Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 ESYM, LLC, a California Limited Case No.: 25-CV-993 TWR (VET) Liability Company, 12 ORDER DENYING PLAINTIFF’S Plaintiff, 13 MOTION TO BIFURCATE AND v. STAY 14 BRAD LUNDAHL, an individual; 15 (ECF No. 97) STEPPING STONE TRAINING, LLC, a 16 Utah Limited Liability Company; and DOES 1–10, inclusive, 17 Defendants. 18 19 Presently before the Court are Plaintiff and Counterdefendant eSym, LLC’s Motion 20 to Bifurcate eSym, LLC’s Claim of Disassociation and Brad Lundahl’s Claim of 21 Dissolution, and for a Limited Stay of all Other Civil Claims (“Mot.,” ECF No. 97), 22 Defendants and Counterclaimants Brad Lundahl and Stepping Stone Training, LLC’s 23 Opposition (“Opp’n,” ECF No. 107) to the Motion, and Plaintiff and Counterdefendant 24 eSym, LLC’s Reply (“Reply,” ECF No. 110) in support of the Motion. The Court took the 25 Motion under submission on the papers pursuant to Civil Local Rule 7.1(d)(1). (ECF No. 26 111.) After carefully considering the Parties’ arguments and the relevant law, the Court 27 DENIES Plaintiff’s Motion. 28 / / / 1 BACKGROUND 2 Plaintiff filed its initial Complaint on April 22, 2025, asserting ten causes of action: 3 (1) Violation of the Defend Trade Secrets Act (“DTSA”), 18 U.S.C. §§ 1836 et seq.; 4 (2) Violation of California Business and Professions Code, §§ 17200 et seq.; (3) Breach of 5 Fiduciary Duty; (4) Breach of the Implied Covenant of Good Faith and Fair Dealing; 6 (5) Breach of Contract; (6) Intentional Interference with Contractual Relations; 7 (7) Intentional Interference with Prospective Economic Relations; (8) Negligent 8 Interference with Prospective Economic Relations; (9) Involuntary Disassociation of 9 Dr. Lundahl as a Member of eSym; and (10) Unjust Enrichment. (See generally ECF No. 10 1.) On May 16, 2025, Defendants filed an Answer, (see generally ECF No. 9), and a 11 Counterclaim, (see generally ECF No. 10), alleging causes of action for (1) Breach of 12 Contract, (2) Breach of Fiduciary Duties, (3) Fraud, (4) Unjust Enrichment, 13 (5) Accounting, and (5) Involuntary Dissolution of Plaintiff. 14 On June 6, 2025, Plaintiff filed a First Amended Complaint, (ECF No. 15), and on 15 June 27, 2025, Defendants filed a First Amended Counterclaim. (ECF No. 23.) The Court 16 dismissed without prejudice Counterclaimant’s third cause of action for fraud on 17 September 17, 2025. (ECF No. 41.) 18 Plaintiff filed a Second Amended Complaint on October 30, 2025. (ECF No. 43.) 19 On December 1, 2025, the Court denied Plaintiff’s Motion to Enforce the Settlement 20 Agreement that Plaintiff alleged was entered into before the start of litigation. (ECF No. 21 49.) Plaintiff filed the instant Motion on March 27, 2026. (ECF No. 97.) 22 LEGAL STANDARD 23 Under Federal Rule of Civil Procedure 42(b), “for convenience, to avoid prejudice, 24 or to expedite and economize, the court may order a separate trial of one or more separate 25 issues, claims, crossclaims, counterclaims, or third-party claims.” Fed. R. Civ. P. 42. 26 Accordingly, Rule 42(b) “confers broad discretion upon the district court to bifurcate a 27 trial, thereby deferring costly and possibly unnecessary proceedings pending resolution of 28 / / / 1 potentially dispositive preliminary issues.” Zivkovic v. S. Cal. Edison Co., 302 F.3d 1080, 2 1088 (9th Cir. 2002) (citing Exxon Co. v. Sofec, Inc., 54 F.3d 570, 575 (9th Cir. 1995)). 3 “Courts generally address the following factors when determining whether 4 to bifurcate proceedings into separate trials: (1) potential simplification and expedition of 5 issues; (2) conservation of judicial resources and resources of the parties; (3) potential 6 unfair prejudice to any of the parties; (4) preservation of the parties’ right to a jury trial.” 7 O’Hailpin v. Haw. Airlines, Inc., No. CV 22-00532 HG-WRP, 2025 WL 1349054, at 8 *1–*2 (D. Haw. May 7, 2025) (citing Jinro Am. Inc. v. Secure Invs., Inc., 266 F.3d 993, 9 998 (9th Cir. 2001)). “With respect to both discovery and trial, the moving party has the 10 burden of proving that bifurcation will promote judicial economy or avoid inconvenience 11 or prejudice to the parties.” Navigators Ins. Co. v. Nat’l Union Fire Ins. Co. of Pittsburgh, 12 Pa., No. C12-13-MJP, 2013 WL 2155707, at *1 (W.D. Wash. May 16, 2013) (citation 13 omitted). 14 “When ordering a separate trial, the court must preserve any federal right to a jury 15 trial.” Fed. R. Civ. P. 42. The Seventh Amendment preserves the right to trial by jury of 16 all legal claims, whereas no right to a jury exists for equitable claims. See Danjaq LLC v. 17 Sony Corp., 263 F.3d 942, 962 (9th Cir. 2001) (citing Dollar Sys., Inc. v. Avcar Leasing 18 Sys., Inc., 890 F.2d 165, 170 (9th Cir. 1989)). Thus, a “constitutional concern may arise 19 when the district court orders that some portions of a case be tried to the judge and others 20 to a jury.” Id. Accordingly, where an action has common issues to both equitable and 21 legal claims, “the legal claims involved in the action must be determined prior to any final 22 court determination of [the] equitable claims.” Id. (citation omitted). 23 ANALYSIS 24 Plaintiff seeks to have the Court determine Plaintiff’s Ninth Cause of Action for 25 involuntary disassociation of Defendant Brad Lundahl under California Corporations Code 26 § 17706.02(e) and Cross-claimant Brad Lundahl’s Sixth Cause of Action for involuntary 27 dissolution of Plaintiff eSym under California Corporations Code § 17707.03. (See 28 generally Mot.) Both causes of action are equitable in nature. Plaintiff argues that an 1 expedited bench adjudication is the most efficient method to protect Plaintiff eSym without 2 any prejudice to Defendant Lundahl or any other party. (See Mot. at 8.) In contrast, 3 Defendant Lundahl argues bifurcation would unnecessarily delay this litigation and 4 prejudice him “due to lost income and business opportunities.” (Opp’n at 7.) For the 5 reasons explained below, the Court finds that Plaintiff has failed to meet his burden of 6 demonstrating that bifurcation would promote judicial economy or avoid inconvenience or 7 prejudice to the parties. 8 To begin, Plaintiff’s suggested course of conduct would potentially subject the Court 9 to hearing the same evidence, witnesses, and arguments twice. This alone justifies denying 10 bifurcation. See Century-Nat’l Ins. Co. v. Gardner, 460 F. Supp. 3d 1059, 1062 (D. Nev. 11 2020) (denying motion to bifurcate when “bifurcating the claims for trial would require the 12 parties to present some of the same evidence twice, have witnesses testify twice, [and] 13 make many of the same arguments twice”). Further, bifurcation would not be dispositive 14 of this case. Instead, it appears that bifurcation would only stand to benefit Plaintiff, who 15 is currently being harmed by Defendant Lundhal’s continued status as a member of the 16 LLC. Accordingly, the Court DENIES Plaintiff’s Motion. 17 Moreover, while neither party addressed this issue, it is worth noting that bifurcation 18 is not only inappropriate but also barred under Rule 42. Plaintiff requests an early bench 19 adjudication of its involuntary disassociation claim under California Corporations Code 20 § 17706.02(e), which provides: 21 (e) On application by the limited liability company, the person is expelled as a member by judicial order because the person has done any of the 22 following: 23 (1) Engaged, or is engaging, in wrongful conduct that has adversely 24 and materially affected, or will adversely and materially affect, 25 the limited liability company’s activities. / / / 26 / / / 27 / / / 28 1 (2) Willfully or persistently committed, or is willfully and persistently committing, a material breach of the operating agreement or the person’s duties or obligations under Section 3 17704.09. 4 (3) Engaged, or is engaging, in conduct relating to the limited 5 liability company’s activities that makes it not reasonably 6 practicable to carry on the activities with the person as a member. 7 ||Cal. Corp. Code § 17706.02(e). As the text of the statue and Plaintiff's Motion illustrate, g ||the resolution of Plaintiffs claim under Section 17706.02(e) would require answering g || questions including whether Defendant Lundahl breached his duty of good faith and fair 19 dealing, (see Mot. at 5), and whether Defendant Lundahl breached fiduciary duties owed 11 ||to eSym. (See id. at 6.) These questions are also legal causes of action in Plaintiff eSym’s 12 Second Amended Complaint, which alleges Breach of Fiduciary Duty (Count Three) and 13 || Breach of the Implied Covenant of Good Faith and Fair Dealing (Count Four). (See 14 || generally ECF No. 43.) Accordingly, a bench adjudication of the dissociation claim under 15 Section 17706.02(e) would not preserve the federal right to a jury trial because there are 16 ||Common issues in both the equitable and legal claims. See Danjag LLC, 263 F.3d at 962 17 || (stating that where an action has common issues to both equitable and legal claims, “the 1g claims involved in the action must be determined prior to any final court 19 || determination of the equitable claims.” (cleaned up and citation omitted)). 20 CONCLUSION 1 For the foregoing reasons, the Court DENIES Plaintiff's Motion to Bifurcate and 33 IT IS SO ORDERED. 94 || Dated: April 24, 2026 —— (2 [ 25 we Honorable Todd W. Robinson 26 United States District Judge 27 28