Rogers v. SOCIETE INTERNATIONALE, ETC.

• Decision Date: 14 April 1960
• Docket Number: No. 15017.,15017.
• Citation: 278 F.2d 268
• Parties: William P. ROGERS, Attorney General of the United States, as Successor to the Alien Property Custodian, et al., Appellants, v. SOCIETE INTERNATIONALE POUR PARTICIPATIONS INDUSTRIELLES ET COMMERCIALES, S.A., etc., and Eric G. Kaufman, et al., Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

278 F.2d 268 (1960)

William P. ROGERS, Attorney General of the United States, as Successor to the Alien Property Custodian, et al., Appellants, v. SOCIETE INTERNATIONALE POUR PARTICIPATIONS INDUSTRIELLES ET COMMERCIALES, S.A., etc., and Eric G. Kaufman, et al., Appellees.

No. 15017.

United States Court of Appeals District of Columbia Circuit.

Argued January 15, 1960.

Decided April 14, 1960.

Petition for Rehearing Denied May 11, 1960.

Mr. Irving Jaffe, Attorney, Department of Justice, with whom Mr. Paul E. McGraw, Attorney, Department of Justice, was on the brief, for appellants.

Mr. John J. Wilson, Washington, D. C., with whom Mr. William E. Rollow, Washington, D. C., was on the brief, for appellee Societe Internationale Pour Participations Industrielles et Commerciales, S. A., etc.

Mr. Irving Moskovitz, New York City, of the bar of the Court of Appeals of New York, pro hac vice, by special leave of court, with whom Messrs. Robert E. Sher, Isadore G. Alk, and James H. Heller, Washington, D. C., were on the brief, for appellees Kaufman.

Mr. Edmund L. Jones, Washington, D. C., with whom Mr. C. Frank Reifsnyder, Washington, D. C., was on the brief, for appellees Ernest Attenhofer, and certain other appellees.

Mr. James J. Bierbower, Washington, D. C., entered an appearance for appellee Annemarie R. Klingler, and certain other appellees.

Before WILBUR K. MILLER, FAHY and DANAHER, Circuit Judges.

Petition for Rehearing En Banc Denied May 11, 1960.

DANAHER, Circuit Judge.

This unique case brought by a Swiss holding company sometimes known as I. G. Chemie or Interhandel plaintiff, was instituted in October, 1948 under the Trading with the Enemy Act, 50 U.S.C.A.Appendix, § 9(a), 40 Stat. 419, as amended, against the Attorney General, as successor to the Alien Property Custodian, and the Treasurer of the United States herein Government. Hundreds of plaintiff's stockholders intervened.¹ Thereafter, many variously contested proceedings resulted in hearings before each of several District Judges. Chief Judge Laws was finally impelled, sua sponte, to consider the appointment of a special master. The record shows that he had consulted his District Judges and had canvassed his plan with counsel. He asked that Chief Judge Knox in the Southern District be consulted to ascertain his practice. Plaintiff's counsel objected to a reference of the case to a special master and formally opposed his appointment. It was argued that the many issues should be decided by a judge and that the reference was beyond the power of the court.

Chief Judge Laws ordered a pretrial hearing whereat counsel could be fully heard. The parties were requested to file proposed orders designed to accomplish the result outlined by Chief Judge Laws. The Government submitted its proposed order. It asked that there be included a provision that "The master's report shall contain findings of fact and conclusions of law," and further that "The master's findings of fact shall have the force provided in Rule 53(e) (2)."

After considering the existence of need based upon the protracted testimony of witnesses in the United States as well as abroad, and other matters, and finding "exceptional circumstances," Chief Judge Laws on February 14, 1950 entered his order appointing as special master William J. Hughes, Esquire, to whom he referred "the determination and findings of all issues of fact and law involved in said action * * *."²

Plaintiff's counsel after the order was entered again noted objection to the reference and a year later sought to vacate and revoke the order. Thereupon the Government opposed the plaintiff's motion for revocation contending that the order was entirely proper "in view of the exceptional circumstances of this case." The Government's opposition further noted that "Plaintiff confuses the reference of all issues with their reference for final decision. The reference of all issues is permissible, but it is not permissible to refer them for a final decision. * * * The specific mention of Rule 53(e) (2) in the order of reference made it clear that the court was not referring to the Master the making of a final decision. Since, under the order and the Rule, the Master's report will come back to the court for adoption or rejection, no impropriety was committed." The court, adopting the position then urged by the Government, denied the plaintiff's motion to vacate the order. Thereafter the respective parties proceeded under the order of reference. More than 140 docket entries reflect various proceedings and the actions taken over the years.

On October 1, 1958, the Government moved that the reference be terminated on the ground that the District Court "lacks authority to continue such reference." Alternatively, it asked that the original order be modified "to limit the scope of the reference and the authority of the Master to the conduct and supervision of discovery proceedings authorized by the Court and depositions." The latter motion came on before Chief Judge Pine who, substantially throughout the interim, had served as special judge. After full hearing and argument, an order was entered denying the Government's motion in its entirety. Judge Pine pronounced his opinion and found as his order recited, that the ruling properly should be reviewed forthwith as coming within the special class of interlocutory orders justifying an immediate appeal, pursuant to 28 U.S.C. § 1292(b) (1958). We allowed this appeal accordingly and are satisfied that the case is properly here.³

The Government assails Judge Pine's order as an abuse of discretion. Relying largely upon La Buy v. Howes Leather Co.,⁴ the Government argues that the factors there predicating the reference greatly outweighed those considerations which actuated Judge Laws' order of reference. In effect, it is thus argued if the La Buy situation could not support a reference as the Supreme Court said, the instant reference must fall.

Quite overlooked is the extreme caution with which Judge Laws explored the situation here before he acted. Obviously familiar with the basic problem as his experience with earlier comparable cases had taught, he not only did not abdicate the judicial function, but contemplated that the parties should have recourse to the court as to the master's rulings. We think that factually, as we shall show, and under the law which is intended to govern the reference, the circumstances in the instant case are totally different from La Buy.

As the Supreme Court observed in Societe Internationale, etc. v. Rogers,⁵ "This issue comes to us in the context of an intricate litigation." We think that if ever there is to be a case presenting itself as "the exception and not the rule,"⁶ it is this one. At stake are claims evaluated at more than $100 million, consisting of cash in American banks and about 90% of the capital stock of General Aniline & Film Corporation, control over all of which had been asserted by the Alien Property Custodian as assets "owned by or held for the benefit of" I. G. Farbenindustrie, said to be a German enemy national. Before the Government in 1958 filed the motion now considered, various groups of intervenors, appellees here, over the years had presented their claims. Some 2,488 stockholders were claimants at one time or other, in fact the complaints of some 720 had been dismissed.⁷ The action of the corporate appellee, the plaintiff, previously dismissed by us⁸ was reinstated by the Supreme Court.⁹ This is no La Buy case.

Moreover it is not always so, even when some doubt has been urged, that an order of reference must be vacated. In the Tendler case,¹⁰ we noted that the master had conducted eleven hearings over a considerable period of time. Here the litigation has evolved over some twelve years, and rights and the status of many claims and the positions of the respective parties have turned upon what has been done. As Judge Pine observed, "so many actions have been taken that to limit the scope as prayed would change the whole pattern of the proceedings and cause confusion and uncertainty in many aspects of this complicated case which are now impossible to visualize."

The order of reference¹¹ expressly specifies that the master is to have only the powers and duties "which by law may be conferred upon or exercised by a master." We have heretofore recognized "that it is the trial court in such a case who makes the final determination of all the issues. * * * And in no instance is the judge bound by the master's conclusions of law."¹² In our case Judge Pine, as special judge, is and for ten years has been available upon proper application and showing by the parties to grant supervision as to any challenged action. The numerous occasions upon which recourse has been had to the courts demonstrate no lack of remedy if it be necessary to seek guidance.

Again, even as to the master's ultimate report, objections conformably to the Rule shall be subject to hearing, to modification, rejection and even to the receipt of further evidence.¹³ Nor should it be overlooked that the evidence in the case is largely documentary. Of course, the trial judge in this equity action may apply the rule in United States v. United States Gypsum Co.¹⁴ and so may we.¹⁵

Since we are satisfied for the reasons stated that there was no abuse of discretion by the trial judge, we need not consider the Government's claim that under the Rules no waiver here occurred. We note only that the appellees were the parties who ten years ago opposed and even later sought to revoke the order of reference. The Government then supported the order, as we have seen, and all parties have since acted pursuant thereto.

We find no error.

Affirmed.

FAHY, Circuit Judge (dissenting).

Insofar as the pretrial features of the case are concerned — including discovery and the taking of depositions here and abroad with rulings incident to the conduct of those proceedings — no modification of the...