Opinion
3:14-cv-1528-JR
03-18-2020
MICHAEL MAKANEOLE, individually and on behalf of all similarly situated individuals, Plaintiffs, v. SOLARWORLD INDUSTRIES AMERICA, INC.; SOLARWORLD INDUSTRIES AMERICA, LP; SOLARWORLD INDUSTRIES SERVICES, LLC; RANDSTAD PROFESSIONALS US, LP; KELLY SERVICES, INC.; SUNPOWER NORTH AMERICA MANUFACTURING LLC; SUNPOWER MANUFACTURING OREGON, LLC; AND SUNPOWER CORPORATION, Defendants.
OPINION & ORDER :
Plaintiff initiated this action on August 26, 2014 in the Circuit Court for the State of Oregon for the County of Multnomah alleging defendants failed to pay all wages for time worked by plaintiff and similarly situated individuals. On September 24, 2014, defendants removed the action to this Court.
After various dispositive motions, class certification, and settlement by one of the defendants, only Solarworld Industries America, Inc., Solarworld Industries America, LP, Solarworld Industries Services, LLC, and Solarworld Power Projects, Inc. ("Solarworld") remained as defendants for plaintiff's claims seeking unpaid regular and overtime wages and civil penalty wages pursuant to Or. Rev. Stat. §§ 652.120, 652.140, 652.150, 653.261, 653.055.
On September 24, 2019, plaintiff moved to amend his complaint to add Sunpower North America Manufacturing LLC, Sunpower Manufacturing Oregon LLC, and Sunpower Corporation (collectively "Sunpower") as defendants in the case. The Court granted plaintiff's motion to amend regarding the Chapter 652 private right of action claims but denied the motion regarding plaintiff's Chapter 653 claim. Makaneole v. Solarworld Indus. America, Inc., 2019 WL 4620385, at *4 (D. Or. June 3, 2019). Specifically, the Court noted that Sunpower could be included as a defendant on the theory that it may be liable for the underlying wage claims as a successor employer to Solarworld. Id. at *3-4.
The parties then proceeded to seek resolution via mediation, and the Court accordingly stayed all proceedings. The parties failed to resolve this matter resulting in the Court lifting the stay. Defendants now move to bifurcate and stay discovery on the issue of Sunpower's alleged successor liability. For the reasons stated below, defendants' motion is denied.
DISCUSSION
Defendants move to bifurcate the trial and stay discovery on the issue of Sunpower's alleged successor liability until the claims against Solarworld are resolved. Plaintiff responds that bifurcating trial and staying discovery as to Sunpower's successor liability is premature, wasteful, and irreparably harmful to plaintiff.
Under Fed. R. Civ. P. 42(b), "the court may order a separate trial of one or more separate issues, claims, crossclaims, or third-party claims" for "convenience, to avoid prejudice, or to expedite and economize" the proceedings. The moving party has the burden to prove bifurcation is appropriate. Benson Tower Condo. Owners Ass'n v. Victaulic Co., 150 F. Supp. 3d 1184, 1208 (D. Or. 2015) (citing Clark v. I.R.S., 772 F. Supp. 2d 1265, 1269 (D. Haw. 2009)). The court has broad, discretionary authority to bifurcate claims or issues. Hirst v. Gertzen, 676 F.2d 1252, 1261 (9th Cir. 1982). Furthermore, bifurcation is "not to be routinely ordered." Fed. R. Civ. P. 42(b) advisory committee's note to 1966 amendment. If bifurcation would lead to multiple proceedings involving overlapping facts or if the purported economy in time and expense informing the motion is speculative, the motion to bifurcate should be denied. Bates v. State Farm Mutual Auto. Ins. Co., 2015 WL 11777838 at *1 (W.D. Wash. May 18, 2015) (citing Datel Holdings LTD. v. Microsoft Corp., 2010 WL 3910344, at *2-5 (N.D. Cal. Oct. 4, 2010)). Courts should deny motions to bifurcate when bifurcation would result in prejudice. Bishop v. Oregon, 2003 WL 24002420 at *3 (D. Or. August 21, 2003) (citing Geudry v. Marino, 164 F.R.D. 181, 186 (E.D. La. 1995)).
The factors to be considered when determining whether to bifurcate include: (1) convenience, (2) prejudice, (3) judicial economy, (4) risk of confusion, and (5) separability of issues. Siddiqi v. Regents of Univ. of California, 2000 WL 33190435 at *9 (N.D. Cal. Sept. 6, 2000).
Threshold Issue
Sunpower's successor status is crucial to plaintiff's claims for unpaid and penalty wages against it. To prevail on an unpaid wages claim under Oregon law, a plaintiff must show that the defendant employed the plaintiff and the plaintiff performed work for which he or she was not compensated. Chard v. Beauty-N-Beast Salon, 148 Or. App. 623, 627, 941 P.2d 611 (1997), overruled on other grounds by Cejas Commercial Interiors, Inc. v. Torrez Lizama, 260 Or. App. 87, 316 P.3d 389 (2013). Additionally, a plaintiff cannot claim penalty wages under Or. Rev. Stat. § 652.150 unless "(1) his or her employment is terminated and the employer (2) willfully fails to pay, (3) within [the time specified], (4) wages that are (5) earned and unpaid at the time of the termination." Wilson v. Smurfit Newsprint Corp., 197 Or. App. 648, 659, 107 P.3d 61 (2005) (emphasis added). Therefore, to succeed on either claim, plaintiff must first show that defendants are an employer. Thus, a threshold issue in this case is whether defendants employed class plaintiffs.
Sunpower's employer status turns on whether it is a successor. See Blachana, LLC v. Bureau of Labor and Indus., 354 Or. 676, 680-81, 318 P.3d 735 (2014) (determining that an entity's capacity for liability in a wage dispute involving a predecessor was contingent upon successorship); see also Makaneole, 2019 WL 4620385 at *3-4 (stating that the Or. Rev. Stat. § 652.310(1) definition of "employer" includes successor employers). Or. Rev. Stat. § 652.310(1) defines an "employer" as:
Any person who in this state, directly or through an agent, engages personal services of one or more employees and includes any successor to the business of any employer, or any lessee or purchaser of any employer's business property for the continuance of the same business, so far as such employer has not paid employees in full.
Sunpower is not an agent of Solarworld, so the only way in which Sunpower can qualify as an employer under Or. Rev. Stat. § 652.310(1) is as a successor to Solarworld. Accordingly, Sunpower's successorship is itself a threshold issue. Additionally, the Court previously granted plaintiff leave to amend the complaint specifically to allow him to pursue his successorship theory. See Makaneole, 2019 WL 4620385 at *4. Defendants' motion to bifurcate and stay discovery of Sunpower's employer status, in essence, seeks to reconsider the motion to amend. The Court previously considered the discovery burden in granting plaintiff leave to amend to allege the successor liability of Sunpower. The Court affirms its previous ruling.
1. Prejudice
One of the reasons this Court allowed plaintiff to amend his complaint was to prevent potential prejudice to plaintiff if Sunpower had not been included as defendants. Specifically, the Court noted: "[p]laintiff moved to amend shortly after discovering Sunpower acquired Solarworld. The impact such acquisition may have on the ability of defendant to pay any judgment would prejudice plaintiff if it were not permitted to amend." Makaneole, 2019 WL 4620385 at *4. Plaintiff is concerned that Solarworld cannot pay judgments against it and that undue delays into successor liability will prejudice plaintiff's ability to collect any judgments, should the class prevail. Plaintiff's concern is heightened by the numerosity of the class members seeking relief and the substantial alleged damages in this case. Though the Court expresses no view on plaintiff's allegation that Sunpower is attempting to "hide assets," it notes plaintiff's concerns as follows: (1) bifurcation may unduly delay the case; (2) Solarworld's warning of its inability to pay any judgment entered against it; and (3) Sunpower's current restructuring. Pl.'s Resp. 11 (doc. 283).
Defendants argue denying bifurcation will prejudice Sunpower by subjecting it to fact-intensive discovery. Def.'s Reply 8 (doc. 287). Specifically, defendants point to "47 burdensome discovery requests." Id. However, given the significant damages at issue and the class size, defendants do not explain how the discovery requests are overly burdensome. Accordingly, the Court can only speculate as to whether the time and expense of discovery justifies bifurcation. Defendants can object to providing privileged material or to discovery that is disproportionate to the needs of the case without bifurcating issues for discovery at this stage. On this record, it appears granting the motion to bifurcate could potentially prejudice plaintiff due to increased delay and uncertainty.
Sunpower's current contention that plaintiff inappropriately seeks "highly confidential and proprietary documents about Sunpower's business and its purchase of the SolarWorld assets" is unpersuasive grounds to bifurcate and stay discovery because there exists a Protective Order in this case ensuring the security and confidentiality of such documents.
2. Risk of Confusion
The issue of successor liability does not pose a serious risk of jury confusion. This factor weighs against bifurcation. See Benson Tower Condo. Owners Ass'n, 105 F.Supp.3d 1184, 1208 (denying bifurcation in part because the moving party did not explain why appropriate jury instructions were insufficient to cure any potential jury confusion).
3. Convenience, Judicial Economy, and Separability of Issues
The issue of successor liability is susceptible to determination separate from Solarworld's underlying liability. However, the motion to bifurcate boasts only the possibility of greater efficiency. Speculative efficiency, particularly in the face of possible prejudice to one of the parties, is not, by itself, a good reason to bifurcate. See Datel Holdings LTD., 2010 WL 3910344 at *2 (citing Calmar, Inc. v. Emerson Research, Inc., 850 F.Supp. 861, 865 (C.D. Cal. 1994)); see also Bates, 2015 WL 11777838 at *1 ("[I]f any economy in time and expense is wholly speculative, the motion [to bifurcate] should be denied."). Moreover, plaintiff persuasively suggests the issue of successor liability will be determined via summary judgment before any jury would have occasion to determine liability of the alleged underlying wage violations.
CONCLUSION
Defendants' motion to bifurcate and stay discovery (doc. 276) is denied at this time.
DATED this 18th day of March, 2020.
/s/ Jolie A. Russo
JOLIE A. RUSSO
United States Magistrate Judge