Severance and Bifurcation

In both federal and state court, the rules give the court discretion to order a case to be divided into two or more parts, each to be tried separately. See Va. Code 8.01-272 (“The court, in its discretion, may order a separate trial for any claim”); Fed. R. Civ. P. 42 (“the court may order a separate trial of one or more separate issues, claims, crossclaims, counterclaims, or third-party claims”). The term “bifurcation” normally refers to the separation of certain issues in the case, while “severance” normally refers to the removal of claims or parties. When issues are bifurcated, the issues typically remain part of the same case; they are just tried separately. For example, when a party has a claim that allows for the recovery of reasonable attorneys’ fees, the decision might be made to bifurcate the attorneys’ fees issue so that the main issues in the case don’t get muddied by lengthy arguments about the reasonableness of attorneys’ fees. If the court orders the fee issue to be tried separately, the issue would still be decided as part of the same case, resulting in a single judgment. Severance, on the other hand, normally involves severing a claim from the lawsuit such that any separate trial on the severed action would be independent of the original action.

Fed. R. Civ. P. 42 permits a court to order severance “[f]or convenience, to avoid prejudice, or to expedite and economize” trial. Relevant considerations include (1) whether the issues are significantly different from one another in the two cases; (2) whether the severable issues require different witnesses and documentary proof; (3) any prejudice to the non-moving party if the motion is granted; and (4) any prejudice to the moving party if the motion is denied. (See Chmura Economics & Analytics, LLC v. Lombardo, Civ. Action 3:19cv813 (E.D. Va. Dec. 18, 2020)). Similarly, bifurcation of issues in state court “is a matter for the trial court’s discretion and requires consideration of whether any party would be prejudiced by granting or not granting such request, as well as the impact on judicial resources, expense, and unnecessary delay.” (Allstate Ins. Co. v. Wade, 265 Va. 383, 393 (2003)).

Bifurcation has been found to be appropriate in the following circumstances, to name just a few examples:

  • Ordering a separate trial on the issue of reasonableness of attorneys’ fees (which would only become an issue if the claimant prevails on the underlying claim supporting the entitlement to reimbursement of attorneys’ fees);
  • In personal injury actions, ordering that liability and damages be tried separately; and
  • Ordering that punitive damages be tried separately, only after a finding has been made that the plantiff is entitled to compensatory damages.

Severance of claims can occur in any number of scenarios where judicial economy, convenience to witnesses, or other factors suggest that severance would be appropriate. In the Chmura case cited above, for example, the Eastern District of Virginia decided to sever a counterclaim and send it to another court to be adjudicated, once it became apparent that a class-action-type case was filed in the other jurisdiction involving nearly identical claims.

Chmura Economics & Analytics, LLC, had sued Richard Lombardo here in Virginia for allegedly violating a noncompete and nonsolicitation agreement and misappropriation of trade secrets. Lombardo filed a counterclaim in response, alleging that Churma had violated the Fair Labor Standards Act. Some time later, a collective and class action was filed against Churma in the Northern District of Ohio, also alleging violations of saw-blade-1801186_960_720-300x169the FLSA. Lombardo was an Ohio citizen who had worked for Churma in Ohio, so he was clearly within the collective class.

Even though Lombardo had originally decided to bring his FLSA claim in Virginia as part of the noncompete case, it clearly made sense to sever the claim and have it adjudicated in Ohio as part of the collective action there. Chmura objected to severance, arguing that Lombardo waived his right to seek severance by voluntarily pursuing the claim in Virginia and that no chance of circumstances justified separating the claim and transferring it to Ohio. The court agreed it was unusual for a party to seek to sever his own claim, but found that circumstances had changed considering a collective action was filed in Ohio by another Churma employee pursuing essentially the same claim.

The court found that severance was appropriate considering “judicial efficiency and economy, as well as avoiding the risk of inconsistent judgments on essentially the same facts and legal issues.” To avoid prejudice to Churma, the court held that the claim “should be transferred in its current posture and that no further discovery should be had as to his FLSA claim.”

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