Saxion v. Titan-C-Manufacturing, Inc.

• Decision Date: 07 June 1996
• Docket Number: TITAN-C-MANUFACTURIN,No. 94-3558,INC,94-3558
• Citation: 86 F.3d 553
• Parties: , 131 Lab.Cas. P 11,589, 34 Fed.R.Serv.3d 919, 11 IER Cases 1321 Beatrice D. SAXION, et al., Plaintiffs-Appellees, v., et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 553

86 F.3d 553

64 USLW 2788, 131 Lab.Cas. P 11,589,

34 Fed.R.Serv.3d 919,

11 IER Cases 1321

Beatrice D. SAXION, et al., Plaintiffs-Appellees, v. TITAN-C-MANUFACTURING, INC., et al., Defendants-Appellants.

No. 94-3558.

United States Court of Appeals Sixth Circuit.

Argued July 27, 1995.

Decided June 7, 1996.

E. Bruce Hadden (briefed), Columbus, OH, Gregory W. Happ (briefed), Medina, OH, for Beatrice D. Saxion.

Edward G. Kemp, Paul L. Jackson (briefed), Roetzel & Andress, Akron, OH, for Titan-C-Manufacturing, Inc. and Titan-A-Manufacturing, Inc.

Before: ENGEL, NELSON, and SUHRHEINRICH, Circuit Judges.

DAVID A. NELSON, Circuit Judge.

The plaintiffs, former employees of defendant Titan-C Manufacturing, Inc., sued the company for closing its manufacturing facility without giving the 60 days notice required under the Worker Adjustment and Retraining Notification ("WARN") Act, 29 U.S.C. §§ 2101 et seq. The district court found that Titan-C had violated the Act and had been in violation for a full 60 days.

In calculating statutory damages, the court multiplied each employee's regular daily rate of pay by a factor of 60. The court thus awarded "back pay," as it is called in the Act, for the total number of calendar days in what was found to be the violation period, including weekends and holidays for which the employees would have received no pay if the plant had remained open.

We shall affirm the judgment as to liability. Concluding that damages should be based on workdays rather than calendar days, however, and concluding further that the violation period was somewhat shorter than the district court held it was, we shall vacate the award and remand the case for a recalculation of damages.

I

Titan-C operated an assembly facility in Medina, Ohio, where it was alleged to have employed more than one hundred people. On March 2, 1990, plant superintendent John Sutton held a meeting to announce that the facility would be closing permanently. Mr. Sutton told the employees that they had the option of applying at a "Titan-S" facility in North Canton, Ohio, but that a position with Titan-S was not guaranteed. Mr. Sutton further indicated that the employees' wages, seniority, and benefits would decrease if Titan-S hired them. Titan-S is a separate corporate entity.

At an employee meeting held on March 13, 1990, Mr. Sutton passed out copies of a letter confirming the plant closing and offering employment with Titan-S at equal wages, benefits, and seniority. Mr. Sutton again stated orally that a position with Titan-S was not guaranteed, however.

On March 23, 1990, Titan-C closed its Medina facility permanently. Seventeen former Titan-C employees accepted the Titan-S offer and received jobs in North Canton with comparable terms of employment.

On May 8, 1990, fifty-one former Titan-C employees filed the present lawsuit against Titan-C under the WARN Act. A bench trial began on November 13, 1991. Believing that this trial was limited to the issue of liability, the plaintiffs rested without having presented evidence on damages. When it became evident that there was no agreement as to the scope of the hearing, the district court decided, over the objection of Titan-C, to bifurcate the case and conduct a damages hearing at a later date.

On March 25, 1992, the district court issued a decision in favor of the plaintiffs on the issue of liability. The court held that Titan-C was liable under the WARN Act because it had employed over one hundred workers at the relevant point in time and had failed to make a reasonable offer of transfer. A subsequent motion for relief from judgment under Rule 60(b), Fed.R.Civ.P., was denied.

The damages hearing took place on June 5, 1992. On August 31, 1992, the district court issued an order declaring that the plaintiffs were entitled to sixty calendar days' pay under the WARN Act and were entitled to attorney fees. The dollar amount of the attorney fees was fixed at $58,957.73 by order of February 22, 1994, and a final judgment quantifying the damages awarded to each individual plaintiff was entered on April 22, 1994. This timely appeal followed.

II

We first address Titan-C's assertion that the district court committed reversible error in denying a motion to dismiss the complaint when the plaintiffs rested at the initial bench trial without having shown the amount of their damages.

In the course of the arguments on the motion it became obvious that the parties had been proceeding under significantly different understandings as to the scope of the trial. The plaintiffs understood from the final pretrial order that the trial was limited to the issue of liability. The defendants insisted that damages were part of the plaintiffs' prima facie case under the WARN Act. Counsel for the plaintiffs stated that he had discussed with defense counsel the appointment of a special master to determine attorney fees and damages, and he said he had understood that this procedure would be followed. The defense countered that its understanding had been that the special master would only consider the issue of statutory fees.

The district court determined that there had been a genuine misunderstanding and that each attorney had communicated his own understanding of the scope of the trial to his clients. Finding itself unable to determine whose understanding was superior, the court "suggested" that the parties let the court determine the issue of liability. Titan-C argues that this decision to bifurcate the trial was reversible error.

We disagree. A district court may bifurcate a trial "in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy." Rule 42(b), Fed.R.Civ.P. Only one of these criteria need be met to justify bifurcation. MCI Communications Corp. v. American Telephone & Telegraph Co., 708 F.2d 1081, 1177 (7th Cir.), cert. denied, 464 U.S. 891, 104 S.Ct. 234, 78 L.Ed.2d 226 (1983). The language of Rule 42(b) places the decision to bifurcate within the discretion of the district court. Davis v. Freels, 583 F.2d 337, 343 (7th Cir.1978). The rule clearly suggests that a court may bifurcate a trial on its own motion. A decision ordering bifurcation is dependent on the facts and circumstances of each case. Idzojtic v. Pennsylvania Rr. Co., 456 F.2d 1228 (3d Cir.1972).

Usually, of course, one of the parties will move for bifurcation before the start of trial. This is not a formal requirement, however, and nothing in the case law suggests that such a motion must necessarily be denied if it comes in medias res. Late motions for bifurcation are granted or (more often) denied based on a demonstration that bifurcation is, or is not, warranted under the circumstances of the particular case.

This includes decisions to bifurcate after trial is already under way. We have recognized that "separating the issues of liability and damages 'at the virtual close of plaintiff's proofs' " need not be an abuse of discretion. Helminski v. Ayerst Laboratories, 766 F.2d 208, 212 (6th Cir.), cert. denied, 474 U.S. 981, 106 S.Ct. 386, 88 L.Ed.2d 339 (1985). See also Berry v. Deloney, 28 F.3d 604, 606 (7th Cir.1994) (no abuse of discretion in denying a motion to bifurcate made after trial had begun, where limiting instruction would cure threat of undue prejudice).

The trial transcript in the case before us supports the district court's conclusion that the misunderstanding over the scope of the trial was genuine and that the plaintiffs' understanding that the initial hearing would be limited to liability was reasonable. The pretrial order on which the plaintiffs partly relied refers to the case as an "action for monies," but specifies only three "contested issues of fact;" none of these contested issues relates to damages. The transcript of the damages hearing indicates that there was no great overlap in issues. The defense called just two witnesses, only one of whom had testified earlier. Neither of the defense witnesses testified at length at the damages hearing. Under the highly unusual circumstances presented here, we are not persuaded that the district court abused its discretion in separating the issues of liability and damages after the plaintiffs had rested.

III

Titan-C also disputes the factual findings on the basis of which the district court concluded that Titan-C was liable under the WARN Act. These findings are subject to review under a "clearly erroneous" standard. Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985).

Titan-C first argues that it was exempt from WARN Act liability because it employed fewer than one hundred people. "With some exceptions and conditions, WARN forbids an employer of 100 or more employees to 'order a plant closing ... until the end of a 60-day period after the employer serves written notice of such an order.' " North Star Steel Co. v. Thomas, --- U.S. ----, ----, 115 S.Ct. 1927, 1928, 132 L.Ed.2d 27 (1995) (quoting 29 U.S.C. § 2102(a)(1)). The number of employees is to be measured as of "the date the first notice is required to be given" unless, as may happen with cyclical businesses, this number is "clearly unrepresentative of the ordinary or average employment level." 20 C.F.R. § 639.5(a)(2). In such a case a more representative number may be used, but the governing regulation cautions that "[a]lternative methods cannot be used to evade the purposes of WARN and should be used only in unusual circumstances."

Arguing that it was a cyclical business, Titan-C presented a chart showing that over a one-year period the number of full-time employees had fluctuated from a low of 51 to a high of 117, with an average of 82. The district court discounted the reliability of the chart because the person who prepared it disclosed on cross-examination that she had not included employees on sick leave, vacation, suspension, or temporary layoff, and because Titan-C's records suggested...