Pacemaker Diagnostic Clinic of America, Inc. v. Instromedix, Inc.

Decision Date16 February 1984
Docket NumberNos. 82-3152,82-3182,s. 82-3152
PartiesPACEMAKER DIAGNOSTIC CLINIC OF AMERICA, INC., a corporation, Plaintiff- Appellant, Cross-Appellee, v. INSTROMEDIX, INC., a corporation, Defendant-Appellee, Cross-Appellant.
CourtU.S. Court of Appeals — Ninth Circuit

Michael A. Lechter, Sherman O. Parrett, Cushman, Darby & Cushman, Washington, D.C., Jerard S. Weigler, James N. Gardner, Lindsay, Hart, Neil & Weigler, Portland, Or., for plaintiff-appellant, cross-appellee.

J. Pierre Kolisch, Jon M. Dickinson, Kolisch, Hartwell, Dickinson & Stuart, Portland, Or., Charles H. Turner, U.S. Atty., Portland, Or., Michael F. Hertz, J. Paul McGrath, Peter R. Maier, Dept. of Justice, Washington, D.C., for defendant-appellee, cross-appellant.

Appeal from the United States District Court for the District of Oregon.


KENNEDY, Circuit Judge:

We consider this case en banc to address an issue important to the administration of justice in the federal courts. The question is the constitutionality of the section of the Federal Magistrate Act of 1979 which allows magistrates to conduct civil trials with the consent of all parties. 28 U.S.C. Sec. 636(c) (Supp. V 1981).

Pacemaker, Inc., brought this suit alleging patent infringement against Instromedix, Inc. Instromedix counterclaimed for a declaration of the patent's invalidity. The parties, pursuant to 28 U.S.C. Sec. 636(c) and local rules of the District of Oregon, elected to try the case before a United States Magistrate. The magistrate held the patent valid, but not infringed. Both parties appealed, and a panel of this court, sua sponte, raised the question of the constitutionality of trial by a magistrate, an officer not accorded the protections of Article III, section 1, of the Constitution. The panel held the statute invalid and vacated the judgment, Pacemaker Diagnostic Clinic v. Instromedix, Inc., 712 F.2d 1305 (9th Cir.1983), and the court has convened en banc to reconsider the case. Pacemaker Diagnostic Clinic v. Instromedix, Inc., 718 F.2d 971 (9th Cir.1983) (order granting rehearing en banc). We hold that, in light of the statutory precondition of voluntary litigant consent and the provisions for the appointment and control of the magistrates by Article III courts, the conduct of civil trials by magistrates is constitutional.

Commencing with the Federal Magistrates Act of 1968, Pub.L. No. 90-578, 82 Stat. 1107, Congress enacted a series of statutes to "reform the first echelon of the Federal judiciary into an effective component of a modern scheme of justice." H.R.Rep. No. 1629, 90th Cong., 2d Sess. 11, reprinted in 1968 U.S.Code Cong. & Ad.News 4252, 4253-54. The 1968 Act replaced the former office of United States Commissioner with the new office of United States Magistrate. The 1968 Act was designed to improve the quality of these officers and to enlarge their responsibilities. The Act established minimum qualifications for the office, and vested the appointment authority with the judges of each district. 28 U.S.C. Sec. 631 (1976). Magistrates' jurisdiction was expanded to include duties such as "service as special masters, supervision of pretrial or discovery proceedings, and preliminary consideration of petitions for postconviction relief." H.R.Rep. No. 1629, 90th Cong., 2d Sess. 11, reprinted in 1968 U.S.Code Cong. & Ad.News at 4254. See 28 U.S.C. Sec. 636(a), (b) (1976). Magistrates were also given jurisdiction over minor criminal offenses when the accused waives trial by judge before an Article III court. 18 U.S.C. Sec. 3401 (1976).

The Act was amended in 1976, Pub.L. No. 94-577, 90 Stat. 2729, in response to a number of court decisions which had, as a matter of statutory interpretation, limited the jurisdiction of magistrates. E.g., Wingo v. Wedding, 418 U.S. 461, 94 S.Ct. 2842, 41 L.Ed.2d 879 (1974); see S.Rep. No. 625, 94th Cong., 2d Sess. 3-4 (1976); H.R.Rep. No. 1609, 94th Cong., 2d Sess. 5-6, reprinted in 1976 U.S.Code Cong. & Ad.News 6162, 6164-66. By clarifying the statutory language, Congress solidified the jurisdiction of magistrates over certain matters. See McCabe, The Federal Magistrate Act of 1979, 16 Harv.J.Legis. 343, 353-54 (1979).

The section at issue here, 28 U.S.C. Sec. 636(c), was enacted in 1979 together with other provisions. The Federal Magistrate Act of 1979, Pub.L. No. 96-82, 93 Stat. 643, Sec. 2(2). Congress' object was "to amend the current jurisdictional provisions for U.S. magistrates ... in order to further clarify and expand the jurisdiction of U.S. magistrates and improve access to the Federal courts for the less-advantaged." S.Rep. No. 74, 96th Cong., 1st Sess. 1, reprinted in 1979 U.S.Code Cong. & Ad.News 1469, 1469. Thus, section 636(c) authorizes magistrates, when specially designated by the district court, to exercise jurisdiction over civil matters and enter a final judgment in the district court in civil cases, provided the parties consent to the reference.

The challenge to the statute is based on the implicit command of Article III that the judicial power of the United States is confined to judges holding commissions under and cloaked with the protections of that article, and the corollary principle of separation of powers. Article III is one of the provisions of the Constitution which delineates the separation of powers among the branches of government. The attributes of Article III judges, permanency in office and the right to an undiminished compensation, are as essential to the independence of the judiciary now as they were when the Constitution was framed. See The Federalist Nos. 78 & 79 (A. Hamilton); Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50, 58-60, 102 S.Ct. 2858, 2865-66, 73 L.Ed.2d 598 (1982); United States v. Will, 449 U.S. 200, 217-221, 101 S.Ct. 471, 481-84, 66 L.Ed.2d 392 (1980). In addition to the unimpeached precedent supporting this proposition, our own experience attests to the substance and reality of the guarantees. A separate and independent judiciary, and the guarantees that assure it, are present constitutional necessities, not relics of antique ideas.

We have observed that separation of powers protections, in some cases, have two components. One axis reaches to the person affected by government action and encompasses his or her relation to a constitutional branch; the other axis runs from each governmental branch to the others to insure separation and independence in the constitutional structure. Chadha v. INS, 634 F.2d 408, 422, 431 (9th Cir.1980), aff'd, --- U.S. ----, 103 S.Ct. 2764, 77 L.Ed.2d 317 (1983). These two aspects of the separation of powers rule are applicable here. Where a case is transferred or assigned from an Article III court to a different forum, both the rights of the parties and the relations between the separate branches of the government are implicated. First, we consider whether transfer of the case to a magistrate invades rights personal to the litigants. Second, we examine whether, even if the parties have consented to the procedure, the existence or operation of the alternate forum compromises the essential independence of the judiciary.

At the outset, and leaving aside all consideration of criminal cases, we recognize the principle that parties to a case or controversy in a federal forum are entitled to have the cause determined by Article III judges, with some significant exceptions yet to be fully delineated by the Supreme Court. Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982) (plurality opinion); id. at 89, 102 S.Ct. at 2881 (Rehnquist, J., concurring). We decide the case before us on the further premise that the patent suit here falls within none of the recognized or potential exceptions, even the public rights exception. Id. at 67-76, 102 S.Ct. at 2869-2874. Though no authority we have found expressly so holds, it is appropriate to address the constitutional issue in this patent case. The statutory provision for reference to magistrates applies, without qualification, to all civil cases, and the issue will arise in other matters that do not arguably qualify as a case involving federally created rights. In its recent decision upholding the statute, the Third Circuit adopted the same approach to reach the constitutional issue. See Wharton-Thomas v. United States, 721 F.2d 922, 930 (3d Cir.1983).

The independent character of federal adjudication under Article III imparts to a judgment qualities of authority and respect that are well understood. It follows that the federal litigant has a personal right, subject to exceptions in certain classes of cases, to demand Article III adjudication of a civil suit. Authorities support the premise that Article III adjudication is, in part, a personal right of the litigant. Glidden Co. v. Zdanok, 370 U.S. 530, 536, 82 S.Ct. 1459, 1465, 8 L.Ed.2d 671 (1962) ("The alleged defect of authority here relates to basic constitutional protections designed in part for the benefit of litigants"); Palmore v. United States, 411 U.S. 389, 412, 93 S.Ct. 1670, 1684, 36 L.Ed.2d 342 (1973) (Douglas, J., dissenting) ("The safeguards accorded Art. III judges were designed to protect litigants with unpopular or minority causes or litigants who belong to despised or suspect classes"); Kurland, The Constitution and the Tenure of Federal Judges: Some Notes from History, 36 U.Chi.L.Rev. 665, 698 (1969) (life tenure of federal judges "not created for the benefit of the judges but for the benefit of the judged"); Kaufman, Chilling Judicial Independence, 88 Yale L.J. 681, 690 (1979) (same). And it could not be otherwise, for in deciding cases or controversies, the judicial branch acts primarily on the litigants before the court. O'Donoghue v. United States, ...

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