Albert's Opinion and Order
Albert's Opinion and Order
Plaintiff,
Defendant.
Plaintiff Albert’s Diamond Jewelers brought suit against AaLand Diamond Jewelers
alleging two counts of trademark infringement and unfair competition. AaLand has moved to
bifurcate the issues of liability and damages for both discovery and trial. The Court finds AaLand
has not met its burden to show bifurcation is appropriate in this case. AaLand’s allegations of
prejudice and inefficiency are generic and vague; ultimately, they are insufficient to convince the
A. Standard
“Under Federal Rule of Civil Procedure 42(b), the Court has considerable discretion to
decide claims or issues in separate trials for convenience, to avoid prejudice, or to expedite and
economize.” Williams v. City of Chicago, 315 F. Supp. 3d 1060, 1080 (N.D. Ill. 2018) (internal
citations omitted). “Bifurcation may be appropriate if one or more of the Rule 42(b) criteria is
met, as long as bifurcation will not prejudice the non-moving party or violate the Seventh
Amendment.” Id. Rule 42(b) allows a court to bifurcate trials “for convenience, to avoid
prejudice, or to expedite and economize.” Fed. R. Civ. P. 42(b). The district court has
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considerable discretion in deciding whether to bifurcate claims. Volkman v. Ryker, 736 F.3d
1084, 1089 (7th Cir. 2013). The moving party has the burden to show bifurcation is proper. See
Toney v. Accor N. Am., No. 2:07-CV-307, 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.
B. Facts
Albert’s and AaLand are competing diamond and jewelry retailers in the Northwest
Indiana region. On February 1, 2023, Albert’s filed a complaint alleging AaLand had infringed
its trademark and engaged in unfair competition practices under federal and Indiana law. (DE 1.)
In short, Albert’s alleges AaLand infringed by using a logo similar to Albert’s common law
trademarked logo. AaLand answered the complaint and denied infringement. (DE 16.) The
parties conducted a Rule 26(f) planning meeting, in which they agreed trial would take about five
days. (DE 18.) The parties also attended a Rule 16 preliminary pretrial conference and agreed on
a discovery plan covering all topics that would be presented at trial. (DE 19.) On June 2, 2023,
AaLand moved to bifurcate the trial, first resolving liability and then conducting a trial on
C. Discussion
The Court begins by addressing whether bifurcating the issue of liability from damages
would be more efficient then turns to the issue of prejudice. AaLand has not convinced the Court
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(1) Efficiency
AaLand argues the issue of damages should be bifurcated from liability. In support of this
argument, AaLand states that resolving the issue of damages will require voluminous discovery,
presenting the damages issue at trial will be needlessly complex and will require expert
testimony, and AaLand may prevail on the issue of liability. The Court has considered these
arguments and does not find them persuasive because this case is no more complex than those of
its kind, AaLand has not made a showing it is likely to prevail, and bifurcation may create its
own inefficiencies as the issues of liability and damages are potentially intertwined.
First, the Court finds AaLand has not shown this case, especially the damages element, is
inordinately complex. AaLand states that damages discovery will require separate evidence and
the likely involvement of experts. But this is true of nearly every lawsuit that contemplates
damages, and most suits are not bifurcated. See BASF Catalysts LLC v. Aristo, Inc., No. 2:07-
CV-222, 2009 WL 523123, at*4 (N.D. Ind. Mar. 2, 2009) (“Although [defendant] is correct that
damages discovery is wasted effort if no liability is found, this applies equally to all liability-
based litigation and is not a convincing argument on a straightforward patent infringement claim
such as presented here.”) Here, “although Defendant claims that complex damages calculations
may be involved, there is no evidence to suggest that this computation is more unusual, complex,
or complicated than the average” case of this kind. Real, 195 F.R.D. at 622 (denying motion to
bifurcate in patent infringement case). The Court is not convinced this sort of routine damages
evidence presents a special case justifying bifurcation. Further, though AaLand argues that this
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case is complex because the parties have very long histories in business, 1 it seems to the Court
that matter touches on both liability and damages and therefore could not be avoided by
bifurcation. If a case is unavoidably “arduous no matter if the parties attempt to focus on only
one alleged discrete issue first… overall case management tends to suffer too greatly for
bifurcated discovery to produce the efficiencies touted by its proponents.” Dean v. Pfizer, Inc.,
No. 4:19-CV-204, 2020 WL 12032895, at *2 (S.D. Ind. Dec. 9, 2020). Here, the burden is not
unusual, and it does not seem likely it could be significantly reduced by bifurcation. AaLand has
not shown the burden of the damages issue is disproportionate or that the entire case is unusually
complex, so the Court does not find efficiency weighs in favor of bifurcation.
Instead, the Court is concerned bifurcation may reduce the overall efficiency of the case
because the issues of liability and damages require much of the same evidence and are not easily
severable, which may lead to discovery disputes. This case presents several concerns about the
intersection of liability and damages evidence. Overlapping issues between the damages and
liabilities phases of a trial weigh in favor of a single trial. Real, 195 F.R.D. at 624. The question
of when any infringement began is central to this case, weighs on both liability and damages, and
will likely require much of the same testimony and evidence. Further, Albert’s has alleged a
willful violation, which is “inextricably bound” to both liability and damages. See Keyes Fibre
Co. v. Packaging Corp. of Am., 763 F. Supp. 374, 375 (N.D. Ill. 1991). As sister courts have
doubt that they will be realized here. Liability and damages cannot be easily
1
In support of its contention that resolving the issue of damages will require voluminous discovery,
AaLand cites that each party has been in business for decades, requiring discovery into the adoption of the mark
from its inception. Albert’s disputes that the relevant time period for this lawsuit is the entire business history of
either party.
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compartmentalized.” Philips Med. Sys. (Cleveland), Inc. v. Buan, No. 1:19-CV-2648, 2021 WL
5447034, at *3 (N.D. Ill. Nov. 22, 2021). “[C]ourts in this district have repeatedly held that
bifurcation in similar cases was inappropriate because issues of liability and willfulness/damages
do overlap.” Trading Techs. Int'l, Inc. v. eSpeed, Inc., 431 F. Supp. 2d 834, 841 (N.D. Ill. 2006)
(addressing overlap in patent infringement case in sister court). Albert’s contends that AaLand
adopted the mark intentionally, with the purpose of diverting sales from Albert’s. One can easily
see how testimony of a willful violation or infringement might be relevant to both liability and
damages. In a hypothetical case, one might imagine a slam-dunk witness testifying that an
infringer adopted a logo for the express purpose of confusing the customer; this testimony would
be relevant to both proving liability (as it might refute a fair use defense, see SportFuel, Inc. v.
PepsiCo, Inc., 932 F.3d 589, 601–02 (7th Cir. 2019)) and damages. See Romag Fasteners, Inc v.
Fossil, Inc., 140 S. Ct. 1492, 1494, 206 L. Ed. 2d 672 (2020) (“A district court may award a
winning plaintiff [under the Lanham Act] injunctive relief, damages, or the defendant’s ill-gotten
profits. Without question, a defendant’s state of mind may have a bearing on what relief a
plaintiff should receive.”). It would be duplicative and needlessly time-consuming to depose the
witness twice or hear the same testimony at two trials. This hypothetical represents just one of
numerous scenarios wherein evidence would be relevant to both issues. Therefore, it seems to the
Court that handling all the evidence in a single discovery period and a single trial will best
economize the presentation of the evidence and ultimate resolution of this case.
Moreover, given the dual relevance of some evidence, the Court is concerned bifurcation
may lead to increased discovery disputes. Where there is no clear dividing line between evidence
relevant to the issue adjudicated in the first trial and that reserved for the later trial, discovery
disputes may arise. The parties are likely to take different views of the relevance of the evidence,
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and these disputes must be sorted out at some cost. See Dean, 2020 WL 12032895, at *3. The
Court expects bifurcation “would result in more contentiousness in the discovery process,
forcing the Court to review discovery requests to determine which issue is applicable.” BASF
Catalysts, 2009 WL 523123, at *4. This would not increase efficiency or aid in the speedy
adjudication of this trial, and so the Court finds the potential proliferation of discovery disputes
Finally, AaLand has not shown it so likely to be successful on the merits of liability that
bifurcate, the Court considers the “likelihood that a finding of no liability will actually occur:
where the movant can make a prima facie showing of success, this Court is more likely to grant
bifurcation in the interests of judicial economy.” Fetzer v. Wal-Mart Stores, Inc., No. 13-CV-
9312, 2016 WL 6833912, at *3 (N.D. Ill. Nov. 21, 2016). This is because if the defendant is
verily likely to succeed on the merits, gains to efficiency may actually be realized by avoiding
the second trial. “It is not enough to assert an indefinite possibility that one will succeed — one
must actually give the Court enough to determine the likelihood of success.” Ortega v. United
States, No. 16-CV-5475, 2017 WL 3841632, at *2 (N.D. Ill. Aug. 31, 2017). AaLand argues
Albert’s is unlikely to prevail because damages are only awarded in very few Langham Act
cases; this argument makes little sense to the Court. See Texas Roadhouse, Inc. v. Texas Corral
Restaurants, Inc., No. 2:16-CV-28, 2017 WL 24170861, at *1–2 (N.D. Ind. June 5, 2017)
(declining to bifurcate despite identical argument). In support of this argument, AaLand cites a
study finding “only 5.5% of cases awarded any damages at all.” See Kenneth L. Port, Trademark
Extortion: The End of Trademark Law, 65 Wash. & Lee L. Rev. 585, 622 (2008). But that
scholarly article does not stand for the proposition that 94.5% of cases would cease after the
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liability phase; indeed, the same article notes “51% of all cases found infringement.” See id. So,
on a purely statistical basis, it is actually more likely than not two trials would be conducted if
the instant case was bifurcated. Other than this failed argument, AaLand offers only a tepid
assessment of its case, writing, “there is a probability defendant will prevail on infringement
issues.” (DE 26 at 2.) “A probability” is not enough to assure the Court that it could reasonably
anticipate bifurcation will save time and streamline procedures rather than needlessly
complicating the resolution of this case. At this juncture, the Court knows very little about the
case, and AaLand has not shown that Albert’s case is frivolous or for some other reason very
unlikely to succeed. See Fetzer, 2016 WL 6833912, at *4 (success on the merits did not weigh in
favor of bifurcation because the court “cannot accurately forecast the likely victor of these
debates [on the success of liability] from paper alone” and the defendant could not demonstrate
any likelihood of success). For the above reasons, efficiency does not favor bifurcation.
(2) Prejudice
The Court must also consider the prejudice to both parties: whether AaLand would be
prejudiced by failing to bifurcate the trial, and whether Albert’s would be prejudiced by the
alternative. See Krocka v. City of Chicago, 203 F.3d 507, 516 (7th Cir. 2000). The prejudice to
Albert’s appears obvious to this Court. If liability and damages were bifurcated, a zealous
defense attorney is likely to argue some evidence is not relevant to stage one discovery and
therefore should not be produced until liability is determined; potentially in that group are
documents that plaintiff’s counsel would find probative of liability. Counsel may be forced to
engage in time consuming discovery disputes (as noted above) to obtain material they otherwise
would be entitled to as a matter of right. See Patterson v. Avery Dennison Corp., 281 F.3d 676,
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681 (7th Cir. 2002) (“there is a strong public policy in favor of disclosure of relevant materials”
and there is a “societ[al] interest in furthering the truth-seeking function in the particular case
before the court”). Further, bifurcation may delay the full adjudication of plaintiff’s claims,
especially if two trials ultimately take place. See OrthoPediatrics Corp. v. WishBone Med., Inc.,
No. 3:20-CV-929, 2023 WL 4926913, at *3 (N.D. Ind. July 31, 2023) (denying motion to
bifurcate). In contrast, the prejudice to AaLand if the trial is not bifurcated is comparatively
minimal. AaLand argues the damages issue will absorb valuable time and is likely to confuse the
jury. First, the Court notes the parties have agreed trial is likely to take 5 days in this matter,
which does not appear to be an inordinate amount of time. It seems, then, that a trial
contemplating both liability and damages can take place without an excessive drain on the
Court’s resources. See Texas Roadhouse, 2017 WL 2417086, at *2 (“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”). Second, juries in
this district regularly decide complex damages issues without difficulty, and AaLand has
presented no evidence that this case is significantly more complex than others of its kind. See
DSM Desotech Inc. v. 3D Sys. Corp., No. 08-CV-1531, 2008 WL 4812440, at *6 (N.D. Ill. Oct.
28, 2008) (differentiating standard patent case from that where bifurcation was warranted, noting
the latter contained two patents, six claims, fifteen products, six defendants, and thousands of
documents written in languages other than English and located outside the United States). The
Court assumes the competency of the jury and has faith that its ability to tailor instructions and
verdict forms will sufficiently guide the jury and avoid confusion. See Real, 195 F.R.D. at 621.
Therefore, the Court finds the prejudice inquiry weighs in favor of denying bifurcation.
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D. Conclusion
For the reasons stated above, the Court denies the motion to bifurcate (DE 25).
SO ORDERED.