                              In the
 United States Court of Appeals
                For the Seventh Circuit
                          ____________

Nos. 01-3550, 01-3676
LEE A. HATCHER, SR.,
                                              Plaintiff-Appellant,
                                                  Cross-Appellee,
                                 v.


CONSOLIDATED CITY OF INDIANAPOLIS
and STEVEN STAAL,
                                 Defendants-Appellees,
                                     Cross-Appellants.
                    ____________
           Appeals from the United States District Court
     for the Southern District of Indiana, Indianapolis Division.
         No. IP 96-1776-C-Y/G—Richard L. Young, Judge.
                          ____________
     ARGUED MAY 16, 2002—DECIDED MARCH 19, 2003
                     ____________


  Before EASTERBROOK, ROVNER, and DIANE P. WOOD,
Circuit Judges.
  DIANE P. WOOD, Circuit Judge. Lee Hatcher filed a civil
rights suit under 42 U.S.C. § 1983 against the City of
Indianapolis and several individually named defendants
(collectively the City) challenging his seizure and a search
of his dwelling and seeking $1 million in damages. After a
trial, the jury awarded him $18,908.50. Hatcher appealed
to this court, and the case settled for $100,000 plus at-
torneys’ fees while the appeal was pending. The district
2                                    Nos. 01-3550, 01-3676

court then, under rather unusual circumstances, awarded
Hatcher a fraction of the attorneys’ fees he sought. He
appeals, and the City cross-appeals the court’s decision to
grant certain costs to Hatcher. We vacate and remand for
further proceedings.


                             I
  Hatcher’s home was searched by a SWAT team on May
29, 1996. No narcotics were found, but he was arrested and
brought to the Marion County jail on various drug charges.
Those charges were later dismissed. Hatcher then filed this
§ 1983 suit against Steven Staal and two other officers
involved in the raid; he brought a supplemental state law
claim against the City. At trial, the jury found for Staal on
the excessive force claim, but it found for Hatcher on his
unlawful search and seizure claim and on his state law
claim and awarded him $18,908.50 in damages. The parties
cross-appealed the judgments, and the appeals were con-
solidated and submitted to this court’s Settlement Confer-
ence Office. The parties then entered into a settlement
providing for a $100,000 payment to Hatcher and his
attorneys, which the parties agreed “resolve[d] all the is-
sues raised by this lawsuit with the exception of legal fees
claimed by [various lawyers] . . . .” Settlement Agreement,
¶ 2. The legal fees issue, according to the agreement, would
“be referred to Magistrate V. Sue Shields for mediation and
resolution.” Id.
  The district court was advised of the decision of the par-
ties and seemed to endorse the referral to a named mag-
istrate judge, although the parties never formally filed
any other document in the district court indicating their
consent to the referral. In accordance with the agreement,
Magistrate Judge Shields set a briefing schedule and
ordered a settlement/status conference to take place on
September 25, 2001. At that point, without any prior an-
Nos. 01-3550, 01-3676                                      3

nouncement and for unexplained reasons, the district court
decided to rule on the fee petitions itself. Those petitions
were available to the court, because they had been filed
in the district court prior to the time when the parties
signed the Settlement Agreement. The court’s order
awarded attorneys’ fees to Hatcher, but it reduced the re-
quested amount of those fees by 70%, from $291,358.75 to
$87,407.62. It also granted Hatcher’s request for costs in
the amount of $18,707.31.


                             II
  The City’s cross-appeal concerns only the grant of costs to
Hatcher. It relies on the language in the Settlement Agree-
ment quoted above, to the effect that the $100,000 payment
covers everything except legal fees; the implication of that
passage, according to the City, is that Hatcher’s costs were
included within the $100,000 payment. Hatcher’s appeal
asserts that the district court erred in two principal re-
spects. First, he contends that the district court should not
have ruled on the fee petitions at all but instead was
obligated by the Settlement Agreement to abide by what-
ever Magistrate Judge Shields decided. Second, he argues
that the district court abused its discretion by reducing his
request categorically by 70% rather than applying the
lodestar calculation to determine the reasonableness of the
services and hours itemized by his attorneys.
  Although we have serious doubts about the correctness of
the analysis the district court used to evaluate the degree
of Hatcher’s success, because it erroneously used the jury’s
award of $18,908.50 as the benchmark instead of the
$100,000 Hatcher received under the Settlement Agree-
ment, we need not delve too deeply into the merits of the
actual award. We agree with Hatcher that the district court
never should have ruled on the fee petitions in the first
4                                    Nos. 01-3550, 01-3676

place. What should have happened instead, however, is a
more complicated question.
  We enforce the terms of settlement agreements like those
of any other contract, even when the agreement in question
somehow limits the discretion of the courts. Dutchak v.
Central States, Southeast & Southwest Areas Pension Fund,
932 F.2d 591, 595-96 (7th Cir. 1991). The City, however,
argues that this particular agreement cannot be enforced
because it has never formally consented to the referral to a
magistrate judge. Magistrate judges are judicial officers of
the United States. As such, they are subject to the Code of
Conduct for United States Judges, see Introduction to Code
of Conduct, and they are subject to the same strict rules
with respect to extra-judicial activities and sources of
income as are all other judicial officers appointed under
either Article III or Article I of the Constitution. See Code
of Conduct for United States Judges, Canons 5 and 6.
The authority of magistrate judges is regulated by 28
U.S.C. §§ 631-39. The City is particularly concerned with
the provision in 28 U.S.C. § 636(c), which permits a magis-
trate judge to make dispositive orders in a civil case only
when the parties have given their written consent to this
manner of proceeding.
   The City is splitting hairs here. There is nothing wrong
with the procedure the parties used to indicate their con-
sent, although there is a more difficult question about the
content of that consent, to which we turn in a moment. The
City is correct that § 636(c) requires the consent of the
parties for a magistrate judge to assume full responsibility
for a case. This consent must be “clear and unambiguous
. . . [it] must be explicit and cannot be inferred from the
conduct of the parties.” Jaliwala v. United States, 945 F.2d
221, 224 (7th Cir. 1991) (quotation marks and emphasis
omitted). But we have all of that. The parties signed a
written document in which they agreed that the attorneys’
fee issue will be “resolved” by Magistrate Judge Shields.
Nos. 01-3550, 01-3676                                       5

This easily serves as a reference to the magistrate judge.
See Rice v. Sunrise Express, Inc., 209 F.3d 1008, 1013 n.7
(7th Cir. 2000) (consent need not take a particular form, so
long as it is explicit and on the record). There is nothing in
§ 636(c) requiring that any specific form be filled out, nor
have we found such a requirement in the local rules. The
word “resolve” can only be interpreted as a consent to the
entry of a judgment dealing with the disputed issues.
  Under the statute and the local rules in force in the
Southern District of Indiana, there is no need for case-by-
case approval of a reference to a magistrate judge. Never-
theless, in this case the district court acknowledged that the
reference was being made when he told the parties that he
would give Magistrate Judge Shields a “heads up” on the
matter. Once a civil case is referred to a magistrate judge,
that reference may be withdrawn only if the district court,
on its own motion, finds good cause to do so, or if any party
shows that extraordinary circumstances have arisen that
require this step. See 28 U.S.C. § 636(c)(4); see also Dixon
v. Ylst, 990 F.2d 478, 480 (9th Cir. 1993). In this case,
neither one of those events justifying withdrawal occurred:
the district court made no finding that good cause existed
before it de facto withdrew the case by entering its own
order on the merits, nor did any party request withdrawal
of the reference. Moreover, the court gave the parties no
notice that the procedure to which they had agreed was
being set aside. To the extent the parties were invoking
magistrate judge authority through their settlement agree-
ment, they were entitled to follow that procedure. Before re-
asserting control over the case, the district court should
have followed the procedures of § 636(c)(4); had it done so,
it is quite possible that it would have noticed the more
serious problem with this case.
  That problem has to do with the difference between
consenting to referral of a case to “a” magistrate judge, as
opposed to consenting only to referral to a specific named
6                                     Nos. 01-3550, 01-3676

magistrate judge whom the parties have hand-picked. The
Settlement Agreement purported to choose one particular
magistrate judge from among those serving in the Southern
District of Indiana. As the district court docket sheet
reflects, Magistrate Judge Shields was not the original
magistrate judge assigned to this case through the district
court’s routine assignment procedures. When asked about
the referral to a specific magistrate judge at oral argu-
ments, Hatcher’s lawyer freely admitted that the parties
chose Magistrate Judge Shields because “both parties knew
her and recognized her as to be a competent person to
resolve it [the dispute] and that was the purpose behind”
choosing her. Hatcher insists that this court has approved
of such a procedure in the past, but a closer look at the
cases on which he relies shows that we have done no such
thing. As we make clear in this opinion, the degree of
specificity the parties sought in this case is inconsistent
with the role of magistrate judges as federal judicial
officers. In general, of course, parties are not permitted to
select their own judges in cases in federal court. See 28
U.S.C. § 137 (providing that the rules and orders of a court
with more than one judge shall provide for the division of
business among district judges). The parties in this appeal
had to take the panel the Seventh Circuit’s procedures
served up to them, just as they were obliged to accept the
district court’s assignment of a particular district judge. We
must decide whether there is something so different about
magistrate judges that parties can limit their consent
under 28 U.S.C. § 636(c) in a manner that disregards the
assignment procedures otherwise used in that district court
for allocating work to the magistrate judges.
  Hatcher suggests that there is nothing wrong with the
procedure followed here, relying in part on Tyson v. Trigg,
50 F.3d 436, 439-42 (7th Cir. 1995). In that case, we held
that a state defendant’s due process rights were not vio-
lated when a prosecutor’s knowledge of local procedures
Nos. 01-3550, 01-3676                                      7

had the effect of enabling him indirectly to select the judge
who would preside over a rape prosecution. This ability on
the prosecutor’s part stemmed from the way the grand
juries operated. Each of the six grand juries to which a
proposed indictment might be presented was assigned to a
specific judge. By selecting a specific grand jury, the
prosecutor was effectively able to choose the judge to whom
the case would eventually be assigned. Id. at 439. The
question before us was whether the defendant’s rights were
violated by this procedure. The answer there was no, but
this does not establish the converse proposition, namely,
that one’s rights are violated when one cannot choose a
judge. Furthermore, Tyson was concerned with whether a
state law violated the federal constitution, while we are
concerned here with the proper administration of the
federal judiciary.
  The best support we can find for the arrangement the
parties adopted here comes from a recent case in our court
that held—under the circumstances of that case—that
consent to one particular magistrate judge did not imply
that the parties had consented to a different magistrate
judge. Kalan v. City of St. Francis, 274 F.3d 1150 (7th Cir.
2001). See also Mendes Junior Int’l Co. v. M/V Sokai Maru,
978 F.2d 920, 924 (5th Cir. 1992) (finding that consent to
have case heard by one magistrate judge, coupled with a
judicial order designating that judge to hear the case, did
not confer authority on a different magistrate judge when
no additional consent or judicial designation transferring
the case to the new judge existed). Kalan contains language
that Hatcher interprets as endorsing the proposition that
parties can broadly specify the particular magistrate judge
they wish to use in any case. He argues further that Kalan
implicitly rejects the argument that § 636(c) does not and
cannot confer such a power on the parties for use in a public
court system. 274 F.3d at 1153.
8                                    Nos. 01-3550, 01-3676

  Kalan involved an appeal from a denial of a motion for
relief under FED. R. CIV. P. 60(b). The panel, which decided
the case per curiam, did not reach the merits because it
believed that flaws in the consent procedure for the magis-
trate judge required it to dismiss for want of jurisdiction.
Thus, the narrow holding of the case was only that a
consent may be ineffective if a judge other than the one who
was named consistently with the court’s procedures is
assigned to the case. Hatcher infers from this rule that
parties always have the right to limit a consent to a par-
ticular individual, but we do not read it that broadly.
  Close attention to the facts and holding in Kalan show
that this court enforced the parties’ agreement only insofar
as it depended upon the facts that existed at the time of the
agreement. Unlike the parties in our case, the parties in
Kalan did not themselves pick the magistrate judge who
was to handle their case. Instead, knowing which magis-
trate judge was assigned to their case through the district
court’s routine assignment procedures, they consented to
the referral of the case to that individual. In our case the
parties attempted to override the district court’s assign-
ment protocol and to substitute their own chosen magis-
trate judge. That presents an entirely different situation,
and one that we cannot endorse. It is one thing for parties,
knowing in advance to whom their case will be referred, to
limit consent to that particular referral, and it is another
thing to allow them to shop among a district court’s magis-
trate judges. Kalan acknowledges that the former may
occur under the procedures used in some districts, and it
holds that this does not violate any rule. The latter, how-
ever, presents more fundamental problems.
  Simply put, we see no distinction between the position of
the magistrate judges for this purpose and the position of
any other judicial officers exercising power in the federal
courts. As we noted before, no one would think of arguing
Nos. 01-3550, 01-3676                                         9

that parties had the right to select a particular district
judge or panel of the court of appeals. Parties who do not
like the judge they are given must satisfy the stringent
requirements of 28 U.S.C. §§ 144 or 455 before they are
entitled to have a different judge assigned to their case. It
is telling in this context that § 455(a) specifically refers to
“[a]ny justice, judge, or magistrate judge of the United
States,” in describing the officers to whom its provisions
apply. Other clues in the statutes also indicate that magis-
trate judge assignment is a matter for the court to decide,
not the parties. Nowhere does § 636 provide for the parties’
choice of a specific magistrate judge: “Upon the consent of
the parties, a full-time United States magistrate judge . . .
may conduct any or all proceedings.” § 636(c)(1) (emphasis
added). The magistrate judge may do so only “when spe-
cially designated to exercise such jurisdiction by the district
court or courts he serves.” Id. This can mean only that it is
the court, and not the parties, that has the power to confer
general or specific duties upon an individual magistrate
judge. Cf. DDI Seamless Cylinder Int’l, Inc. v. General Fire
Extinguisher Corp., 14 F.3d 1163, 1166 (7th Cir. 1994)
(holding that the parties could not designate a magistrate
judge as an arbitrator). This court has taken the view that
two prerequisites exist for a valid reference to a magistrate
judge: (1) consent of the parties and (2) special designation
by the court. Sunrise Express, Inc., 209 F.3d at 1014 n.7.
Nothing in that system explicitly supports the idea that the
parties may commandeer this entire process in lieu of the
court.
   Kalan took a slightly different tack. It started off from the
premise that nothing in § 636(c)(1) prevents the parties
from agreeing to a referral to a magistrate judge, knowing
in advance which person would be assigned to their case. It
then added that the consent itself had to be understood in
light of this pre-existing situation. We have no quarrel with
Kalan, to the extent that it reflects only the real-world fact
10                                    Nos. 01-3550, 01-3676

that parties may be influenced in their decision whether or
not to consent to magistrate judge jurisdiction by the
knowledge of which individual will acquire responsibility
for their case. Nevertheless, we think that it would be an
inappropriate extension of Kalan and a construction of
§ 636(c)(1) that the statute simply will not bear to allow
parties to designate a magistrate judge independently of the
district court’s procedures for magistrate assignment. The
language in the statute that indicates that the magistrate
judge may exercise her power “when specially designated to
exercise such jurisdiction by the district court or courts” is
inconsistent with a rule permitting the parties effectively to
make that designation.
  Moreover, as we have already noted, the other back-
ground rules governing magistrate judges, including ethical
rules about the activities in which they may engage and the
disqualification rules, put them on a par with Article III
judges when they are exercising judicial power. An impor-
tant way in which the federal courts strive to fulfill their
role as the impartial and apolitical “third branch” of
government is their insistence on equal respect for, and
responsibility of, each individual judge. (We are not un-
aware that parties may engage in different procedural
stratagems designed to make their case wind up in front of
a preferred judge, but acknowledgment that these kinds of
judge-shopping efforts exist is quite a different thing from
outright endorsement of them.) In our view, the general
rule that one may not choose one’s judge in federal court
should not have an exception for magistrate judges. Once a
party has submitted a justiciable dispute to a federal
tribunal, it is up to the court to designate the judge. If the
parties here had preferred a system under which they could
name the individual who would resolve the legal fees issue,
nothing would have prevented them from entering into a
binding arbitration agreement to that effect. But that is not
what they did, and we think their decision to use the courts
Nos. 01-3550, 01-3676                                      11

carried with it a certain loss of discretion over the identity
of the judicial officer who would preside.
  As a last observation on this topic, we note that the Local
Rules of the U.S. District Court for the Southern District of
Indiana provide that selections of magistrate judges are to
be made at random. See Local Rule 72.1(h) (“Upon the
consent of the parties, a full-time Magistrate Judge is
hereby authorized and specially designated to conduct any
or all proceedings in any civil case which is filed in this
Court.”) (emphasis added). District courts are entitled to
enact such rules, which relate to the administration of the
court’s business. See FED. R. CIV. P. 83(a); In re Establish-
ment Inspection of Gilbert & Bennett Mfg. Co., 589 F.2d
1335, 1340 (7th Cir. 1979) (district court may pass local
rules regarding magistrate judges to aid it in the perfor-
mance of its business); see also United States v. Claros, 17
F.3d 1041, 1044-45 (7th Cir. 1994) (promulgation of local
rules permissible as long as the rules are not “inconsistent
with the Constitution, a statute of the United States, or
with a national rule governing the conduct of litigation in
the United States courts).
  The remaining question is the proper disposition of this
appeal, given our conclusion that the selection of a par-
ticular magistrate judge here was impermissible. Three
options are available: (1) we could simply decide, as the City
urges, that there was no effective consent and evaluate the
merits of the district court’s decision on fees, (2) we could
rule that the consent to Magistrate Judge Shields was an
effective consent to any and all magistrate judges
in the district, or (3) we could remand this case for further
proceedings. Because the rule we are announcing today may
not have been clear in light of the different pos-
sible interpretations of Kalan, we think it best under all
the circumstances to remand the case to the district court
for further proceedings. The parties consented to something,
12                                    Nos. 01-3550, 01-3676

and we have rejected the City’s formalistic argument
about the writing in which that consent was embodied. This
leaves us with an ambiguity in the Settlement Agreement
that must be resolved by reference to extrinsic evidence or
by further agreement of the parties. See, e.g., Air Line
Stewards & Stewardesses Assoc. v. American Airlines, Inc.,
763 F.2d 875, 878 n.3 (7th Cir. 1985). If on remand the
district court concludes that the parties meant to refer the
dispute to any magistrate judge designated in accordance
with the court’s normal rules, it should carry out the terms
of their consent accordingly. If it concludes that the parties
meant to select only Magistrate Judge Shields, then the
reference cannot be carried out and the consent is ineffec-
tive. In the latter instance, the case will remain with the
district court unless the parties execute a new consent, and
the court must reconsider its award of fees and costs, using
the $100,000 figure as the amount Hatcher gained in this
litigation.


                             III
  The judgment of the district court is VACATED and the
case is REMANDED for further proceedings consistent with
this opinion.

A true Copy:
       Teste:

                        ________________________________
                        Clerk of the United States Court of
                          Appeals for the Seventh Circuit




                   USCA-02-C-0072—3-19-03
