Case Cite

Cephalon, Inc. v. Sun Pharmaceutical Indus., Ltd., No. 11-5474 (FLW)(DEA), 2013 WL 3417416 (D. N.J. July 8, 2013).

IPDQ Commentary

Cephalon teaches us not to expect bifurcation of damages (either in discovery or trial) in every case. We are reminded that the decision to bifurcate is discretionary, and courts have approached the issue in different ways.

Case Summary

The magistrate judge denied Defendant’s motion to bifurcate the case on issues of liability and damages for discovery and trial purposes. Id. at *1. The district court (1) affirmed the magistrate judge’s order denying a request to bifurcate discovery, then (2) vacated as premature the magistrate’s decision denying bifurcation of the issues for trial. Id. at *5.

At the initial scheduling conference in February 2013, the magistrate judge rejected Defendant’s motion to bifurcate. In March, Defendants informally renewed their earlier request to the magistrate to bifurcate the discovery and trial portions of the case because of the complexity of the case, the threat of prejudice due to potential jury confusion, and judicial economy. Id. at *1. However, the magistrate judge rejected the request, saying (1) the case was not complex, (2) bifurcation would delay litigation and result in duplication of effort, and (3) Defendant’s reliance on the case law it cited was misplaced. Id.

The district court noted a ruling regarding trial proceedings was premature so early in the case, then vacated the magistrate’s order. Id. at *2. The district court also noted that, while the application to bifurcate trial was premature, the parties could submit another application to bifurcate – ideally, at the time of the final pretrial conference. Id. at *2, *5.

In affirming the magistrate’s decision denying the request to bifurcate discovery on liability and damages, the district court said:

  • A decision to bifurcate is within the sound discretion of the court. Id.
  • Courts in the district of New Jersey do not routinely grant motions to bifurcate unless the moving party shows why bifurcation is appropriate. Id. at *3.
  • Defendant’s argument that “the question of a ‘reasonable royalty’ can be exceedingly complex” related to trial not discovery. Id. Defendants point to no mistake of fact or law by the magistrate on the issue of complexity. Id.
  • Defendants contended the issue of damages is contingent on a finding of liability, saying judicial resources could be conserved through bifurcation. Defendants pointed to the fact that the court had denied a motion for preliminary injunction based in part on Plaintiff’s failure to demonstrate a likelihood of success on the merits. Id. Again, Defendants failed to highlight any mistake of law or fact underlying the magistrate’s decision. Id.
  • Finally, Defendants argued the magistrate abused his discretion by ignoring a controlling case – Princeton Biochemical, Inc. v. Beckman Instruments, Inc., 180 F.R.D. 254 (D. N.J. 1997). Id. at *4. Princeton specifically said a trial on damages in an infringement suit is often difficult and expensive, and can be easily severed. But, a cursory review of the case indicated Defendant’s reliance was misplaced. Specifically, (1) the issue in Princeton was trial, not discovery, (2) Princeton does not require bifurcation, but clearly explains that a decision on bifurcation is discretionary. Id.