In re Armco, Inc.

No. 85-1598 (8th Cir. July 18, 1985)

The court holds that reference of liability issues to a Special Master in a case initiated under the Comprehensive Environmental Response, Compensation, and Liability Act was improper, but upholds the reference with regard to pretrial matters and damages. First, the court notes that Federal Rule of Civil Procedure 53(b) and cases interpreting it make reference to a master the exception and not the rule. The court then holds that the district court erred in granting the master authority to preside at trial on the merits of the case, but that such authority was proper concerning pretrial matters, including discovery and summary judgment motions, and after trial to conduct evidentiary hearings to determine damages owed by any parties found liable or to supervise any injunctive relief granted.

Counsel for Petitioners
S. William Livingston
Covington & Burling
1201 Pennsylvania Ave., P.O. Box 7566, Washington DC 20044
(202) 662-6000

Counsel for Respondents
David C. Shilton
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-5580

James Jeans
5100 Rockhill Rd., Kansas City MO 64110
(816) 276-1581

Kenneth Josephson, Ass't U.S. Attorney
811 Grand Ave., Kansas City MO 64106
(816) 374-3122

[15 ELR 20775]

Per curiam

Armco, Inc., FMC Corporation, IBM Corporation, and AT&T Technologies, Inc., petition this Court for a writ of mandamus to revoke the authority of the Special Master to prepare a report and recommendation pertaining to liability and remedy in this environmental litigation initiated under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. §§ 9606(a) and 9607(a). The government's response to the petition for writ of mandamus also urged the revocation of the Special Master's authority to preside at trial. In a separate filing, the district court defended its reference to the master.After a careful review of the materials submitted by all the parties, we upheld the district court's reference to the Special Master, but with specified limitations on the master's authority.

The standard for evaluating references to a master is set out in Fed. R. Civ. P. 53(b), which provides in pertinent part:

A reference to a master shall be the exception and not the rule. In actions to be tried by a jury, a reference shall be made only when the issues are complicated; 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.

The courts have tended to read the rule somewhat narrowly, closely circumscribing the range of circumstances in which reference to a master is appropriate. In LaBuy v. Howes Leather, 352 U.S. 249 (1957), the Supreme Court approved the Seventh Circuit's authority to issue a writ of mandamus requiring a district court judge to vacate his order of reference. The Court rejected as "exceptional circumstances" congestion of the court's docket, complexity of the referred case and anticipated length of trial.The Court noted, however, that "the detailed accounting required in order to determine the damages suffered by each plaintiff might be referred to a master after the court has determined the over-all liability of defendants[.]" Id. at 249. This Court has also restricted the circumstances in which reference is proper: "Beyond matter of account, difficult computation of damages, and unusual discovery, 'it is difficult to conceive of a reference of a nonjury case that will meet the rigid standards of the LaBuy decision.'" Liptak v. United States, 748 F.2d 1254, 1257 (8th Cir. 1984) (quoting 9 C. Wright & A. Miller, Federal Practice and Procedure § 2605 at 791 (1971)).

The principal matter at issue is the scope of the district court's reference to the magistrate; petitioners complain that the circumstances do not justify reference of all pretrial and discovery matters as well as the conduct of trial on the merits, including the preparation of findings of fact and conclusions of law. Although LaBuy and Liptak limit the authority of the master, LaBuy was a case in which a district court had abused its authority to appoint masters. Other cases help ascertain the breadth of his powers within those limits. California v. Texas, 459 U.S. 963 (1982) (mem.); Costello v. Wainwright, 387 F. Supp. 324, 327 (M.D. Fal. 1973); Biechele v. Norfolk & Western Ry., 309 F. Supp. 354, 359 (N.D. Ohio 1969).

We believe that the district court erred in granting the master authority to preside at trial on the merits of this case. We also believe, however, that the district court acted properly in granting the master the broad authority to supervise and conduct pretrial matters, including discovery activity, the production and arrangement of exhibits and stipulations of fact, the power to hear motions for summary judgment or dismissal and to make recommendations with respect thereto. If the district court determines that liability rests with some or all of the parties, it may request the master to conduct evidentiary rehearings with respect to damages and alternative relief and make recommendations with respect to these matters. It may also direct the magistrate to monitor and supervise any injunctive relief granted and to make reports to it with respect to compliance with any decrees entered.

Therefore, we issue the writ of mandamus and direct the district court to revise its reference of this case to the master, in accordance with the opinion of this Court.