Maenner v. St. Paul Fire & Marine Insurance

127 F.R.D. 488, 1989 U.S. Dist. LEXIS 13413, 1989 WL 105681
CourtDistrict Court, W.D. Michigan
DecidedAugust 11, 1989
DocketNo. G85-1209 CA1
StatusPublished
Cited by3 cases

This text of 127 F.R.D. 488 (Maenner v. St. Paul Fire & Marine Insurance) is published on Counsel Stack Legal Research, covering District Court, W.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Maenner v. St. Paul Fire & Marine Insurance, 127 F.R.D. 488, 1989 U.S. Dist. LEXIS 13413, 1989 WL 105681 (W.D. Mich. 1989).

Opinion

OPINION AND ORDER ON MOTION FOR BIFURCATED TRIALS

JOSEPH G. SCOVILLE, United States Magistrate.

Procedural History

This is a certified class action. The plaintiff class, as presently certified,1 contains 253 members. The named plaintiffs and the members of their class were all herd owners under a cattle-leasing plan offered and operated by the now-defunct North American Cattle Corporation (NACC). Plaintiffs allege that their cattle were stolen by employees of NACC. Their first amended complaint, brought against casualty insurers who covered the cattle against certain named perils, alleges that the defendant insurance companies are liable to indemnify plaintiffs for the loss of their cattle. Plaintiffs set forth diversity claims for reformation, breach of contract, violation of statutory duties, negligence, and estoppel.

Pursuant to the provisions of Fed.R. Civ.P. 23(d) and 26(f), the court directed the parties to submit proposed plans addressing discovery and other procedural aspects of the case. Plaintiffs’ discovery plan, filed on September 30, 1988, requested that issues of liability be tried separately from those relating to damages. At a scheduling conference conducted on October 28, 1988, I granted defendants an opportunity to respond in writing to the request for bifurcated proceedings. Defendants thereafter filed briefs in opposition to plaintiffs’ request. At a hearing on February 15, 1989, I indicated a general inclination to bifurcate the issues of liability and damages, but requested further briefs from counsel on the question of how particular issues should be treated in each phase of the trial. In response, all parties filed a second round of briefs. The court heard oral argument on June 29, 1989.

In essence, plaintiffs argue that all issues of fact and law relevant to liability are common to all class members and should be tried separately from issues involving the damages sustained by individual class members. Plaintiffs assert that once liability is established, the calculation of damages for each individual class member will involve an accounting procedure to determine the number of cows lost, the date of the loss and the amount recoverable. Plaintiffs suggest reference of these damage issues to a special master in proceedings separate from the liability phase, followed, if necessary, by a trial on damages.

Defendants oppose any separate trial on issues of liability and damages. They contend that the relevant considerations under Rule 42(b)—convenience, judicial economy, and possibility of prejudice—weigh against [490]*490bifurcation. They also raise a constitutional issue under the Seventh Amendment. In this vein, defendants argue that splitting up the closely related liability and damage questions into two separate trials will deprive defendants of their constitutional right to trial by jury.

After consideration of the arguments of the parties, I conclude that separate trials, with appropriate safeguards, would promote the ends of Rule 42(b), and will not prejudice any party’s right to a fair trial by jury-

Discussion

The purpose of a class action is to conserve “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.” General Tel. Co. of Southwest v. Falcon, 457 U.S. 147, 155, 102 S.Ct. 2364, 2369, 72 L.Ed.2d 740 (1982). This is a so-called “spurious” class action, certified pursuant to Rule 23(b)(3) of the Federal Rules of Civil Procedure. In all spurious class actions, it is assumed that the claims of the plaintiff class will present some common issues, while other issues (especially those relating to damages) will not be common to all class members. See Advisory Committee Notes, Amendments to Rule 23, 39 F.R.D. 69, 103 (1966). Class certification under that subsection of Rule 23 requires an express finding that the common questions predominate over the individual issues. Fed.R.Civ.P. 23(b)(3). The report and recommendation adopted by Judge Miles expressly noted that individual questions might arise on issues such as the extent of insurance coverage (Report and Recommendation at 16 n. 2) and the amount of damages. (Id. at 9). Judge Miles nevertheless found that, despite the inevitable existence of some individual issues, the common issues in this case predominate. (Order of June 8,1988, adopting findings of Report and Recommendation at 6-9). The issue presented by the present dispute, therefore, is not whether common questions exist. That question has been resolved. The issue is whether the common questions should be tried at the same time as the individual issues.

Both the courts and the commentators have recognized the utility of bifurcated trials in Rule 23(b)(3) class actions. A leading commentator has summarized the rationale for bifurcation as follows:

A bifurcated procedure allows the class representative to try common issues to final judgment. If the defendant prevails, the adverse judgment is binding on all class members, and anticipated management problems are avoided altogether. If the class representative prevails on the common issues, however, individual issues may be resolved in a second trial.

2 Newberg on Class Actions § 9.53 at 320 (2d Ed.1985). The federal courts have used bifurcated trials in class actions when doing so would further convenience, manageability, and the ends of justice. See, e.g., Jenkins v. Raymark Indus., Inc., 782 F.2d 468, 470-471 (5th Cir.1986); Greenhaw v. Lubbock Co. Bev. Ass’n, 721 F.2d 1019, 1024-25 (5th Cir.1983). In fact, one court has described this method of proceeding as the one “generally” adopted in Rule 23(b)(3) class actions. Halverson v. Convenient Food Mart, Inc., 69 F.R.D. 331, 334 (N.D.Ill.1974).

The authority underlying the court’s power to order bifurcated trials is Rule 42(b). Under this rule, the court has discretion to order separate trials on the issues of liability and damages. Helminski v. Ayerst Laboratories, 766 F.2d 208, 212 (6th Cir.), cert. denied, 474 U.S. 981, 106 S.Ct. 386, 88 L.Ed.2d 339 (1985). Judge Enslen has summarized the relevant considerations under Rule 42(b) as follows:

Under this Rule the Court is given a method to separate issues. It may do so if: (1) it would avoid prejudice; (2) it would provide for convenience, or; (3) it would expedite the proceedings and be economical. Of course, under general circumstances, a single trial is more likely to satisfy these conditions than a bifurcated trial. Moss v. Associated Transport, Inc., 344 F.2d 23 (CA 6 1965). However, in complex cases with complex [491]*491issues, justice is often best served if issues are separated. Warner v.

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Cite This Page — Counsel Stack

Bluebook (online)
127 F.R.D. 488, 1989 U.S. Dist. LEXIS 13413, 1989 WL 105681, Counsel Stack Legal Research, https://law.counselstack.com/opinion/maenner-v-st-paul-fire-marine-insurance-miwd-1989.