The Court of Appeals Decision (Post five--The Special Master Appointment and end of majority opinion):
V.
Though the proceedings below may continue, they must do so without the preliminary injunction. With respect to the continuation, Microsoft argues that [*56] the "blanket" reference to a special master violates Article III, and, in the alternative, that the case does not present the exceptional circumstances required under Federal Rule of Civil Procedure 53(b) n21 and La Buy v. Howes Leather Co., 352 U.S. 249, 1 L. Ed. 2d 290, 77 S. Ct. 309 (1957), to justify a nonconsensual reference. Future developments may moot this problem. In view of our interpretation of the consent decree, tentative though it be, see University of Texas v. Camenisch, 451 U.S. 390, 395, 68 L. Ed. 2d 175, 101 S. Ct. 1830 (1981); Taylor v. FDIC, 132 F.3d 753, 766 (D.C. Cir. 1997), the Department may well regard further pursuit of the case as unpromising, especially given the alternate avenues developing in its recently launched separate attacks on Microsoft's practices, Nos. 98-1232 and 98-1233. But no such mooting has yet occurred. Accordingly, we address the questions of whether mandamus is available to correct the asserted illegality in the reference and, if so, whether it should issue in this case. We answer yes to both.
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n21 The rule provides in relevant part: "A reference to a master shall be the exception and not the rule. 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."
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The Department claims that mandamus jurisdiction is lacking. Its primary theory is evidently that an unlawful reference can be reached by mandamus only if it is so outrageous as to fail to "comport[ ] with Article III." Supplemental Br. of United States 9. But La Buy, the Supreme Court's authoritative pass at the use of mandamus to correct illegal references, rests simply on the presence of "an abuse of [the judge's] power under Rule 53(b)," 352 U.S. at 256, and on that abuse being "clear," id. at 257. To be sure, La Buy observed that the court of appeals there confronted a district court "practice" of freewheeling references to masters: "There is an end of patience." Id. at 258. But we have explicitly rejected the idea that mandamus is available only to correct "persistent disregard" of the limits on references. In re Bituminous Coal Operators' Ass'n, 292 U.S. App. D.C. 309, 949 F.2d 1165, 1168 n.4 (D.C. Cir. 1991).
Of course it may be that the boundaries of Rule 53(b) and Article III are close, so that the La Buy Court, in addressing the Rule 53 "exceptional conditions" criterion, was actually finding unconstitutional conduct. If true, this helps the [*58] Department not at all. If mandamus is available only to correct unconstitutional abdications of Article III power, but a clear abuse of discretion under Rule 53 amounts to such an abdication, we may properly exercise mandamus jurisdiction if we find the same sort of clear abuse of discretion that the La Buy Court found.
It is objected that a challenge at the end of the proceeding provides ample remedy, and black-letter mandamus law tells us that such adequacy of remedy defeats mandamus. In re Minister Papandreou, 1998 WL 163561 at * 1 (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, 276 U.S. App. D.C. 184, 869 F.2d 1503, 1508 (D.C. Cir. 1989) (reference to a master for purposes of determining relief is not an "abdication of the total judicial power" such as to justify mandamus). But the Court's action in La Buy appears necessarily to depend on the view that, at least at some point, even the temporary subjection of a party to a Potemkin jurisdiction so mocks the party's rights as to render [*59] end-of-the-line correction inadequate.
On the merits, the Department defends the reference on three grounds. First, it asserts that it falls within the well recognized category of references for purely remedial determinations, such as the accountings and computations of damages, which Rule 53(b) expressly permits. Second, it claims that the technological complexity of the case and need for speed constitute "exceptional conditions" under the Rule. And third, it says that the order contains an implicit reservation by the district court of a power of de novo review, and that that unstated reservation saves the order.
In saying that the reference was merely for purposes of supervising remediation the Department invokes the wellestablished tradition allowing use of special masters to oversee compliance. See generally Apex Fountain Sales, Inc. v. Kleinfeld, 818 F.2d 1089, 1097 (3d Cir. 1987) (citing cases). But this is not such a situation. The issue here is interpretation, not compliance; the parties' rights must be determined, not merely enforced. The matters referred to the master are no more "remedial" than would be those of any total referral of a contract case. The concern [*60] about nonconsensual references turns on the determination of rights, not on a formalistic division of the juridical universe into pre-trial, trial and post-trial. It is for this reason that special masters may not decide dispositive pretrial motions. See In re United States, 816 F.2d 1083, 1090 (6th Cir. 1987).
The Department also proposes that this is a case of such technological complexity as to be "exceptional." So far as the meaning of the consent decree is concerned, that is clearly false; the words are in plain English, and if their meaning is not clear it is not because of some deep technological issue but because of uncertainties in the purposes of the parties that drafted the decree, the sort of uncertainties that pervade contract actions. As for application of that meaning, we have just stated our interpretation, an interpretation that we regard as grounded, as are the related antitrust doctrines, in a realistic assessment of the institutional limits of the judiciary. Application of our reading of IV(E)(i) does not require a software expert; it precludes Microsoft from any purely artificial "bolting" of functionalities but is otherwise deferential to entrepreneurs' [*61] product design choices. n22
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n22 To the extent that adjudication may lead the court into deep technological mysteries, we note the court's power under Rule of Evidence 706 to appoint expert witnesses. Whether such an expert is appointed by agreement of the parties or not, the expert's exposure to cross-examination by both sides, see Rule 706(a), makes the device a far more apt way of drawing on expert resources than the district court's unilateral, unnoticed deputization of a vice-judge.
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More broadly, if La Buy was not complex, with its six defendants and nearly 100 plaintiffs (87 in one suit, six in another), 27 pages of docket entries in one of the cases for preliminary pleas and motions, over 50 depositions, and intricate charges of monopolization and Robinson-Patman violations, 352 U.S. at 251-52, we see no reason to think of this case as especially complicated. In fact, it is very doubtful that complexity tends to legitimate references to a master at all. La Buy noted that the complexity of an antitrust [*62] case, rather than justifying a reference, "is an impelling reason for trial before a regular, experienced trial judge rather than before a temporary substitute appointed on an ad hoc basis and ordinarily not experienced in judicial work." Id. at 259.
Thus the only remaining question is whether some implicit district court reservation of a power of de novo review of the special master's report, as to both fact and law, could save the reference. First, we find no such implied reservation. The order itself recites that "the Special Master shall receive evidence and legal authority presented by the parties at such times and places, and in such manner as he shall prescribe, and shall propose findings of fact and conclusions of law for consideration by the Court on the issues raised by this case." J.A. 1301 (emphasis added). The Department suggests that the use of "propose" is somehow helpful, and distinguishes the reference from that in Bituminous Coal, which invited "recommended findings of fact and conclusions of law." 949 F.2d at 1166 (emphasis added). The difference in wording is immaterial, and in any event a special master's findings and conclusions are [*63] always advisory. Thus, even if we thought that a reservation of de novo review could save the reference we would have to vacate it, subject to possible re-issuance with an unequivocal commitment to non-deferential review. But we think, in fact, that no such rescue mechanism is available.
Microsoft notes Rule 53(e)(2)'s instruction that in non-jury trials, "the court shall accept the master's findings of fact unless clearly erroneous." (emphasis added). It reads this, as have courts and commentators, as making deferential review mandatory. See, e.g., Williams v. Lane, 851 F.2d 867, 884 (7th Cir. 1988); Apex Fountain, 818 F.2d at 1097; In re Crystal Palace Gambling Hall, 817 F.2d 1361, 1364 (9th Cir. 1987); In re United States, 816 F.2d at 1087, 1088; 9A Charles A. Wright & Arthur R. Miller, Federal Practice & Procedure 2605 at 670 (1995).
The Department counters with a footnote from Stauble to the effect that a district court may refer fundamental issues of liability if he affords de novo review. 977 F.2d at 698 n.13. But compare id. at 698 n.12 (explaining that, because the parties have agreed that if the reference were constitutionally [*64] deficient the remedy would be remand for a full trial before the district court, the court will leave for "another day" the possibility that a master's findings on liability might "perhaps be salvaged, even after appeal, by having the district court conduct a deeper, more participatory sort of review."). At most, however, the thought reflected in the Stauble footnote might save a reference from invalidation under the Constitution; that possibility would do little to make it any less the sort of clear abuse of discretion that is fatal under La Buy. The same is equally true of the observation in United States v. Raddatz, 447 U.S. 667, 683 n.11, 65 L. Ed. 2d 424, 100 S. Ct. 2406 (1980), saying that the Court itself, in the exercise of its original Article III jurisdiction, acts on the basis of special masters' reports. Clearly that practice tells us nothing about the presence of a clear abuse of discretion under Rule 53(b).
We note some ambiguity on this point in our decision in Bituminous Coal. Our concluding directive told the judge to "revise his order of reference ... and to decide de novo, without deferring to a special master, all potentially dispositive [*65] questions of fact or law." 949 F.2d at 1169. The Department thinks that this implicitly endorsed the possibility of a non-deferential reference. We think not. In Bituminous Coal we rejected the coal operators' suggestion that "any unconsented-to reference would constitute an abuse of judicial power," id. (emphasis added), but our rejection of that broad claim was based not on variations in scope of district court review but on our endorsement of the established and legitimate practice of using unconsented-to references for pretrial preparation or for implementation of remedies, id. And in the introductory summary of our disposition we said that the judge must "revise the order of reference to reserve for himself, and not delegate to the special master, the core function of making dispositive rulings, including findings of fact and conclusions of law on issues of liability." Id. at 1166. In short, when we said in Bituminous Coal that we were granting the writ "not because the district judge simply abused his discretion, but because he has no discretion to impose on parties against their will 'a surrogate judge,' " id. at 1168 (citations omitted), we effectively [*66] ruled out nonconsensual references in nonjury cases except as to peripheral issues such as discovery and remedy. Compare In re Armco, Inc., 770 F.2d 103, 105 (8th Cir. 1985) ("Beyond matters 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 La Buy decision.") (internal quotations omitted).
In short, finding the case devoid of anything remotely "exceptional" within the meaning of Rule 53(b), we believe the reference to a master must be vacated. We do not, accordingly, reach Microsoft's claims that the specific referee is biased or has conducted the proceedings on referral improperly.
VI.
The preliminary injunction was issued without adequate notice and on an erroneous reading of IV(E)(i) of the consent decree. We accordingly reverse and remand. The reference to the master was in effect the imposition on the parties of a surrogate judge and either a clear abuse of discretion or an exercise of wholly non-existent discretion. We grant mandamus to vacate the reference.
So ordered. |
