-
USCA1 Opinion
October 13, 1992
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 92-1102
ALFRED STAUBLE, INDIVIDUALLY AND F/U/B WARROB, INC.,
Plaintiff, Appellee,
v.
WARROB, INC., ET AL.,
Defendants, Appellants.
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No. 92-1103
ALFRED STAUBLE, INDIVIDUALLY AND F/U/B
MONTECHUSETTS LEASING CORP.,
Plaintiff, Appellee,
v.
MONTECHUSETTS LEASING CORP., ET AL.,
Defendants, Appellants.
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APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. A. David Mazzone, U.S. District Judge]
___________________
_________________________
Before
Torruella and Selya, Circuit Judges,
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and Zobel,* District Judge.
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Robert S. Potters, with whom Potters & Brown was on brief,
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for appellants.
Peter S. Terris, with whom Harvey Nosowitz and Palmer &
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Dodge were on brief, for appellee.
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*Of the District of Massachusetts, sitting by designation.
SELYA, Circuit Judge. This appeal requires us to
SELYA, Circuit Judge.
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delineate for the first time the outer boundaries of a district
judge's power to refer liability determinations to a special
master. After assessing the constraints that Article III of the
Constitution imposes on Fed. R. Civ. P. 53, we conclude that
referring fundamental issues of liability to a master for
adjudication, over objection, is impermissible. Accordingly, we
vacate the judgment below.
I. THE SETTING
I. THE SETTING
Plaintiff-appellee Alfred Stauble is a shareholder and
director of two closely held corporations, Warrob, Inc. and
Montechusetts Leasing Corp. The saga of Stauble's shareholder
suits is scarcely a short story.1 Our burden of exegesis is
reduced, however, because our focus is less on the vicious
infighting and Byzantine business practices that plagued the
parties' dealings inter sese than on the procedural path
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traversed below.
In 1978, after Stauble's relationship with a fellow
shareholder and several other directors first soured, then
curdled, he brought suit in his own right and on behalf of the
two corporations, alleging a host of misdeeds (including, but by
no means limited to, breach of fiduciary duty, diversion of
corporate assets, and misappropriation of corporate
opportunities). The defendants included the shareholder with
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1Although Stauble brought two suits, the cases were
consolidated below. Hence, we treat them as if they comprised a
single civil action.
3
whom Stauble had feuded (Warren Katz); five corporate directors
(Richard King, Robert Gottsegen, Larry Gottsegen, Stuart
Gottsegen, and Lawrence Wald); and four corporations (Amarin
Plastics, Inc., R.L.S.L. Corp., Montechusetts Chem. Corp., and
Montechusetts Chem. DISC, Inc.). Neither side requested a jury
trial.
A magistrate policed discovery at the outset of the
litigation. After witnessing two years of acrimonious bickering,
the district court, on its own initiative, referred the case to a
special master to manage pretrial discovery.2 None of the
parties objected to this reference. The discovery period
extended over several years. When discovery was finally closed,
the district court adopted the master's report in toto.
In mid-1986, the case was trial-ready. Acting sua
___
sponte, the district court referred the case to the same special
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master for trial on the merits. The defendants immediately
objected to the reference. Their objection was overruled and
their motion to vacate the order of reference was denied. They
then sought relief by way of mandamus. Concerned that the record
was incomplete, we issued an order directing the court below to
provide additional information as to why it thought the reference
was desirable. The district court obliged. It noted, among
other things, that the record was voluminous, the defendants
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2The district court selected as special master the Honorable
Walter H. McLaughlin, Sr., a retired chief judge of the
Massachusetts Superior Court. Judge McLaughlin's credentials are
conceded by all concerned.
4
numerous, and the issues complex; that the master's wealth of
experience, gained while overseeing discovery, augured an economy
and efficiency that the court could not aspire to match; that the
history of the litigation foretold a lengthy and disputatious
trial, occurring at a time when the court's docket was
burgeoning; that damages were difficult to compute and would
involve a full-scale accounting; and that the imbrication between
the facts and the law, and between liability and damages, made it
impractical to bifurcate the trial and militated in favor of a
single trier. After considering the district court's detailed
response, we declined to issue an extraordinary writ.
Trial began before the master on January 12, 1988.
Because Stauble's claims turned in good measure on the
defendants' knowledge and intent, witness credibility comprised
an important aspect of the trial. After approximately thirty-
five trial days and the submission of over four hundred exhibits,
the master resolved the credibility questions, found against the
defendants, and recommended that a judgment be entered in the
amount of $756,206.41. The master's final report was submitted
on January 8, 1990, a year and a half after completion of the
trial.
Almost nine months later, the district court confirmed
the report, accepting the master's findings and recommendations
in their entirety. Thereafter, the court entered final judgment
and awarded fees in excess of $900,000 to Stauble's attorneys,
plus costs of roughly $60,000. King and Amarin Plastics have
5
made their peace with Stauble. The other defendants appeal.3
II. STANDARD OF REVIEW
II. STANDARD OF REVIEW
We believe that the fundamental issue before us
delineating the purview of the district court's power to refer
cases to masters presents a pure question of law. It is,
therefore, appropriate that we review the exercise of that power
de novo. See, e.g., Dedham Water Co. v. Cumberland Farms Dairy,
__ ____ ___ ____ ________________ _______________________
Inc., ___ F.2d ___, ___ (1st Cir. 1992) [No. 91-2116, slip op. at
____
8] (confirming that, where the question on appeal is whether the
district committed an error of law, appellate review is plenary);
Brewer v. Madigan, 945 F.2d 449, 452 (1st Cir. 1991) (same); New
______ _______ ___
England Legal Found. v. Massachusetts Port Auth., 883 F.2d 157,
_____________________ _________________________
167 (1st Cir. 1989) (same).
The standard of review is not altered by reason of our
earlier denial of appellants' petition for writ of mandamus. It
is, after all, black letter law that mandamus is not a substitute
for direct appeal. See In re Recticel Foam Corp., 859 F.2d 1000,
___ _________________________
1005 (1st Cir. 1988); United States v. Kane, 646 F.2d 4, 9 (1st
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Cir. 1981). Unlike an appeal, which almost always lies as a
matter of right, mandamus is an extraordinary remedy. See Allied
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Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 34 (1980) (per
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curiam). The writ's "currency is not profligately to be spent."
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3The two appeals parallel the two underlying lawsuits. See
___
supra note 1. Although the appeals focus primarily on the
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propriety of the district court's reference of the liability
determination to a master, the defendants assign error in other
respects as well. Inasmuch as we remand for a new trial before
the district court, see infra, we do not pass upon the additional
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assignments of error.
6
Boreri v. Fiat S.P.A., 763 F.2d 17, 26 (1st Cir. 1985). To
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ensure that the remedy is used judiciously, courts have usually
required that a mandamus petitioner who seeks to vacate an
interlocutory order "demonstrate that something about the order,
or its circumstances, would make an end-of-case appeal
ineffectual or leave legitimate interests unduly at risk."
Recticel, 859 F.2d at 1005-06. Put another way, mandamus is
________
generally inappropriate when the petitioner has an adequate
remedy by a direct appeal following the entry of final judgment.
See In re Bushkin Assocs., Inc., 864 F.2d 241, 243 (1st Cir.
___ _____________________________
1989); United States v. Sorren, 605 F.2d 1211, 1215 (1st Cir.
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1979).
Because of the special standards affecting review by
way of mandamus, the general rule is that the denial of a
petition for mandamus is not ordinarily entitled to any
preclusive effect when the unsuccessful petitioner later
prosecutes his direct appeal. See, e.g., United States v.
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Shirley, 884 F.2d 1130, 1135 (9th Cir. 1989); Key v. Wise, 629
_______ ___ ____
F.2d 1049, 1054-55 (5th Cir. 1980), cert. denied, 454 U.S. 1103
_____ ______
(1981). While a different rule might obtain in a case where the
denial of mandamus specifically addressed, and rested on, the
merits of the decision below, see, e.g., Skil Corp. v. Millers
___ _____ ___________ _______
Falls Co., 541 F.2d 554, 558 (6th Cir.), cert. denied, 429 U.S.
_________ _____ ______
1029 (1976), this is not such a case. The panel that considered
the petition did not venture to decide whether the order of
reference was erroneous. Rather, the panel simply declined to
7
issue the writ on the record before it. Moreover, there was
ample reason, unrelated to the merits, for going that route,
since the order of reference, even if improvident, presented no
danger of irreparable harm.4 Compare, e.g., Bushkin, 864 F.2d
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at 243-44 (holding that an order disqualifying a party's
preferred trial counsel can effectively be reviewed following the
entry of final judgment and, therefore, does not justify review
by way of mandamus). It follows that our earlier ruling is not
entitled to any deferential weight today.
III. DISCUSSION
III. DISCUSSION
A.
A.
__
While it is axiomatic that the "judicial power of the
United States must be exercised by courts having the attributes
prescribed in Art. III," Northern Pipeline Constr. Co. v.
________________________________
Marathon Pipe Line Co., 458 U.S. 50, 59 (1982) (plurality op.),
______________________
federal judges handling civil calendars have long relied on
assistants, such as magistrates and special masters, who do not
possess the distinct attributes of Article III status.5 This
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4To be sure, appellants were forced to undergo a trial
before they could test the validity of the order of reference on
direct appeal. But, we have consistently "rejected the general
burden-someness of litigation as a basis for assuming mandamus
jurisdiction." In re Justices of the Supreme Court of Puerto
_________________________________________________
Rico, 695 F.2d 17, 20 (1st Cir. 1982); see also Bushkin, 864 F.2d
____ ___ ____ _______
at 244 & n.1.
5While Article III courts also review determinations of
adjudicators who do not possess Article III stature, the Supreme
Court has long recognized distinctions between judicial
assistants (such as masters) and, for example, administrative
courts. See generally Northern Pipeline, 458 U.S. at 50; Crowell
___ _________ _________________ _______
v. Benson, 285 U.S. 22, 54-64 (1932). Our analysis today deals
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exclusively with the former category, that is, those who assist
8
reliance has grown in direct proportion to the length of the
federal court docket. Although these assistants do not satisfy
the criteria set by Article III for the exercise of judicial
power, they may appropriately perform a wide variety of
preparatory functions, e.g., overseeing discovery and
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spearheading pretrial factual inquiries in complicated
controversies. They may also appropriately perform a variety of
consummatory functions, e.g., superintending the execution of
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consent decrees and the implementation of structural injunctions.
The realm of Fed. R. Civ. P. 53 includes, but extends
somewhat beyond, these tasks. The rule empowers the district
court to appoint special masters for more than these limited
purposes, Fed. R. Civ. P. 53(a), but cautions that:
A reference to a master shall be the
exception and not the rule. . . . [I]n
actions to be tried without a jury, save in
matters of account and of difficult
computation of damages, a reference shall be
made only upon a showing that some
exceptional condition requires it.
Fed. R. Civ. P. 53(b). Although the parties to a civil case may
consent to the appointment of a master under any circumstances,
see Peretz v. United States, 111 S. Ct. 2661, 2669 (1991)
___ ______ _____________
("litigants may waive their personal right to have an Article III
judge preside over a civil trial"); Goldstein v. Kelleher, 728
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F.2d 32, 35 (1st Cir.) (same), cert. denied, 469 U.S. 852 (1984),
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judges in "the performance of specific judicial duties, as they
may arise in the progress of a cause." Ex Parte Peterson, 253
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U.S. 300, 312 (1920).
9
Rule 53 anticipates, and practice bears out, that in respect to
the conduct of trials proper, masters are most helpful where
complex quantitative issues bearing on damages must be resolved.
Indeed, the district court may appoint a master to determine
"matters of account, and of difficult computation of damages,"
Fed. R. Civ. P. 53(b), even over the objection of one or more of
the parties, without providing a further rationale for the
appointment.
When the issues referred to a master go beyond hard-to-
measure damages or an accounting, however, the waters grow more
turbid. In that event, only an "exceptional condition" can
justify a reference. Id. The Supreme Court shed some light on
___
the meaning of the term in La Buy v. Howes Leather Co., 352 U.S.
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249 (1957). There, the trial court referred a complex antitrust
case to a master, over objection, because the court's docket was
"extremely congested" and the trial promised to be protracted.
Id. at 253. The Supreme Court vacated the reference, holding
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that neither a crowded calendar nor the presence of complicated
issues warranted appointment of a master. Id. at 259. The Court
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noted that litigants in complex cases are no less entitled to
trial before a court than their counterparts in more mundane
disputes. Id. What is more, if congestion or complexity were
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sufficient to meet the "exceptional condition" criterion
established by Rule 53, the exception would jeopardize the rule.
Id. The wisdom of La Buy is evident: crowded dockets and
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complex business disputes such as the one we confront today are
10
dismayingly commonplace; thus, predicating access to auxiliary
adjudicators on the incidence of such circumstances would likely
trivialize Article III.
B.
B.
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In this case, Stauble urges that more than mere
complexity (if an oxymoron can be forgiven) is involved. He
asserts that the interweaving of liability and damages
constitutes the requisite "exceptional condition." As a
practical matter, Stauble's position has some superficial appeal.
On closer scrutiny, however, the perceived imbrication seems to
be the same old whine in a different bottle. Saying that
liability and damages are inextricably intertwined is just an
alliterative way of saying that a given case suffers from a
particular strain of complexity.
We need not probe this point too deeply for, in the
last analysis, we cannot constitutionally forge an "exceptional
condition" test for cases of blended liability and damages. The
overriding consideration, applicable in this case, is that the
Constitution prohibits us from allowing the nonconsensual
reference of a fundamental issue of liability to an adjudicator
who does not possess the attributes that Article III demands.
Because Rule 53 cannot retreat from what Article III requires, a
master cannot supplant the district judge. Accord In re
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Bituminous Coal Operators' Ass'n, Inc., 949 F.2d 1165, 1168 (D.C.
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Cir. 1991). Determining bottom-line legal questions is the
responsibility of the court itself. See Reilly v. United States,
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11
863 F.2d 149, 158 (1st Cir. 1988); Reed v. Cleveland Bd. of
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Educ., 607 F.2d 737, 747-48 (6th Cir. 1979); see also Madrigal
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Audio Labs., Inc. v. Cello, Ltd., 799 F.2d 814, 818 (2d Cir.
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1986) (that judge did not "understand anything about . . . patent
or trademark" law and was "not about to educate [him]self" was
not sufficient reason to justify appointment of a master to hear
and determine the entire case). Thus, Article III bars a
district court, "of its own motion, or upon the request of one
party," from "abdicat[ing] its duty to determine by its own
judgment the controversy presented, and devolve that duty upon
any of its officers." Kimberly v. Arms, 129 U.S. 512, 524
________ ____
(1889).
To be sure, Article III does not require that a
district judge find every fact and determine every issue of law
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involved in a case. In respect to preparatory issues (such as,
say, the appropriateness of class certification) or consummatory,
remedy-related issues (such as, say, the performance of an
accounting), when the reference otherwise comports with Rule 53 a
master may be appointed to make findings of fact and recommend
conclusions of law. By the same token, a master who is appointed
to oversee pretrial discovery will often investigate the parties'
compliance with the relevant Federal Rules as part of his or her
factfinding. As long as the district court discerns sufficient
supporting evidence and is satisfied that the master applied the
correct legal standards, it may rely on the master's report as
part of its own determination of liability. See, e.g., Crowell
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12
v. Benson, 285 U.S. 22, 51 (1932); In re Armco, Inc., 770 F.2d
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103, 105 (8th Cir. 1985) (holding that the district court could
properly delegate broad pretrial authority, including
responsibility for conducting evidentiary hearings, to a
master);6 see also In re Bituminous, 949 F.2d at 1169 (stating
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that a trial court's use of a special master is acceptable at the
remedy-implementation stage of ongoing litigation).
Yet, there is an important distinction between such
collateral issues, on the one hand, and fundamental
determinations of liability, on the other hand. The former
comprise table setting and table clearing, while the latter
comprise the meal itself. As the Court has observed, where a
district judge does not hear and determine the main course, i.e.,
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the meat-and-potatoes issues of liability, there is an
"abdication of the judicial function depriving the parties of a
trial before the court on the basic issues involved in the
litigation." La Buy, 352 U.S. at 256. Because determining a
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fundamental question of liability goes beyond mere assistance and
reaches the essential judicial function identified by Article
III, Rule 53 does not allow the responsibility for making such
judgments to be delegated to masters (or other persons not of
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6Inexplicably, the Armco court indicated that it would have
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approved the determination of dispositive pretrial motions by the
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master. In re Armco, 770 F.2d at 105 (dictum). The Sixth
____________
Circuit was "unable to follow the [Armco] court's reasoning" on
this point. In re United States, 816 F.2d 1083, 1091 (6th Cir.
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1987). We, too, are baffled.
13
Article III stature) in the face of a contemporaneous
objection.7
C.
C.
__
In plotting the intersection where Article III and Rule
53 cross, we do not write on a pristine page. The four circuit
courts that have confronted this issue in the post-Northern
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Pipeline era have refused to allow references of liability to
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masters over timely objection.8 See In re Bituminous, 949 F.2d
___ ________________
at 1169 (holding that, under Article III and Rule 53, the
district judge must decide "dispositive issues of fact and law");
Burlington N. R.R. v. Department of Revenue, 934 F.2d 1064, 1073
___________________ _____________________
(9th Cir. 1991) (ruling that the district court's reference of
the issue of liability to a master violated Rule 53, and its
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7We think it is instructive that in drafting the Federal
Magistrates Act of 1979, codified as amended at 28 U.S.C. 631-
639 (1988), Congress was careful to avoid granting magistrates
the power to rule on dispositive motions or determine liability
without the parties' consent. Magistrates may proffer
recommendations on such matters, but, if any party objects, the
district court must make a de novo determination, which may
__ ____
include recalling witnesses where credibility is critical to the
inquiry. See 28 U.S.C. 636(b)(1)(B). We have previously
___
warned that if a magistrate's authority was not so limited, "we
would find this . . . troubling indeed." Goldstein, 728 F.2d at
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35.
8Some circuits have not decided the issue directly, but have
authored dicta supportive of one position or the other. Compare,
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e.g., Jack Walters & Sons Corp. v. Morton Bldg., Inc., 737 F.2d
____ __________________________ __________________
698, 712-13 (7th Cir.) (if objection had been preserved, the
court "might well [have] reverse[d]" reference of summary
judgment proceedings to a master), cert. denied, 469 U.S. 1018
_____ ______
(1984) with, e.g., Sims Consol., Ltd. v. Irrigation Power Equip.,
____ ____ __________________ ________________________
Inc., 518 F.2d 413, 417 (10th Cir.) (suggesting that it would
____
have been proper to refer the case to a master for trial because
of the great distance the witnesses had travelled), cert. denied,
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423 U.S. 913 (1975). We note that Sims, unlike Jack Walters, was
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decided before the Supreme Court handed down Northern Pipeline.
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14
subsequent failure independently to determine liability violated
Article III); In re United States, 816 F.2d 1083, 1092 (6th Cir.
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1987) (holding that the reference of dispositive motions to a
master violated the litigants' "right to have the basic issues
heard by the district judge"); In re Armco, 770 F.2d at 105
____________
(concluding that, under Rule 53, the "district court erred in
granting the master authority to preside at trial on the merits
of this case"). But see Loral Corp. v. McDonnell Douglas Corp.,
___ ___ ___________ _______________________
558 F.2d 1130 (2d Cir. 1977) (upholding over objection, in pre-
Northern Pipeline era, district court's reference of liability
_________________
issues to a master on the ground that the importance of
classified materials to the litigation constituted an exceptional
condition).
Here, the district court, understandably frustrated
with the snail's pace of the litigation, referred the entire case
to a special master for findings of fact and conclusions of law,
with no boundaries on the master's authority and no provision for
anything remotely resembling de novo review. The court lacked
__ ____
the authority to handle the case in this fashion. Nonconsensual
reference of fundamental issues of liability to a master for
adjudication is not consonant with either Rule 53 or Article III.
D.
D.
__
Nor does the district court's summary confirmation of
the master's final report rend harmless the overly ambitious
reference. The court's entire rescript consumed less than two
pages and stated that the judge's review "was made in the light
15
of the strong presumption of validity" that he accorded to the
master's findings and conclusions. We have regularly held that
the mere "laying on of hands" by a district judge who adopts a
magistrate's or master's recommendation of liability pro forma
___ _____
cannot inoculate a proceeding against the pathology that
invariably follows from noncompliance with Article III. See Reed
___ ____
v. Board of Election Comm'rs, 459 F.2d 121, 123 (1st Cir. 1972);
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Rainha v. Cassidy, 454 F.2d 207, 208 (1st Cir. 1972); see also
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Burlington N. R.R., 934 F.2d at 1074 (ruling that the district
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court violated Article III where its review "provided no
substantive explanation for affirming" the master's findings).
In the circumstances of this case, the judicial determination of
liability was not sufficiently independent to save the day.
Like the bark of a dog to Sherlock Holmes, see Arthur
___
Conan Doyle, Silver Blaze, in The Complete Original Illustrated
__________________________________
Sherlock Holmes 117 (1976), the indicia of independent review are
_______________
telling in this case by their absence. The district court
adopted the master's report without a hearing, without any stated
analysis of the evidence, and without any discussion of the
master's legal conclusions. A master's legal conclusions, unlike
his or her findings of fact, must be reviewed de novo. See Polin
__ ____ ___ _____
v. Dun & Bradstreet, Inc., 634 F.2d 1319, 1321 (10th Cir. 1980)
_______________________
(describing district court scrutiny of master's legal conclusions
as "essential"); D. M. W. Contracting Co. v. Stolz, 158 F.2d 405,
________________________ _____
407 (D.C. Cir. 1946) (similar), cert. denied, 330 U.S. 839
_____ ______
(1947). Moreover, the controversy between Stauble and the
16
defendants turned almost entirely on credibility and the
district court heard no witnesses. If a transcript of the
hearings before the master exists a point which is not clear
from the record there is no sign that the district court read
it.9 Finally, although the defendants objected in considerable
detail to the master's report, the district court did not comment
in any particularized way on their objections. Mindful of how
the matter was handled below, we reluctantly conclude that the
district judge's contribution to the adjudication of Stauble's
claims was not sufficiently participatory to cure the
constitutional infirmity.
IV. THE REMEDY
IV. THE REMEDY
This litigation recently mourned its fourteenth
anniversary. It has already consumed inordinate time and
resources.10 At this point, the principal beneficiaries are
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9The record on appeal contains no transcript of the trial
before the master. The district court docket does not show that
a transcript was filed (or even prepared). The district judge's
rescript does not mention a transcript. In what seems a contrary
vein, the rescript recites that the court reviewed "the Special
Master's Final Report and defendants' objections thereto," along
with "the plaintiff's application for adoption of the Final
Report, supporting memorandum and appendices, and, finally, the
defendants' opposition."
10The history of these lawsuits bears out the Court's
warning that indiscriminate references of cases to masters may
actually increase, rather than shorten, the amount of time
necessary to bring litigation to fruition. See La Buy, 352 U.S.
___ ______
at 253 n.5. Although this case was trial-ready in mid-1986,
final judgment was not entered below until December 19, 1991. Of
the intervening five and one-half years, roughly eighteen months
was spent fighting over whether the case should be referred to a
master; a period of approximately eight months was needed to
produce thirty-five trial days; a year and one-half elapsed from
the trial's end to the rendition of the master's report; another
17
the litigators, not the litigants: the award of attorneys' fees
already dwarfs the award of damages.
Against this lugubrious backdrop, the appellee argues
that, even if the lower court lapsed into error, we ought not to
perpetuate the litigation, but should decide it here and now. In
support of this proposition, he cites Adventures in Good Eating,
__________________________
Inc. v. Best Places to Eat, Inc., 131 F.2d 809 (7th Cir.
____ ___________________________
1942).11 There, the Seventh Circuit was "unable to find any
exceptional conditions such as the rule . . . contemplates" and
held that the district court erred in referring the entire case
to a master. Id. at 814. The court of appeals nevertheless
___
reviewed the record and upheld the master's conclusion, finding
it to be "one which was well nigh inescapable." Id.
___
Despite our fervent wish that it were otherwise, this
is not such a case. Unlike Adventures in Good Eating, the record
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____________________
eight months went by before the district court acted on the
defendants' objections to the report; and over a year passed
before the court disposed of the prevailing party's claims for
attorneys' fees and costs and entered final judgment.
11Stauble also relies on Johnson Fare Box Co. v. National
_____________________ ________
Rejectors, Inc., 269 F.2d 348 (8th Cir. 1959) for the same
________________
proposition. Such reliance is mislaid. In Johnson, the court
_______
held that the reference to a master for trial was not justified
and punished the defendants (who had sought the reference in the
first place) by taxing an extra share of the costs against them.
Id. at 351. Johnson's approach is not helpful where, as here,
___ _______
neither party requested the reference. Moreover, although the
Johnson court stated as an aside that an "improvidently or
_______
improperly granted" order of reference would not necessarily
"entitle the [losing party] to a reversal," id. (dictum), a later
___
opinion of the Eighth Circuit aligns that court with the views we
announce today and, in the bargain, divests the Johnson dictum of
_______
the significance that Stauble attaches to it. See In re Armco,
___ ___________
770 F.2d at 103.
18
in this case is voluminous, the factual issues are tangled, and
the legal issues are largely factbound. On several key points,
the testimony is capable of supporting conflicting conclusions.
Credibility is vital to a reasoned determination of the
litigation. In such straitened circumstances, even the most
searching review of the record by an appellate court would not be
a satisfactory substitute for a trial conducted in accordance
with Article III. See Dedham Water, ___ F.2d at ___ [slip op. at
___ ____________
22] (appellate factfinding is generally "permissible only when no
other resolution of a factbound question would, on the compiled
record, be sustainable") (collecting cases). While we deeply
regret the colossal waste of time and resources that has plagued
this litigation, the case must be tried by the district
court.12 The Constitution offers no other principled choice.
V. CONCLUSION
V. CONCLUSION
Article III requires that the judicial power of the
United States be exercised by federal judges appointed for life
tenure and protected from diminished compensation. Although
parties to litigation may agree, at the behest of a judge or at
their own contrivance, to make alternative arrangements for
____________________
12At oral argument before us, Stauble conceded that, if we
found the proceedings below to have been constitutionally
deficient and declined to decide the merits ourselves, the
appropriate remedy on the facts of this case would be a full new
trial before the district court. Because the parties agree on
this point, we leave for another day the possibility that a
master's findings and conclusions on a fundamental issue of
liability might perhaps be salvaged, even after appeal, by having
the district court conduct a deeper, more participatory sort of
review.
19
dispute resolution at the hands of judicial assistants or even
private citizens, parties who object to such a departure may not
be forced to have the fundamental issues of their disagreement,
which would otherwise come within the jurisdiction of an Article
III court, decided by non-Article III surrogates.13 It follows
that, in this instance, the district court delegated too much
judicial power by asking a special master, over the defendants'
timely objection, to determine the entire case, liability
included.
We need go no further. The order of reference is
reversed, the judgment below is vacated, and the cause is
remanded to the district court for a new trial. All parties
shall bear their own costs.
So Ordered.
So Ordered.
__________
____________________
13A judge may, of course, refer the fundamental issue of
liability to a master without running afoul of the Constitution,
so long as the judge is prepared to afford de novo review or
__ ____
otherwise to honor Article III's commands.
20
Document Info
Docket Number： 92-1102
Citation Numbers： 977 F.2d 690
Filed Date： 10/13/1992
Precedential Status： Precedential
Modified Date： 1/12/2023