs alleged breach of contract, fraud and racketeering. The trial court bifurcated trial, limiting the first phase to whether the contract at issue was a “sham.” The jury found the alleged contract invalid, and the trial court dismissed the entire action. Although ultimately remanding because improper expert testimony had been admitted, the 9th Circuit concluded that the trial court did not abuse its discretion by bifurcating the issues of the validity and terms of the agreement, and lauded its “judicial economy.” Id. at 998-99. In Bates, the U.S. District Court for the Northern District of California entertained the plaintiffs motion to bifurcate the trial into liability and damages phases in a class action alleging violations of the Americans With Disabilities Act and other state and federal laws. 205 F.R.D. at 442. The plaintiffs argued that severing the issue of pattern and practice would promote judicial economy and prevent confusion. The defendants countered that bifurcation was not appropriate because individualized evidence for each potential class member was necessary for adjudication. The court ordered bifurcation, ruling that the individualized evidence was not necessary to determine whether the defendant was liable to the class of plaintiffs, and noting that bifurcation would eliminate the need for a second trial phase unless a pattern and practice of wrongdoing were proved. Looking for overlap Given Rule 42′s concern with economy, whether evidence necessary to litigate the threshold issue overlaps with evidence relevant to other issues should inform the decision on bifurcation, and a significant overlap may prevent economical bifurcation. In Progressive Northern Ins. Co. v. Bachmann, 314 F. Supp. 2d 820, 832-33 (W.D. Wis. 2004), the plaintiff insurance company sought a ruling that it was not liable under the terms of the defendant’s insurance policy. The U.S. District Court for the Western District of Wisconsin refused to bifurcate because some evidence relating to the coverage issue also related to the bad-faith counterclaim. The U.S. District Court for the Northern District of California reached a similar decision in White v. E-Loan Inc., 2006 WL 2850041 (N.D. Calif. Oct. 5, 2006). The plaintiff, seeking to represent a class, alleged that the defendant’s solicitation willfully violated the Fair Credit Reporting Act. The defendant sought to bifurcate discovery, to consider first the “threshold” issue of whether the solicitation violated the act and to stay discovery on the remaining issues because resolution of the threshold issue in its favor would be case-dispositive. The court denied the defendant’s motion for several reasons. First, the threshold issue could not be determined based on evidence of the solicitation alone. Second, whether and how the defendants violated the act would help determine whether the defendants acted willfully. Last, bifurcation would result in duplicative discovery, wasting the resources of the court and the parties. Obviously, the need to analyze potential overlap is important, and issues that are neatly severable and require only limited discovery are most appropriately bifurcated. Counsel should show why the potential savings of bifurcation outweigh any costs of overlap, and urge the court to require the party opposing bifurcation to “explain why the evidence must be repeated in its entirety.” Gensler, supra at 778-79 & n. 425, 426. Counsel should think creatively about minimizing the burden of overlapping discovery. In Vintage Pharmaceuticals Inc. v. Watson Pharmaceuticals Inc., No. CV-01-B-1847 (N.D. Ala. May 20, 2002), the court granted the defendant’s motion to bifurcate discovery, but required that side to bear limited expenses of repetitive discovery should the case proceed after the litigation of the threshold issue. Weighing prejudice In weighing these issues, a court will consider two types of prejudice: whether evidence presented to adjudicate one claim would prejudice a party as to another claim (see North Dakota Fair Housing Council Inc. v. Allen, 298 F. Supp. 2d 897, 899 (D.N.D. 2004)) and whether bifurcation would prejudice the party opposing bifurcation. See In the matter of Rhone-Poulenc Rorer Inc., 51 F.3d 1293, 1302-1303 (7th Cir. 1995). In North Dakota Fair Housing Council Inc. v. Allen, the defendants sought to separate the punitive damages claim from the liability portion of the case due to concerns that evidence of the defendants’ financial condition would adversely affect the jury’s consideration of liability. 298 F. Supp. 2d at 899. The court granted the unopposed motion, citing the “interest of judicial economy and of avoiding confusion.” Id. The 7th Circuit weighed whether the trial court exceeded its discretion to manage discovery by ordering the bifurcation of certain certified class issues from the individual issues. In the matter of Rhone-Poulenc Rorer Inc., 51 F.3d at 1302. After resolving the class issues, the trial court proposed remanding the cases to their original districts. The 7th Circuit disapproved and ordered the class decertified, saying that the plan divided “issues between separate trials in such a way that the same issue is reexamined by different juries.” Id. at 1303. The 7th Circuit held that the Seventh Amendment right to jury trial “is a right to have juriable issues determined by the first jury impaneled to hear them . . . and not reexamined by another finder of fact.” Id. See also Compagnie Francaise D’Assurance Pour Le Commerce Exterieur v. Phillips Petroleum Co., 105 F.R.D. 16, 36-38 (S.D.N.Y. 1984)(Bifurcation would prejudice defendant because it would force defendant to go to trial without necessary discovery.) Counsel seeking bifurcation should prepare a motion that explicitly outlines the issues that should be resolved first, describes the evidence to be presented during the first phase and explains how bifurcation will convenience the court or prevent prejudice. Alexis & Deshazo, supra at 86. Counsel should remember that an order bifurcating trial need not stay discovery (Motions in Federal Court � 8:47 (3d ed.)) and seek a stay of unwanted discovery pending resolution of the threshold issue. Counsel also should argue its likely success on the merits to convince the court that limiting discovery and bifurcating the triable issues could end the case. See Schmidt v. California State Auto. Ass’n., 127 F.R.D. 182 (D. Nev. 1989) (granting separate trial on a breach of contact claim, but refusing to stay other discovery when defendant’s chances of prevailing on contract claim were unlikely). Bifurcated discovery Should a court or client not wish to seek bifurcation of trial, bifurcation of discovery may be desirable. Counsel can seek a Rule 16(b) discovery scheduling order that limits discovery to the threshold issue until the threshold issue is resolved. Custis, “Steering Cases Toward Early Resolution,” Litigation Management Handbook � 9:24, 2 & n. 4. (2005). Counsel also should determine whether the local rules promote bifurcation. A sound example of a bifurcation-friendly provision is the U.S. District Court for the Middle District of Tennessee’s Local Rule 16.01, which encourages the use of “Customized Case Management” and requires the discussion of the “desirability of limiting discovery to certain claims . . . the necessity of any protective order or other limitations on discovery . . . and the need for a stay of discovery” at the initial case management conference. M.D. Tenn. Local R. 16.01 generally & 16.01(d)(1)c3. April S. Rogers is an associate in the Birmingham, Ala., office of Waller Lansden Dortch & Davis. She practices in the firm’s trial and appellate section and primarily focuses on complex commercial litigation. She represented Watson Pharmaceuticals Inc. in Vintage Pharmaceuticals Inc. v. Watson Pharmaceuticals Inc. , a case mentioned in this article.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.