Othart Dairy Farms, LLC v. Dairy Farmers Of America, Inc.

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW MEXICO

OTHART DAIRY FARMS, LLC, PAREO

FARM, INC., PAREO FARM II, INC.,

DESERTLAND DAIRY, LLC, DEL ORO

DAIRY, LLC, BRIGHT STAR DAIRY, LLC,

and SUNSET DAIRY, LLC, individually and

on behalf of all others similarly situated,

Plaintiffs,

v. No. 2:22-cv-0251 MIS/DLM

DAIRY FARMERS OF AMERICA, INC.,

SELECT MILK PRODUCERS, INC., and

GREATER SOUTHWEST AGENCY,

Defendants.

MEMORANDUM OPINION AND ORDER

This matter is before the Court on the parties’ position statements regarding bifurcated

discovery. (Docs. 106–07; 111; 114.) Although the Court’s Scheduling Order (Doc. 100) will stand

as is, the Court enters this order to clarify that the parties will be allowed generous merits discovery

relevant to the Rule 23 analysis. Of course, the Court also remains free to reevaluate and reconsider

this decision as discovery proceeds.

In deciding whether to bifurcate class and merits discovery, courts consider “(1) overlap

between individual and class discovery, (2) whether bifurcation will promote Federal Rule of Civil

Procedure 23’s requirement that certification be decided at ‘an early practicable time,’

(3) judicial economy, and (4) any prejudice likely to flow from the grant or denial of a stay of class

discovery.” Klassen v. SolidQuote LLC, No. 23-CV-00318-GPG-NRN, 2023 WL 5497865, at *2

(D. Colo. Aug. 23, 2023) (quoting Pavelka v. Paul Moss Ins. Agency, LLC, No. 1:22 CV 02226,

2023 WL 3728199, at *2 (N.D. Ohio May 30, 2023)); see also Armendariz v. Santa Fe Cnty. Bd.

of Comm’rs, No. 17CV339-WJ-LF, 2018 WL 487300, at *1 (D.N.M. Jan. 18, 2018) (considering

expediency, economy, and severability).

Here, both parties argue that their preferred method of discovery (bifurcated or not) will

result in less prejudice, lower costs, and a shorter certification period. (See Docs. 106 at 2, 9–10;

108 at 6, 12–13.) They agree that class-related discovery will overlap to some extent with merits-

related discovery, particularly in the discussion of Rule 23(b)(3)’s predominance inquiry. (See

Docs. 106 at 4–5; 108 at 11.) Plaintiffs outline two categories of issues (market power and antitrust

impact) in which class-certification and merits discovery will be impractical to separate. (See Doc.

106 at 4–7.) The parties will be allowed liberal discovery in these areas for class-certification

purposes. The undersigned finds that phasing discovery will enable the Court to decide the class-

certification question earlier than if the parties were to engage in merits discovery at the same time.

The Court believes that phasing discovery will not have a significant impact on judicial economy

and will not unduly lengthen the process, as the parties have already requested regular discovery

conferences.

The Manual for Complex Litigation, which both parties cite favorably, “suggests that the

prime considerations in whether bifurcation is efficient and fair include whether merits-based

discovery is sufficiently intermingled with class-based discovery and whether the litigation is

likely to continue absent class certification.” In re Plastics Additives Antitrust Litig., No. CIV.A.

03-2038, 2004 WL 2743591, at *3 (E.D. Pa. Nov. 29, 2004); see also 21.14. Precertification

Discovery, Ann. Manual Complex Lit. § 21.14 (4th ed.) (“in cases that are unlikely to continue if

not certified, discovery into aspects of the merits unrelated to certification delays the certification

decision and can create extraordinary and unnecessary expense and burden”). In that spirit, the

Court asked Plaintiffs to answer “whether litigation is likely to continue absent class certification.”

(Doc. 109.) In response, Plaintiffs assert that their “claims and those of the class are linked: the

same common proof is needed to vindicate both” and “the discovery necessary . . . will not be

meaningfully different even if Plaintiffs were to decide today that they would proceed only in

individual actions.” (Doc. 111 at 2.) Defendants contend that Plaintiffs’ assertion falls short of a

straightforward response, most likely because Plaintiffs previously stated that “absent a class

action, it would not be feasible for Class members to seek redress .. . .” (Doc. 114 at 2 (quoting

Doc. 1 4 208).) Given the circumstances, the Court finds that the cost of full-blown merits

discovery, particularly where it is not abundantly clear that Plaintiffs will continue with this lawsuit

if the class is not certified, poses a significant risk of prejudice.

The Court acknowledges the age of the case and agrees that class versus merits-related

discovery disputes have the potential to waste more resources than bifurcation is worth. The Court

will attempt to strike a balance by allowing the parties generous discovery parameters.

Moreover, should the parties disagree about whether discovery is class-certification or

merits-related, the Court highly encourages the parties to call chambers for an informal discovery

conference. This practice will help move discovery along without the cost of motion practice. !

IT IS SO ORDERED.

DAMIAN L. MARTINEZ

UNITED STATES MAGISTRATE JUDGE

' If this matter becomes significantly burdened by discovery motions, the Court will require the parties to request an

informal discovery conference before filing discovery motions. See Fed. R. Civ. P. 16(b)(3)(B)(v) (permitting a

scheduling order to “direct that before moving for an order relating to discovery, the movant must request a conference

with the court”); Dietz v. Bouldin, 579 U.S. 40, 45 (2016) (stating that district courts possess “inherent powers that

are ‘governed not by rule or statute but by the control necessarily vested in courts to manage their own affairs so as to

achieve the orderly and expeditious disposition of cases’”) (quoting Link v. Wabash R. Co., 370 U.S. 626, 630-31

(1962)).