Stauble v. Warrob, Inc.

Decision Date28 July 1992
Docket NumberNos. 92-1102,92-1103,s. 92-1102
Citation977 F.2d 690
PartiesAlfred STAUBLE, Individually and f/u/b Warrob, Inc., Plaintiff, Appellee, v. WARROB, INC., et al., Defendants, Appellants. Alfred STAUBLE, Individually and f/u/b Montechusetts Leasing Corp., Plaintiff, Appellee, v. MONTECHUSETTS LEASING CORP., et al., Defendants, Appellants. . Heard
CourtU.S. Court of Appeals — First Circuit

Robert S. Potters, with whom Potters & Brown was on brief, for defendants, appellants.

Peter S. Terris, with whom Harvey Nosowitz and Palmer & Dodge were on brief, for plaintiff, appellee.

Before TORRUELLA and SELYA, Circuit Judges, and ZOBEL, * District Judge.

SELYA, Circuit Judge.

This appeal requires us to 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

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 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 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 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 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 made their peace with Stauble. The other defendants appeal. 3

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., 972 F.2d 453, 457-58 (1st Cir.1992) (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 Cir.1981). Unlike an appeal, which almost always lies as a matter of right, mandamus is an extraordinary remedy. See Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 34, 101 S.Ct. 188, 189, 66 L.Ed.2d 193 (1980) (per curiam). The writ's "currency is not profligately to be spent." Boreri v. Fiat S.P.A., 763 F.2d 17, 26 (1st Cir.1985). To 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.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. 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, 102 S.Ct. 682, 70 L.Ed.2d 647 (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, 97 S.Ct. 653, 50 L.Ed.2d 631 (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 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 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
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, 102 S.Ct. 2858, 2865, 73 L.Ed.2d 598 (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 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 spearheading pretrial factual inquiries in complicated controversies. They may also appropriately perform a variety of consummatory functions, e.g., superintending the execution of 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....

To continue reading

Request your trial
36 cases
  • U.S. v. Microsoft Corp.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • June 23, 1998
    ...mandamus. In re Minister Papandreou, 139 F.3d 247, 250 (D.C.Cir.1998) (discussing mandamus criteria). See also Stauble v. Warrob, Inc., 977 F.2d 690, 693 & n. 4 (1st Cir.1992) (dictum to effect that "improvident" reference presents no danger of irreparable harm); In re Thornburgh, 869 F.2d ......
  • Cargill, Inc., In re, 94-8042
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • January 12, 1995
    ...And, moreover, the fact that a lengthy trial has intervened will not rob an appeal of its effectiveness. See, e.g., Stauble v. Warrob, Inc., 977 F.2d 690 (1st Cir.1992) (vacating judgment on direct appeal following 35-day trial, despite the circuit court's earlier denial of mandamus relief ......
  • Sperling v. Hoffmann-La Roche, Inc., Civ. Action No. 85-2138 (HAA).
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • April 30, 1996
    ...de novo. See Prudential Ins. Co. of America v. U.S. Gypsum Co., 991 F.2d 1080, 1086 n. 11 (3d Cir. 1993) (citing Stauble v. Warrob, Inc., 977 F.2d 690, 697 (1st Cir.1992)). In addition, due to the granting of plaintiffs' request pursuant to Federal Rule of Civil Procedure 56(f), there is an......
  • Gottlieb v. Barry, s. 93-1316
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • December 9, 1994
    ...legal conclusions de novo. See Polin v. Dun & Bradstreet, Inc., 634 F.2d 1319, 1321 (10th Cir.1980); see also Stauble v. Warrob, Inc., 977 F.2d 690, 697 (1st Cir.1992); Martin, 911 F.2d at 608; Williams, 851 F.2d at 885; Apex Fountain Sales, Inc. v. Kleinfeld, 818 F.2d 1089, 1097 (3rd Cir.1......
  • Request a trial to view additional results
4 books & journal articles
  • Collateral Estoppel and Prima Facie Effect
    • United States
    • ABA Antitrust Library Antitrust Evidence Handbook
    • January 1, 2016
    ...addressed and rested on the merits of a decision below, the decision could be afforded preclusive effect) (citing Stauble v. Warrob, Inc., 977 F.2d 690, 693 (1st Cir. 1992)); Hiley v. United States, 807 F.2d 623, 625 (7th Cir. 1986) (accord). C. Nonmutual Collateral Estoppel 1. Definition N......
  • Table of Cases
    • United States
    • James Publishing Practical Law Books Preparing for Trial in Federal Court
    • May 4, 2010
    ...7-50 Staton , 327 F.3d at 969, Form 7-49 Staton v. Boeing Co. , 327 F.3d 938, 969-70 (9th Cir. 2003), Form 7-49 Stauble v. Warrob Inc ., 977 F.2d 690, 691 (1st Cir. 1992), §1:24 Stavenjord v. Mont. State Fund , 2006 MT 257, ¶ 27 334 Mont. 117, 146 P.3d 724, Form 7-49 Stearns v. U.S. Distric......
  • Table of Cases
    • United States
    • ABA Antitrust Library Antitrust Evidence Handbook
    • January 1, 2016
    ...Memory (SRAM) Antitrust Litig., No. 4:07-md-1819 CW, 2011 U.S. Dist. LEXIS 32156 (N.D. Cal. Jan. 12, 2011), 72 Stauble v. Warrob, Inc., 977 F.2d 690 (1st Cir. 1992), 262 Stecyk v. Bell Helicopter Textron, Inc., 295 F.3d 408 (3d Cir. 2002), 213 Stein v. Pacific Bell, No. C 00-2915, 2007 WL 8......
  • Organization and strategy
    • United States
    • James Publishing Practical Law Books Preparing for Trial in Federal Court
    • May 4, 2010
    ...authority of a special master to assist the judge by making recommendations concerning complex issues. See Stauble v. Warrob Inc. , 977 F.2d 690, 691 (1st Cir. 1992). Amended FRCP 53 does not change the responsibility of an Article III judge to rule on all dispositive matters. It does, howe......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT