Case Information
*1 IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION Advanced Microtherm, Inc., et al., NO. C 04-02266 JW Plaintiffs, v. ORDER GRANTING IN PART AND DENYING IN PART OBJECTIONS TO RECOMMENDED DISCOVERY ORDER NUMBER SEVEN Norman Wright Mechanical Equipment Corporation, et al.,
Defendants. /
I. INTRODUCTION This case arises out of disputes between a number of corporations and individuals over various large construction projects. Plaintiffs Advanced Microtherm, Inc. ("AMT") and HVAC Sales, Inc. ("HVAC") (collectively "Plaintiffs") are California corporations in the business of, inter alia, obtaining orders for manufacturers of commercial and industrial ventilation systems. Defendants are corporations and individuals involved in the construction industry, including: other businesses that obtain orders for manufacturers of ventilation systems, landowners, construction engineering firms, construction management firms, architectural firms, and their employees. The Special Master granted the joint motion of Defendants for separate trials and to stay discovery in Recommended Discovery Order Number Seven ("RDO7"). Plaintiffs filed a timely objection to RDO7. On March 20, 2006, the Court held a hearing on Plaintiffs' objections. Based on the arguments of the parties in the papers and at the hearing, the Court GRANTS IN PART and *2 DENIES IN PART Plaintiffs' objections to RDO7, and in so doing GRANTS IN PART and DENIES IN PART Defendants' motion for separate trials and to stay discovery.
II. BACKGROUND In the interest of brevity, the Court refrains from reciting the entire lengthy factual background of this case already set forth in the Court's prior orders. (See, e.g., Order Denying Defendant NSW's Motion to Dismiss Plaintiffs' First, Second, Third, Ninth, Tenth, Eleventh, Twelfth, and Thirteenth Causes of Action; Granting NSW's Motion to Dismiss Plaintiffs' Fourth Cause of Action; Denying NSW's Motion for a More Definite Statement; and Denying NSW's Motion to Strike Certain Portions of Plaintiffs' Complaint (Docket Item No. 28).) The causes of action in the TAC arise out of Plaintiffs' allegations that Defendants engaged in a massive anti- competitive scheme involving a large number of products over a large number of construction projects. In pleading one of many examples of Defendant's alleged wrongdoing, Plaintiffs list sixteen products in Table 1 and twenty-one products in Table 2, and allege that Defendant NSW was able to "control sales and . . . able to dictate pricing of the aforementioned goods to customers and tie the sale of separate products in 'Table 1' together, as well as, tie the sale of products identified in 'Table 2' to those identified in 'Table 1.'" (TAC ¶ 50). Plaintiffs allege unlawful anti-competitive conduct also occurred with respect to the thirty-four "other construction projects" listed at Table 3 (TAC ¶ 55).
The Special Master issued RDO7 granting Defendants' motion for a separate trial limited to five construction projects, and staying discovery outside the scope of those five construction projects. Plaintiffs timely objected to the Special Master's findings in RDO7.
III. STANDARDS Federal Rule of Civil Procedure 42(b) permits a court "in the furtherance of convenience or to avoid prejudice," to "order a separate trial of any claim, cross-claim, counterclaim, or third-party claim or of any separate issue or any number of claims, cross-claims, counterclaims, third-party claims or issues." The limitation on a court's discretion to order separate trials is the "right of trial *3 by jury as declared by the Seventh Amendment to the Constitution or as given by a statute." Rule 42(b). Ordering separate trials is, in effect, the "flip side" of consolidation. See De Anda v. City of Long Beach, 7 F.3d 1418, 1421 (9th Cir. 1993). Unlike separate trials ordered under Rule 21, separation of issues under Rule 42 does not result in separate judgments for each issue tried
separately. See Vann v. Citicorp Sav. of Ill., 891 F.2d 1507, 1511 (11th Cir. 1991).
IV. DISCUSSION A. Standard of Review Generally, discovery orders by the Special Master are non-dispositive and are reviewed by this Court under a "clearly erroneous" or "abuse of discretion" standard pursuant to the Court's Order Appointing Special Master (Docket Item No. 116). RDO7 differs from the ordinary discovery order because it requires Plaintiffs to select only five projects and to proceed to trial with only these five projects, staying discovery and trial on the allegedly thousands of remaining projects. Other courts have held that motions that "are critical in shaping the nature of litigation are generally considered 'dispositive.'" See Boskoff v. Yano, 217 F. Supp. 2d 1077, 1084 (D. Haw. 2001); Kiep v. Turner, 80 B.R. 521, 523-24 (D. Haw. 1987). The Court finds that the issues raised in RDO7 render it
"functionally" similar to a dispositive order. See Victoria's Secret Stores v. Artco Equip. Co., 194 F.
Supp. 2d 704, 714 (S.D. Ohio 2002). Accordingly, the Court reviews RDO7 de novo.
B.
Separate Trials
In determining whether separate trials are proper under Rule 42(b), a court may consider the interests of convenience, judicial economy, and reducing risk of confusion, whether separate trials would prejudice any party, and whether the issues are clearly separable. Matter of Rhone-Poulenc Rorer Inc., 51 F.3d 1293, 1303 (7th Cir. 1995). Although antitrust cases generally tend to be complex, the present case is unusual in that it alleges a scheme involving a large number of customized products used in a large number of construction projects. Thus, unlike the ordinary situation where a scheme involves a single product or perhaps a small number of tied products, this case involves significantly more variables. Focusing the litigation would be more convenient for the *4 parties and for the Court, and greatly reduce the risk of jury confusion. Providing that the contours of the separate trials are properly delineated, the Court does not foresee that prejudice would occur to either party. At this point, the Court makes a preliminary finding that separate trials are appropriate in this case, but finds that a final decision on the contours of the Rule 42(b) separation would be premature.
V. CONCLUSION Based on the Court's preliminary finding that a separate trial pursuant to Rule 42(b) would be appropriate, the Court GRANTS IN PART Plaintiffs' objections to RDO7 and modifies RDO7 by permitting discovery on only those products and projects contained in Tables 1, 2, and 3 of the Third Amended Complaint at paragraphs 50 and 55 ("Stage 1 Discovery"). Stage 1 Discovery on this limited scope will be open through Tuesday, April 11, 2006. Following Stage 1 Discovery, Plaintiffs shall identify five projects on which to proceed to a Rule 42(b) separate trial. Plaintiffs shall submit these five projects to the Special Master on or before May 15, 2006. The Special Master will revisit the propriety of separate trials under Rule 42(b) based on these five identified projects and issue a recommendation to this Court. Dated: March 23, 2006 /s/ James Ware JAMES WARE United States District Judge 04cv2266RDO7 *5 THIS IS TO CERTIFY THAT COPIES OF THIS ORDER HAVE BEEN DELIVERED TO: Bruce H. Winkelman bwinkelman@Craig-Winkelman.com Christopher T. Coco ccoco@provostumphrey.com David B. Abramowitz dabramowitz@lordbissell.com Dennis P. Fitzsimons dfitzsimons@bjg.com Janette George Leonidou jleonidou@alr-law.com Jeffrey G. Nevin jgnevin@freitaslaw.com Jesse Thomas Rhodes trhodesiii@aol.com John Morwick Ross jross@cwclaw.com John T. Williams jwilliams@lordbissell.com Kenneth Lawrence Mahaffey kmahaffey@pecklaw.com Lisa Dritsas Wright lwright@alr-law.com Maria Giardina maria.giardina@sdma.com Maureen Ellen McTague mem@severson.com Merrit Jones mjones@cwclaw.com Michael Bernard Murphy mbm@severson.com Michael F. Tubach mtubach@omm.com Paul Bartlett pbjatp@swbell.net Paul B. Lahaderne paul.lahaderne@sdma.com Peter Michael Hart p.hart@wrightrobinson.com Pruett Moore pmooreiii@sbcglobal.net Raymond Marion Buddie rbuddie@pecklaw.com Sloan C. Bailey sbailey@alr-law.com Steven Ellis Conigliaro sconigliaro@omm.com Stuart E. Jones sjones@wrightrobinson.com Thomas C. Tagliarini tagliarinilaw@aol.com Tommy L Yeates tyeates@moorelandrey.com Zane D Negrych zanenegrych@sbcglobal.net George F. Salamy Clapp Moroney Bellagamva & Vucinich 15 Southgate Avenue, Suite 200 Daly City, CA 94015 Duane E. Clapp Clapp Moroney Bellagamva & Vucinich 15 Southgate Avenue, Suite 200 Daly City, CA 94015 William McGahan F.W. Spencer & Son Inc 99 South Hill Drive Brisbane, Ca 94005 George Berris, Esq., 471 Galen Drive San Jose, CA 95123 Thomas HR Denver Mediation Masters 96 N. Third St., Suite 300 San Jose, CA 95112 Dated: March 23, 2006 Richard W. Wieking, Clerk
By:_/s/ JW Chambers_________ Melissa Peralta Courtroom Deputy