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Howes Leather Co. v. Honorable Walter J. Labuy . Howes Leather Co.

October 13, 1955

HOWES LEATHER COMPANY, INC., AND MONTGOMERY WARD & COMPANY, INC.
v.
HONORABLE WALTER J. LABUY. HOWES LEATHER COMPANY, INC. V. HONORABLE WALTER J. LABUY.



Author: Lindley

Before DUFFY, Chief Judge, MAJOR and LINDLEY, Circuit Judges.

LINDLEY, Circuit Judge: These causes are before us on separate petitions seeking writs of mandamus directing the Honorable Walter J. LaBuy, Judge of the United States District Court, to vacate orders entered February 24, 1955, referring two related civil cases then pending before him to a master for trial.

At the outset, we are met with the contention that we have no jurisdiction to entertain these petitions, inasmuch as the pertinent orders are interlocutory in character. The argument is that the extraordinary procedures permissible under the All Writs Act, 28 U.S.C.A. § 1651, may not be employed as a device for review of such orders in advance of final decision.

We see no reason to depart from our recent holding in Chicago, R.I. & P.R. Co. v. Igoe, 212 F.2d 378, that we have the power, in extraordinary cases, to entertain a petition for a writ directing a district judge to vacate an unauthorized interlocutory order in advance of final decision. There we relied on a series of decisions by the courts of other circuits of which Paramount Pictures v. Rodney 186 F.2d 111, cert. den. 340 U.S. 953 (CA-3), Ford Motor Co. v. Ryan, 182 F.2d 329, cert. den. 340 U.S. 851 (CA-2), and Wiren v. Laws, 194 F.2d 873 (CA-DC), are representative. All of these cases involved the question of whether mandamus would lie to review an order entered on a motion under 28 U.S.C.A., § 1404(a), to transfer a pending case to another district for trial. To this array of authorities we now add In re Josephson, 218 F.2d 174 (CA-1).

Our attention is directed to In re Narragansett Pier Amusement Corp., 224 F.2d 231 (CA-1), and we are urged to reconsider the jurisdictional question in the light of that opinion. In Narragansett, which is the most recent of a series of decisions by the Court of Appeals for the First Circuit dealing with mandamus, the court denied leave to file a petition for a writ to compel a district judge to vacate an order referring eight related antitrust cases to a master for trial. The basis for the court's decision was its finding that "no exceptional circumstances" existed to justify invocation of mandamus jurisdiction.

As we analyze the decisions which that court has made in this series of cases, we do not believe its position is basically incompatible with our decision in the Rock Island case. The First Circuit recognizes that it has jurisdiction to entertain petitions for extraordinary writs directed toward review of interlocutory orders of the district courts, wherever exceptional circumstances exist which justify use of the procedure.Such is the tenor of the language employed by that court in: In re Narragansett Pier Amusement Corp., 224 F.2d 231 (CA-1); In re Sylvania Electric Products, Inc., 220 F.2d 423 (CA-1); In re Previn, 204 F.2d 417 (CA-1); In re Chappell & Co., Inc., 201 F.2d 343 (CA-1). And in In re Josephson, 218 F.2d 174 (CA-1) the court did entertain a petition for the writ. There the petitioner was plaintiff in a civil action brought in Massachusetts against a New Mexico corporation having its principal place of business in Massachusetts and the corporation's directors, all of whom were residents of that State. after process had been served, the court granted defendants' motion under 28 U.S.C.A., § 1404(a) and ordered the cause transferred to New Mexico for trial. Josephson was granted leave to file a petition in the Court of Appeals for a writ of mandamus. In ruling on the petition, the court reviewed in some detail the history of the mandamus power in both the Supreme Court and the Courts of Appeals and reiterated its belief that the power vested in the latter is extremely limited. The court, however, concluded that it was faced with exceptional circumstances sufficient to justify exercise of the power and proceeded to a consideration of the petition on its merits.

Thus, on the naked question of power, there seems to be no disagreement between this court and that of the First Circuit. However, we differ with the able jurists of that circuit in evaluating the exceptional nature of the circumstances sufficient to endow the court with the power. Compare Chicago, R.I. & P.R. Co. v. Igoe, 220 F.2d 299 (CA-7), with In re Josephson, 218 F.2d 174, 181 (CA-1). To this extent and on this basis, we feel constrained to disagree with the decision in the Narragansett case. The basis for that decision is the view that if the issue as to the propriety of the interlocutory order may eventually reach the appellate tribunal by appeal after final judgment on the merits, then jurisdiction is wanting to test its propriety by mandamus in advance of a trial and final decision. Under such a view, it is immaterial whether or not any effective or adequate relief from an unauthorized order is possible by way of appeal from the final judgment.

This is a much more restricted position than that which we voiced in the Rock Island case, 220 F.2d 299. Assuming the challenged orders to be beyond the governing rule, respondent's action in referring these cases to a master is, in effect, a refusal on his part, as a judge, to try the causes in due course, rather than referring them to a tribunal which is unauthorized by law. Unless we have power to decide the question of propriety of his action at this time, petitioners are faced with the necessity and great expense of protracted trials which conceivably may eventually lead nowhere but to a complete retrial of the causes before a competent tribunal. While we recognize that there is a doubtful area surrounding the dividing line between the power of this court and its lack of power to issue the writ, in view of the extraordinary nature of these causes, we think that any doubt must be resolved in favor of the existence of the power to issue the writ, if we find that the orders were beyond the court's power under the pertinent rule. See Chicago, R.I. & P.R. Co. v. Igoe, 212 F.2d 378, 381 (CA-7); Ford Motor Co. v. Ryan, 182 F.2d 329, 330 (CA-2).

Upon the merits of the petitions, then, we are concerned only with the question of whether the contested orders are in conformity with the provisions of Rule 53(b) of the Federal Rules of Civil Procedure, 28 U.S.C.A.

Petitioners in No. 11472 are defendants in a civil action instituted in the court below entitled "William Rohlfing, et al. v. Cat's Paw Rubber Co., et al.,' No. 50-C-229. Petitioner in No. 11473 is defendant in a similar action pending below entitled "Norman P. Shaffer, et al., v. United States Rubber Co., et al.," No. 50-C-884. Each cause is assigned to the calendar of Judge La Buy for trial.

The averments of each petition are substantially identical, and the following statement of fact, taken from the petition in No. 11472, controls disposition of both petitions. The Rohlfing case, from which this action stems, was instituted by a complaint filed by 87 independent shoe repairmen against petitioners and others, praying equitable relief and damages by reason of defendants' alleged violations of the antitrust laws.

The cause came on for trial on February 23, 1955. Judge La Buy suggested that it be referred to a master for trial and, on the following day, over the objections of petitioners, entered an order of reference. The essence of the order follows: "The Court, being confronted with an extremely congested calendar, and finding that exceptional conditions exist for this reason, is of the opinion that this case can be more adequately and intelligently presented to the Court for ultimate disposition by reference to a master." On April 29, all parties to the action moved to vacate the order. These motions were denied May 6, 1955. On May 18 the parties appeared before the master, pursuant to notice, for trial of the cause. At this time all the parties presented objections to the reference. On May 20, the master ruled that the cause would proceed to trial before him; whereupon petitioners filed their petition in this court praying that a writ of mandamus issue to compel Judge La Buy to vacate the order and to direct trial of the cause to proceed before the court.

The only material factual difference between No. 11472 and No. 11473 is that the Shaffer case (No. 11473) had not been called for hearing before the master prior to the date when the petition for writ of mandamus was filed. Under the circumstances recited in these petitions, however, the same principles and considerations are determinative of the question of the propriety of the order of reference in each case.

Rule 53(b) provides that: "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, a reference shall be made only upon a showing that some exceptional condition requires it." In support of his action, respondent outlines the complexity of these cases in which the court must determine the question of liability of each of the several defendants to each of the plaintiffs and the element of accounting which must enter into the final judgment. He asserts that consideration of these factors, together with the fact that he is faced with an extremely congested calendar, brings the cases within the "exceptional condition" proviso of the Rule, and that the orders for reference constitute, therefore, an exercise of a sound discretion which this court should not disturb.

Our exact question, then, is whether the facts presented in justification of the orders of which complaint is made, as a matter of law, bring the orders of reference within the exceptional circumstances mentioned in the rule. In other words, has the district court failed to conform to the rule of civil procedure prescribed by the Supreme Court. This is a question of law dependent upon the pleaded facts.Mere error of law in a decision upon the issues presented to the court, of course, is not ground for mandamus. But if the facts upon which the judge relied in entering the order are wholly insufficient to justify nonconformance with the rule, then the action of the judge in entering the order, over the objection of all parties concerned, must be held so arbitrary and extraordinary as to justify issuance of the writ.

Measured by these tests, we do not believe respondents' position tenable. Although evidence in the nature of accounts may have a substantial bearing on the issue of liability, the element of accountancy, in the sense intended in the "account" provision of the Rule, which these cases contain can not arise until the issue of liability has been resolved.The rule refers to the subject matter of the controversy, not to the nature of the evidence which may be introduced in the course of a trial. It provides a blanket permit for reference of any accounting, see Troyak v. Enos, 204 F.2d 536, 544-5 (CA-7), but, even as to matters of account, we agree with the belief expressed in Barrick v. Pratt, 32 F.2d 732, 733-4 (CA-5), that a reference need not follow automatically in every case. The Rohlfing and Shaffer cases, in their present status, before trial has been had on the question of liability, are not "matters of account." Indeed, if the court finds that defendants are not liable, there will never be an accounting. The reference cannot be sustained under the "account" proviso, and the prospective accounting issues may not be relied on to prove exceptional circumstances. "This is not an accounting, but the case is exceptional because an accounting may be necessary and because some of the evidence bearing on the issue of liability may be relevant also to the issue of accounting should that prospective issue arise" is an argument which seeks to expand the positive permissive accounting proviso of the Rule to include any and all issues which may bear even a remote relationship to a question of an accounting. That, essentially, is the argument made here which we find ourselves unable to accept.

The substance of the remaining contentions is that the issues presented are complex; that the judge is confronted with a congested calendar; that reference to a master will facilitate a speedy trial and disposition of the causes, and that it cannot be said that the judge abused the discretion vested in him by the Rule in entering the orders complained of.

There is an element of discretion inherent in the last clause of the Rule, i.e., the trial court must determine in each case whether "exceptional conditions" exist which will authorize a reference. When these orders are tested in the light of the interpretation placed on the Rule by the Supreme Court and the Courts of Appeals, we can only conclude that the orders complained of are beyond the permissive scope of the rule, and ...


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