Diaz v. Tesla, Inc.

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 OWEN DIAZ, Case No. 3:17-cv-06748-WHO

8 Plaintiff, ORDER DENYING NEW TRIAL ON 9 v. LIABILITY

10 TESLA, INC., et al., Re: Dkt. No. 359 Defendants. 11

12 13 After a jury verdict assigning Tesla liability and awarding plaintiff Owen Diaz 14 compensatory and punitive damages, and after I denied Tesla’s motion for a new trial on liability 15 and damages, it moves again for a new trial on liability and damages. But I already decided this 16 question. There appears to be no reason—aside from strategic gamesmanship—that Tesla could 17 not have made these same arguments when I previously decided this issue. Tesla’s motion is 18 judicially estopped and procedurally barred. In addition, it fails on the merits. For the reasons 19 that follow, the motion is denied. 20 BACKGROUND 21 The facts and procedural background of this case are recounted in detail in my April 13, 22 2022, Order on Post Trial Motions. [Dkt. No. 328]. That order denied Tesla’s motion for 23 judgment as a matter of law, denied Tesla’s motion for a new trial on liability and damages, and 24 conditionally denied Tesla’s motion for a new trial on damages only, based on Diaz’s acceptance 25 of a remittitur. (“Post-Trial Motion”) [Dkt. 317]. Diaz subsequently declined the remittitur, Dkt. 26 No. 347, and I granted Tesla’s motion for a new trial on damages only, Dkt. No. 348. 27 At a subsequent scheduling conference, Tesla stated that it believed a new trial on damages 1 Gasoline Products Co. v. Champlin Refining Co., 283 U.S. 494 (1931). See Dkt. No. 350; Reply 2 to Motion for New Trial on Liability and Damages (“Repl.”) [Dkt. No. 362] Ex. A (Transcript of 3 Conference). I shared my doubts about this argument but permitted Tesla to file the new motion. 4 Repl. Ex. A. Tesla subsequently filed its “Motion for New Trial on Liability and Damages,” 5 (“Mot.”) [Dkt. No. 359], which is now before me for decision. 6 LEGAL STANDARD1 7 I. Judicial Estoppel 8 Courts consider at least three “non-exclusive factors” when deciding to invoke judicial 9 estoppel: whether “a party’s later position [is] ‘clearly inconsistent’ with its earlier position”; 10 “whether the party has succeeded in persuading a court to accept that party’s earlier position, so 11 that judicial acceptance of an inconsistent position in a later proceeding would create ‘the 12 perception that either the first or second court was misled’”; and “whether the party seeking to 13 assert an inconsistent position would derive an unfair advantage or impair an unfair detriment on 14 the opposing part if not estopped.” Bock v. Washington, 33 F.4th 1139, 1145 (9th Cir. 2022) 15 (quoting New Hampshire v. Maine, 532 U.S. 742, 750-51 (2001)). 16 II. Motion for Reconsideration 17 “[A] motion for reconsideration should not be granted, absent highly unusual 18 circumstances, unless the district court is presented with newly discovered evidence, committed 19 clear error, or if there is an intervening change in the controlling law.” Marlyn Nutraceuticals, 20 Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 880 (9th Cir. 2009) (quoting 389 Orange St. 21 Partners v. Arnold, 179 F.3d 656, 665 (9th Cir. 1999)). And because “[r]econsideration ‘offers an 22 extraordinary remedy, to be used sparingly in the interests of finality and conservation of judicial 23 resources,’ . . . a motion for reconsideration may not be used to raise evidence or arguments for the 24 first time that ‘could reasonably have been raised earlier in the litigation.’” Woods v. August, No. 25 3:15-CV-05666-WHO, 2018 WL 5841311, at *1 (N.D. Cal. Nov. 8, 2018) (first quoting Carroll v. 26 Nakatani, 342 F.3d 934, 945 (9th Cir. 2003); and then quoting Marlyn, 571 F.3d at 880); see also 27 1 Bhatnagar v. Surrendra Overseas Ltd., 52 F.3d 1220, 1231 (3d Cir. 1995) (“[R]eargument should 2 not be used as a means to argue new facts or issues that inexcusably were not presented to the 3 court in the matter previously decided.” (internal quotation marks omitted)). 4 DISCUSSION 5 I. Judicial Estoppel 6 “Judicial estoppel is an equitable doctrine that precludes a party from gaining an advantage 7 by asserting one position, and then later seeking an advantage by taking a clearly inconsistent 8 position.” Arconic, Inc. v. APC Inv. Co., 969 F.3d 945, 956 (9th Cir. 2020) (quoting Hamilton v. 9 State Farm Fire & Cas. Co., 270 F.3d 778, 782 (9th Cir. 2001)). The purpose of judicial estoppel 10 “is to protect the integrity of the judicial process, by prohibiting parties from deliberately changing 11 positions according to the exigencies of the moment . . . and to prevent improper use of judicial 12 machinery.” New Hampshire, 532 U.S. at 749-50 (internal quotation marks and citations omitted). 13 “[J]udicial estoppel ‘protects against a litigant playing fast and loose with the courts.” Corbello v. 14 Valli, 974 F.3d 965, 978 (9th Cir. 2020) (quotation marks omitted) (quoting Religious Tech. Ctr. v. 15 Scott, 869 F.2d 1306, 1311 (9th Cir. 1989) (Hall, J., dissenting)). 16 Each of the three “non-exclusive factors” that courts consider when deciding to invoke 17 judicial estoppel is present here. See Bock, 33 F.4th at 1145. To start, Tesla’s entire motion is 18 “clearly inconsistent” with its previous motion for a new trial. Tesla’s previous position was that 19 there were four viable options for litigation to proceed: judgment as a matter of law, a new trial on 20 liability and damages, remittitur, or a new trial on only damages. See Post-Trial Motion 11-17 21 (seeking remittitur or a new trial on damages). Its new position is that there were actually only 22 three viable options all along, and that a new trial on only damages was not a real option because it 23 is unconstitutional. These positions are clearly inconsistent. Tesla never once alluded to this 24 position in the papers or hearings leading up to my order granting its motion for a new trial on 25 damages only. 26 Second, because I ultimately granted Tesla’s motion for a new trial on only damages, Tesla 27 “succeeded in persuading [me] to accept [its] earlier position”; changing that position now 1 in its motion and at the hearing, Tesla seems to assert that it did not mislead me because it did not 2 think of this argument earlier, as it could not have predicted that Diaz would reject the remittitur 3 and so would not know that the outcome it previously sought was actually unconstitutional. See 4 Mot. 13:3-4. That is unconvincing at best. 5 Those two factors are more than sufficient to judicially estop Tesla from making its new 6 arguments here. And the third consideration—“whether the party seeking to assert an inconsistent 7 position would derive an unfair advantage or impair an unfair detriment on the opposing part if not 8 estopped,” Bock, 33 F.4th at 1145—is also present. As Diaz points out, he could have made 9 different arguments in subsequent motions had he known Tesla would take the position that one of 10 its own requests was unconstitutional. See Oppo. 12:4-14:7. More broadly, Diaz was precluded 11 from making choices about his litigation strategy because Tesla hid the ball on its true intentions 12 for this litigation. That creates an unfair detriment for Diaz. See Bock, 33 F.4th at 1145. It would 13 also give Tesla “an unfair advantage” if I now permit it to make an argument that directly 14 contradicts one that it previously made and upon which the plaintiffs and the court relied. 15 Tesla is judicially estopped from arguing for a new trial on damages and liability. Its 16 motion is denied. 17 II. Motion for Reconsideration 18 I need not provide other reasons for denying Tesla’s motion, but I will. Even if judicial 19 estoppel somehow did not apply, I construe this as a motion for reconsideration.2 And it is barred. 20 At its core, this is a motion for a new trial on liability. Though the arguments and legal 21 bases differ from those presented in Tesla’s Post-Trial Motion from November 16, 2021, this 22 motion has the identical purpose as one of Tesla’s arguments in the November 2021 motion: to 23 hold a brand-new trial on Tesla’s liability. And my Order on Post-Trial Motions specifically 24 rejected Tesla’s request for a new trial on liability. Dkt. No. 328. Tesla’s newest motion asks me 25

26 2 Tesla contends it is not a motion for reconsideration but rather an entirely new motion, and so did not have to seek leave of the court, and at any rate received leave from the court to seek 27 reconsideration. I agree I granted leave to file this motion in the hearing and minute order from 1 to again analyze whether it is entitled to a new trial on liability. Because I already addressed that 2 issue, this motion inherently asks me to reconsider my previous order; it is therefore a motion for 3 reconsideration. See generally Civ. Loc. R. 7-9(a) (noting a motion for reconsideration seeks 4 “reconsideration or any interlocutory order on any ground set forth in Civil L.R. 7-9(b)”); Fed. R. 5 Civ. Proc. 54(b) (“[A]ny order or other decision, however designated, that adjudicates fewer than 6 all the claims or the rights and liabilities of fewer than all the parties does not end the action as to 7 any of the claims or parties and may be revised at any time before the entry of a judgment 8 adjudicating all the claims and all the parties’ rights and liabilities.”).3 9 In this new motion, Tesla’s only substantive reason for not presenting its central Gasoline 10 Products argument earlier is that it had no way of knowing that Diaz would reject the remittitur 11 and so, in essence, could not know that I would consider a retrial on damages only without trying 12 liability. See Mot. 13:3-4. This is unconvincing at best and does not meet the standard for 13 granting a motion for reconsideration. See Marlyn, 571 F.3d at 880. 14 Tesla argued in the alternative for a retrial on only damages or for remittitur. See Dkt. No. 15 317. Arguing now that it could not know that Diaz would reject remittitur and seek a new trial on 16 only damages is disingenuous. See also ICTSI Or., Inc. v. Int’l Longshore & Warehouse Union, 17 No. 3:12-CV-1058-SI, 2020 WL 2768683, at *2 (D. Or. May 28, 2020) (rejecting defendant’s 18 belated attempt to seek a new trial on damages and liability under Gasoline Products where 19 defendant had previously “moved alternatively for judgment as a matter of law, for new trial (on 20 all issues, including liability), . . . for new trial on damages, [or] . . . for remittitur” and had 21 specifically argued in post-trial motions for “a new trial limited to damages”). 22 Tesla’s motion relies entirely on Gasoline Products, a case from 1931. It does not cite 23 “newly discovered evidence” or “an intervening change in the controlling law.” Marlyn, 571 F.3d 24 at 880; see also ICTSI Or., Inc., 2020 WL 2768683, at *2 (noting Gasoline Products is decidedly 25 “not new law”). Indeed, Tesla’s briefs epitomize the rationale for rejecting reconsideration 26 3 This can be construed as a motion for reconsideration even though judgment was entered in this 27 case, see Dkt. No. 307, because “the action” “d[id] not end” as to certain claims; the Order on 1 because Tesla “raise[s] . . . arguments . . . for the first time that ‘could reasonably have been raised 2 earlier in the litigation.’” Woods, 2018 WL 5841411, at *1 (citation omitted). As noted, Tesla’s 3 only substantive reason for not presenting its Gasoline Products argument in its Motion for a New 4 Trial was that it could not have foreseen that Diaz would reject the remittitur. But that is 5 irrelevant to whether it should have previously raised the argument, particularly where Tesla’s 6 own briefing argues in the alternative for a new trial on only damages. See Dkt. No. 317 11-26. 7 Nowhere in its fifteen pages of argument for new trial on only damages did Tesla suggest that a 8 new trial on only damages would violate its Seventh Amendment rights, ala the argument in its 9 present motion. And while Tesla is permitted to make arguments in the alternative as it did in its 10 first Motion for a New Trial, those briefs never suggested that Tesla’s preferred outcome—a new 11 trial on liability—was the only constitutionally permissible option given the edict of Gasoline 12 Products. There is no reason that Tesla could not have previously made its present argument. See 13 Woods, 2018 WL 5841311, at *1. 14 Third, Tesla does not assert I committed any clear error. See Marlyn, 571 F.3d at 880. It 15 is not clear that Tesla can assert I committed clear error when I adopted one of the approaches it 16 sought in its previous motion. And even if its argument about waiving constitutional rights is an 17 argument about clear error, I find it unconvincing. Holding a second jury trial on only damages 18 does not retroactively waive Tesla’s right to have the first jury try its liability. And Tesla did not 19 waive its right to a jury trial on liability: it already received its jury trial, and the jury found that 20 Tesla was liable. 21 Additionally, holding a second trial on only damages is permitted by the Seventh 22 Amendment. See, e.g., Gasperini v. Ctr. for Humans., Inc., 518 U.S. 415, 436 n.20 (1996) 23 (“[N]ew trials restricted to the determination of damages” are “compatible with the Seventh 24 Amendment.” (citing Gasoline Prods., 283 U.S. 494)); Dimick v. Schiedt, 293 U.S. 474, 491-92 25 (1935) (The Seventh Amendment presents “no bar” to adopting procedures contrary to common 26 law, including “order[ing] a new trial on th[e] issue [of damages] alone.” (citing Gasoline Prods., 27 283 U.S. 294)); see also infra Part II. As explained below, holding a second damages-only trial 1 here does not violate Tesla’s constitutional rights.4 2 For those reasons, Tesla’s motion is denied as procedurally barred. The new trial will be 3 held on damages only. 4 III. Merits 5 Tesla’s motion primarily makes two assertions based on the reasoning from Gasoline 6 Products: that liability and damages are inextricably interwoven so that a new trial on damages 7 would rely on the same evidence as the trial on liability, Mot. 5:9-9:15, and that Tesla would be 8 prejudiced by a damages-only trial because the second jury would improperly rely on the liability 9 determination, id. 9:17-12:2. Though I need not review the merits of Tesla’s judicially estopped 10 and procedurally barred argument, see ICTSI Or., Inc., 2020 WL 2768683, at *2, I do so to show 11 that even if Tesla’s motion were not barred for other reasons, its argument still fails. 12 A. Gasoline Products 13 Tesla’s motion for a new trial on liability and damages is grounded in the reasoning of 14 Gasoline Products Company v. Champlin Refining Company. Although subsequent cases have 15 discussed and applied the analysis from Gasoline Products, it is helpful to understand the facts 16 and reasoning of the original case to properly apply its holding. 17 The case involved a contract dispute between Gasoline Products (“GP”) and Champlin, 18 where GP agreed to provide two structures to Champlin to increase production of gasoline and 19 Champlin agreed to pay GP royalties. 283 U.S. at 495-96. GP sued for breach of contract and 20 Champlin counterclaimed, alleging that a separate contract required GP to provide treatment 21 towers to make the gasoline marketable before Champlin had to pay royalties. Id. The jury found 22 for GP on the royalties claim and for Champlin on the counterclaim, but the First Circuit held that 23 the damages for the counterclaim were miscalculated and so sent the case back for retrial on the 24

25 4 Even if this second trial somehow waived Tesla’s constitutional right to a jury trial on liability, “[l]ike other constitutional rights, the right to a jury trial in civil suits can be waived.” Edmo v. 26 Corizon, Inc., 935 F.3d 757, 802 (9th Cir. 2019) (citing United States v. Moore, 340 U.S. 616, 621 (1951)). Though there is “presumption against waiver” of the right to a jury trial, Lutz v. Glendale 27 Union High Sch., 403 F.3d 1061, 1065 (9th Cir. 2005), the demand must be timely, see Edmo, 935 1 counterclaim damages only. Id. at 496. The Supreme Court held that the Constitution did not 2 require retrying the entire case, and that the royalties claim was properly separated from retrial. 3 Id. at 497-99. 4 But the Court determined that the questions of damages and liability for the counterclaim 5 could not be separated on retrial. Id. at 499-500. Its reasoning was highly fact-specific: Champlin 6 sought lost profits, cost of storage for the gasoline, depreciation of value due to evaporation, and 7 losses due to halted production, id. at 496, but it was “impossible” to calculate those damages 8 from the record or verdict form because it was unclear which of two possible contracts were 9 breached, the dates of formation or breach, how many towers GP was supposed to construct, 10 whether GP assured treatment of all gas produced by Champlin, or whether GP guaranteed 11 satisfaction with the treatment towers, id. at 499-500. The Court held that those questions were 12 material to calculating damages but were also “so interwoven with that of liability”—indeed, they 13 were functionally the same questions as those of liability—that it would cause the jury “confusion 14 and uncertainty” to submit the damages questions alone to the jury. Id. at 500. The Court ordered 15 retrial for both damages and liability. Id. 16 B. The Resulting Rule 17 Gasoline Products has been discussed sporadically by the Supreme Court, the Ninth 18 Circuit, and various district courts since 1931, though not at length. The subsequent discussions 19 and analyses clarified three governing principles. 20 First, district courts have discretion to grant new trials on only some of the issues in a case. 21 Wharf v. Burlington N. R.R. Co., 60 F.3d 631, 638 (9th Cir. 1995); Gasoline Prods., 283 U.S. at 22 497-99; see also Galdamez v. Potter, 415 F.3d 1015, 1025 n.8 (9th Cir. 2005); Peterson v. Kelly 23 Servs., Inc., 730 F. App’x 471, 473 (9th Cir. 2018) (unpublished); Zottola v. City of Oakland, 32 24 F. App’x 307, 313 (9th Cir. 2002) (unpublished). Courts may exercise their discretion in limiting 25 retrials to manage the “substantial complexity” presented in “modern litigation” so long as the trial 26 “‘afford[s] opportunity for the consideration by the jury’ provided at common law.” Arthur Young 27 & Co. v. U. S. Dist. Ct., 549 F.2d 686, 693 (9th Cir. 1977) (citing Gasoline Prods., 283 U.S. at 1 were “sufficiently ‘distinct and separable’ from the measure of damages question, that, in the 2 interest of judicial economy” they do not need to be retried with damages). Indeed, the Supreme 3 Court has noted that Gasoline Products stands for the proposition that civil jury trials are meant 4 “to assure a fair and equitable resolution of factual issues,” Colgrove v. Battin, 413 U.S. 149, 157 5 (1973), not necessarily for the strict proposition that certain issues must always be retried 6 together.5 7 Second, the Seventh Amendment does not preclude district courts from ordering new trials 8 on damages only, without a concurrent new trial as to liability. See Gasperini, 518 U.S. at 436 9 n.20 (“[N]ew trials restricted to the determination of damages” are “compatible with the Seventh 10 Amendment.” (citing Gasoline Prods., 283 U.S. 494)); Dimick, 293 U.S. at 491-92 (The Seventh 11 Amendment presents “no bar” to adopting procedures contrary to common law, including 12 “order[ing] a new trial on th[e] issue [of damages] alone.” (citing Gasoline Prods., 283 U.S. 294)); 13 see also Parklane Hosiery Co. v. Shore, 439 U.S. 322, 336 (1979) (same); Fairmount Glass Works 14 v. Cub Fork Coal Co., 287 U.S. 474, 480 (1933) (same). 15 Third, new damages-only trials are appropriate where the questions of liability and 16 damages are not “so interwoven” that trying them separately may result in juror “confusion and 17 uncertainty.” Gasoline Prods., 283 U.S. at 500; see also Lutz v. Glendale Union High Sch., 403 18 F.3d 1061, 1067 & n.6 (9th Cir. 2005) (finding “no bar” to separate trials on liability and damages 19 where the issues were “sufficiently distinct”); United Air Lines, Inc. v. Wiener, 286 F.2d 302, 306 20 (9th Cir. 1961) (holding that, “under the circumstances presented by this appeal,” liability and 21 damages were “not so distinct and separable that a separate trial of damages issues may be had 22 without injustice”). That inquiry is inherently fact specific and based on the district court’s 23 discretion. See Wharf, 60 F.3d at 638; d’Hedouville v. Pioneer Hotel Co., 552 F.2d 886, 897 (9th 24 Cir. 1977); United Air Lines, Inc., 286 F.2d at 305-06. 25 26 5 In discussing trials (though not clearly re-trials), the Federal Rules similarly acknowledge that 27 separate trials are permissible: “For convenience, to avoid prejudice, or to expedite and 1 C. The Rule As Applied to These Facts 2 It is clear that ordering a new trial for damages only does not inherently violate Tesla’s 3 Seventh Amendment rights.6 See Gasperini, 518 U.S. at 436 n.20; Dimick, 293 U.S. at 491-92. 4 And it is clear that I may exercise my discretion to hold a new trial on damages only so long as the 5 questions of damages and liability are not so interwoven as to confuse the jury or prejudice Tesla. 6 Gasoline Prods., 283 U.S. at 500; Lutz, 403 F.3d at 1067 & n.6; United Air Lines, 286 F.2d at 306. 7 Tesla contends that ordering a damages-only retrial in this factual context violates its Seventh 8 Amendment rights and would constitute an abuse of discretion because the issues of liability and 9 damages are so interwoven that they will cause the jury confusion and uncertainty and will 10 prejudice Tesla. But after thoroughly reviewing the facts and procedural background of many 11 other cases giving rise to similar Gasoline Products issues, I determine that based on the facts of 12 this case, the issues of liability and damages are sufficient distinct and separable as to permit a 13 retrial on damages only. 14 Tesla argues that a damages-only trial is impermissible because the second jury will have 15 to consider the same evidence considered by the first jury, but it fails to distinguish the case where 16 the Ninth Circuit permitted a damages-only retrial under Gasoline Products even though the 17 second jury would have to consider an issue determined by the first jury. See Wharf, 60 F.3d at 18 638. In Wharf, the plaintiff sued his employer for an injury suffered at work and the jury found 19 the employer was negligent, awarding compensatory damages in part based on repeated 20 representations by the defendant and defense counsel that the plaintiff retained his job after the 21 injury. Id. at 634-35. When the defendant fired the plaintiff as soon as the case was submitted to 22 the jury, it was revealed that those representations were false.7 Id. The plaintiff moved for a new 23 6 Diaz seems to argue that Gasoline Products did not concern constitutional rights under the 24 Seventh Amendment but rather concerned the right to a fair trial more broadly. See Oppo. 14 n.3. That is incorrect. The case clearly discussed whether the Seventh Amendment right to a jury trial 25 precludes separating claims for retrial. Gasoline Prods., 283 U.S. at 498-99.

26 7 Tesla cites another decision where defense counsel lied about material facts affecting the damages calculation. Pumphrey v. K.W. Thompson Tool Co., was a wrongful death action where 27 the jury found the plaintiff-widow suffered $100,000 in damages due to issues with the gun’s 1 trial only on damages so that his job loss would be included in the calculation, but the district 2 court construed that as a motion alleging wrongful termination, which it denied as preempted 3 under the Railroad Labor Act. Id. at 635-36. The Ninth Circuit agreed that damages for wrongful 4 termination were preempted but found that the motion should have been granted because the jury 5 should have considered whether the job loss was caused by the injury and if so, what damages the 6 plaintiff could recover from that finding. Id. at 636-38. The court held that the retrial should be 7 for damages only, not liability for negligence, even though the jury would “of course have to 8 determine the cause of [the plaintiff’s] damages so that it does not award damages” based on the 9 preempted theory of wrongful discharge. Id. at 638 (emphasis added). 10 In Wharf, to determine whether the plaintiff’s damages from job loss were caused by his 11 hand injury, the second jury would inherently have to review the same evidence of liability 12 presented to the first jury, including the facts of the plaintiff’s job before the accident, how he used 13 his hand, how the hand was injured, what his new role entailed, and how he used his hand in his 14 new role—all with the knowledge of the first jury’s verdict finding the employer negligent in 15 causing the injury. Here, too, to calculate damages from Diaz’s underlying injuries, the second 16 jury will have to review some of the same evidence presented in the first trial to determine “the 17 nature and extent of the injuries” suffered, see Jury Instructions [Dkt. No. 80] at 39, with the 18 knowledge of the liability finding against Tesla. But that question is sufficiently distinct from 19 whether the work environment was racially hostile, whether Tesla was a joint employer, whether 20 there was a sufficient contractual relationship, whether Tesla took reasonable steps to protect Diaz, 21 and whether Tesla actions concerning Ramon Martinez were negligent. See Jury Verdict [Dkt. 22 No. 301]; cf. Gasoline Prods., 283 U.S. at 496-500 (describing the similarities between the facts 23

24 videos manufactured for litigation that purportedly showed the gun’s safety never failed, while concealing videos of it failing during testing that same day, and so the district court set aside the 25 verdict for fraud upon the court under FRCP 60(b). Id. The defendants argued on appeal that the issues of damages and liability could be separated for the new trial, but the Ninth Circuit held that 26 to avoid injustice, the plaintiff “should be given the opportunity to present a complete case, unhampered by [the attorney’s] fraud.” Id. at 1133-34 (citing Gasoline Prods., 283 U.S. at 500). 27 That case is sufficiently distinct from this one as the Ninth Circuit’s concern about fraud unjustly 1 necessary for damages and liability). Reviewing some of the same evidence and knowing the first 2 jury found the employer was liable was not enough in Wharf to cause the jurors “confusion and 3 uncertainty,” Gasoline Prods., 283 U.S. at 500, or to cause “injustice” to the defendant, United Air 4 Lines, 286 F.2d at 306. Here, too, a damages-only retrial will not create confusion or injustice for 5 the same reasons: the questions about damages are sufficiently distinct from the questions of 6 liability.8 7 Tesla asserts that a damages-only retrial is particularly inappropriate in cases solely 8 concerning “emotional injury,” Mot. 7:5, as opposed to cases concerning breach of contract or 9 patent infringement, which Tesla argues are more easily calculated and thus more readily 10 separable from the question of liability, see id. 11:10-15. It ignores that its key case, Gasoline 11 Products, was a breach of contract case where the Court determined liability and damages had to 12 be retried together because they were so interwoven—which works against Tesla for this specific 13 argument because it merely shows that the determination is case-specific, not predetermined by 14 the legal theory presented. Moreover, the Ninth Circuit in Lutz held that a separate trial for 15 liability and damages was not unconstitutional even where damages were based on pain and 16 suffering, which are similar to the emotional damages awarded to Diaz. 403 F.3d at 1065, 1067 & 17 n.6. Lutz was different from this case: the Ninth Circuit remanded for a new trial on only liability 18 where the plaintiff had requested a jury trial only for damages, because the district court had 19 improperly held a jury trial on liability, too. See id. at 1065-67. But the Ninth Circuit determined 20 that if the subsequent bench trial resulted in a finding of liability, the court could use the jury’s 21 determination on damages without retrying the issue because the questions “were sufficiently 22 distinct,” even where damages included pain and suffering. Id. at 1067 & n.6. 23 Despite the factual and procedural differences, the analysis from Lutz applies here. 24 Calculating Diaz’s damages requires assessing intangible injuries like emotional harm or pain and 25 8 For this reason, Tesla’s concerns about the jury “bolstering” Diaz’s evidence are unconvincing. 26 See Mot. 10:3-17. Tesla cannot establish prejudice merely by showing the second jury must consider some of the same evidence considered by the first jury—this was explicitly permitted in 27 Wharf. Also, Tesla may also seek an instruction for the jury to not improperly allow the liability 1 suffering, as in Lutz, but the “nature and extent” of the harm suffered by Diaz, including his 2 “mental or emotional pain,” Jury Instructions at 39, is sufficiently distinct from whether the work 3 environment was racially hostile, whether Tesla was a joint employer, whether there was a 4 sufficient contractual relationship, whether Tesla took reasonable steps to protect Diaz, and 5 whether Tesla actions concerning Ramon Martinez were negligent, see Jury Verdict. The 6 questions are distinct. The compensatory damages may be retried separately and will not result in 7 prejudice to Tesla. 8 Additionally, while Lutz and Wharf specifically discuss separate trials for liability and 9 compensatory damages, the reasoning also applies here to allow retrial of punitive damages 10 without retrying liability. As outlined in the jury instructions, assessing punitive damages requires 11 determining whether the conduct at issue was “malicious, oppressive or in reckless disregard of 12 the plaintiff’s rights.” Jury Instructions at 41. That question is not so intertwined with liability so 13 as to confuse the jury. Asking whether Tesla acted maliciously, oppressively, or recklessly is a 14 fundamentally different question from whether the environment itself was hostile, Tesla was a 15 joint employer, there was a sufficient contractual relationship, Tesla failed to take reasonable 16 steps to protect Diaz, or Tesla was negligent in supervising or continuing to employ Ramon 17 Martinez. See Jury Verdict at 1-2; cf. United Air Lines, 286 F.2d at 305-06 (determining the 18 question of exemplary damages was sufficiently intertwined with liability where calculating 19 damages required assessing “the degree of negligence” of the defendant (emphasis added)). 20 And assuming that the second jury must consider some of the same evidence as the first 21 jury did in determining the issue of punitive damages, Wharf permits that assessment. Tesla 22 argues that punitive damages must be considered with liability because there is even more overlap 23 between liability and damages. For example, Tesla says to assess punitive damages the second 24 jury will have to consider whether the conduct was repeated, which it asserts is essentially the 25 same question that the first jury considered when determining whether the conduct was systemic 26 or pervasive. See Mot. 8:6-9:15. But based on Wharf, merely having to consider a similar 27 question addressed by the first jury when calculating damages is not enough to require the second 1 jury to retry liability, too. See Wharf, 60 F.3d at 638.9 2 Other cases support granting a new trial on damages only, despite their lack of discussion 3 of Gasoline Products.10 Though these cases do not directly grapple with the edict from Gasoline 4 Products, they align with the Ninth Circuit’s view of that case, which is that the Seventh 5 Amendment is not violated so long as the form of trial properly “afford[s] opportunity for the 6 consideration by the jury.” Arthur Young & Co., 549 F.2d at 693. Here, as discussed in Parts I 7 and II, Tesla was sufficiently afforded consideration by the jury for its arguments about liability. 8 Denying Tesla a retrial by jury on these issues does not violate the Seventh Amendment. 9 Finally, Tesla cites several other cases for support, many of which are out-of-circuit or 10 unpublished, and several of which merely affirm that district courts do not abuse their discretion 11 by holding new trials on damages and liability. See, e.g., Simone v. Golden Nugget Hotel & 12 Casino, 844 F.2d 1031, 1040 (3d Cir. 1988); Spence v. Bd. of Educ. of Christina Sch. Dist., 806 13 F.2d 1198, 1202-03 (3d Cir. 1986); d’Hedouville, 552 F.2d at 897. One of Tesla’s citations is 14 procedurally similar to this case: Prendeville v. Singer is an unpublished memorandum disposition 15 affirming the district court’s decision to hold a new trial on damages and liability where the 16 plaintiff sued his former employer for defamation, a jury found for the plaintiff and awarded high 17 compensatory damages, the court remitted the damages or in the alternative ordered a new trial, 18 9 Tesla cites Zender v. Vlasic Foods, Inc., for the proposition that the law “generally require that 19 the same jury determine both liability for, and the amount of, punitive damages because those questions are so interwoven.” 91 F.3d 158, at *5 (9th Cir. 1996), amended (Aug. 29, 1996) 20 (unpublished). First, the procedural posture of the case was very different from here because the Ninth Circuit remanded for a new trial as to punitive damages where it affirmed the district court’s 21 grant of judgment as a matter of law on some claims but reversed on others, and it was not possible to tell which claims the punitive damages were grounded in. Id. Second, the court cited 22 to United Air Lines and Gasoline Products for this proposition, but neither case distinguished between compensatory and punitive damages. Third, Zender is a non-binding memorandum 23 disposition. For those reasons, it does not preclude a retrial on punitive damages alone here. The other cases Tesla cites to support this proposition are similarly distinguishable. See Mot. 9:3-15. 24

10 See, e.g., Watson v. City of San Jose, 800 F.3d 1135, 1137, 1141-43 (9th Cir. 2015) (holding 25 that the district court did not abuse its discretion for ordering a new trial as to compensatory and punitive damages where liability was based on an officer removing children from suspected 26 abusers without a warrant, and at least part of the damages calculation was based on the emotional distress suffered by plaintiffs); Larez v. Holcomb, 16 F.3d 1513, 1520-21 (9th Cir. 1994) 27 (remanding for a new trial on punitive damages only where the court erred in instructing the jury 1 and the plaintiff rejected the remittitur. 155 F. App’x 303, 304-05 (9th Cir. 2005) (unpublished). 2 || Despite the procedural similarities, the case does not contain a rule of law that I have yet to 3 || consider, and importantly it does not provide sufficient factual context to analyze the application 4 || of the law. Rather, the Ninth Circuit emphasized that district courts have discretion to order new 5 || trials on damages or liability and determined that the district court did not abuse that discretion 6 || based on the facts by ordering a new trial on both liability and damages. Jd. at 305. The 7 || discussion does not provide sufficient factual context to mandate a new trial on liability and 8 || damages here." 9 My decision here is therefore in line with the rule applied to those cases: that courts have 10 || the discretion to order new trials on damages only. I exercise my discretion to do so here, because 11 doing so will not violate Tesla’s Seventh Amendment rights. 12 CONCLUSION

13 As aresult of judicial estoppel, the procedural bar, and lack of merit, any one of which

v 14 || alone would be sufficient, Tesla’s motion for a new trial on liability and damages is DENIED.

IT IS SO ORDERED. 16 || Dated: December 12, 2022

= 17

4 18 Iam H. Orrick 19 United States District Judge 20 21 22 '! For this reason the Ninth Circuit’s most recent cite to Gasoline Products is similarly unhelpful here. In City of Pomona v. SQM North America Corp., the court remanded the case for a new trial 23 || where the district court gave the incorrect instruction on strict products liability and the jury found the defendant was not liable. 801 F. App’x 488, 490-91 (9th Cir. 2020). The plaintiffs sought to 24 || not retry an issue that was found in their favor—that the product was a substantial factor in causing harm—but the Ninth Circuit determined it had to be retried with liability and damages 25 || because all issues required assessing “the extent to which” the plaintiff's harm was caused by the defendant’s product “as opposed to another source.” Id. at 491. This case does not offer new law 26 || and the facts are not sufficiently clear from the short order to determine their applicability here. However, the memorandum does suggest that issues are sufficiently interwoven under Gasoline 97 || Products where they ask the same underlying question—there, whether the plaintiff's injuries were caused by the product. See id. Here, as discussed, the liability and damages issues ask 28 different underlying questions, including whether the work environment was hostile (liability) and whether Tesla acted maliciously (damages).