Presenting a live 90-minute webinar with interactive Q&A Bifurcated Discovery in Class Litigation: Navigating the Blurred Lines Before and After Certification Evaluating "Merits Discovery" vs. "Class Discovery," Addressing Damages Issues, Preparing Defendants for Depositions When Bifurcation is Permitted WEDNESDAY, JUNE 11, 2014 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Jennifer L. Liu, Outten & Golden , New York Katherine Murray, Of Counsel, Paul Hastings , Los Angeles The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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Bifurcated Discovery in Class Litigation: Navigating the Blurred Lines Before and After Certification Jennifer L. Liu, Outten & Golden LLP jliu@outtengolden.com Katherine F. Murray, Paul Hastings LLP katherinemurray@paulhastings.com
Class Actions Can Be a Force of Good • Class actions are procedural devices that allow similarly-situated claims to be tried together. • As described by various courts: • “[T]he class -action devise saves the resources of both the courts and the parties by permitting an issue potentially affecting every [class member] to be litigated in an economical fashion.” Gen. Tel. Co. of Southwest v. Falcon , 457 U.S. 147, 155 (1982). • “The class action is a procedural device intended to advance judicial economy by trying claims together that lend themselves to collective treatment.” Blaz v. Belfer , 368 F.3d 501, 508 (5th Cir. 2004). • “The class action is an ingenious device for economizing on the expense of litigation and enabling small claims to be litigated.” Thorogood v. Sears, Roebuck and Co. , 547 F.3d 742, 744 (7th Cir. 2008). • “Class action litigation is a procedural mechanism designed to join multiple parties with similar or identical claims, so that they may seek redress in an efficient and expeditious manner.” Cummings v. Connell , 402 F.3d 936, 944 (9th Cir. 2005). • “The class action is a useful jurisprudential tool which places special responsibilities on the court and counsel.” Bradford v. Sears, Roebuck and Co. , 673 F.2d 792, 797 (5th Cir. 1982). • “The class action is an ingenious procedural innovation that enables persons who have suffered a wrongful injury, but are too numerous for joinder of their claims alleging the same wrong committed by the same defendant or defendants to be feasible, to obtain relief as a group, a class as it is called. The device is especially important when each claim is too small to justify the expense of a separate suit, so that without a class action there would be no relief, however meritorious the claims .” Eubank v. Pella Corp. , --- F.R.D. ----, 2014 WL 2444388, at *1 (7th Cir. 2014) (Posner, J.). 6
But They Can Also Be Subject to Abuse • Because class action lawsuits present opportunities for abuse, “a district court has both the duty and the broad authority to exercise control over a class action and to enter appropriate orders governing the conduct of counsel and parties.” Gulf Oil Co. v. Bernard , 452 U.S. 89 , 100 (1981). • “[I]t bears repeating that ‘[c]lass action are unique creatures with enormous potential for good and evil.’” Besinga v. United States , 923 F.2d 133, 135 (9th Cir. 1991). • “Neither the judges on this panel nor other federal judges so far as we are aware have denied that the class action is a worthwhile device, and indeed is indispensable for the litigation of many meritorious claims. But like many other good things it is subject to abuse.” Thorogood v. Sears, Roebuck and Co. , 627 F.3d 289, 294-95 (7th Cir. 2010). 7
Discovery in Class Action Lawsuits • Time consuming • Labor intensive • Expensive 8
One Solution: Bifurcated Discovery • What does it mean to bifurcate discovery? • Separate discovery of class certification issues from discovery of merits issues. • Conduct only discovery of class certification issues until a class is certified. • Defendants often want bifurcated discovery; plaintiffs generally do not. 9
Basis for Seeking Bifurcated Discovery • The Federal Rules of Civil Procedure do not explicitly provide for bifurcated discovery. • But see Fed. R. Civ. P. 26(c)(1): A court may, “for good cause,” limit the scope of discovery or control its sequence to “protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.” • The 2003 Advisory Committee Notes to Rule 23 recognize that bifurcation “is appropriate to conduct controlled discovery . . . limited to those aspects relevant to making the certification decision on an informed basis .” • It is the burden of the party resisting discovery ( i.e., proposing bifurcation) to show that good cause exists to limit discovery. o New England Carpenters Health and Welfare Fund v. Abbott Labs. , No. 12 Civ. 1662, 2013 WL 690613 (N.D. Ill. Feb. 20, 2013) o Hines v. Overstock, Com, Inc., No. 09 Civ. 991, 2010 WL 2775921 (E.D.N.Y. July 13, 2010) (“[D]efendant bears the burden of establishing ‘good cause” for [bifurcated discovery].”) Exemar v. Urban League of Greater Miami, Inc. , (S.D. Fla. June 26, 2008) (“Bifurcation is the o exception rather than the rule. [] The burden rests with the moving party to show that bifurcation is necessary.”). 10
But what is a “merits” issue and what is a “class” issue? • At its most basic level, a “class” issue is one which relates to one of the requirements of class certification under Federal Rule of Civil Procedure 23. • To certify a class, the court must find that all Rule 23(a) requirements and at least one Rule 23(b) requirement is met: o Rule 23(a): A party seeking class certification must demonstrate that: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class. o Rule 23(b)(1) applies where either (a) class certification is warranted to protect the defendant from inconsistent obligations vis-à-vis other class members, or (b) where, in practical effect, resolving one class member’s claims would impede or impair other class members from protecting their interests. Rule 23(b)(2) applies where “the party opposing the class has acted or refused to act on o grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole [.]” Rule 23(b)(3) applies where “the court finds that the questions of law or fact common to class o members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for adjudicating the controversy.” 11
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