Environmental Disposal and Recycling LLC v. Certain Underwriters at Lloyd's London, 5:20-cv-01010

Plaintiff Environmental Disposal & Recycling, LLC (EDR) operates an oil/petroleum recycling facility in Alva, Oklahoma and stores contaminated material in on‑site containment pits.
On October 6, 2018, heavy rains caused a containment pit to rupture, releasing a mixture of water and crude oil onto adjacent property.
At the time, Defendants (Certain Underwriters at Lloyd’s London and HDI Global Specialty SE) insured EDR; EDR submitted a claim for remediation costs, which Defendants denied.
EDR sued for breach of contract and bad faith; Defendants moved for a “Phased Scheduling Order” to bifurcate the case: first resolve breach of contract, then (if necessary) litigate bad faith.
EDR opposed bifurcation, arguing substantial overlap of witnesses, issues, and evidence, likely duplication of discovery, and prejudice from delay.
The court denied the motion, applying Rule 42(b) principles (convenience, economy, separability, fairness) and concluding the benefits of bifurcation did not outweigh the drawbacks; defendants remain free to move for summary judgment on breach without bifurcation.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether to grant a phased (bifurcated) scheduling order under Fed. R. Civ. P. 42(b)	Bifurcation would duplicate discovery, delay resolution, and prejudice EDR due to overlapping witnesses/evidence	Bifurcation conserves resources, expedites case by resolving breach first, and postpones bad faith discovery until necessary	Denied — court exercised discretion to keep claims together; potential duplication and delay outweigh asserted efficiencies
Whether the breach and bad faith issues are separable	Not separable; significant overlap in witnesses, facts, and evidence	Separable because bad faith depends on outcome of breach; discovery can be phased	Court concluded issues not sufficiently separable to justify bifurcation
Whether bifurcation would be unfair or prejudicial	Prejudicial: delays full resolution and risks duplicative depositions and discovery costs	Not unfair; promotes efficiency and conservation of resources	Court found potential for unfair delay and duplication; denied motion and noted defendants may still move for summary judgment on breach

Angelo v. Armstrong World Indus., Inc., 11 F.3d 957 (10th Cir. 1993) (establishes Tenth Circuit framework for evaluating bifurcation under Rule 42(b): consider convenience/economy, separability, and prejudice; movant bears burden)