Polin v. Dun & Bradstreet, Inc., 78-1648

• Decision Date: 03 December 1980
• Docket Number: No. 78-1648,78-1648
• Citation: 634 F.2d 1319
• Parties: Paul Wm. POLIN and Marsha Polin, Plaintiffs-Appellants, v. DUN & BRADSTREET, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1319

634 F.2d 1319

Paul Wm. POLIN and Marsha Polin, Plaintiffs-Appellants, v. DUN & BRADSTREET, INC., Defendant-Appellee.

No. 78-1648.

United States Court of Appeals, Tenth Circuit.

Argued and Submitted Sept. 16, 1980.

Decided Dec. 3, 1980.

Charles A. Whitebook, Tulsa, Okl. (Don E. Gasaway, Fred Boss and David E. Kumpe, Tulsa, Okl., with him, on brief), for plaintiffs-appellants.

John Kinslow of Wade & Kinslow, Lawton, Okl. (Arthur E. Rubin of Gable, Gotwals, Rubin, Fox, Johnson & Baker, Tulsa, Okl., with him, on brief), for defendant-appellee.

Before, SETH, Chief Judge, and HOLLOWAY, McWILLIAMS, BARRETT, DOYLE, McKAY, LOGAN, and SEYMOUR, Circuit Judges.

SEYMOUR, Circuit Judge.

This diversity action applying Oklahoma law was brought by Paul and Marsha Polin against Dun & Bradstreet, Inc. for damages resulting from alleged invasions of privacy. The trial court granted defendant's motion for summary judgment on the ground that the applicable statute of limitations barred the action. On appeal, we reversed and remanded for further proceedings. Polin v. Dun & Bradstreet, Inc., 511 F.2d 875 (10th Cir. 1975).

After remand, the court ordered the cause referred to a special master to make final findings of fact, and to recommend conclusions of law and the judgment to be entered thereon. Upon stipulation of the parties, the judge entered a later order enlarging the authority of the special master to conduct all further proceedings and stating that "judgment will be entered in the case by this Court as recommended by such Special Master." Rec., vol. IV, at 761. The special master handled pretrial matters and then entertained a motion for summary judgment. He granted summary judgment in favor of defendant. On the same day, the district court entered judgment "(i)n conformity with the Order entered by (the) Special Master ...." Rec., vol. IV, at 868.

The Polins appealed. The issue of the propriety of the reference was not raised by the parties either before the district court or on appeal. However, a panel of this court exercised its supervisory power to order the case reversed and remanded with directions that the cause be heard and determined by a district judge. The panel held that the reference to a special master was improper under Fed.R.Civ.P. 53(b), ¹ and that it amounted to an abdication of the judicial function. We granted rehearing en banc so the parties could brief and argue the validity of the reference. ² Upon rehearing, we hold that this case must be remanded for exercise by the district court of its responsibilities under Fed.R.Civ.P. 53(e)(4). ³

Although this court has expressed disapproval of the reference to a special master when made outside the limitations of Rule 53(b), see Wilver v. Fisher, 387 F.2d 66 (10th Cir. 1967); Bartlett-Collins Co. v. Surinam Navigation Co., 381 F.2d 546 (10th Cir. 1967), such a reference does not raise an issue of jurisdiction. Cruz v. Hauck, 515 F.2d 322, 327 (5th Cir. 1975), cert. denied, 424 U.S. 917, 96 S.Ct. 1118, 47 L.Ed.2d 322 (1976); Diamond Door Co. v. Lane-Stanton Lumber Co., 505 F.2d 1199, 1206 (9th Cir. 1974). At most it constitutes an abuse of discretion. See La Buy v. Howes Leather Co., 352 U.S. 249, 77 S.Ct. 309, 1 L.Ed.2d 290 (1957) (parties objected to reference); Wilver, 387 F.2d at 69. We have not previously exercised our supervisory powers to vacate a reference under Rule 53(b) and reverse on that ground. See Wilver, 387 F.2d 66; Bartlett-Collins, 381 F.2d 546.

Here, however, we are faced with a more serious problem namely the district court's failure to review the legal conclusions in the special master's order. As noted above, the trial court entered judgment "in conformity with" the special master's order on the same day the master issued his order. Unlike the district court in Bartlett-Collins or Wilver, it is apparent that the judge here did not review the special master's report.

Failure of the district court to review and consider questions of law arising upon the special master's report violates Rule 53(e)(4). Duryea v. Third Northwestern National Bank, 602 F.2d 809, 810 (8th Cir. 1979); De Costa v. Columbia Broadcasting System, Inc., 520 F.2d 499, 508-09 (1st Cir. 1975), cert. denied, 423 U.S. 1073, 96 S.Ct. 856, 47 L.Ed.2d 83 (1976). District court scrutiny is essential for several reasons:

"(S)uch review permits correction of possible error at the earliest time. Thus, an improper verdict may be detected and corrected before appeal. Similarly an erroneous charge to the jury or an incorrect ruling of law by the magistrate or master can be rectified by ordering a new trial. Finally, not only will review at the district court level often save parties the expense and difficulty of appeal, but it will also give the appellate court the benefit of the district court's reasoned consideration."

Sick v. City of Buffalo, 574 F.2d 689, 693 (2d Cir. 1978) (footnotes omitted).

This case is remanded to the district court for review of the special master's report in accordance with Rule 53(e)(4). ⁴ The decision whether summary judgment was proper should be made in the first instance by the trial judge after he has reviewed the legal conclusions reached by the special master.

WILLIAM E. DOYLE, Circuit Judge, dissenting.

I respectfully dissent.

I do so not only for the reason that I originally wrote the opinion when the matter was presented to a panel of this court, and that opinion condemned the proceedings in the trial court. An additional reason is the fact that the majority of the Judges acting for the court en banc have subscribed to an opinion which is in conflict with not only Rule 53 of the Federal Rules of Civil Procedure, which deals with the appointment and the functioning of special masters, but is contrary as well to the Supreme Court's decision in La Buy v. Howes Leather Company, 352 U.S. 249, 77 S.Ct. 309, 1 L.Ed.2d 290 (1967), and is out of harmony with two decisions of this circuit, Wilver v. Fisher, 387 F.2d 66 (10th Cir. 1967), and Bartlett-Collins Company v. Surinam Navigation Company, 381 F.2d 546 (10th Cir. 1967).

It is of interest and important to set forth here the reference to the special master. It provided as follows:

... to take and hear the evidence offered by the respective parties and to make his Findings of Fact, which Findings shall be final (except for an appeal, if any, to the United States Court of Appeals, Tenth Circuit); and to recommend Conclusions of Law on all issues presented and recommend the Judgment to be entered thereon to this Court. It is further ordered that the Special Master is authorized and empowered to do all things and to make such Orders as may be required to accomplish a full hearing on all matters of fact and law in issues in this case.

Not only did the trial court in this reference authorize the special master to make findings of fact which were to be final except for appeal to this court, but it also authorized the recommendation of conclusions of law on all issues presented. The master was also authorized to recommend the judgment which was to be entered thereon. This was followed by a general authorization to make all orders and conduct the full hearing on all matters of fact and law in the case. This, however, was not all. Two months later, on May 18, 1977, an order was entered which greatly enlarged the authority of the special master. This further grant of authority not only allowed the master to recommend a judgment following a jury trial, it committed the court to entering a judgment in conformity with that very recommendation. The outstanding terms of this supplemental grant of authority are as follows:

It is therefore ordered that the Special Master be authorized to conduct all proceedings and make all orders deemed by him to be necessary in preparing for and presiding over the trial of this cause, and that judgment will be entered in the case by this Court as recommended by such Special Master, all in accordance with the agreement and recommendation of counsel for the parties.

A motion for summary judgment was filed after a pretrial conference was held before the master on April 3, 1978. The next step was for the special master to grant the motion for summary judgment. This order of the master was confirmed on the same date by the trial court.

Rule 53(b) provides that a reference to a master shall be the exception and not the rule, and that actions calling for a jury trial should be referred only when the issues are complicated. The rule goes on to provide that actions to be tried without a jury, save in matters of account and of difficult computation of damages, shall be referred only upon a showing that some exceptional condition requires it.

There is no dearth of authority in the area before the court. The most important of the many decisions which have been rendered is that of the Supreme Court in La Buy v. Howes Leather Co., Inc., supra. In the La Buy case the trial judge was faced with the trial of a troublesome anti-trust action; it was not only complex, it was lengthy. The estimate was that it would require six weeks. Judge La Buy had prepared the case for trial and had devoted a great deal of time and effort to it. Despite this, he did not take it to trial. Instead, he ordered an appointment of a special master to hear it. The parties then filed a mandamus in the Court of Appeals, Seventh Circuit. That court ruled that the references had to be vacated and issued a writ of mandamus so directing. It was argued on behalf of La Buy in the Supreme Court that the Court of Appeals lacked the power to issue a mandamus in the circumstances presented. The Supreme Court disagreed with that position, and ruled that the case did not satisfy the requirements of Rule 53(b), and that it was contrary to that rule. The Supreme Court said that congestion of the docket was not an exceptional circumstance under Rule 53(b). The Court said also that the complexity of the...