Texas Roadhouse, Inc. et al v. Texas Corral Restaurants, Inc. et al

Filing 230

OPINION AND ORDER: The Court DENIES 121 Motion to Bifurcate. Signed by Judge Joseph S Van Bokkelen on 6/5/17. (jss)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
TEXAS ROADHOUSE, INC., and
TEXAS ROADHOUSE DELAWARE, LLC,
Plaintiffs,
Case No. 2:16-CV-28 JVB

v.
TEXAS CORRAL RESTAURANTS, INC.,
TEXCOR, INC.,
TEXAS CORRAL RESTAURANT II, INC.,
T.C. OF MICHIGAN CITY, INC.,
T.C. OF KALAMAZOO, INC.,
CHICAGO ROADHOUSE CONCEPTS,
LLC,
T.C. OF OAK LAWN, INC.,
T.C. OF HARWOOD HEIGHTS, INC.,
TEXAS CORRAL INCORPORATED.,
MARTINSVILLE CORRAL, INC., and
PAUL SWITZER,
Defendants.

OPINION AND ORDER
The Texas Roadhouse Plaintiffs claim the Texas Corral Defendants copied them.
Defendants move under Federal Rule of Civil Procedure 42(b) to bifurcate liability from
damages for discovery and trial. (DE 121.)

A.

Law
Rule 42(b) allows, but does not require, trial courts to bifurcate in certain circumstances:
For 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. When ordering a separate
trial, the court must preserve any federal right to a jury trial.
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Fed. R. Civ. P. 42(b).
The moving party has the burden to show bifurcation is proper. See Toney v. Accor N.
Am., 2010 WL 2162626, at *1 (N.D. Ind. May 27, 2010). Bifurcation is the exception, not the
rule. See Real v. Bunn-O-Matic Corp., 195 F.R.D. 618, 620 (N.D. Ill. 2000). A court should
order separate trials only in extenuating circumstances. See id. at 621.
The Seventh Circuit articulated a three-step test for determining when to bifurcate:
First, the trial judge must determine whether separate trials would avoid
prejudice to a party or promote judicial economy. Only one of these
criteria—avoidance of prejudice or judicial economy—need be met before
a court can order separation. Next, the court must be satisfied that the
decision to bifurcate does not unfairly prejudice the non-moving party.
Finally, separate trials must not be granted if doing so would violate the
Seventh Amendment.
Houseman v. U.S. Aviation Underwriters, 171 F.3d 1117, 1121 (7th Cir. 1999) (internal citations
omitted).
Trial courts should “balance considerations of convenience, economy, expedition, and
prejudice, depending on the peculiar facts and circumstances of each case.” Houskins v.
Sheahan, 549 F.3d 480, 495 (7th Cir. 2008). The decision of whether to bifurcate rests with the
discretion of the trial court. Krocka v. City of Chi., 203 F.3d 507, 516 (7th Cir. 2000).

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B.

Analysis

(1)

Step One: Would bifurcation avoid prejudice to the Texas Corral Defendants, or
promote judicial economy?

(a)

Prejudice to the Texas Corral Defendants
When “weighing the competing equities under Rule 42(b), prejudice is the Court’s most

important consideration.” Real, 195 F.R.D. at 621.
The Texas Corral Defendants argue that the Texas Roadhouse Plaintiffs claim multiple
and alternative theories for damages. Defendants argue that the damages issues are complex, and
that addressing and resolving the issue of liability first will either render the damages issues
moot or narrowed. Defendants claim they (and Plaintiffs and the Court) will save substantial
time “by bypassing speculative and complex damages calculations” (DE 121 at 2) and
addressing damages in a focused manner, if at all, only after resolution of liability.
Indeed, Defendants claim they will probably prevail regarding liability, thereby
eliminating the issue of damages. Moreover, Defendants cite a law review article for the
proposition that only 5.5% of all Lanham Act cases decided between 1947 and 2005 resulted in
monetary damages.
Defendants claim resolution of the damages issue will require separate evidence and,
likely, experts. Defendants also claim that discovery regarding damages before resolution of
liability will delay resolution of liability, including a delay of potential dispositive motions.
Defendants also claim prejudice in the form of jury confusion absent bifurcation.
Finally, Defendants claim prejudice absent bifurcation in the form of potential irreparable
harm if they have to disclose confidential financial information to their competitors.

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The Texas Roadhouse Plaintiffs counter that the issues in this case are not as complex as
Defendants frame them. Plaintiffs point out that Defendants act like a single entity, at least in this
litigation. They share counsel and they conduct discovery in a nearly-identical manner. Plaintiffs
further point out that Defendants have only identified three Texas Corral witnesses with
knowledge of this case on behalf of all eleven Texas Corral Defendants. Plaintiffs argue
Defendants have provided virtually no discovery offering distinct facts, circumstances, evidence,
or witnesses particular to each Defendant. Plaintiffs also note that the parties already agreed that
trial in this matter would only take eight days, even absent bifurcation. These points would tend
to mitigate the prejudice to Defendants regarding discovery and trial if the Court does not
bifurcate.
In fact, Plaintiffs argue that bifurcation would increase the prejudice to Defendants by
forcing each witness with testimony regarding damages and liability to be deposed twice, and by
exacerbating the proliferation of discovery motions.
Plaintiffs do not address Defendants’ claim that forcing them to divulge confidential
financial information when the liability determination might render that information irrelevant
would result in prejudice.
The Court concludes that bifurcation might avoid some prejudice to the Texas Corral
Defendants. But Defendants have not shown that, absent bifurcation, they would suffer the kind
of substantial, exceptional, extenuating prejudice which would justify bifurcation.

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(b)

Judicial economy
Many of Defendants’ arguments regarding prejudice to the defense also apply to the issue

of judicial economy. In short, Defendants argue that resolution of liability first will likely render
resolution of damages unnecessary, or will at least streamline and focus the remaining damages
issues.
The Court is not convinced. It seems as likely that bifurcation would result in further
protracted discovery disputes, duplicative written discovery, and depositions of the same
witnesses twice. Also, of course, bifurcation might require two trials.

(2)

Step Two: Would bifurcation unfairly prejudice the Texas Roadhouse Plaintiffs?
The Texas Roadhouse Plaintiffs argue that bifurcation would unfairly prejudice them by

duplicating discovery, increasing the money and time incurred in litigation, and delaying the
ultimate resolution of this case.
Plaintiffs’ points in this regard are sound. Defendants failed to satisfy their burden to
show that bifurcation would not unfairly prejudice Plaintiffs.

(3)

Step Three: Would bifurcation violate the Seventh Amendment?
As neither side addressed this issue in detail, and as the Texas Corral Defendants failed to

carry their burden regarding the prior steps, the Court need not resolve this issue.

C.

Conclusion
The Court denies the motion to bifurcate (DE 121).

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SO ORDERED on June 5, 2017.

s/ Joseph S. Van Bokkelen
JOSEPH S. VAN BOKKELEN
UNITED STATES DISTRICT COURT

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