Ringelberg v. Vanguard Integrity Professionals -Nevada, Inc. et al

RESPONSE to 112 Motion

D. Nev.March 28, 2018

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 Daniel Norr, Esq. Nevada Bar No. 6438 Law Office of Daniel Norr, LLC 170 S. Green Valley Parkway, Suite 300 Henderson, NV 89012 (702) 990-3237 dan@norrlaw.com Richard A. Mescon, Esq. New York Bar No. 1434968 (admitted pro hac vice) Leichtman Law PLLC 315 Madison Avenue, Suite 3011 New York, New York 10017 (212) 419-5210 rmescon@leichtmanlaw.com Attorneys for Plaintiff Steven Ringelberg UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEVADA STEVEN RINGELBERG, Plaintiff, v. VANGUARD INTEGRITY PROFESSIONALS – NEVADA, INC., a Nevada Corporation, and VANGUARD INTEGRITY PROFESSIONALS, INC., a Nevada Corporation Defendants. Civil Action No. 2:17-cv-01788-JAD-PAL PLAINTIFF’S MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION TO BIFURCATE ISSUES OF LIABILITY AND DAMAGES AT TRIAL Plaintiff Steven Ringelberg (“Plaintiff”) files this memorandum of law in Opposition to Defendants Vanguard Integrity Professionals-Nevada, Inc.’s (“Vanguard Nevada”) and Vanguard Integrity Professionals, Inc.’s (“Vanguard INC”) Motion to Bifurcate Issues of Liability and Damages at Trial for the reasons set forth below. I. RELEVANT FACTS. Below is a summary of the facts that Plaintiff intends to prove at trial that are relevant to Defendants’ Motion to Bifurcate. Case 2:17-cv-01788-JAD-PAL Document 128 Filed 03/28/18 Page 1 of 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 a. Plaintiff’s work for Defendants. Plaintiff will prove at trial that from May 7, 2007 to May 15, 2015 Plaintiff was an employee of Vanguard Nevada, which is the parent company of Vanguard INC, Vanguard Integrity Professionals, Ltd, Vanguard Research Institute, Inc. and Vanguard Federal Systems, Inc. (collectively, the “Vanguard Group of Companies”). In that capacity Plaintiff provided services to the entire Vanguard Group of Companies throughout this period. From May 7, 2007 to June 2010, Plaintiff was on the payroll of Vanguard Nevada. From 2010 to May 15, 2015 Plaintiff was paid off the payroll of Defendants. Ronn Bailey (“Bailey”) is the sole shareholder, Chairman of the Board, Chief Executive Officer and Chief Technical Officer of Vanguard Nevada. From 2007 to 2015, largely through the efforts of Plaintiff, the net profits of Vanguard Nevada increased from $REDACTED per year to over $REDACTED per year, all of which has been distributed to Bailey as sole shareholder. This jump was due to increased sales of software, and to maintaining operating expenses at the 2007 level or lower. In addition, through Plaintiff’s efforts, Bailey was able to structure his tax posture so as to reduce his federal income tax liabilities by over $REDACTED per year. Finally, because of Plaintiff’s management of his personal investments, other than Vanguard Nevada, the value of Bailey’s portfolio increased from under $REDACTED to over $REDACTED. To say that Plaintiff was a valued employee would be the understatement of the year, and, appropriately, Bailey was very grateful. To show this gratitude, as well as to induce Plaintiff to continue working for Vanguard Nevada, Vanguard Nevada awarded Plaintiff bonuses, promised additional bonuses, and promised to issue to Plaintiff 10% of the shares of Vanguard Nevada. In addition, Bailey personally promised to forgive a loan he had made to Plaintiff. In return, Plaintiff continued to work for Vanguard Nevada and for Bailey personally. b. Plaintiff’s complaints of sexual harassment by Bailey and Bailey’s termination of Plaintiff’s employment. Plaintiff will prove at trial that on May 4, 2015 Plaintiff, after observing incidents of sexual harassment, illegal drug use, and abuse of alcohol by Bailey, and hearing other reports of sexual harassment and misconduct against Bailey, filed a complaint of sexual harassment against Bailey with Yvonne Shoup (“Shoup”), the sister of Bailey, a member of the Board of Directors of Vanguard Nevada, and its Director of Human Resources, and Michael Piescik (“Piescik”) the Case 2:17-cv-01788-JAD-PAL Document 128 Filed 03/28/18 Page 2 of 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 corporate attorney for Vanguard Nevada. On May 4, 2015 Shoup and Piescik investigated Plaintiff’s and other persons’ complaints against Bailey and determined the allegations to be true. Plaintiff, in his role as Chief Operating Officer and number two at the Vanguard companies, concluded that Bailey, in accordance with Vanguard Nevada’s personnel policies, must be held accountable, and determined that Bailey should be placed on an unpaid leave of absence, and prohibited from entering the offices of Defendants until he had completed extensive anti-sexual harassment training, and had ceased using illegal drugs and abusing alcohol. Shoup and Piescik agreed with Plaintiff’s response to the complaints. Plaintiff met with Bailey, as well as Brian Marshall, the current President of the Vanguard Group of Companies, on May 5, 2015 at Bailey’s home. Plaintiff confirmed with Bailey that Plaintiff had been the source of the sexual harassment, illegal drug use, and abuse of alcohol complaints against Bailey, and that Ringelberg had personally observed some of Bailey’s improper conduct. Ringelberg confirmed that he had determined the steps the Vanguard Group of Companies needed to take to protect themselves in light of Bailey’s conduct. Plaintiff underscored that Bailey’s conduct had put Vanguard Nevada and Vanguard INC at risk of losing customers and revenue, as well as risks of lawsuits by the women and others Bailey had harassed, because all of Bailey’s misconduct had been observed by customers and business partners, and that Bailey’s harassing conduct had been directed at employees and customers of Defendants. Bailey agreed to take a leave of absence, participate in anti-sexual harassment training, and “get clean” before he returned to the Defendants’ offices. On May 8, 2015 while Plaintiff was conducting business for Defendants in Zurich, Switzerland, Shoup telephoned Plaintiff and informed him that Bailey had decided that he had not sexually harassed anyone, because he had no memory of doing so. She said that he had returned to the office, was holding meetings with staff and that his appearance and conduct suggested he was using illegal drugs. From May 8, 2015 to May 13, 2015 Plaintiff was unsuccessful in his attempts to contact Bailey to direct him to stay away from the office consistent with his May 5 agreement to do so. On the afternoon (Pacific Time) of May 13, 2015 Plaintiff finally spoke to Bailey while Bailey was at the offices of Defendants. While Plaintiff was imploring Bailey to honor his May 5 commitments and stay away from Defendants’ offices because Bailey had not yet complied with the conditions he had agreed to meet at the May 5 meeting, Bailey disconnected the telephone ending the call. Bailey then directed that Plaintiff’s Case 2:17-cv-01788-JAD-PAL Document 128 Filed 03/28/18 Page 3 of 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 employment be terminated. On May 15, 2015, while Plaintiff was in flight travelling from London, England to Las Vegas, a termination letter was delivered to Plaintiff’s home, Plaintiff’s corporate credit card was cancelled, his mobile phone service was cancelled, and his access to Defendants computer networks was terminated. c. The July 1, 2015 Limited Settlement Agreement. From May 19, 2015 through July 1, 2015, Plaintiff, and Piescik and Bailey, on behalf of Defendants, were negotiating two things: (1) Plaintiff’s return to work for Vanguard Nevada,1 and (2) a limited Settlement Agreement by and between Vanguard INC and Plaintiff, and between Bailey personally and Plaintiff. On July 1, 2015 Plaintiff, Vanguard INC and Bailey entered into a Settlement Agreement (the “Limited Settlement Agreement”). In order to understand the limited scope of the release, it is important to review the definition of each party to the settlement and the “Recitals”. The Limited Settlement Agreement first defines “Vanguard Integrity Professionals, Inc.” as “VANGUARD,” then Bailey and the Bailey Living Trust Dated 12/31/92 as “BAILEY,” and then Plaintiff as “VENDOR.” In relevant part the Settlement Agreement provides: 1.01 Whereas, VENDOR had been employed by VANGUARD from May 8, 2007 until May 31, 2010 and VANGUARD AND VENDOR believe there are claims related to that employment. 1.02 Whereas, VENDOR performed services for VANGUARD since June 1, 2010 until the complete cessation of the performance of those services on May 15, 2015. VENDOR AND VANGUARD believe there are claims related to performing those services; Exhibit B, p. 1. With these definitions and recitals in mind, it is clear that the Limited Settlement Agreement is indeed very limited. 2.02(b) Release. 1 Attached as Exhibit A are Piescik’ s notes of his meeting with Plaintiff on May 19, 2015, in which he wrote that he had informed Plaintiff of Defendants wish to re-hire him. Case 2:17-cv-01788-JAD-PAL Document 128 Filed 03/28/18 Page 4 of 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 (i) Effective as of the Effective Date, VENDOR, on behalf of himself, his predecessors, successors, assigns, agents and attorneys (collectively, the “VENDOR”), hereby releases and forever discharges VANGUARD and BAILEY, including in BAILEY’s individual/personal capacity, their predecessors, successors, assigns, agents, contractors and attorneys of and from all claims, obligations, losses and liabilities, known or unknown, asserted or unasserted of whatever nature, now existing or hereinafter arising, relating in VENDOR’s prior employment with and provision of services as a VENDOR to VANGUARD, and any and all claims, obligations, losses and liabilities, known or unknown, asserted or unasserted of whatever nature, now existing or hereinafter arising, related to VENDOR’s relationship and/or interactions with BAILEY in any capacity. (ii) Effective as of the Effective Date, VANGUARD and BAILEY, on behalf of themselves, their predecessors, successors, assigns, agents and attorneys, hereby release and forever discharge VENDOR, his predecessors, successors, assigns, agents, contractors and attorneys of and from all claims, obligations, losses and liabilities, known or unknown, asserted or unasserted of whatever nature, now existing or hereinafter arising, relating in VENDOR’s prior employment with and provision of, services as a VENDOR to VANGUARD and any and all claims, obligations, losses and liabilities, known or unknown, asserted or unasserted of whatever nature, now existing or hereinafter arising, related to BAILEY’s relationship and/or interactions with VENDOR in any capacity. Exhibit B, p. 2-3. In addition, section 2.03, subpart (c) makes clear that the releases are limited to the subjects set forth in the Limited Release the releases set forth above extend and apply to and also cover and include all unknown, unforeseen, unsuspected, and unanticipated injuries, claims, damages, losses, and liabilities, if any, arising out of or related to the subject matter of the giving rise to this Agreement, and are supported by the payment of adequate consideration. Exhibit B, p 3. It is clear from the Recitals that the subject matter giving rise to the July 1, 2015 Limited Settlement Agreement is restricted, in the case of Plaintiff and Vanguard INC., to claims that the parties may have had arising out of Plaintiff’s employment with Vanguard INC from 2007 to Case 2:17-cv-01788-JAD-PAL Document 128 Filed 03/28/18 Page 5 of 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 2010, and arising out of “Services” between June 1, 2010 and May 15, 2010. The July 1, 2015 Limited Settlement Agreement was executed by Ringelberg, on behalf of himself personally, Shoup, on behalf of Vanguard INC, and Bailey, on behalf of himself personally, and as Trustee of the Bailey Living Trust dated 12/31/92. Exhibit B, p. 5. On July 28, 2015, in a sworn affidavit, Piescik, then corporate attorney for Vanguard Nevada, in the application for a TPO brought by Vanguard INC., acknowledged that the July 1, 2015 was a Limited Settlement Agreement when he declared under penalty of perjury that the July 1, 2015 Agreement resolved “at least most, of the disputed issues.” Exhibit C. In Vanguard INC’s application for a temporary protective order Ms. Chee (then known as Erica Kelly), counsel for Defendants at the time and in this action, represented to the Justice Court that “On July 1, 2015 the parties entered into an agreement that [Vanguard INC] believed resolved all, or at least most, of the parties’ disputed issue.” (emphasis added). Exhibit D, last paragraph. Finally, Vanguard INC.’s entire application for a TPO was based largely on Plaintiff’s conduct during the period between May 15, 2015 and July 1, 2015, and Vanguard INC clearly did not believe it was barred from making claims against Plaintiff based on that conduct despite having entered into a release agreement with Plaintiff on July 1, 2015. In summary, the July 1, 2015 Limited Settlement Agreement, under a plain reading of its terms: A. Does not contain or include a release of Vanguard Nevada (or Vanguard Integrity Professionals, Limited; Vanguard Research Institute, Inc.; Vanguard Federal Systems, Inc.) by Ringelberg, or release of Ringelberg by Vanguard Nevada or its other subsidiaries, because “Vanguard” is defined to be “Vanguard INC” and there is no language in the agreement to include affiliates, subsidiaries or parent corporations. As demonstrated in the agreements attached as Exhibit E, when Vanguard Nevada wanted to have one entity execute an agreement on behalf of its affiliates, subsidiaries and divisions, it expressly said so. For example: This Employee Confidential Information and Inventions Agreement ("Agreement") is made this day _________of _______, by and between Vanguard Integrity Professionals - Nevada, a Nevada corporation whose principal office is located at 6625 S. Eastern Avenue, Suite 100, Las Vegas, Nevada 89119, and all its affiliates, subsidiaries and divisions (hereinafter collectively referred to as "COMPANY'') and the employee of Case 2:17-cv-01788-JAD-PAL Document 128 Filed 03/28/18 Page 6 of 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 COMPANY who executes this Agreement (hereinafter referred to as "EMPLOYEE''). Exhibit E, p. 2, 4, 8, 10, 12 and 16, executed between 2011 and 2015. Alternatively, Defendants phrased it this way when they meant to include all of the Vanguard Group of Companies as well as Ronn Bailey personally: This Non-Disclosure Agreement (the "Agreement") is entered Into this 26th day of April, 2013 (the "Effective Date"), by and between Vanguard Integrity Professionals - Nevada, a Nevada Corporation with its principal offices at 5S25 S. Eastern Ave.. Ste. 100. on behalf of Itself and owner, Ronn H. Bailey, its affiliates, divisions and subsidiaries (“Vanguard”), and Paul DeGraaff (“ Receiving Party”) Exhibit E, p. 14. And finally, a third variation when Defendants’ meant to include all of the Vanguard Group of Companies: This Non-Disclosure Agreement (the "Agreement") is entered into this 15 day of January, 2014 (the "Effective Date"), by and between Vanguard Integrity Professionals, Inc. [6625 Eastern Ave, LLC], a Nevada corporation with its principal offices at 6625 Eastern Aye., Ste. 100, on behalf of itself and its affiliates, divisions and subsidiaries ("Vanguard"), and Milton Perkins . Exhibit E, p. 6. B. Plaintiff and Vanguard INC only released claims relating to Plaintiff’s employment before June 1, 2010, and relating to Plaintiff’s “services” as a Vendor after June 1, 2010, but did not release any other claims they have against each other, such as claims related to Plaintiff’s employment after June 1, 2010. In addition, because Plaintiff stopped providing services after Defendants served the termination letter on May 15, 2015 at his home, Plaintiff and Defendants did not release any claims at all that arose after May 15, 2015. C. Bailey and Ringelberg each gave general releases to each other (“Vendor in any capacity”) for all claims that arose prior to execution of the Limited Settlement Agreement (which demonstrates that Defendants knew how to draft a general release, but chose not to between Plaintiff and Vanguard INC). Case 2:17-cv-01788-JAD-PAL Document 128 Filed 03/28/18 Page 7 of 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 D. No party released any claim(s) that arose after July 1, 2015. In short, contrary to Defendants’ assertions in prior motions, and in this Motion to Bifurcate, a determination by the Court or a jury about the meaning and scope of the July 1, 2015 Limited Settlement Agreement will not be determinative of many of Plaintiff’s claims in this action. d. Defendants’ Invasions of Plaintiff’s Privacy from May 15, 2015 through January 31, 2016. Defendants admittedly conducted covert surveillance of Plaintiff from at least May 15, 2015 through at least January 31, 2016. Plaintiff will prove at trial that Defendants’ surveillance was done by placing a GPS tracking devices on Plaintiff’s personal vehicle from time to time during that period, by monitoring him with cameras (still and movie) with and without telephoto lenses, and long range parabolic microphones and amplifiers. Plaintiff will prove at trial that information about Plaintiff’s whereabouts, who he was with and what he was saying, was transmitted to Defendants over the internet. Plaintiff will demonstrate that such conduct was illegal, and violated his reasonable expectation of privacy. No part of the July 1, 2015 Limited Release Agreement covers Plaintiff’s claims against Defendant for this conduct after May 15, 2015. e. Defendants’ Offers to Place Plaintiff on the Payroll from April 15, 2015 to May 15, 2015. Plaintiff will prove at trial that Vanguard Nevada promised, in the third week of April 2015 and on May 5, 2015, to begin paying Plaintiff through the Defendants payroll system beginning with the May 15, 2015 paycheck. Vanguard Nevada informed him that when this was accomplished he would have credit for eight (8) years of employment in the payroll system (May 7, 2007 to May 15, 2015), which would mean that Plaintiff would, based on the duration of his employment, be eligible for four (4) weeks paid vacation instead of three (3) weeks paid vacation per twelve (12) month period of employment. f. Defendants’ Offers of Employment from May 15, 2015 to July 1, 2015. 2 2 See Exhibit A. “I stated that I was authorized to communicate that Ronn is building the management team and that Ronn anticipated that it would take about two months to complete that. At that time Ronn would like to discuss with Steven a role within Ronn's organization Case 2:17-cv-01788-JAD-PAL Document 128 Filed 03/28/18 Page 8 of 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 Plaintiff will prove at trial that Defendants made multiple offers of employment during the period after his termination up through July 1, 2015, and that these offers incentivized Plaintiff to enter into the July 1, 2015 Limited Settlement Agreement, and that these offers were rescinded and never acted upon by Defendants in retaliation against Plaintiff. For example, on May 19, 2015 Piescik told Plaintiff that Plaintiff would return to work for Defendants later that summer. No claim related to Plaintiff’s employment with Defendants between May 15, 2015 and July 1, 2015 is covered by any release in the July 1, 2015 Limited Settlement Agreement. g. Defendants’ Offers of Employment from July 1, 2015 to July 24, 2015. Plaintiff will prove at trial that Defendants made offers of employment during the period from July 1, 2015 to July 24, 2015, and that these offers were rescinded and never acted upon by Defendants in retaliation against Plaintiff. No claim related to Plaintiff’s employment with Defendants between July 1, 2015 and July 24, 2015 is covered by any release in the July 1, 2015 Limited Settlement Agreement. h. Defendants’ Pretext for the Termination of Plaintiff’s Employment. In late July 2015 Defendants were responding to Plaintiff’s complaint to the Nevada Commissioner of Labor regarding the non-payment of bonuses. Defendants came to realize that the July 1, 2015 Limited Settlement Agreement had not released any claims Plaintiff had against Vanguard Nevada at all for any period of time and in any capacity, had not released any claims Plaintiff had against Vanguard INC related to his employment from June 2010 through May 15, 2015, and had not released any claims against Vanguard INC after Plaintiff’s employment was terminated on May 15, 2015. Defendants, therefore, developed their “pretext” for termination Plaintiff’s employment. Plaintiff will prove at trial that since June 2010, when Vanguard Nevada began paying Plaintiff off the payroll for performing the same scope of duties he had previously been providing, Bailey had known that Plaintiff had not formed any separate entity, including an LLC. Not later than August of 2014, Piescik knew Plaintiff had never formed any LLC called Ringelberg Law or Ringelberg Consulting. From 2010 to 2015 every payment to Plaintiff was wire transferred directly to Plaintiff’s personal checking account, the same checking account into moving forward.” Notes of Michael Piescik of May 19, 2015 meeting. Case 2:17-cv-01788-JAD-PAL Document 128 Filed 03/28/18 Page 9 of 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 which Vanguard Nevada had deposited Plaintiff’s paychecks from 2007 to 2010. This was because Plaintiff had told Shoup, the treasurer of Defendants who signed all checks and initiated all wire transfers, that he had not formed any LLC, and could not cash a check written to such a non-existent LLC nor receive a wire transfer to a non-existent LLC. Despite the fact that Defendants’ knew Plaintiff had never formed an LLC from June 2010 to May 2015, the absence of a separate entity is now the sole basis that Defendants use as their “justification” for terminating Plaintiff’s employment. This “justification” is false pretext II. LAW. 3 Defendants’ Motion for Bifurcation correctly states that District Courts’ generally have discretion to control their dockets and may, in appropriate circumstances, order that trials be bifurcated into two or more segments. A decision to bifurcate, or not bifurcate, a trial are reviewed by the Courts of Appeal under an “abuse of discretion” standard. See DeAnda v. City of Long Beach, 7 F.3d 1418, 1421 (9th Cir. 1993)(9th Circuit reversal of an order of bifrucation as an abuse of discretion where bifrucation of civil rights action against officers, officials and municipalities was improper as it denied plaintiff an opportunity to prove his case against the municipal official). As set forth in a second case cited by Defendants, Oracle USA, Inc. v. Rimini St., Inc., No. 2:10-CV-00106-19LRH, 2015 WL 5092702, (D. Nev. Aug. 26, 2015): Under Rule 42 of the Federal Rules of Civil Procedure, the court may bifurcate a trial for the convenience of the court and the parties, to avoid prejudice, and to expedite and economize the trial process. FED. R. CIV. P. 42(b). Under Rule 42(b), a district court has broad discretion to bifurcate as part of its trial management. (citations omitted). In considering a motion to bifurcate trial, courts have weighed the factors of convenience, prejudice, judicial economy, risk of confusion, and whether the issues are clearly separable (citation omitted). Here, the court finds that bifurcating the upcoming trial as proposed by defendants is not warranted. First, the court finds that bifurcation will not expedite nor economize the trial. Defendants argue generally that bifurcation will avoid a 3 Bifurcation of trials is very different than “Severance” of trials. Bifurcated trials have a part 1 and a part 2 (if necessary) and if part 2 goes forward, the evidence of the parties is heard by the same jury. With severance of trials, two different juries decide the various parts of the claims. Defendants seek bifurcation, and Plaintiff has responded to the request for bifurcation despite the fact that some of the case law cited by Defendants is in regard to Severance decisions by District Courts. Case 2:17-cv-01788-JAD-PAL Document 128 Filed 03/28/18 Page 10 of 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 waste of juror time because if the jury does not find defendants liable for any of Oracle's state tort claims, then the issue of punitive damages becomes moot, thus saving juror's time. But, defendants proposed bifurcation would not reduce the time for trial as even if the jury does not find liability on the state tort claims, there would still be a second trial phase on the issue of willful infringement as the court has already found that defendants engaged in copyright infringement as a matter of law. Second, the court finds that bifurcation will cause an unnecessary duplication of evidence and testimony that is relevant to both Oracle's state law tort claims and the issues of willfulness and punitive damages liability. For example, Oracle has brought claims for intentional interference and intentional misrepresentation based on defendants' statements to prospective customers that they did not engage in any copyright infringement and were actively taking steps to prevent any infringement. Thus, evidence showing that defendants engaged in willful infringement is relevant to show that defendants made intentional misrepresentations to prospective customers. Determining Oracle's state-law claims will also involve the same witnesses and documents required to determine Oracle's entitlement to punitive damages and willful infringement. Therefore, bifurcation will not save time and resources at trial. Accordingly, the court shall deny defendants' motion. Id. at 2-3. In a third case cited by Defendants’ in Support of their Motion to Bifrucate, the request for bifrucation was denied. "A motion to sever and stay under Fed. R. Civ. P. 42(b) is addressed to the discretion of the court, and must be denied unless it appears that separate trials are necessary `in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy....'" (citations omitted). The "separation of issues for trial is not to be routinely ordered." Fed. R. Civ. P. 42(b), advisory committee note. Generally speaking, bifurcation is most frequently ordered when the resolution of one claim or issue may obviate the need for trial of other, more complicated issues. (citations omitted) Otherwise, "piecemeal litigation is not ... favored," and bifurcation is inappropriate "`in cases where the facts are so inextricably interwoven that separation is impossible or at least manifestly unfair.'" (citations omitted) In deciding a Rule 42(b) motion, "courts often try to establish if the issues would involve the same witnesses or not." (citation omitted) In the instant action, it is not apparent that separate trials of plaintiff's claims will result in greater efficiency or economy from the point of view of either the Court or the litigants. Although Counts II and III primarily concern the events surrounding the negotiation and execution of the Reimbursement Agreement, they also involve issues of costs incurred by Jackson in its work under the subcontract and payments made by Morse/Diesel to Jackson, issues that will also be central to Count I. Thus, the issues raised in Counts I, II, III are Case 2:17-cv-01788-JAD-PAL Document 128 Filed 03/28/18 Page 11 of 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 interrelated to a certain extent, and there exists a likelihood of an overlap in trial witnesses and other evidence. For these reasons, F & D's motion to bifurcate the trial of plaintiff's claims is denied. Having concluded that the most practicable way to proceed in this action is to address all of the issues in a single trial, the Court also denies F & D's motion for a stay of discovery. Morse/Diesel, Inc. v. Fidelity and Deposit Co. of Maryland, 763 F. Supp. 28, 35 (S.D. N.Y. 1991), opinion modified on reargument, 768 F. Supp. 115 (S.D. N.Y. 1991). In a fourth case cited by Defendant, the 9th Circuit upheld the district court’s denial of a motion for bifrucation. "Rule 42(b) of the Federal Rules of Civil Procedure confers broad discretion upon the district court to bifurcate a trial, thereby deferring costly and possibly unnecessary proceedings...." (citation omitted) A district court's refusal to bifurcate a trial is accordingly reviewed for an abuse of discretion. (citation omitted) Defendants argue that the district court abused its discretion in trying the issues of liability for contract damages and liability for punitive damages for tortious breach of that contract together before the same jury. Defendants cite Mathews v. Eldridge, 424 U.S. 319, 96 S. Ct. 893, 47 L.Ed.2d 18 (1976), and Connecticut v. Doehr, 501 U.S. 1, 111 S. Ct. 2105, 115 L.Ed.2d 1 (1991), for support of the quite novel proposition that due process required that the issues of liability for contract damages be bifurcated from liability for punitive damages for tortious breach. Neither Mathews nor Doehr mention bifurcation at all; such cases concern what due process must be afforded by a state statute enabling the government on its own initiative or an individual enlisting the aid of the state to deprive another of his or her property by means of a prejudgment attachment or similar procedure. Rule 42(b) merely allows, but does not require, a trial court to bifurcate cases "in furtherance of convenience or to avoid prejudice." Fed. R. Civ. Proc. 42(b). The district court's decision to decline to bifurcate the trial comported with normal trial procedure. "[S]ince the evidence usually overlaps substantially, the normal procedure is to try compensatory and punitive damage claims together with appropriate instructions to make clear to the jury the difference in the clear and convincing evidence required for the award of punitive damages." McLaughlin v. State Farm Mut. Auto. Ins. Co., 30 F.3d 861, 871 (7th Cir.1994). Defendants concede that the district court issued correct jury instructions regarding the different burdens of proof. Additionally, Defendants' profits, financial condition, and financial statements helped establish Defendants' alleged business strategies, incentives, and practices, all of which were relevant to Hangarter's claim for breach of contract. Cf. EEOC v. HBE Corp., 135 F.3d 543, 551 (8th Cir.1998) ("The evidence of racially discriminatory conduct was relevant on issues of liability ... and punitive damages.... [T]he district court did not abuse its discretion in declining to bifurcate the issues."). The district court therefore did not abuse its discretion in trying the issues of Case 2:17-cv-01788-JAD-PAL Document 128 Filed 03/28/18 Page 12 of 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13 liability for contract damages and liability for punitive damages for tortious breach of that contract together before the same jury. Hangarter v. Provident Life & Acc. Ins. Co., 373 F.3d 998, 1021 (9th Cir. 2004). As indicated by the cases cited by Defendants reviewed below, bifurcation is most often appropriate in the following category of cases: (i) Cases against individual police officers and municipalities alleging civil rights violations by the officers. Often courts bifurcate the cases because the (a) individual police officers’ actions should be judged by a jury only with respect to the allegations of misconduct before the jury on the plaintiff’s specific claims (and a municipalities prior history of police misconduct by other officers would be prejudicial to the officers if heard by the jury), and (b) the municipalities are not liable if the police officers are not liable, and if the police officers are liable, the municipality automatically is liable. In short, bifurcation avoids prejudice and promotes judicial efficiency at the same time. See e.g. DeAnda v. City of Long Beach, supra, Amato v. City of Saratoga Springs, N.Y., 170 F.3d 311, 316, 43 Fed. R. Serv. 3d 218 (2d Cir. 1999); Ismail v. Cohen, 706 F. Supp. at 251 (S.D. N.Y.1989); Daniels v. Loizzo, 178 F.R.D. 46, 48 (S.D. N.Y. 1998); Estate of Diaz v. City of Anaheim, 840 F.3d 592, 603 (9th Cir. 2016), cert. denied sub nom. City of Anaheim, Cal. v. Estate of Diaz, 137 S. Ct. 2098, 197 L. Ed. 2d 895 (2017). (ii) In cases of intellectual property infringement claims where there is a licensing contract that one or more of the parties' claims covers the infringing conduct. In such cases bifurcation between the contract claim, and the infringement claim promotes judicial efficiency because if the contract covers the allegedly wrongful infringement, the infringement claim need not go to trial. See e.g. Western Geophysical Co. of Americav. Bolt Associates, Inc., 50 F.R.D. 193, 194, 165 U.S.P.Q. (BNA) 182 (D. Conn. 1970) (“Resolution of the contract claims may render resolution of the patent issues unnecessary”), Kasper v. Cooper Canada Ltd., 688 F. Supp. 347, 7 U.S.P.Q.2d (BNA) 1734 (N.D. Ill. 1988). (iii) Class actions where there is a commonality of proof regarding liability but discrete proof per class member regarding damages. See e.g. Arthur Young & Co. v. United States Dist. Ct., 549 F.2d 686, 697 (9th Cir. 1977); Hopkins v. Dow Case 2:17-cv-01788-JAD-PAL Document 128 Filed 03/28/18 Page 13 of 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14 Corning Corp., 33 F.3d 1116, 1119 (9th Cir. 1994); Goldman v. RadioShack Corp., No. CIV.A.03-0032, 2005 WL 1155751, at *2 (E.D. Pa. May 13, 2005). (iv) Coverage claims against insurers claiming both breach of the insurance contract and “bad faith.” In these cases, resolving the coverage issue in favor of the insurer would moot the “bad faith” claim. See e.g. Drennan v. Maryland Cas. Co., 366 F. Supp. 2d 1002, 1007 (D. Nev. 2005)(bifrucation of trial granted bifurcation of discovery on the two issues of insurance coverage and bad faith denied because it was more efficient to carry out the discovery on both issues at the same time.); Cook v. United Serv. Auto. Ass'n., 169 F.R.D. 359, 361 (D. Nev. 1996); O'Malley v. U.S. Fidelity & Guaranty Co., 776 F.2d 494, 501 (5th Cir.1985) (v) Multi-defendant cases where it was unclear which defendant will be liable on the claim, and where damages proof is complicated, it is fairer to the defendants (some or all of whom will be found not to be liable) to bifrucate. See e.g. Witherbee v. Honeywell, Inc., 151 F.R.D. 27, 29, 27 Fed. R. Serv. 3d 964 (N.D. N.Y. 1993). The claims in this action are not in any of the categories of cases set forth in (i) through (v) above. III. ARGUMENT (i) Determining Bifurcation at this point is premature. At this point, discovery remains open, Plaintiff is conducting Depositions, awaiting responsive documents from Defendants, and preparing requests for admissions and interrogatories. No dispositive motions have been resolved by the Court and none are pending. Many of the issues and concerns raised by Defendants’ in the Motion to Bifrucate may be resolved by the Court on either a Motion to Dismiss under Rule 12(b)(6), or on either or both parties’ Motions for Summary Judgment. The decisions on those dispositive motions may obviate Defendants’ stated reason for bifurcation. It is simply too early to tell what claims of liability will be presented at trial, and what claims of damages will be presented at trial, and whether or not the two are so inextricably intertwined that bifurcation would add complexity and reduces judicial efficiency, rather than the reverse. Case 2:17-cv-01788-JAD-PAL Document 128 Filed 03/28/18 Page 14 of 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15 (ii) Bifurcation is not appropriate in this case. Defendants’ argue in their Motion to Bifurcate that Defendants will be “prejudiced” by any evidence of Bailey’s personal wealth or Defendants’ profitability. Defendants therefore argue that bifurcation will avoid that prejudice because evidence of Defendants’ profits will only be relevant if Plaintiff prevails on either his claim for past due bonus payments or his claim for a 10% interest in Vanguard Nevada. Defendants provide no evidence at all that such a prejudice exists or is likely to exist. Barring Plaintiff from presenting evidence of Defendants’ profits from 2009 to 2015 in support of his bonus claims deprives Plaintiff of his ability to prove the claims at all. Barring Plaintiff from presenting evidence of Defendants’ profits from 2009 to date prevents Plaintiff from proving that Defendants had a very good reason for promising Plaintiff bonuses, and a very good reason to promise him a 10% interest in Vanguard Nevada: Plaintiff, through his own efforts, sales calls, business plans and talent had increased Vanguard Nevada’s profits by 250%, all of which flowed directly into the pockets and bank accounts of Bailey. Bailey had good reason to forgive a loan owed by Plaintiff to Bailey because Plaintiff, through his own efforts, had saved Bailey millions of dollars per year in Federal Income Taxes, and had managed his investments in such a way that Bailey earned millions of dollars more per year from his investment portfolio. Promising Plaintiff bonuses and equity was done for a reason: Plaintiff had earned them. Plaintiff will prove that to a jury at trial. Not allowing Plaintiff to present proof of the Vanguard Group of Companies success under his leadership will be very prejudicial to Plaintiff in proving Defendants liability on his claims for bonuses and for 10% of the stock of Vanguard Nevada. In addition, Plaintiff’s success in growing the Vanguard Group of Companies’ revenues and profits also explains why Defendants were willing to take whatever risk Defendants took in keeping Plaintiff as an employee, but paying Plaintiff directly, without withholding any taxes, instead of through the payroll system, beginning in mid-2010: they were desperate to keep Plaintiff working for the Defendants. Not allowing Plaintiff to prove the success of the Vanguard Group of Companies under his leadership will limit Plaintiff’s ability to demonstrate that Defendants’ pretext for firing him was a sham, and, therefore, be very prejudicial to his Title VII claims. Case 2:17-cv-01788-JAD-PAL Document 128 Filed 03/28/18 Page 15 of 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 16 The witnesses that will be used to prove damages are many of the same witnesses that will be used to prove liability, and bifurcation would require these witnesses to testify twice at trial. Bifurcation would do the opposite of promoting efficiency. Plaintiff, Bailey, Shoup, Piescik, Marshall, and Carlos Lescano, payroll clerk for Defendants, and possibly others, would have to testify two different times. Finally, the fact that Defendants are profitable and that Bailey is a wealthy man is simply a fact in this case. Bailey is far from the wealthiest person in the Las Vegas area, nor is he so wealthy that a jury would be biased against Defendants simply because they are profitable corporations and Bailey is comparatively wealthy. There is no credible evidence presented by Defendants on their motion to show that evidence of profitability and wealth will be prejudicial against Defendants. (iii) Discovery should not be stayed. There is no stay of discovery in place in this action. Defendants, unilaterally, have simply decided they will not produce certain documents.4 There is no pending motion for a stay of discovery. Defendants’ Motion to Bifurcate does not mention a stay of discovery. There is no proposed Order submitted with Defendants’ Motion to Bifurcate at all, let alone a proposed Order that would stay discovery. The categories of documents that Defendants have unilaterally decided not to produce include: (a) All of Defendants financial statements from 2007 to 2015. (b) All of Defendants Audited Financial Statements. (c) Records related to the covert investigation of Plaintiff, including contract(s) with private investigators, reports, log records, invoices and payments. (d) All documents related to Plaintiff’s complaint against Bailey for sexual harassment on May 4, 2015. On March 6, 2018, Defendants’ counsel represented to Plaintiff that Plaintiff would receive Defendants’ financial statements within 7 days, on March 13, 2018.5 In addition, 4 Plaintiff is not a competitor or Defendants. Plaintiff does not sell or license any software or services that compete with Defendants. 5 Attached hereto as Exhibit F is a true copy of an email confirming the commitments of counsel Case 2:17-cv-01788-JAD-PAL Document 128 Filed 03/28/18 Page 16 of 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17 Defendants’ represented that they would diligently search for interview notes by the three employees of Defendants who purportedly investigated Plaintiff’s complaint of sexual harassment by Bailey in the first and second week of May 2015. Defendants have produced nothing of the kind. Defendants simply have chosen not to disclose either the financial statements of Defendants or any record at all of the purported investigation into Plaintiff’s allegation of sexual harassment against Bailey. Defendants have not produced any documents referencing their cover surveillance of Plaintiff at all. The witnesses that Plaintiff seeks to depose are witnesses Plaintiff would like to question about Defendants financials. Defendants’ unilateral refusal to produced requested documents that are relevant to Plaintiff’s proof of liability and proof on damages is simply uncalled for. The Defendants request within this motion for a Stay of discovery in this action should be denied. If discovery were to be stayed pending the outcome of a trial on liability, many of the witnesses will have to be deposed twice: once on liability issues and once on damages issues. That simply is wasteful. Finally, bifurcating discovery transforms this Motion to Bifurcate into a motion for severance: the court could not empanel a jury to determine the liability of Defendants on Plaintiff claims, and when Plaintiff prevails on one or more claims, reopen discovery and hold the jury until damages discovery is complete. The Defendants request for bifurcation of discovery is simply a backdoor way for Defendants to seek severance of Plaintiff’s claims, which would require empaneling two separate juries: one for liability, and one for damages. This would cause an extreme waste of judicial resources and the parties’ resources. after a “Meet and Confer” telephone conference on March 6, 2018. “A quick summary of some of the key points from today’s call: - Plaintiff to email summons and third amended complaint to Jason today. Mr. Bailey’s time to respond starts to run today. - Vincent to provide deposition dates and locations for Marshall, Connors, Van Wormer & Lescano by close of business Wednesday. Target is 4th week of March for Marshall & Connors and 3rd week of March for Van Wormer & Lescano. - Vincent to give final answer on search for Perkins interview notes/memoranda by close of business Wednesday; same for Shoup/Piescik investigation to follow shortly thereafter Financial statements expected to be delivered within 7 days” Case 2:17-cv-01788-JAD-PAL Document 128 Filed 03/28/18 Page 17 of 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18 IV. CONCLUSION For all the reasons set forth above, Defendants’ Motion to Bifurcate the trial in this action should be denied. March 28, 2018 /s/ Daniel Norr___________ Daniel Norr Nevada Bar No. 6438 Law Office of Daniel Norr, LLC 170 S. Green Valley Parkway, Suite 300 Henderson, NV 89012 (702) 990-3237 Case 2:17-cv-01788-JAD-PAL Document 128 Filed 03/28/18 Page 18 of 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 19 CERTIFICATE OF SERVICE I HEREBY CERTIFY that I electronically filed the foregoing with the Clerk of the Court by using the CM/ECF system on March 28, 2018. I also certify that the foregoing document is being served on all counsel of record or pro se parties identified on the service list below in the manner specified, either via transmission of Notices of Electronic Filing generated by CM/ECF or in some other authorized manner for those counsel or parties who are not authorized to receive Notices of Electronic Filing electronically. /s/ Daniel Norr______________________ Daniel Norr SERVICE LIST Vincent J. Aiello Greenspoon Marder, P.A. 3993 Howard Hughes Parkway, Suite 400 Las Vegas, NV 89169 Attorney for Corporate Defendants Case 2:17-cv-01788-JAD-PAL Document 128 Filed 03/28/18 Page 19 of 19