DeCosta v. Columbia Broadcasting System, Inc.

• Decision Date: 24 June 1975
• Docket Number: No. 74-1391,74-1391
• Citation: 520 F.2d 499
• Parties: Victor DeCOSTA, Plaintiff-Appellee, v. COLUMBIA BROADCASTING SYSTEM, INC., et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — First Circuit

Page 499

520 F.2d 499

186 U.S.P.Q. 305

Victor DeCOSTA, Plaintiff-Appellee, v. COLUMBIA BROADCASTING SYSTEM, INC., et al., Defendants-Appellants.

No. 74-1391.

United States Court of Appeals First Circuit.

Argued March 5, 1975.

Decided June 24, 1975.

Eugene L. Girden, New York City, with whom Knight Edwards, Edwards & Angell, Carleton G. Eldridge, Jr., Coudert Brothers, John M. Keene, III, Michael J. Calvey, New York City, and David Wolf, Boston, Mass., were on brief, for defendants-appellants.

Alan T. Dworkin, Providence, R. I., with whom Leonard Michaelson, Providence, R. I., was on brief, for plaintiff-appellee.

Before COFFIN, Chief Judge, ALDRICH and McENTEE, Circuit Judges.

COFFIN, Chief Judge.

Plaintiff, a dozen years ago, began this suit against the Columbia Broadcasting System, Inc. and allied corporations (CBS) to seek compensation for their unauthorized use of a character concept he had developed, embodying a costume, slogan, name, and symbol. A mechanic living in Cranston, Rhode Island, his avocation had been to don an all black cowboy suit, with a St. Mary's medal affixed to his flat crowned black hat, a chess symbol to his holster, and an antique derringer secreted under his arm, and make public appearances at rodeos and other events, meeting innumberable children, and passing out his card, inscribed with a chess set knight, proclaiming "Have Gun Will Travel, Wire Paladin, N. Court St., Cranston, R.I." We described these events in greater detail when this case was before us on appeal from the first count ¹ in his complaint, Columbia Broadcasting System, Inc. v. DeCosta, (DeCosta I), 377 F.2d 315 (1967), cert. denied, 389 U.S. 1007, 88 S.Ct. 565, 19 L.Ed.2d 603 (1968). As every well-versed television viewtume and accessories found its way into defendants' television series, "Have Gun Will tume and accessories found its way into defendants' television series, "Have Gun Will Travel", which enjoyed enormous popularity for over eight years in its initial run, grossing in excess of fourteen million dollars.

The claim below, in the remaining counts two and three of the complaint, asserted a wilful and intentional infringement of plaintiff's common law trademark and/or service mark and unfair competition. The plaintiff sought both injunctive and monetary relief, including an accounting for all profits made by defendants in broadcasting "Have Gun Will Travel". The first count had been tried before a jury. When this court reversed the result obtained in that trial, the case was returned to the district court where the parties entered into a stipulation that counts two and three be determined by the district judge on the basis of the trial transcript, including all exhibits, together with a stipulation of additional testimony. 383 F.Supp. 326, 327.

Subsequent to this stipulation the following order was entered by the district court on October 5, 1973:

"Pursuant to stipulation of the parties on each side and of counsel on each side, the above captioned case is referred, under authority of 28 U.S.C. 636, to United States Magistrate Jacob Hagopian for hearing and determination to be had on or before November 5, 1973."

Six months later, on April 15, 1974, a report was filed by the magistrate setting forth his findings of fact and conclusions of law sustaining the plaintiff's position. Five days after this report was filed, the defendants objected to the reference for the first time and argued that the parties were without authority to consent to reference and that the decision of the magistrate had been ultra vires. The district court ruled that the consensual reference granted the magistrate the power to "determine" the issues in the case. It therefore held the magistrate's exercise of jurisdiction legitimate and restricted its own review to a search for "manifest error" of fact or law. Finding none, it affirmed the magistrate's decision and entered judgment thereon. This appeal challenges both the propriety of the reference and the decision on the merits.

I. The Reference.

The defendants' argument to the district court and to us on appeal may be reduced to the following syllogism: (1) the order of reference in effect authorized the magistrate to act as special master; (2) the United States Magistrates Act, 28 U.S.C. §§ 631-639 ² provides for appointment of magistrates as masters only under the auspices of the Federal Rules of Civil Procedure; (3) Rule 53(b) provides that "in 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"; (4) since there is not such exceptional condition here, the reference was improper and the magistrate was without jurisdiction to hear the case; and (5) since this is a jurisdictional matter, it cannot be waived by counsel. They further argue that even if the consent of the parties ratifies the reference, the district court employed an inappropriate standard of review, and the governing standard should not have been manifest error of fact or law, but errors of law and clearly erroneous findings of fact as provided in Rule 53.

The district court's analysis began with a holding that a consensual reference to a magistrate was not a reference to a special master within the meaning of 28 U.S.C. § 636(b)(1) and was instead governed by that part of § 636(b) which provides: "any district court . . . may establish rules pursuant to which any full-time United States magistrate . . . may be assigned . . . such additional duties as are not inconsistent with the Constitution and laws of the United States." Reviewing the law governing the powers of non-Article III ³ judges to hear and determine cases, it held that there was no statutory or constitutional bar to the magistrate adjudicating a civil case on the basis of the litigants' consent. And to determine the scope of review, the district court examined Kimberly v. Arms, 129 U.S. 512, 9 S.Ct. 355, 32 L.Ed. 764 (1889), which treated district court review as limited to the question of "manifest error" in law or fact. 383 F.Supp. at 336-337.

Defendants argue that it is constitutionally impermissible for an Article III judge to abjure decision making responsibilities and that the judge is therefore without power to invest other non-Article III judicial officers or parajudges, such as magistrates, with broad authority. However persuasive such an argument may be where governmental sanction is threatened, ⁴ indicating a strong public interest in the outcome of litigation ⁵ and creating a countervailing necessity for extending the full measure of judicial process to the defendant, ⁶ or where parties to civil litigation properly before the federal judiciary insist on judicial resolution, ⁷ quite different policy and precedent should apply where the parties to a civil dispute themselves select another forum. Under such circumstances, it is inappropriate to evaluate the problem as one of the right of the judiciary to relinquish its authority. ⁸ The issue is not the power of the judge to refer, but the power of the parties to agree to another arbiter, absent overriding constitutional considerations.

There is old authority for consensual reference for decision after court proceedings have been instituted. In Heckers v. Fowler, 2 Wall. 123, 69 U.S. 123, 17 L.Ed. 759 (1864), the parties agreed to a reference under the terms of which the report of the referee was to "have the same force and effect as a judgment of the court." Id. at 127, 17 L.Ed. 759. In responding to a challenge to the power of a federal court to authorize such a proceeding, the Court endorsed the holding of an earlier case that "a trial by arbitrators, appointed by the court, with the consent of both parties, was one of the modes of prosecuting a suit to judgment as well established and as fully warranted by law as a trial by jury . . . ." Id. at 128-129, 17 L.Ed. 759. It also recognized that, assuming the preservation of exceptions to acceptance of the report and a sufficient record, the same scope of appellate review would be available as in the case of appeal from an ordinary trial court judgment. See also Newcomb v. Wood, 97 U.S. 581, 24 L.Ed. 1085 (1878). And, in Kimberly v. Arms, 129 U.S. 512, 9 S.Ct. 355, 32 L.Ed. 764 (1889), the Court said "A reference by consent of parties, of an entire case for the determination of all its issues, though not strictly a submission of the controversy to arbitration a proceeding which is governed by special rules is a submission of the controversy to a tribunal of the parties' own selection, to be governed in its conduct by the ordinary rules applicable to the administration of justice in tribunals established by law." Id. at 524, 9 S.Ct. at 359. ⁹

We would add that we find nothing in La Buy v. Howes Leather Co., 352 U.S. 249, 77 S.Ct. 309, 1 L.Ed.2d 290 (1957) to cast doubt on the propriety of truly consensual reference. The Court in La Buy was concerned with the wholesale resort to references to private masters ordered, despite objection, by district courts attempting to deal with crowded dockets, such references having gained notoriety for their delay and high cost. We see none of these problems in truly consensual references to magistrates.

Both Heckers and Kimberly spoke in terms of arbitration supervised by the Court even though both cases long antedated the present availability of authorization for binding private agreement to arbitrate future disputes. In that era, an agreement to arbitrate a dispute that might arise was not judicially enforceable, ¹⁰ although an arbitration award, once granted, was treated as the equivalent of adjudication by the courts. ¹¹ There was a long history in the field of arbitration of unwillingness on the part of the judiciary to relinquish power to decide cases properly before the courts. ¹² With the adoption of the Federal Arbitration Act, 9 U.S.C. §§...