
USCA1 Opinion

	




          October 13, 1992                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                              _________________________          No. 92-1102                 ALFRED STAUBLE, INDIVIDUALLY AND F/U/B WARROB, INC.,                                 Plaintiff, Appellee,                                          v.                                WARROB, INC., ET AL.,                               Defendants, Appellants.                                 ____________________          No. 92-1103                       ALFRED STAUBLE, INDIVIDUALLY AND F/U/B                              MONTECHUSETTS LEASING CORP.,                                 Plaintiff, Appellee,                                          v.                         MONTECHUSETTS LEASING CORP., ET AL.,                               Defendants, Appellants.                              _________________________                    APPEALS FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                     [Hon. A. David Mazzone, U.S. District Judge]                                             ___________________                              _________________________                                        Before                         Torruella and Selya, Circuit Judges,                                              ______________                             and Zobel,* District Judge.                                         ______________                              _________________________               Robert S. Potters, with  whom Potters & Brown was  on brief,               _________________             _______________          for appellants.               Peter  S.  Terris, with  whom Harvey  Nosowitz and  Palmer &               _________________             ________________      ________          Dodge were on brief, for appellee.          _____                              _________________________                              _________________________          _______________          *Of the District of Massachusetts, sitting by designation.                    SELYA,  Circuit  Judge.   This  appeal  requires us  to                    SELYA,  Circuit  Judge.                            ______________          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          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                                        ____________________               1Although  Stauble   brought  two  suits,  the   cases  were          consolidated  below.  Hence, we treat them as if they comprised a          single civil action.                                          3          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                                        ____________________               2The district court selected as special master the Honorable          Walter  H.  McLaughlin,  Sr.,  a  retired  chief  judge   of  the          Massachusetts Superior Court.  Judge McLaughlin's credentials are          conceded by all concerned.                                          4          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                                          5          made their peace with Stauble.  The other defendants appeal.3          II.  STANDARD OF REVIEW          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., ___ F.2d ___, ___ (1st Cir. 1992) [No. 91-2116, slip op. at          ____          8]  (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 (1980)  (per          ____________      _____________          curiam).   The writ's "currency is not profligately to be spent."                                        ____________________               3The two appeals parallel the two underlying lawsuits.   See                                                                        ___          supra  note 1.    Although the  appeals  focus primarily  on  the          _____          propriety  of the  district  court's reference  of the  liability          determination to a master,  the defendants assign error  in other          respects as well.   Inasmuch as we remand for  a new trial before          the district court, see infra, we do not pass upon the additional                              ___ _____          assignments of error.                                          6          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                                               _____ ______          (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 (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                                          7          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          III.  DISCUSSION                                          A.                                          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 (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                                        ____________________               4To  be sure,  appellants  were forced  to  undergo a  trial          before they could test the validity of the order of  reference on          direct appeal.  But,  we have consistently "rejected  the general          burden-someness of  litigation as  a basis for  assuming mandamus          jurisdiction."  In  re Justices  of the Supreme  Court of  Puerto                          _________________________________________________          Rico, 695 F.2d 17, 20 (1st Cir. 1982); see also Bushkin, 864 F.2d          ____                                   ___ ____ _______          at 244 & n.1.               5While  Article  III courts  also  review determinations  of          adjudicators who  do not possess Article III stature, the Supreme          Court  has  long  recognized   distinctions  between     judicial          assistants (such  as  masters) and,  for example,  administrative          courts.  See generally Northern Pipeline, 458 U.S. at 50; Crowell                   ___ _________ _________________                  _______          v. Benson, 285 U.S.  22, 54-64 (1932).  Our  analysis today deals             ______          exclusively  with the former category,  that is, those who assist                                          8          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.  United States,  111  S.  Ct.  2661, 2669  (1991)          ___  ______      _____________          ("litigants may waive their personal right to have an Article III          judge  preside over a  civil trial"); Goldstein  v. Kelleher, 728                                                _________     ________          F.2d 32, 35 (1st Cir.) (same), cert. denied, 469 U.S. 852 (1984),                                         _____ ______                                        ____________________          judges  in "the performance of specific  judicial duties, as they          may arise  in the progress of  a cause."  Ex  Parte Peterson, 253                                                    _________ ________          U.S. 300, 312 (1920).                                          9          Rule 53 anticipates, and  practice bears out, that in  respect to          the  conduct of  trials proper,  masters are  most helpful  where          complex quantitative issues bearing  on damages must be resolved.          Indeed,  the district  court may  appoint a  master  to determine          "matters of  account, and  of difficult computation  of damages,"          Fed. R.  Civ. P. 53(b), even over the objection of one or more of          the  parties,  without  providing  a further  rationale  for  the          appointment.                    When the issues referred to a master go beyond hard-to-          measure damages  or an accounting, however, the  waters grow more          turbid.   In  that  event, only  an  "exceptional condition"  can          justify a reference.   Id.  The Supreme Court  shed some light on                                 ___          the meaning of the term in La  Buy v. Howes Leather Co., 352 U.S.                                     _______    _________________          249  (1957).  There, the trial court referred a complex antitrust          case  to a master, over objection, because the court's docket was          "extremely congested"  and the  trial promised to  be protracted.          Id. at 253.   The  Supreme Court vacated  the reference,  holding          ___          that neither a  crowded calendar nor the  presence of complicated          issues warranted appointment of a master.  Id. at 259.  The Court                                                     ___          noted that litigants  in complex  cases are no  less entitled  to          trial  before a  court  than their  counterparts in  more mundane          disputes.  Id.   What is more,  if congestion or complexity  were                     ___          sufficient   to  meet   the  "exceptional   condition"  criterion          established by  Rule 53, the exception would jeopardize the rule.          Id.   The wisdom  of  La Buy  is evident:    crowded dockets  and          ___                   ______          complex business disputes such  as the one we confront  today are                                          10          dismayingly  commonplace; thus,  predicating access  to auxiliary          adjudicators on the incidence  of such circumstances would likely          trivialize Article III.                                          B.                                          B.                                          __                    In  this  case,  Stauble  urges  that  more  than  mere          complexity  (if an  oxymoron can  be forgiven)  is involved.   He          asserts   that  the   interweaving  of   liability   and  damages          constitutes  the   requisite  "exceptional  condition."     As  a          practical matter, Stauble's position has some superficial appeal.          On closer  scrutiny, however, the perceived  imbrication seems to          be  the  same old  whine  in  a different  bottle.    Saying that          liability  and damages  are inextricably  intertwined is  just an          alliterative  way  of saying  that a  given  case suffers  from a          particular strain of complexity.                     We need not  probe this  point too deeply  for, in  the          last analysis,  we cannot constitutionally forge  an "exceptional          condition"  test for cases of blended liability and damages.  The          overriding consideration,  applicable in  this case, is  that the          Constitution  prohibits  us   from  allowing  the   nonconsensual          reference of a  fundamental issue of liability  to an adjudicator          who does  not possess the  attributes that  Article III  demands.          Because  Rule 53 cannot retreat from what Article III requires, a          master  cannot  supplant  the  district  judge.    Accord  In  re                                                             ______  ______          Bituminous Coal Operators' Ass'n, Inc., 949 F.2d 1165, 1168 (D.C.          ______________________________________          Cir.  1991).   Determining  bottom-line  legal  questions is  the          responsibility of the court itself.  See Reilly v. United States,                                               ___ ______    _____________                                          11          863  F.2d 149,  158 (1st  Cir.  1988); Reed  v. Cleveland  Bd. of                                                 ____     _________________          Educ.,  607 F.2d 737, 747-48  (6th Cir. 1979);  see also Madrigal          _____                                           ___ ____ ________          Audio  Labs., Inc. v.  Cello, Ltd.,  799 F.2d  814, 818  (2d Cir.          __________________     ___________          1986) (that judge did not "understand anything about . . . patent          or  trademark" law and was  "not about to  educate [him]self" was          not  sufficient reason to justify appointment of a master to hear          and  determine  the  entire case).    Thus,  Article  III bars  a          district court,  "of its own motion,  or upon the request  of one          party,"  from "abdicat[ing]  its  duty to  determine  by its  own          judgment the  controversy presented,  and devolve that  duty upon          any  of  its officers."    Kimberly v.  Arms, 129  U.S.  512, 524                                     ________     ____          (1889).                     To  be  sure, Article  III  does  not  require  that  a          district judge find every  fact and determine every issue  of law                              _____                     _____          involved in a case.   In respect to preparatory  issues (such as,          say, the appropriateness of class certification) or consummatory,          remedy-related  issues  (such  as,  say, the  performance  of  an          accounting), when the reference otherwise comports with Rule 53 a          master  may be appointed to  make findings of  fact and recommend          conclusions of law.  By the same token, a master who is appointed          to oversee pretrial discovery will often investigate the parties'          compliance with the relevant Federal Rules as  part of his or her          factfinding.  As long as  the district court discerns  sufficient          supporting evidence  and is satisfied that the master applied the          correct  legal standards, it may  rely on the  master's report as          part of its own  determination of liability.  See,  e.g., Crowell                                                        ___   ____  _______                                          12          v. Benson,  285 U.S. 22, 51  (1932); In re Armco,  Inc., 770 F.2d             ______                            __________________          103, 105 (8th Cir.  1985) (holding that the district  court could          properly   delegate   broad    pretrial   authority,    including          responsibility   for  conducting   evidentiary  hearings,   to  a          master);6  see also In re  Bituminous, 949 F.2d  at 1169 (stating                     ___ ____ _________________          that a trial court's use of a special master is acceptable at the          remedy-implementation stage of ongoing litigation).                    Yet,  there is  an important  distinction between  such          collateral   issues,   on   the   one   hand,   and   fundamental          determinations  of  liability, on  the  other hand.    The former          comprise  table  setting and  table  clearing,  while the  latter          comprise  the meal itself.   As the  Court has observed,  where a          district judge does not hear and determine the main course, i.e.,                                                                      ____          the   meat-and-potatoes  issues   of  liability,   there   is  an          "abdication of the judicial  function depriving the parties of  a          trial  before the  court  on the  basic  issues involved  in  the          litigation."   La Buy, 352  U.S. at 256.   Because  determining a                         ______          fundamental question of liability goes beyond mere assistance and          reaches  the essential  judicial  function identified  by Article          III,  Rule 53 does not  allow the responsibility  for making such          judgments to be  delegated to  masters (or other  persons not  of                                        ____________________               6Inexplicably, the Armco court  indicated that it would have                                  _____          approved the determination of dispositive pretrial motions by the                                        ___________          master.   In re  Armco,  770 F.2d  at 105  (dictum).   The  Sixth                    ____________          Circuit  was "unable to follow the  [Armco] court's reasoning" on          this point.  In re  United States, 816 F.2d 1083, 1091  (6th Cir.                       ____________________          1987).  We, too, are baffled.                                          13          Article   III  stature)   in  the   face  of   a  contemporaneous          objection.7                                         C.                                           C.                                         __                    In plotting the intersection where Article III and Rule          53 cross,  we do not write on a  pristine page.  The four circuit          courts  that  have confronted  this  issue  in the  post-Northern                                                                   ________          Pipeline era have  refused to  allow references  of liability  to          ________          masters over timely objection.8   See In re Bituminous,  949 F.2d                                            ___ ________________          at  1169  (holding  that, under  Article  III  and  Rule 53,  the          district judge must decide "dispositive issues of fact and law");          Burlington  N. R.R. v. Department of Revenue, 934 F.2d 1064, 1073          ___________________    _____________________          (9th Cir.  1991) (ruling that  the district court's  reference of          the issue  of liability  to a  master violated  Rule 53, and  its                                        ____________________               7We  think it  is instructive that  in drafting  the Federal          Magistrates Act of 1979, codified as amended at 28 U.S.C.    631-          639 (1988),  Congress was  careful to avoid  granting magistrates          the power to rule  on dispositive motions or  determine liability          without  the   parties'  consent.      Magistrates  may   proffer          recommendations on such  matters, but, if any party  objects, the          district  court  must make  a  de novo  determination,  which may                                         __ ____          include recalling witnesses where  credibility is critical to the          inquiry.    See 28  U.S.C.    636(b)(1)(B).   We  have previously                      ___          warned that if a  magistrate's authority was not so  limited, "we          would find this . . .  troubling indeed."  Goldstein, 728 F.2d at                                                     _________          35.               8Some circuits have not decided the issue directly, but have          authored dicta supportive of one position or the other.  Compare,                                                                   _______          e.g., Jack Walters &  Sons Corp. v. Morton Bldg., Inc.,  737 F.2d          ____  __________________________    __________________          698,  712-13 (7th  Cir.) (if  objection had  been preserved,  the          court  "might  well  [have]   reverse[d]"  reference  of  summary          judgment proceedings to  a master), cert.  denied, 469 U.S.  1018                                              _____  ______          (1984) with, e.g., Sims Consol., Ltd. v. Irrigation Power Equip.,                 ____  ____  __________________    ________________________          Inc., 518 F.2d  413, 417  (10th Cir.) (suggesting  that it  would          ____          have been proper to refer the case to a master  for trial because          of the great distance the witnesses had travelled), cert. denied,                                                              _____ ______          423 U.S. 913 (1975).  We note that Sims, unlike Jack Walters, was                                             ____         ____________          decided before the Supreme Court handed down Northern Pipeline.                                                       _________________                                          14          subsequent  failure independently to determine liability violated          Article III); In re  United States, 816 F.2d 1083, 1092 (6th Cir.                        ____________________          1987) (holding  that the reference  of dispositive  motions to  a          master violated the  litigants' "right to  have the basic  issues          heard  by the  district judge");  In re  Armco, 770  F.2d at  105                                            ____________          (concluding  that, under  Rule 53,  the "district court  erred in          granting the master authority  to preside at trial on  the merits          of this case").  But see  Loral Corp. v. McDonnell Douglas Corp.,                           ___ ___  ___________    _______________________          558 F.2d 1130 (2d  Cir. 1977) (upholding over objection,  in pre-          Northern Pipeline era,  district court's  reference of  liability          _________________          issues  to  a  master  on  the  ground  that  the  importance  of          classified materials to the litigation constituted an exceptional          condition).                    Here,  the  district  court, understandably  frustrated          with the snail's pace of the litigation, referred the entire case          to a special master for findings  of fact and conclusions of law,          with no boundaries on the master's authority and no provision for          anything remotely  resembling de novo  review.  The  court lacked                                        __ ____          the  authority to handle the case in this fashion.  Nonconsensual          reference  of fundamental  issues of  liability to  a master  for          adjudication is not consonant with either Rule 53 or Article III.                                          D.                                          D.                                          __                    Nor does  the district court's summary  confirmation of          the  master's final  report  rend harmless  the overly  ambitious          reference.  The  court's entire rescript  consumed less than  two          pages and stated that  the judge's review "was made  in the light                                          15          of  the strong presumption of  validity" that he  accorded to the          master's findings and  conclusions.  We have  regularly held that          the mere  "laying on of hands"  by a district judge  who adopts a          magistrate's  or master's recommendation  of liability  pro forma                                                                  ___ _____          cannot  inoculate   a  proceeding  against   the  pathology  that          invariably follows from noncompliance with Article III.  See Reed                                                                   ___ ____          v. Board  of Election Comm'rs, 459 F.2d 121, 123 (1st Cir. 1972);             __________________________          Rainha v.  Cassidy, 454 F.2d 207,  208 (1st Cir. 1972);  see also          ______     _______                                       ___ ____          Burlington  N. R.R., 934 F.2d  at 1074 (ruling  that the district          ___________________          court  violated  Article  III   where  its  review  "provided  no          substantive  explanation for  affirming" the  master's findings).          In the circumstances of this case, the judicial  determination of          liability was not sufficiently independent to save the day.                    Like the bark of  a dog to Sherlock Holmes,  see Arthur                                                                 ___          Conan Doyle,  Silver Blaze, in The  Complete Original Illustrated                                         __________________________________          Sherlock Holmes 117 (1976), the indicia of independent review are          _______________          telling  in this  case  by their  absence.   The  district  court          adopted the master's report without a hearing, without any stated          analysis  of  the evidence,  and  without any  discussion  of the          master's legal conclusions.  A master's legal conclusions, unlike          his or her findings of fact, must be reviewed de novo.  See Polin                                                        __ ____   ___ _____          v. Dun & Bradstreet,  Inc., 634 F.2d 1319, 1321 (10th  Cir. 1980)             _______________________          (describing district court scrutiny of master's legal conclusions          as "essential"); D. M. W. Contracting Co. v. Stolz, 158 F.2d 405,                           ________________________    _____          407  (D.C.  Cir.  1946) (similar),  cert.  denied,  330 U.S.  839                                              _____  ______          (1947).    Moreover,  the  controversy between  Stauble  and  the                                          16          defendants  turned  almost  entirely  on credibility     and  the          district  court heard  no  witnesses.   If  a transcript  of  the          hearings  before the master  exists   a point  which is not clear          from  the record   there is no  sign that the district court read          it.9   Finally, although the defendants  objected in considerable          detail to the master's report, the district court did not comment          in  any particularized way on  their objections.   Mindful of how          the  matter was handled  below, we reluctantly  conclude that the          district judge's  contribution to  the adjudication  of Stauble's          claims   was   not  sufficiently   participatory   to   cure  the          constitutional infirmity.          IV.  THE REMEDY          IV.  THE REMEDY                    This   litigation   recently  mourned   its  fourteenth          anniversary.    It  has  already  consumed  inordinate  time  and          resources.10   At  this  point, the  principal beneficiaries  are                                        ____________________               9The record  on appeal contains  no transcript of  the trial          before the master.  The district court docket does  not show that          a  transcript was filed (or even prepared).  The district judge's          rescript does not mention a transcript.  In what seems a contrary          vein, the rescript recites that  the court reviewed "the  Special          Master's Final Report and defendants' objections thereto,"  along          with  "the  plaintiff's application  for  adoption  of the  Final          Report, supporting memorandum  and appendices, and,  finally, the          defendants' opposition."               10The  history  of  these  lawsuits bears  out  the  Court's          warning that  indiscriminate references  of cases to  masters may          actually  increase,  rather  than  shorten, the  amount  of  time          necessary to bring litigation to fruition.  See La Buy, 352  U.S.                                                      ___ ______          at  253 n.5.   Although  this case  was trial-ready  in mid-1986,          final judgment was not entered below until December 19, 1991.  Of          the intervening five and  one-half years, roughly eighteen months          was spent fighting over whether the case should  be referred to a          master;  a period  of  approximately eight  months was  needed to          produce  thirty-five trial days; a year and one-half elapsed from          the  trial's end to the rendition of the master's report; another                                          17          the  litigators, not the litigants:  the award of attorneys' fees          already dwarfs the award of damages.                      Against this  lugubrious backdrop, the  appellee argues          that, even if the lower court lapsed into error, we  ought not to          perpetuate the litigation, but should decide it here and now.  In          support of  this proposition, he cites Adventures in Good Eating,                                                 __________________________          Inc.  v.  Best  Places  to Eat,  Inc.,  131  F.2d  809 (7th  Cir.          ____      ___________________________          1942).11   There,  the Seventh  Circuit was  "unable to  find any          exceptional conditions such as  the rule . . .  contemplates" and          held that the district  court erred in referring the  entire case          to a  master.  Id.  at 814.   The court  of appeals  nevertheless                         ___          reviewed the  record and upheld the  master's conclusion, finding          it to be "one which was well nigh inescapable."  Id.                                                           ___                    Despite our  fervent wish that it  were otherwise, this          is not such a case.  Unlike Adventures in Good Eating, the record                                      _________________________                                        ____________________          eight  months  went by  before the  district  court acted  on the          defendants'  objections to  the report;  and over  a  year passed          before the  court disposed of  the prevailing party's  claims for          attorneys' fees and costs and entered final judgment.               11Stauble also  relies on Johnson  Fare Box Co.  v. National                                         _____________________     ________          Rejectors,  Inc., 269  F.2d  348 (8th  Cir.  1959) for  the  same          ________________          proposition.   Such reliance is  mislaid.  In  Johnson, the court                                                         _______          held that the reference to a  master for trial was not  justified          and  punished the defendants (who had sought the reference in the          first place) by taxing an extra share  of the costs against them.          Id. at  351.  Johnson's  approach is not helpful  where, as here,          ___           _______          neither party  requested the  reference.  Moreover,  although the          Johnson  court stated  as  an  aside  that an  "improvidently  or          _______          improperly  granted"  order of  reference  would  not necessarily          "entitle the [losing party] to a reversal," id. (dictum), a later                                                      ___          opinion of the Eighth Circuit aligns that court with the views we          announce today and, in the bargain, divests the Johnson dictum of                                                          _______          the significance that Stauble  attaches to it.  See  In re Armco,                                                          ___  ___________          770 F.2d at 103.                                          18          in this case is  voluminous, the factual issues are  tangled, and          the legal issues are  largely factbound.  On several  key points,          the testimony is  capable of supporting conflicting  conclusions.          Credibility  is   vital  to  a  reasoned   determination  of  the          litigation.   In  such  straitened circumstances,  even the  most          searching review of the record by an appellate court would not be          a  satisfactory substitute  for a  trial conducted  in accordance          with Article III.  See Dedham Water, ___ F.2d at ___ [slip op. at                             ___ ____________          22] (appellate factfinding is generally "permissible only when no          other resolution  of a factbound question would,  on the compiled          record,  be sustainable")  (collecting cases).   While  we deeply          regret  the colossal waste of time and resources that has plagued          this  litigation,  the   case  must  be  tried  by  the  district          court.12  The Constitution offers no other principled choice.          V.  CONCLUSION          V.  CONCLUSION                    Article  III requires  that the  judicial power  of the          United States be  exercised by federal judges appointed  for life          tenure and  protected  from diminished  compensation.    Although          parties  to litigation may agree, at the  behest of a judge or at          their own  contrivance,  to  make  alternative  arrangements  for                                        ____________________               12At  oral argument before us,  Stauble conceded that, if we          found  the  proceedings  below  to  have  been   constitutionally          deficient  and  declined  to  decide the  merits  ourselves,  the          appropriate remedy on the facts of this case would be  a full new          trial  before the district court.   Because the  parties agree on          this  point,  we leave  for another  day  the possibility  that a          master's  findings  and conclusions  on  a  fundamental issue  of          liability might perhaps be salvaged, even after appeal, by having          the district court  conduct a deeper, more participatory  sort of          review.                                          19          dispute resolution at  the hands of  judicial assistants or  even          private  citizens, parties who object to such a departure may not          be  forced to have the fundamental  issues of their disagreement,          which would otherwise  come within the jurisdiction of an Article          III court, decided by non-Article  III surrogates.13  It  follows          that,  in this  instance, the  district court delegated  too much          judicial power by asking  a special master, over  the defendants'          timely  objection,  to  determine   the  entire  case,  liability          included.                    We  need  go no  further.   The  order of  reference is          reversed,  the  judgment  below  is vacated,  and  the  cause  is          remanded to  the district  court for a  new trial.   All  parties          shall bear their own costs.          So Ordered.          So Ordered.          __________                                        ____________________               13A judge may,  of course,  refer the  fundamental issue  of          liability to a master without running afoul of  the Constitution,          so long  as the judge  is prepared  to afford de  novo review  or                                                        __  ____          otherwise to honor Article III's commands.                                          20
