Eastern Profit Corporation Limited v. Strategic Vision US LLC

Background

The parties waived a jury trial and consented to a bench trial before the court. Eastern asserted a declaratory-judgment claim seeking a declaration that a research agreement was void under the Virginia Private Security Services Statute. The case also included the parties’ contract claims and Strategic’s fraud claim. The trial was scheduled for November 9, 2020.

Eastern filed a request under Federal Rule of Civil Procedure 42(b) for bifurcation, meaning separate trials of different issues or claims. Eastern proposed trying the declaratory-judgment claim first and then addressing the remaining issues if necessary. Strategic opposed that request, arguing that the same witnesses and evidence would be relevant to the declaratory, contract, and fraud claims. Strategic also argued that a ruling for Eastern on the declaratory issue would not resolve factual questions about whether Eastern conferred a benefit on Strategic or suffered damages.

Strategic separately asked to adjourn the trial. Strategic’s lead attorney and trial team lived in Missouri, and Eastern’s lead attorney lived in Delaware. The opinion states that both states were on New York’s list of restricted states and that counsel would have been required to quarantine for 14 days before an in-person trial on November 9, 2020. Eastern was willing to proceed remotely, but Strategic did not consent. Strategic pointed to the need for interpreters for two witnesses and the importance of having witnesses testify in person, particularly because some witnesses had resisted answering questions during depositions.

Court’s analysis and rulings

The court explained that bifurcation is an exception to the ordinary practice of trying all issues together. It considered whether the issues involved different evidence and witnesses, whether separate trials would avoid later litigation, and whether separation would cause prejudice or improve efficiency. The court concluded that Eastern had not shown that the evidence and witnesses for its declaratory claim would be different from, or eliminate the need to litigate, the evidence relevant to the contract and fraud claims. The court therefore denied the request to try the issues separately.

Applying the good-cause standard for changing a trial schedule, the court found that holding the November 9 trial in person would create hardship because of quarantine and travel restrictions during the COVID-19 pandemic. Although Rule 43(a) permits testimony by live remote transmission in appropriate circumstances, the court viewed in-person testimony as preferable and found Strategic’s reasons for rejecting a remote trial reasonable at that time. The court also stated that the short delay would not prejudice Eastern because the relief sought was monetary.

Judge Lewis J. Liman adjourned the trial to January 11, 2021. The court stated that the trial would be held in open court, assuming the courthouse remained open, and that it would consider requests for remote testimony on a witness-by-witness basis if circumstances required. The order did not decide the merits of the declaratory, contract, or fraud claims.