Castillo v. Johnson

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Tisha Castillo, et al., No. CV-17-04688-PHX-DLR

10 Plaintiffs, ORDER

11 v.

12 George Harry Johnson, et al.,

13 Defendants. 14 15 16 One year-and-a-half after Plaintiffs added their fraudulent transfer claims to their 17 first amended complaint, Defendants move to bifurcate and stay them until the remainder 18 of the case has been resolved. (Doc. 188.) The motion is fully briefed (Docs. 188, 196, 19 206) and will be denied.1 20 The Court has broad discretion to bifurcate issues and claims for trial, and to order 21 discovery to proceed in a convenient manner. See Fed. R. Civ. P. 26, 42(b); Estate of Diaz 22 v. City of Anaheim, 840 F.3d 592, 603 (9th Cir. 2016). When making these determinations, 23 the Court considers factors such as “avoiding prejudice, separability of the issues, 24 convenience, judicial economy, and reducing the risk of confusion.” Bates v. United 25 Parcel Service, 204 F.R.D. 440, 448 (N.D. Cal. 2001). “With respect to judicial economy, 26 additional considerations include (1) whether evidence to be offered in the proposed phases

27 1 Defendants’ request for oral argument is denied because the issues are adequately briefed and oral argument will not help the Court resolve the motion. See Fed. R. Civ. P. 28 78(b); LRCiv. 7.2(f); Lake at Las Vegas Investors Grp., Inc. v. Pac. Malibu Dev., 933 F.2d 724, 729 (9th Cir. 1991). 1 will overlap, . . . and (2) whether unnecessary costs can be avoided by resolution of 2 dispositive preliminary issues[.]” Arizona v. ASARCO, CV-08-441-TUC-DCB, 2011 WL 3 13185802, at *1 (D. Ariz. Jan. 11, 2011) (internal quotations and citations omitted). 4 Defendants, as the movants, are responsible for showing that bifurcation is convenient, 5 economical, or would avoid prejudice. Id. They have not done so. 6 On the contrary, it would be wasteful to bifurcate the transfer claims from the rest 7 of the case after the parties have conducted months of discovery—and even engaged in 8 discovery disputes—related to them. Although Defendants contend that bifurcation is 9 appropriate because the discovery deadline approaches while significant discovery must 10 yet be conducted as to the fraudulent transfer claims, it seems more practical to address 11 this issue by requesting an extension of the discovery deadline, rather than bifurcation.2 12 Moreover, Plaintiffs have alleged, and Defendants do not dispute, that the same few 13 witnesses overlap for all claims. It would make little economic sense to travel to and 14 depose each witness on the bribery claims, only to depose the exact same witness again, 15 perhaps years later as evidence becomes stale, on the fraudulent transfer claims. 16 Bifurcating the claims also risks the need for two separate and costly trials, and the Court 17 is unpersuaded by Defendants’ speculation that “a trial on the fraudulent transfer claims 18 will never become necessary.” (Doc. 188 at 7.) 19 The Court is similarly unpersuaded that the fraudulent transfer claims are wholly 20 divorced from the bribery claims. Rather, evidence of the fraudulent transfer arrangement 21 might be relevant to showing the Defendants’ motive to enter the bribery scheme. States 22 v. Reyes, 660 F.3d 454, 464 (9th Cir. 2011) (holding that motive and personal financial 23 gain were relevant considerations for the jury when deciding the defendant’s participation 24 in an illicit scheme). Defendants’ assertion that Plaintiffs do not need evidence of the 25 fraudulent transfers to prove motive and financial gain, because Plaintiffs already have 26 access to Defendants’ tax returns, is misguided. Plaintiffs are not limited to one route in 27 proving their case. The Court finds the remainder of Defendants’ arguments in support of

28 2 This approach is all the more preferable in light of the interlocutory appeal and the Court’s request for briefing on the appropriateness of a stay. || bifurcation and a stay unconvincing. Accordingly, 2 IT IS ORDERED that Defendants’ motion to bifurcate and stay Plaintiffs’ fraudulent transfer claims (Doc. 188) is DENIED. 4 Dated this 12th day of May, 2020. 5 6 ‘boy tha 9 Upied States Dictria Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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