Special masters are another category of ADR

6 minute read

REUTERS/Henry Romero

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September 15, 2021 - When we think of Alternative Dispute Resolution (ADR) we often think of arbitration and mediation, both of which provide alternatives to the classic litigation in court. But there are other categories of ADR that are gaining in popularity, and one of those is the use of Special Masters. These court appointments are made for the very purpose of resolving disputes that the court cannot resolve because of the lack of sufficient judicial resources or the lack of the required expertise or both.

I begin with the sensitive subject of lack of judicial resources. In our overburdened state courts around the country, it is not atypical for a judge to handle a docket of upwards of 1,000 cases. For those of us who served in the federal system, that is a staggering number. The typical federal judge caseload ranges from 250 civil cases at the low end to a high of 600. While this is a substantial caseload, it is not as daunting as what state court judges are tasked with managing.

The federal system also has the benefit of Magistrate Judges — who are available to supervise discovery and conduct settlement conferences. Many state courts do not have the benefit of these experienced and highly qualified court adjuncts. In addition, federal judges generally have two to four law clerks per judge, who are top law school graduates well qualified to conduct research, check citations submitted by the parties, review huge record evidence, and work with the judge to draft judicial opinions.

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In most state courts, a judge may have one dedicated law secretary — usually a career job — and perhaps access to a law clerk pool. The available resources are often not sufficient to permit the judge to really dig into the nitty gritty of discovery disputes, settlement or the award of fees.

Most judges are generalists. Prior to joining the bench, they often practiced in a specialized area of the law and did not have familiarity with other areas that they now encounter for the first time. Because of that, they occasionally face technical issues as to which they lack sufficient familiarity or expertise. When that happens, they may seek the assistance of someone who has the expertise to assist the court in analyzing the problems presented by such issues.

Rule 53 of the Federal Rules of Civil Procedure, revised in 2003, provides a road map to federal judges for the appointment of Special Masters. It is a broad and flexible rule that now permits the appointment of a Special Master whenever the parties consent or when pretrial and/or post trial matters cannot be "effectively and timely addressed by an available district judge or magistrate judge."

It is plain that the governing rule allows for an appointment whenever the judge believes it will assist in the just and speedy resolution of a case. Rule 53 also requires that before making an appointment the court provide notice to the parties and an opportunity for them to be heard and to suggest candidates for the appointment. The selected Special Master must file an affidavit disclosing whether there are any grounds for disqualification prior to the court issuing an order of appointment. That order, once issued, should spell out the duties assigned to the Master, the scope of her assignment, and the powers she may exercise. The Rule also provides for the standard of judicial review of any order or recommendation issued by the Master.

Many state courts have adopted their own versions of Rule 53, some closely tracking the federal rule, others differing in significant respects. Not all state courts have promulgated a rule governing such appointments.

In January 2019, the American Bar Association adopted Guidelines for the Appointment and use of Special Masters in Federal and State Civil Litigation, consisting of nine guidelines. These guidelines provide a list of the many functions masters may perform; guidance for the selection of qualified, skilled and experienced masters; and guidance for the content of orders appointing masters. The guidelines also call for education of the bar regarding special masters.

Other guidelines set forth approaches that courts, counsel, parties and legislatures should take when considering appointments:

•Courts should consider such appointments in all complex cases often at the outset;

•Courts, counsel, and the parties should consider the range of functions a master can perform;

•When considering an appointment, courts should weigh the benefits against the costs;

•Courts should adopt rules for such appointments;

•Courts and legislatures should ensure that the rules will effectuate these goals.

Special Master appointments in high-profile cases have recently been the subject of much media attention. For example, a Special Master was appointed to conduct a privilege review of documents seized by law enforcement from the home and office of former New York City Mayor Rudy Giuliani, and of Michael Cohen, Mr. Trump's former private lawyer.

Another Special Master was appointed just a few weeks ago to review document discovery produced, or not produced, by Endo Pharmaceuticals, a defendant in the New York state court trial against several opioid manufacturers. A third recent example was the appointment of a Special Master, to conduct a privilege review of materials seized from an attorney in lieu of a "taint team" from the Department of Justice, which typically has been permitted to conduct such a review.

There are many other examples of the effective uses of special masters. These include: (1) discovery oversight; (2) settlement and administration of settlements; (3) claims administration; (4) reviewing auditing or accounting; (5) determining counsel fees particularly in class actions; (6) monitors of prisons, transportation, or businesses; (7) resolving highly technical e-discovery disputes; and (8) conducting Markman hearings in complex patent cases followed by a recommendation to the court.

Uses are not limited to this short list. Appointments can be made to cover any role that a court decides would expedite the litigation and help achieve a just and speedy resolution.

As a trial judge in the federal court, I appointed a number of Special Masters to serve in some of the capacities described above. Each time I did so, the assistance was invaluable to the court and the parties. As an ADR practitioner I have now been appointed several times to serve as a Special Master in many different roles including supervising discovery disputes, conducting privilege reviews, and recommending whether class certification should be granted and whether certain parties qualified as members of the class. Each appointment has been challenging and time-intensive, but I have no doubt that it assisted the court and the parties to reach a resolution that might otherwise have resulted in greater expense and delay.

I end by encouraging courts and counsel to consider when, and if, the appointment of a Special Master will help to achieve a speedier and more cost-effective resolution of a pending matter.

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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. Westlaw Today is owned by Thomson Reuters and operates independently of Reuters News.

Hon. Shira A. Scheindlin, a former U.S. District Judge for the Southern District of New York, is of counsel at Stroock & Stroock & Lavan LLP in New York City. She has arbitrated or mediated more than 60 complex civil cases since leaving the bench in 2016. She can be reached at sscheindlin@stroock.com.