Bifurcating discovery for early summary judgment in class actions.

• Author: Durney, Peter M.

HOW BEST to defend a new class action in which you think your client does not belong? Make a strong showing right out of the gate, and seek an early disposition if the likelihood of success seems probable. One way to set the stage for an early exit is to contain the scope of discovery. In the right circumstances, moving for bifurcated discovery with the goal of bringing an early summary judgment motion can be an effective tool in fending off protracted litigation. If the argument for bifurcation is sound and well-supported, courts will often phase the discovery schedule to minimize the waste of the time and resources and to allow for a dispositive motion to be argued and decided.

In complex or discovery-intensive cases, including class actions, bifurcation of discovery into distinct phases can create an opportunity for early disposition. Phased discovery is a practical way to manage a case in which a defendant believes the case can and should be disposed of prior to full-blown merits discovery. Claims of prejudice by class action plaintiffs are usually meritless, as the bifurcation process protects the rights of plaintiffs. After the first phase of bifurcated discovery, if there appears to be justification for a second stage, the second phase of discovery begins after an express determination by the court that there is a reasonable likelihood that the individual claims are viable. Such a determination would customarily be made in a summary judgment ruling.

This type of bifurcation should not be confused with the more typical bifurcation of pre-certification and post-certification discovery in the class action context, and the two types of bifurcation are not mutually exclusive. Even within a case where pre- and post-certification discovery are likely to be bifurcated, requesting bifurcated pre-certification discovery enables the moving party to take an early shot at summary judgment on a discrete, but complete, record without the distraction of other class discovery or merits discovery, as the case may be. This form of bifurcation is more closely related to post-removal jurisdictional discovery under CAFA, (1) or to predicate statutory liability issues, such as whether the claim or defense meets a certain definition or criterion before liability issues attach. The same governing principles apply in all of these instances.

1. Opportunity for Early Resolution

   1. Arguments in Favor of Seeking Bifurcation

      Courts possess inherent powers to control the manner of discovery in cases proceeding before them. (2) With the goal of federal rules "to secure the just, speedy, and inexpensive determination of every action," (3) a party is justified in making a well-founded request to conduct discovery pursuant to certain phases or limitations, and it is within the court's discretion to permit such requests. (4) In a circumstance in which there is a predicate issue or fact upon which the possibility of liability rests--for example, a term defined in a statute, or a jurisdictional question--limiting discovery to that issue at the outset of the case may result in substantial cost savings for the parties and the court. To some extent, the practicability of this approach depends upon whether the circumstances would permit a dispositive ruling on a discrete issue, which can be flushed out with minimal time and effort.

      For example, in Interstate Production Credit Association v. Fireman's Fund, a ten million dollar insurance action pending in the District of Oregon, the defendant insurer argued for bifurcation of discovery, on the grounds that early summary judgment might dispose of the case, and that discovery on other issues would be protracted and expensive. (5) The defendant insurer argued that if the dispositive coverage issue were to be litigated first, expensive broader discovery likely could be avoided.

      The insurer argued further that bifurcation had been permitted in that district on statute of limitations issues. The cost and time savings would be substantial were summary judgment granted, and even if it were not to be granted, there would be little delay and no prejudice to the plaintiff. Limited discovery was necessary to create the record underlying a summary judgment proceeding on the issue of coverage. In opposition, the plaintiff argued that the summary judgment motion could be filed without bifurcation, that the insurer was unlikely to prevail on the merits of the coverage argument, and that this was not a case involving complex issues or multiple parties so as to warrant bifurcation. (6)

      In accepting the insurer's arguments, the Interstate Production court simply agreed that bifurcation of the coverage issues was "likely to promote judicial efficiency and minimize litigation expenses for both parties." (7) In reviewing the competing proposed discovery schedules submitted by the parties, the court elected to use the plaintiff-objector's schedule, modifying it only to have both a coverage issue discovery cutoff date and a cutoff date for all other discovery. (8)

      In Vondriska v. Cugno, bifurcation was sought in a Fair Labor Standards Act ("FLSA") case in Florida, where the defendant asserted that it could not be held liable because it was never the plaintiffs' "employer" as that term is defined under the FLSA. (9) One of the defendants moved to bifurcate early in the case, and the Court agreed, bifurcating discovery into two phases. The first phase involved discovery only as to the threshold issue of whether the moving defendant was plaintiffs' "employer" as defined under the FLSA. At the close of discovery...