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Sequential versus Unitary Trials: An Economic Analysis

WHEN Polaroid successfully sued Kodak for infringing its patents on instant photography, the question of damages was litigated in a separate trial before a different judge than the one who found Kodak liable for patent infringement.' A bifurcated or "sequential" trial on liability and damages, as opposed to a "unitary" trial on both issues, is the exception rather than the norm. A sequential trial is not limited to separating liability and damages. Indeed, the entire structure of the Federal Rules of Civil Procedure calls for sequential decision making. The parties first may litigate whether the court has jurisdiction over the matter (Rule 12(b)(1)) or over the defendant (Rule 12(b)(2)) and, if it does, whether each element of the complaint states a claim under which relief can be granted (Rule 12(b)(6)). Next, the parties may litigate summary-judgment motions (Rule 56). Rule 42(b) gives courts wide discretion to separate substantive issues. These include bifurcating liability and damages, separating claims asserted by the plaintiff, separating counterclaims raised by the defendant, deciding whether a contract exists before considering claims based on its existence, and deciding whether a product-liability defendant manufactured the allegedly defective product before considering liability and