United States District Court, D. Oregon, Medford Division
OPINION AND ORDER
D. CLARKE United States Magistrate Judge
case comes before the Court on a motion (#226) by the Hoyal
defendants to bifurcate the issues in this case for trial.
The Hoyal defendants assert that the preliminary issue that
should be bifurcated and addressed first is "whether or
not the mailers used to solicit newspaper subscriptions were
convenience, to avoid prejudice, or to expedite and
economize, the court may order a separate trial of one or
more separate issues, claims, crossclaims, counterclaims, or
third-party claims." Fed.R.Civ.P. 42(b). Rule 42(b)
"confers broad discretion upon the district court to
bifurcate a trial, thereby deferring costly and possibly
unnecessary proceedings pending resolution of potentially
dispositive preliminary issues." Zivkovic v. S. Cal.
Edison Co., 302 F.3d 1080, 1088 (9th Cir. 2002).
"In determining whether to bifurcate, courts consider a
No. of factors, including whether bifurcation would promote
efficient judicial administration, promote convenience,
simplify discovery or conserve resources, reduce the risk of
juror confusion, and separability of the issues."
Lam Research Corporation v. Schunk
Semiconductor, 65 F.Supp.3d 863, 865 (N.D. Cal. 2014).
Hoyal defendants move to bifurcate the case so that the
alleged deceptiveness of the subject mailers is adjudicated
first. Many of the cases cited by the defendants in support
of their motion indicate that bifurcating liability from
remedy issues can be cost and time efficient, and certainly
this Court has seen instances where this is the case. The
Hoyal defendants do not propose to bifurcate all questions of
liability, however. Instead, they propose to limit the first
phase of the Court's determination to whether or not the
mailers used were "deceptive." The defendants claim
that this is a narrow, discrete, and simple issue, which can
be adjudicated quickly and may be dispositive of the case.
The Court disagrees.
it is undisputed that the FTC's case will rest on the
allegation that the defendants engaged in "unfair or
deceptive acts or practices in or affecting commerce."
See 15 U.S.C. § 45(a)(1). "'An act or
practice is deceptive if 'first, there is a
representation, omission, or practice that, second, is likely
to mislead consumers acting reasonably under the
circumstances, and third, the representation, omission, or
practice is material.'" F.T.C. v. Gill, 265
F.3d 944, 950 (9th Cir.2001) (citing F.T.C. v. Pantron I
Corp., 33 F.3d 1088, 1095 (9th Cir.1994)). Actual
deception is not required for a Section 5 violation.
Trans World Accounts, Inc. v. F.T.C, 594
F.2d 212. 214 (9th Cir.1979). Rather, Section 5
""only requires a showing that misrepresentations
'possess a tendency to deceive.'" F.T.C. v.
Commerce Planet, Inc., 878 F.Supp.2d 1048, 1073
(C.D.Cal.2012) (quoting Trans World Accounts, Inc.,
594 F.2d at 214). Furthermore, the Court considers "the
overall, common sense 'net impression' of the
representation or act as a whole to determine whether it is
misleading, " and a Section 5 violation may still be
found even if the fine print and legalese were technically
accurate and complete. Commerce Planet, 878
F.Supp.2d at 1063 (citing Gill, 265 F.3d at 956));
see also F.T.C. v. Cyber space.Com LLC, 453 F.3d
1196, 1200 (9th Cir.2006) (stating that a representation
"may be likely to mislead by virtue of the net
impression it creates even though the [representation] also
contains truthful disclosures").
case, while the deceptiveness of the mailers is a key factor
in the overall deceptiveness of the "practice" or
business at issue, such a determination does not depend
solely on the words used in each notice; the context of the
mailers is just as important to liability. This includes
whether or not defendants were authorized to offer or sell
the subscriptions offered, whether or not the recipients were
led to believe they owed money for existing subscriptions,
and whether or not recipients who ordered subscriptions based
on the mailers ever received the products as advertised. Such
contextual considerations rely on information regarding the
functional operation of the businesses at issue, and how the
defendants interacted with each other and with the consumers
- how they ran those operations - is at the heart of that
unlike some of the cases cited by the defendants, here the
complex questions regarding how the defendants are related,
and how they operated individually and together, are not
confined to issues of remedy, as suggested by the defendants.
Instead, a significant amount of overlap exists between the
facts the FTC will have to show to prove liability and the
facts it will have to show to determine the appropriate
remedy. Therefore, bifurcation would not be an efficient use
of the Court's and the parties' resources.
even if bifurcation would streamline separable issues of
liability and remedy for trial, it would not simplify
discovery, as claimed by the defendants. This case has
already progressed through several phases of complicated
discovery for the last two years. By now, the FTC, and, the
Court presumes, all of the parties, have already completed a
significant amount of the discovery necessary for issues of
both liability and remedy. Thus, even if this motion were
well taken, it would have been more appropriately posed at
the start of this case.
there is no risk of juror confusion in this case because it
will be tried to the Court.
motion for bifurcation (#226) is DENIED. Additionally the
Court adopts, in part, the schedule proposed by the FTC, as
indicated below. The parties should note two additional dates
on the list. First, if the FTC wishes to conduct additional
depositions in this case, they must submit such a request by
please note the date for "Requests to file Summary
Judgment Motions." This deadline indicates that all
parties will be required to request permission from the Court
prior to filing a motion for summary judgment. Such request
must be filed in writing and include a brief, no longer than