Petition for Writ of Certiorari — DeCosta v. Columbia Broadcasting System, Inc.

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IN THE

Supreme Court of the Anited States

OCTOBER TERM, 1975

nw. %75-752 %

VICTOR DeCOSTA,

Petitioner,

COLUMBIA BROADCASTING SYSTEM, INC.,

CAPITAL CITIES BROADCASTING CORPORATION

and CBS FILMS, INC.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

ALAN T. DWORKIN

809 Industrial Bank Building

Providence, Rhode Island 02903

LEONARD MICHAELSON

300 Industrial Bank Building

Providence, Rhode Island 02903

EUGENE GRESSMAN

1828 L Street, N.W.

Washington, D.C. 20036

November 21, 1975 Counsel for Petitioner

SE ERTS

AGE DUPLICATORS, INC.-—1732 Eye Street, N.W.—Weshington, 0.C.—288-6637

INDEX

OPINIONS BELOW

JURISDICTION .

QUESTIONS PRESENTED .

STATUTES AND RULES INVOLVED .

STATEMENT OF THE CASE .

A. The first count

B. The second and third counts

REASONS FOR GRANTING THE WRIT .

1. The decision below has created a

confused and unmanageable standard

for reviewing a Magistrate's findings

and conclusions in a consensual

reference situation

The decision below, in overturning

the Magistrate's express factual

findings of the likelihood of con-

fusion, has created important pro-

cedural and substantive problems .

CONCLUSION

APPENDIX

(Opinions of Court of Appeals and District Court;

Report of Magistrate) . Pee 2s

SIG SBA. LEARN

teak we ett

BR MOR REE

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Bios an pistes #5

(ii)

CITATIONS

Cases:

Adamson v. Gilliland,

242 U.S. 350 (1917) . 25

CBS, Inc. v. DeCosta,

377 F.2d 315 (C.A. 1, 1967),

cert. denied, 389 U.S. 1007 (1967) . . . . .. . 8,10

Commissioner v. Duberstein,

363 U.S. 278 (1960) .

Compco Corp. v. Day-Bright — Inc.,

376 U.S. 234 (1964) . 9

Corona Cord Tire Co. v. Dovan Chemical _— “

276 U.S. 358 (1928) . 25

Davis v. Schwartz,

155 U.S. 631 (1895) . 25

DeCosta v. CBS, Inc.,

389 U.S. 1007 (1967) 7, 10

DeCosta v. CBS, Inc.,

ee Pe ee, PP ke 6 CD

Eastern Fireproofing Co. v. United States Gypsum Co.,

ee Oe ee ee

Fleishmann Distilling Corp. v. Maier Brewing Co.,

ge te Oe a ee re {

Goldstein v. California,

412 US. 546 (1973) . 10

soy

(iii)

International News Service v. Associated Press,

248 U.S. 215 (1918) .

Kewanee Oil Co. v. Bicron Corp.,

416 U.S. 470 (1974) .

Kimberly v. Arms,

ae es Se teeeP lk ot ETM,

Mercury Record Productions, Inc. v. Economic

Consultants, Inc.,

183 U.S.P.Q. 358

I I ha eG. ao gt ea) ok ok mee 10

San Francisco Association for the Blind v.

Industrial Aid for the Blind,

ee Be ok ee 0 a:

Sears, Roebuck & Co. v. Stiffel Co..,

ee: gh Gf ke we cw aN wk i)

Spangler Candy Co. v. Crystal Pure Candy Co.,

aoe rue ee Ga, ©, PO kk kl te Oe

Standard Brands, Inc. v. Eastern Shore Canning Co.,

ree eo A ene ¢ /

Standard Oil Co. v. Standard Oil Co.,

252 F.2d 65 (C.A. 10, 1958) A SE gt MN ee 28

Sweetarts v. Sunline, Inc.,

og Se 8g ee es ees 29

United States v. Singer Mfg. Co.,

ee ee PO | 6 ie ee a es OO” ae

United States v. United States Gypsum Co.,

ee a SRD a ee ae Ss BE ee

(iv)

Page

Volkswagenwerk Aktiengesellschaft v. Rickard,

ee es ee es a SOD wee ee 8 se es

Wingo v. Wedding,

CO OE US eee a eee ee ee

World Carpets, Inc. v. Dick Littrell’s New World sean

Gee Fine Gee Ce. SS TPN) 8 ck ee ee |

Statutes and Rules:

Federal Magistrates Act, 28 U.S.C. 8636(b) . . . 3, 12, 15, 19

Lanham Trademark Act of 1946,

CR Gc a eRe oe a ke es

Uniform Deceptive Trade Practices Act

(6 Martindale-Hubbell Law nace

i See eee PSO Se ee

Rule 32, Local Rules of U.S. District Court

for the District of Rhode Island . . ....... 4

Rule 52, Federal Rules of Civil Procedure. . . . 6, 18, 22,

23, 24, 26

Rule 53, Federal Rules of Civil Procedure . . . 6, 17, 18, 21,

22, 23, 24, 25

Standing Order re Utilization of U.S. Magistrates,

U.S. District Court for the District of Rhode

SR it here e ie ao cee a a aT Rew 5, 6

Miscellaneous:

1975 Annual Report of the Director of the

Administrative Office of the United States

SN Ske eae os ) NAT se te ee eee ee ae es

SO, NS CANE OD i AIRE Bi i 8 toe i

(v)

McCarthy, Trademarks and Unfair Competition,

Vol. 2 (1973) ;

SA Moore’s Federal Practice (2d ed. 1975)

Wright and Miller, Federal Practice and

Procedure, Vol. 9 (1971)

Wright, Law of Federal Courts (2d ed. 1970)

H. Rep. No. 1629, 90th Cong.,

2d Sess. (1968) . ;

Note, 88 Harv. L. Rev. 779 (1975) .

PO PN NI en SEMEL CA A RS OYE TSN rte Vere

IN THE

Supreme Court of the Rnited States

OCTOBER TERM, 1975

No.

VICTOR DeCOSTA,

Petitioner,

Vv.

COLUMBIA BROADCASTING SYSTEM, INC.,

CAPITAL CITIES BROADCASTING CORPORATION

and CBS FILMS, INC.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

The petitioner Victor DeCosta respectfully requests

that a writ of certiorari issue to review the opinion and

judgment entered in this proceeding on June 24, 1975, by

the United States Court of Appeals for the First Circuit.

OPINIONS BELOW

The opinion of the First Circuit, entered on June 24,

1975, is reported at 520 F.2d 499. It is printed in the

appendix hereto, p. A. 1, infra.

The opinion of the United States District Court for

the District of Rhode Island, entered on September 23,

Qiskcaws PAG solar ee

1974, is reported in 383 F. Su,p. 326. It is printed in the

appendix hereto, p. A. 31, infra.

The report of Magistrate Hagopian, setting forth his

findings of fact and conclusions of law, was filed on April

15, 1974. It has not been reported, but is printed in the

appendix hereto, p. A. 57, infra.

JURISDICTION

The judgment of the Court of Appeals for the First

Circuit was entered on June 24, 1975. See p. A. 30, infra.

No rehearing was sought.

On timely application, Mr. Justice Brennan on Septem-

ber 11, 1975, signed an order extending the time for filing

this petition for writ of certiorari to and including Novem-

ber 21, 1975. This petition has been filed within that

extended period. ne

The jurisdiction of this court is invoked under 28

U.S.C. §1254(1).

QUESTIONS PRESENTED

1. Whether a United States Magistrate's findings of

fact and conclusions of law, entered pursuant to a con-

sensual reference under the Federal Magistrates Act, 28

U.S.C. 8636(b), for a "hearing and determination" of

cross motions for summary judgment, are reviewable by

a District Court only for ''manifest error."'

2. Whether the Magistrate's findings of fact, entered

pursuant to such a consensual reference, are to be con-

sidered ''final'’ and non-reviewable within the meaning

of Rule 53(e)(4), Fed.R.Civ.Proc., or whether they are

a IANA a A RRM PRE thf ah

subject to the ''clearly erroneous'' review standard of Rule

52(a), Fed.R.Civ.Proc.

3. Whether a Magistrate's determination, based upon

stipulated facts and his independent examination of the

record, that virtually identical service marks create ''a

great likelihood of confusion'' among the public is to be

treated, for review purposes, as a finding of fact or a con-

clusion of law.

4. Whether a Magistrate's finding as to the "'likeli-

hood of confusion'' between identical competing service

marks in the entertainment field is clearly erroneous simply

because (a) there is a great disparity in the size and scope

of the competing enterprises, (b) only six witnesses testi-

fied as to actual confusion, and (c) there was stated to be

a lapse of eleven years between the start of the alleged

infringement and the testimony as to likelihood of confu-

sion.

STATUTES AND RULES INVOLVED

Federal Magistrates Act, 28 U.S.C. $636(b):

Any district court of the United States... . may es-

tablish rules pursuant to which any .. . United States mag-

istrate . . . may be assigned within the territorial jurisdic-

tion of such court such additional duties ‘as are not incon-

sistent with the Constitution and laws of the United States.

The additional duties authorized by rule may include, but

are not restricted to —

(1) service as a special master in an appropriate

civil action, pursuant to the applicable provisions

of this title and the Federal Rules of Civil Pro-

cedure for the United States district courts;

25 oe a

we — re

(2) assistance to a district judge in the conduct

of pretrial or discovery proceedings in civil or

criminal actions; and

(3) preliminary review of applications for post-

trial relief made by individuals convicted of crim-

inal offenses, and submission of a report and

recommendations to facilitate the decision of

the district judge having jurisdiction over the

case as to whether there should be a hearing.

Rule 32, Local Rules of U.S. District Court

for the District of Rhode Island:

(a) Duties in general. Full time United States Magis-

trates of this district . . . shall, when directed by the

court:

(1) Serve as a Special Master in appropriate civil

actions pursuant to the applicable provisions of

Title 28 United States Code and the Federal

Rules of Civil Procedure for the United States

District Courts; and

* * *

(4) Perform such other duties as are not incon-

sistent with the Constitution and laws of the

United States and as may be assigned by. the

court.

(b) Powers. Unle.s otherwise provided by Fed.R.Civ.

P. 53 or other statute or rule, the magistrate shall have

authority to conduct the proceedings specified in the or-

der of reference and to make such orders as may be

SAMAR AE nS ERS BEES we PE as em RTE RB Oe nl ae AI

incidental or necessary to the completion thereof, subject

to review by the judge as herein provided.

of the hearing, the magistrate shall file with the clerk his

findings, report and recommendations. . .

(d) Objections; review. Any party who has not

waived an appeal to the judge may serve and file written

objections to the magistrate's report within 5 days after

service of the report. Opposition to the objections shall

be served and filed with 5 days after service of the ob-

jections. The clerk shall thereupon promptly set and notice

the review hearing to be disposed of by the judge to whom

the case is assigned.

+ * *

Paragraphs of the Standing Order of the

United States District Court for the

District of Rhode Island Providing for

the Utilization of United States

Magistrates:

12. DESIGNATION OF MAGISTRATE TO ASSIST

DISTRICT JUDGES

Pursuant to the rule making power conferred on the

Court by 28 U.S.C. 8636, the Court may, without further

formal order, from time to time refer civil and criminal

motions to the magistrate as it deems proper for hearing,

determination, recommendation, or report, and the magis-

trate shall render such other assistance to a district judge

of the Court as may be directed of him by the Court.

Stes ee

13.1 RECONSIDERATION OF MAGISTRATE'S

RULING BY DISTRICT JUDGE

A magistrate's ruling on a motion, not incident to

the exercise of his trial jurisdiction, shall be final and con-

clusive unless a party thereto moves for reconsideration by

a district judge. A motion for reconsideration shall be

made with five (5) days of the magistrate's ruling. Re-

consideration shall not be de novo but shall be the same

as on a question of law.

Federal Rules of Civil Procedure:

Rule 52. Findings by the Court.

(a) EFFECT. In all actions tried upon the facts

without a jury or with an advisory jury, the court shall

find the facts speciaily and state separately its conclusions

of law thereon, ... Findings of fact shall not be set

aside unless clearly erroneous, and due regard shall be

given to the opportunity of the trial court to judge of

the credibility of the witnesses. The findings of a master,

to the extent that the court adopts them, shall be con-

sidered as the findings of the court... .

Rule 53. Masters

(a) APPOINTMENT AND COMPENSATION. Each

district court with the concurrence of a majority of all

the judges thereof may appoint one or more standing

masters for its district, and the court in which any action

is pending may appoint a special master therein. . . .

* * *

: ee ee eee eee Ree ae

ee oe ONS ee See on er or

(e) REPORT.

(1) Contents and Filing. The master shall prepare

a report upon the matters submitted to him by the order

of reference and, if required to make findings of fact

and conclusions of law, he shall set them forth in the

report. ...

(2) In Non-Jury Actions. In an action to be tried

without a jury the court shall accept the master's findings

of fact unless clearly erroneous. . .

* * *

(4) Stipulation as to Findings. The effect of a

master's report is the same whether or not the parties

have consented to the reference; but, when the Parties

stipulate that a master's findings of fact shall be final.

only questions of law arising upon the report shall there-

after be considered.

STATEMENT OF THE CASE

This case, which was instituted in the federal district

court in Rhode Island in 1963,! comes before this Court

on certiorari for the second time. In 1967, over the dis-

sent of Mr. Chief Justice Warren and Mr. Justice Fortas,

this Court declined to review the First Circuit's reversal

of a judgment in petitioner's favor on the first count of

the instant complaint. DeCosta y. CBS, Inc., No. 693

(Oct. Term, 1967), 389 U.S. 1007 (1967). Now this Court

! The complaint, as amended, grounded federal jurisdiction upon

factual allegations of diversity of citizenship and jurisdictional

amount, 28 U.S.C. §1332, and upon factual allegations of a federal

trademark question, 28 U.S.C. §§1125(a), 1121 and 1127.

| ALE EMAL SE LEASE EE ES

Bites FEDA RAW Mat

is being asked to review still another reversal by the First

Circuit of a judgment favorable to the petitioner, a rever-

sal of a favorable judgment on the second and third counts

of the complaint.

The basic allegation in all three counts of the com-

plaint was the same — i.e., that the respondent CBS, Inc.,

and allied corporations had stolen and then exploited

petitioner DeCosta's idea, characterization and three en-

tertainment service marks — ''Paladin'', ''Have Gun Will

Travel’, and a knight chess piece. Indeed, misappropriation

has already been determined and is no longer in issue.

On the earlier appeal in this case the First Circuit acknowl-

edged that the jury's disbelief of respondents’ protestations

of innocent coincidence was ‘amply justified'’ and that

“the plaintiff [DeCosta] has had the satisfaction of prov-

ing the defendants [CBS, et al.] pirates." CBS, Inc. v. ;

DeCosta, 377 F.24 315, 317 (C.A. 1, 1967).

Virtually all the relevant facts in this case were de-

veloped before the jury that considered the first count

of the complaint based upon unjust enrichment. Those

facts are fully set forth in the earlier opinion of the First

Circuit, 377 F.2d at 316-317, prefaced by the statement

that ''The story of this case — more bizarre than most

television serial installments — is one of ‘coincidence’ run

riot." Suffice it to repeat here what the First Circuit

has succinctly said in the opening paragraph of its latest

judicial installment (Appendix hereto, pp. A.1-2, infra):

"Plaintiff [DeCosta], a dozen years ago, began

this suit against [CBS and allied corporations]

. . . to seek compensation for their unauthorized

use of a character concept he had developed, em-

bodying a costume, slogan, name and symbol.

a ied Sot ae ORLA SE Bite eee em

A mechanic living in Cranston, Rhode Island,

his avocation had been to don an all black

cowboy suit, with a St. Mary's medal affixed

to his flat crowned black hat, a chess symbol

to his holster, and an antique derringer secreted

under his arm, and make public appearances at

rodeos and other events, meeting innumerable

children, and Passing out his card, inscribed

with a chess set knight, proclaiming 'Have Gun

Will Travel, Wire Paladin, N. Court St., Cran-

ston, R.I.' ... As every well-versed televi-

sion viewer of the late fifties and early six-

ties knows, the gestalt conveyed by plaintiff's

costume and accessories found its way into

defendants’ television series, 'Have Gun Will

Travel’, [starring Richard Boone] which en-

joyed enormous popularity for over eight years

in its initial run, grossing in excess of fourteen

million dollars."

A. The First Count

The first count of the complaint, which had been

separated for trial purposes, alleged that the piratical acts

of the respondents constituted unjust enrichment under

applicable state law. The jury, after hearing the evidence.

awarded the petitioner DeCosta $150,000 in damages on

this count.

In reversing that award, the First Circuit took the

position that this Court's decisions in Sears, Roebuck &

Co. v. Stiffel Co., 376 U.S. 225 (1964), and Compco

Corp. v. Day-Bright Lighting, Inc., 376 U.S. 234 (1964),

meant that the Copyright Clause of the Constitution had

preempted this effort under state law to protect the creator

ha Si Re

Bsc sei

of an uncopyrighted characterization against unfair eppro-

priations or unjust enrichment. See CBS, Inc. v. DeCosta,

377 F.2d 315, 318-319 (C.A. 1, 1967). DeCosta's peti-

tion for certiorari, protesting that holding, was denied by

this Court, with two dissents as noted above. 389 U.S.

1007 (1967).

The First Circuit has now conceded the error of its

earlier 1967 ruling, stare decisis though it may be. This

Court's later decision in Goldstein vy. California, 412 U.S.

546 (1973), particularly as summarized and applied in

Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 478-

479 (1974), convinced the First Circuit that its 1967 in-

terpretation of the preemptive reach of the Copyright

Clause was "‘over-inclusive.'""2 See Appendix, p. A.18,

infra. Petitioner's damage award under the first count,

being grounded on a non-preempted state law of unjust

enrichment stemming from a misappropriation of peti-

tioner'’s character, should therefore have been sustained.

The First Circuit has here stated that but for the

erroneousness of its 1967 ruling that decision would likely

have ‘predetermined our decision on the second and third

causes of action." See Appendix, p. A.18, infra. Those

counts or causes of action were based on the applicable

state common law respecting service mark infringement

2 The 1967 holding of the First Circuit that the leading case

applying a remedy for mere copying, /nternational News Service

v. Associated Press, 248 U.S. 215 (1918), is no longer authoritative

has not been accepted by this Court. See Goldstein v. California,

412 U.S. 546, 570 (1973); Kewanee Oil Co. v. Bicron Corp., 416

U.S. 470, 481 (1974); see also Mercury Record Productions, Inc.

v. Economic Consultants, Inc., 183 U.S.P.Q. 358 (Wis. Sup.Ct.,

1974).

ND A Oa

and unfair competition. But since the court felt that it

did "not have a tabula rasa to write upon" (p. A.19,

infra), the merits of the judgments favorable to petitioner

on the second and third causes of action were deemed to

be in issue on the appeal.

B. The Second and Third Counts

Premised upon the same acts of appropriating the

"Paladin, Have Gun Will Travel" characterization. the

second count of the complaint alleged an infringement of

a common law service mark. And on the same basis, the

third count charged that the respondents had engaged in

unfair competition as defined by the applicable state

common law. Both counts were reserved for disposition

by the District Court, sitting without a jury, following

the final adjudication of the first count 3

The petitioner DeCosta and the respondent corpora-

tions subsequently filed in the District Court cross motions

for summary judgment on the second and third counts.

In support of his motion, DeCosta filed an affidavit set-

ting forth additional facts to the effect that he continues

to portray the character ''Paladin" at various rodeos, auc-

tions, horse shows, parades, and other types of public

gatherings, dressed in his original outfit as created by him,

and that he still distributes the printed cards advertising

that characterization. He further stated in this affidavit

that he had filed in the U.S. Patent Office an application

to register the service marks in question, and that the

3 The lapse of time between 1967, when the appeal on the first

count was finally resolved, and 1973, when the second and third

counts were considered, was not due to the dilatoriness of any

party. The District Court’s docket condition simply did not permit

an earlier calling of the case for disposition of the second and third

counts.

LER AEE EE EO paste

tains

respondent CBS, Inc., in its opposition to such registration,

had admitted that the marks were entertainment service

marks and had not contested the validity of the same as

service marks.*

In August of 1973 the parties stipulated that the

cross motions for summary judgment would be determined

by the District Court on the basis of the transcript of the

earlier jury trial on the first count, including all exhibits,

together with a stipulation of further testimony. Then,

on October 5, 1973, by agreement of all parties, the

District Court entered the following order:

Pursuant to stipulation of the parties on

each side and of counsel on each side, the

above captioned case is referred, under au-

thority of 28 U.S.C. 636, to United States

Magistrate Jacob Hagopian for hearing and

determination to be had on or before Nov-

ember 5, 1973."

Pursuant to that consensual reference, the cross mo-

tions for summary judgment were fully briefed and orally

argued by the parties before the Magistrate. Six months

later, on April 15, 1974, the Magistrate filed an extensive

report setting forth his findings of fact and conclusions

of law, which in all respects favored the petitioner DeCosta.

See pp. A. 57-89, infra. Among the Magistrate's findings

of fact were three that were later to become decisive on

the appeal to the First Circuit:

4 Petitioner filed two such applications, one in 1962 and another

in 1970. The second application is still pending before the Trade-

mark Trial and Appeal Board. See DeCosta v. CBS, Inc., 498 F.2d

1383 (C.C.P.A., 1974), for an account of these applications.

Kaan San 2 Ti i ty A te AE VEAL EIT iat Bs cl Oe has eh aR Re 6 Ce Ne Na As Ry AR

"13. My examination of the record and com-

parison of the description and exhibits of the

‘Paladin' marks heretofore mentioned discloses

that the marks used by plaintiff DeCosta are

identical to those subsequently used by de-

fendants Columbia Broadcasting System, Inc.

in the television series of ‘Paladin’, and that

4 great likelihood of confusion exists between

the marks used by plaintiff and those used by

defendants because they are virtually identical."

"17. At least 21 witnesses testified that

before the airing of the television series by

defendant, Columbia Broadcasting System. Inc..

they knew plaintiff as Paladin: at least 18 of

such witnesses testified that, before the airing

of the television series as aforesaid, they saw

cards as passed out by plaintiff that bore the

slogan and/or purported service marks ‘Have

Gun Will Travel’ 'Wire Paladin’ and the figure

of a knight chess piece: that at least 21 of

such witnesses testified that they thought

on viewing the television program that there

was a physical similarity between plaintiff in

his costume and accoutrements and Richard

Boone dressed as the television character

Paladin."

"18. At least 6 of such witnesses testified

that they had at first thought, on viewing the

television program, that Richard Boone was

the plaintiff Mr. DeCosta until they learned

the contrary from viewing the credits on the

show, or otherwise."

eee ,

pasha ah tea ba OKA EAE IER PLI AO AEB, BEN:

The witnesses referred to by the Magistrate in these find-

ings, of course, had given their testimony at the earlier

jury trial in 1966 on the first count of the complaint.

Their testimony was part of the evidence that the parties

stipulated should be considered in adjudicating the cross

motions for summary judgment on the second and third

counts.®

In what the First Circuit described as a ‘well ordered

opinion," the Magistrate discussed at length the applica-

bility of the preemption doctrine and other threshold legal

issues, and concluded that the respondents’ reliance on

the Sears-Compco preemption concept was without merit.

His ultimate conclusions were four-fold: (1) the respond-

ents ‘are not entitled to recover as a matter of law on

their cross-motion for summary judgment and the same

is DENIED"; (2) the petitioner DeCosta "'is entitled to

recover on Counts II and III as a matter of law on his

motion for summary judgment and the same is GRANTED",

(3) the petitioner DeCosta is entitled ‘as a matter of law

to an accounting of all profits’ acquired by the respond-

ents’ television series, and the respondents ‘are required

to hand over the proceeds of their wrong to the plain-

tiff by reason of their unjust enrichment’, and (4) the

attorneys for each side were directed to meet with the

Magistrate within five days ‘to settle the drafting of an

appropriate judgment order to be entered in this case."

5 The First Circuit's opinion erroneously states that this testimony

as to likelihood of confusion was introduced by affidavit eleven

years after the alleged infringement began in 1957, See p. A. 26,

infra, The testimony actually was given at the jury trial in 1966

and was introduced by stipulation of the parties as a part of the

record in summary judgment proceedings. DeCosta’s motion for

summary judgment was filed in 1968,

See pp. A. 82-83, infra. Such order was then to be pre-

sented to the District Court.

The respondents promptly filed objections to the

Magistrate's report. Included in those objections were

claims that the reference of the summary judgment mo-

tions to the Magistrate was u/rra vires and beyond the

jurisdiction of the Magistrate as defined in the United

States Magistrates Act, 28 U.S.C. 8636(b), that the refer-

ence was violative of respondents’ constitutional rights,

and that the reference was void ab initio. The District

Court stayed all further proceedings before the Magistrate

pending determination of these Objections. The petitioner

DeCosta then filed a motion to confirm the Magistrate's

report.

The District Court rejected all of respondents’ ob-

jections to the consensual reference of the summary judg-

ment motions to the Magistrate, a reference to which

the respondents had voluntarily agreed. The court held

that such a consensual reference to the Magistrate to hear

and decide all issues and to report his findings of fact

and conclusions of law to the court does not offend the

Constitution, at least insofar as a right to review in the

court is preserved. Hence the reference was held to be

authorized by the United States Magistrates Act. 28 U.S.C.

8636(b), which inter alia permits assignments to Magistrates

of "such additional duties as are not inconsistent with

the Constitution and laws of the United States."

The District Court then held that the "presumptively

correct" and "manifest error" standards of review, as

enumerated in Kimberly vy. Arms, 129 U.S. $12 (1889),

with reference to judicial review following a consensual

reference to a master, should be applied to the court's

review of the Magistrate's findings of fact and conclusions

of law. Applying those standards, the District Court

declared that it was ''not prepared to hold that the Mag-

istrate's findings of fact and conclusions of law are unequi-

vocally wrong.'’ See p. A. 45, infra. In the court's words

(p. A. 46, infra):

"I am well aware of our appellate court's

admonition that a pro forma ‘laying of hands'

upon a magistrate's report will not be sanctioned

following a reference. This teaching, however,

involved two cases . . . which are distinguish-

able [as not involving a consensual reference

to a magistrate] .. .

"| make no pretense of either affirming or

reversing the Magistrate. I simply find no

manifest error and, therefore, while neither

affirming or reversing, I deny the defendants’

motion to vacate the Magistrate's rescript,

adopt the Magistrate's report and enter a

final and appealable judgment based thereon."

On appeal, the First Circuit rebuffed all of the re-

spondents' renewed constitutional assaults on this con-

sensual reference. The court discussed the referral of

cases by consent in detail and phrased the issue as "not

the power of the judge to refer, but the power of the

parties to agree to another arbiter, absent overriding con-

stitutional considerations.'' See p. A. 6, infra. The court

found no constitutional impediment to the parties freely

choosing a non-Article III forum in the first instance, and

also found that the legislative history of the Federal Mag-

istrates Act supported a congressional intent to permit

consensual references to magistrates.

Mant

Although the First Circuit suggested that review of

such references could be limited so as to preclude any

reconsideration of the Magistrate's decision, it ruled that

the stipulation of the parties in this case did not clearly

express that intent; they had merely stipulated that the

case be referred for "hearing and determination." In

that context, the court turned to the standard of review

to be accorded a Magistrate's findings and conclusions

under such a consensual reference.

The First Circuit clearly rejected the "manifest error"

standard of review, as articulated by this Court in Kim-

berly vy. Arms, 129 U.S. 512 (1889), and adopted by

the District Court in this case. The term "manifest error,"'

said the First Circuit, "lacks content," at least as applied

to legal error. See p. A. 13, infra. But at the same time

the appellate court conceded that the review properly to

be accorded the Magistrate's report "does not appear at

all clear to us.'" See p. A. 13, infra. That perhaps ex-

plains the confusing nature of the ensuing discussion and

formulation of a new standard, borrowed in bits and

pieces from what were thought to be analogous provisions

of the Federal Rules of Civil Procedure. Fairly read, the

opinion below appears to have created and applied a

standard whereby:

(1) The Magistrate's legal conclusions are sub-

ject to ''full review" to discover "any prejudicial

error as required by F.R.Civ.Pro. 53(e)(4)."'

See p. A. 13, infra.

(2) The Magistrate's findings of fact are

"being treated as final" (see p. A. 26, infra),

since the Magistrate may be treated "as trier

of fact whose rulings on the facts are final

| es Rg EM LEED ph GP

under Rule 53(e)(4)."' See p. A. 14, infra.

But, at the same time, ''the factual findings

of the magistrate adopted by the district

court'’ are treated ''as subject to the clearly

erroneous standard of Rule 52(a).'’ See p.

A. 15, infra. To repeat, ''The magistrate's

findings being treated as final, they are here

subject to the same standard of review as

are district court findings under Fed.R.Civ.

Pro. 52(a)."" See p. A. 26, infra.

Rather than remanding the case to the District Court

to review the Magistrate's report in light of: these stand-

ards, and in order to save time in this protracted case,

the First Circuit undertook the reviewing task itself. It

thus proceeded to review the Magistrate's ‘findings in

the light of the pleadings, the evidence, and the law." See p.

‘A. 15, infra. In so doing, the First Circuit found that the cri-

tical issue respecting the merits of the case was ''whether

there was a deceiving of the public as the result of de-

fendants' actions."’ See p. A. 24, infra. And on that

issue, the First Circuit professed to find from the Magis-

trate's report ‘only a finding as to the identical nature of

the marks used by plaintiff and defendants and the re-

sulting ‘great likelihood of confusion’ therefrom, and

another that 'At least 6 . . . witnesses testified that they

had at first thought, on viewing the television program,

that Richard Boone was the plaintiff Mr. DeCosta until

they learned the contrary from viewing the credits of

the show, or otherwise.’ '' See p. A. 26, infra; and see

Magistrate's Findings No. 13 and No. 18, quoted above

at p. 13, supra.

CLA So SATA A TITS ETS Ate II iE, RRNA Da Lk TER NR es SIVA Nts RAW ea

The First Circuit's opinion concluded with the obser-

vation that such testimony by six witnesses "seems to us

either no evidence at all or so minimal as not to support

a finding of likelihood of confusion." See p. A. 27, infra.

And "to give any relief, however tailored, we need a predicate

of liability. Absent the ultimate fact of confusion, we cannot

find a basis for liability for common law service mark infringe-

ment or unfair competition.’ See p. A. 27, infra. On that

basis alone, the District Court's judgment in petitioner's favor

was reversed. Judge Aldrich wrote a concurring opinion. See

p. A. 27, infra.

REASONS FOR GRANTING THE WRIT

The decision below has been heralded by the Administra-

tive Office of the United States Courts as one of the “prin-

cipal decisions” rendered during the past year respecting the

relatively new Federal Magistrates Act, 28 U.S.C. §636(b).®

Unfortunately, that decision constitutes a confusing prece-

dent in the administration of this important Act, a statute

designed ‘‘to cull from the ever-growing workload of the

U.S. district courts matters that are more desirably per-

formed by a lower tier of judicial officers.” H.Rep.No.

1629, 90th Cong, 2d Sess., 12 (1968),

Both the importance of the opinion below and the con-

fusion that is rampant therein concern only those refer-

ences under the Act that are consensual in nature. Just

6 1975 Annual Report of the Director of the Administrative Of-

fice of the United States Courts, pp. VIII-17-18.

The only decision by this Court interpreting the Act is Wingo

v. Wedding, 418 U.S. 461 (1974), holding that magistrates may not

conduct evidentiary hearings on petitions for habeas corpus relief

pursuant to §636(b)(3) — a subsection of the Act not here involved,

ETS een

Wiese:

how many consensual references are made each year to

United States Magistrates is not known.’ But the prob-

lems in this consensual area also stem from the more

general enigma created by the complete silence of the Act

as to the weight to be accorded the findings and conclu-

sions of the magistrates, whatever the terms or nature of

their references, There is an obvious need to establish

some basic guidelines for judicial review of a magistrate’s

findings and conclusions and to determine the extent, if

any, to which analogous standards in the Federal Rules of

Civil Procedure may be borrowed. Therein lies the ulti-

mate justification for the grant of certiorari in this case.

1. The decision below has created a confused and un-

manageable standard for reviewing a Magistrate's

findings and conclusions in a consensual reference

situation.

In its commendable struggle to create a standard for

reviewing the results of a consensual reference to a Magis-

trate, the First Circuit has created more problems and ques-

7 The 1975 Annual Report of the Director of the Administrative

Office of the United States Courts states that, in the fourth year of

operation of this Act (ending June 30, 1975), there was a total of

487 United States Magistrates, including 133 full-time positions, and

that the number of full-time positions has been steadily increasing as

district courts continue to delegate a greater variety and volume of

judicial duties to the magistrates. During the last fiscal year ending

on June 30, 1975, magistrates disposed of 255,061 separate items

of judicial business, a 5 percent increase over the preceding fiscal

year. During that last fiscal year, magistrates handled 67,230 judi-

cial proceedings under the “additional duties’ authorization contained

in 28 U.S.C. §636(b). Report, pp. VIII-1, 3. But this Report does

not specify the number of references to magistrates that were con-

sensual in origin or nature.

se acer RES

tions than it has solved. Particularly as to the review of

findings of fact, the First Circuit has produced a two-

headed standard, the two heads facing in opposite direc-

tions. One need only follow the various Zig-Zags in the

opinion below to appreciate the puzzling and inconsistent

nature of the new standard created for consensual refer-

ences under the Federal Magistrates Act,

(1) The First Circuit has found that the consensual

reference in this instance. by which the parties agreed to

submit the case to the Magistrate “for hearing and deter-

mination,”’ was not clear enough “by its own terms to

support the conclusion that the Parties consented to a

grant of power greater than that outlined” in Rule 53(e)

(4). See p. Al14, infra, Is the standard of review thus

dependent upon the clarity of the language used in the

reference order agreed to by the parties? What degree of

unclarity is necessary before Rule 53(e 4) becomes applic-

able? And if Rule 53(e)4) does become applicable, are

not the parties and the reviewing court bound to accept

the findings of the magistrate, whatever may have been

the terms of the reference? Rule 53(e)(4) says in no un-

certain terms, although it deals only with references to

special masters, that where the parties “stipulate that a

master’s findings of fact shall be final,” then “only ques-

tions of law arising upon the report shall thereafter be

considered,”

(2) Does the First Circuit mean, then, that the Magis-

trate’s findings of fact upon this consensual reference

given its so-called unclear terms — must be considered

“final” in the Rule 53(e(4) sense? Professor Moore has

written that a master’s fact findings are so “final” under

Rule 53(e)(4) that they cannot be disturbed unless the

Peet ays Ts

| oe tsSihan ftrtee Je cet

master “is clearly shown to have arbitrarily abused his dis-

cretion or acted in a grossly unfair manner in his inquisi-

tion into the facts.”8 And if such finality does attach to

the Magistrate’s findings in this case, why was not the First

Circuit bound to accept his critical findings (Nos. 13 and

18) respecting the likelihood of confusion pertinent to the

infringement or unfair competition claims? Since the facts

contained in those findings had been stipulated into the

present record from the earlier trial transcript, there could

have been and was no suggestion that the Magistrate abused

his discretion or acted unfairly in making these findings.

(3) But if the consensual reference here is to be gov-

erned by Rule 53(e)(4), how can it also be governed by

the “clearly erroneous” review standard of Rule 52(a) —

as the First Circuit has repeatedly indicated? The Rule

52(a) standard is in no way confined to an arbitrary abuse

of discretion by the fact-finder, and thus envisages a much

wider standard of review than allowed by Rule 53(e)(4).?

Which rule prevails under the First Circuit’s view, Rule

52(a) or Rule 53(e)(4)?

8 SA Moore’s Federal Practice, P. 53, 15, p. 3045 (2d ed. 1975).

See discussion in Eastern Fireproofing Co. v. United States Gypsam Co.,

50 F.R.D. 140 (D. Mass. i970), stating that the First Circuit reviews a

master’s findings under Rule 53(e\4) only for an abuse of discretion.

9 But in the absence of a Rule 53(e)(4) stipulation as to the fi-

nality of the master’s findings of fact, the court must accept the

master’s findings unless, as Rule 53(e)(2) states, his findings are

“clearly erroneous.” The Rule 53(e)(2) “clearly erroneous” standard

is precisely the same as the Rule 52(a) “clearly erroneous” standard.

That is, ‘‘a finding by the master is clearly erroneous when, although

there is evidence to support it, the court on the entire evidence is

left with the definite and firm conviction that a mistake has been

made.” Wright and Miller, Federal Practice and Procedure, Vol. 9,

§2614, p. 810 (1971).

(4) Since Rule 52(a) governs Only the review by a

court of appeals of findings of fact by a district court,

how can the First Circuit make that rule applicable also

to a district court’s review of a magistrate’s findings of

fact? Or was the First Circuit applying this rule in its

Capacity as a court of appeals, intent on bringing this pro-

longed litigation to an end? And by refusing to remand

the case to the District Court to allow that tribunal to

review properly the results of its own reference to the

Magistrate, has the First Circuit vitiated the vital role that

the District Court plays under the Federal Magistrates Act?

(5S) Since the Federal Magistrates Act was designed to

permit and promote consensual references to magistrates

of matters not often delegated to masters, why should the

review of a magistrate’s findings on a consensual reference

be governed or circumscribed by those Civil Rules that

deal with the different and narrower relationships between

the district courts and their special masters? In the ab-

sence of any congressional direction or indication that such

Civil Rules should be imported into the administration of

this Act, by what token does the First Circuit promulgate

the applicability of either Rule 52(a) or Rule 53(e)(4)?10

(6) Indeed, in the absence of any congressional concern

with the matter, are not the federal courts bound to fash-

ion the standards of review solely in conformity with the

purposes of the Federal Magistrates Act, and independently

16 and what is the answer to the District Court’s statement

(see p. A. 35, infra) that a reference to a magistrate under the Act

“may be broader than reference to a master under Rule 53(b), and

indeed should be in order to accomplish the broad goals that the

Magistrates Act was designed to facilitate”? See Note, 88 Harv. L.

Rev. 779, 796-803 (1975).

of standards developed for use in entirely different con-

texts? Perhaps only this Court can do so in a definitive

manner, which only adds to the appropriateness of grant-

ing certiorari in this case. If the Court is willing to un-

dertake that task, it may well wish to ponder the wise

words spoken by an earlier Court in Kimberly v. Arms,

129 U.S. 512, 524-525 (1889), which dealt with a con-

sensual reference to a special master long before Rule 52

(a) or Rule 53(e)(4) was born. The Court there stated:

. . when the parties consent to the refer-

ence of a case to a master or other officer to

hear and decide all the issues therein, and report

his findings, both of fact and of law, and such

reference is entered as a rule of the court, the

master is clothed with very different powers from

those which he exercises upon ordinary references;

and his determinations are not subject to be set

aside and disregarded at the mere discretion of

the court. A reference, by consent of parties, of

an entire case for the determination of all its is-

sues ... is a submission of the controversy to a

tribunal of the parties’ own selection, to be gov-

erned in its conduct by the ordinary rules ap-

plicable to the administration of justice in tribu-

nals established by law. its findings, like those

of an independent tribunal, are to be taken as

presumptively correct, subject, indeed, to be re-

viewed, under the reservation contained in the

consent and order of the court, when there has

been manifest error in the consideration given to

the evidence, or in the application of the law,

but not otherwise... .

“. .. To disregard the findings, and treat the

report as a mere presentation of the testimony,

is to defeat, as we conceive, the purpose of the

reference, and disregard the express stipulation

of the parties. We are therefore constrained to

hold that the learned court below failed to give

to the findings of the master the weight to which

they were entitled, and that they should have been

treated as so far correct and binding as not to be

disturbed, unless clearly in conflict with the weight

of the evidence upon which they were made,”

This statement in Kimberly vy, Arms has never been repu-

diated by this Court," And while the First Circuit as-

serted its puzzlement as to the meaning of “manifest er-

ror,” that term in conjunction with other references to

“presumptively correct” and “not to be disturbed, unless

clearly in conflict with the weight of the evidence” could

well be used by this Court in casting a standard of review

for purposes of the Federal Magistrates Act.

Indeed, as the First Circuit has acknowledged (p. A. 10.

infra), a staff memorandum of the Senate Judiciary Sub-

11 The standards for review expressed in Kimberly v. Arms, of

course, are no longer applicable to consensual references to a mas-

ter. They have been replaced by the standard set forth in Rule

53(e4), Fed.R.C iv.Proc., which makes the master’s findings of fact

“final” and virtually non-reviewable, whereas “questions of law

arising upon the repori shall thereafter be considered,”

But the “manifest error” doctrine of Kimberly v, Arms has

been perpetuated in decisions of this Court in other contexts. See

Davis v, Schwartz, 155 U.S. 63} (1895); Adamson v, Gilliland, 242

U.S. 350 (1917); Corona Cord Tire Co, v, Dovan Chemical Corp.,

276 U.S. 358 (1928),

committee that drafted this Act specifically called atten-

tion to the “manifest error” language in Kimberly v. Arms,

in the course of discussing consensual references to special

masters. That may be a clue to what Congress intended

by way of reviewing a magistrate’s report following a con-

sensual reference. It is certainly a clue worth pursuing if

the Federal Magistrates Act is to be properly adminis-

tered.

The decision below, in overturning the Magistrate’s

express factual finding of the likelihood of confu-

sion, has created important procedural and substan-

tive problems.

The First Circuit premised its reversal of the judgment

in petitioner’s favor upon its holding that the critical de-

terminations of the Magistrate, respecting the likelihood

of confusion between the identical service marks of the

parties, were unsupported by the evidence. Incredibly,

the First Circuit held that the testimony of six witnesses

as to their actual confusion was “‘either no evidence at all

or sO minimal as not to support a finding of likelihood

of confusion.”” See p. A. 27, infra.

(1) Since the Magistrate’s determination as to the like-

lihood of confusion was based on stipulated testimony and

his own viewing of the competing service marks, was his

determination factual in nature so as to be subject to the

“clearly erroneous” test of Rule 52(a)? While this Court

has stated in other contexts that the “‘clearly erroneous”

test applies to “inferences drawn from documents or un-

— ee ee tee ee eS Se eres Oh att wh J wigticantnn hes tie

disputed facts,”!? the Circuits have been characterized as

still “indescribably confused”’ as to the factual or legal na-

ture of a fact-finder’s determination based upon undisputed

or stipulated facts, !3 Particularly is that confusion appar-

ent as to ‘likelihood of confusion” determinations.4 A

grant of certiorari in this case would clarify the situation

in this important area of trademark and service mark liti-

gation,

(2) The First Circuit’s ruling that six instances of ac-

tual confusion by television viewers cannot provide sub-

stantial proof of the “likelihood of confusion” is in direct

conflict with relevant decisions of other Circuits. Thus

the Fifth Circuit in World Carpets, Inc. v. Dick Littrell’s

New World Carpets, 438 F.2d 482, 489 (C.A. 5, 1971),

held that in a trade mark infringement action

. it is not necessary to show actual con-

fusion. One merely has to show that the likeli-

12 See United States v, United States Gypsum Co,, 333 U.S.

364, 394 (1948): Commissioner y, Duberstein, 363 U.S. 278, 291

(1960); United States v, Singer Mfg. Co., 374 U.S. 174, 194

(1963).

13 See Wright and Miller, Federal Practice and Procedure, Vol. 9,

§2587, p. 740 (1971); Wright, Law of Federal Courts, 430 (2nd ed. 1970).

14 See, for example, Fleishmann Distilling Corp. v. Maier Brewing

Co., 314 F.2d 149 (C.A. 9, 1963), where the Ninth Circuit stated that

the “determination of likelihood of confusion partakes more of the

character of a conclusion of law than of a finding of fact.” An exam-

ple of the opposite view is Standard Brands, Inc. v. Eastern Shore Can-

ning Co,, 172 F.2d 144 (C.A. 4, 1949). All the conflicting decisions

are gathered in McCarthy, Trademarks and Unfair Competition, Vol.

2, §23:22, p. 76 (1973).

hood of confusion exists, There can be no more

positive or substantial proof of the likelihood of

confusion than proof of actual confusion. More-

over? reason tes us that while very little proof

of actual confusion would be necessary to prove

the likelihood of confusion, an almost overwhelm-

ing amount of proof would be necessary to re-

fute such proof.

To the same effect are Standard Oil Co, v. Standard Oil

Co,, 252 F.2d 65, 74 (C.A. 10, 1958); Spangler Candy

Co., v. Crystal Pure Candy Co,, 353 F.2d 641, 644 (C.A.

7, 1966), both holding that “‘There can be no more posi-

tive proof of likelihood of confusion than evidence of ac-

tual confusion.”

This conflict should be resolved by this Court. The de-

gree of proof necessary to demonstrate “‘likelihood of con-

fusion” is a problem that goes far beyond the confines of

this case. It is the keystone of all trademark and service

mark infringement cases, whether arising under the “like-

lihood of confusion’ concepts of the common law, the

Lanham Trademark Act of 1946 (15 U.S.C. §1052(d)), or

the Uniform Deceptive Trade Practices Act (6 Martindale-

Hubbell Law Directory, 1975, p. 4067).

Similarly, the implicit holding of the First Circuit (see

pp. A. 25, 27, infra), that the passage of time imposes

an extraordinary duty on plaintiffs to present substantial

proof of actual confusion, constitutes a novel departure

from recognized trademark law and pays lip service only

to the test of likelihood of confusion. A resolution of

this question is imperative.

(3) Finally, the First Circuit has emphasized the small

size and scope of petitioner’s “Paladin” enterprise, in con-

trast to the vast nationwide television scope of the respond-

ents’ “Paladin’’ enterprise, in holding that the “likelihood

of confusion’? determination was clearly erroneous. See

p. A. 26, infra, Such a ruling is in direct conflict with

the Eighth Circuit’s ruling in Sweetarts v, Sunline, Inc.,

380 F.2d 923, 928 (C.A. 8, 1967), holding that

“Plaintiff's vested and existing rights cannot be

overpowered merely by defendant’s comparatively

massive size and generous promotional expendi-

tures,”

Or, as the same court said in San Francisco Association for

the Blind v, Industrial Aid for the Blind, 152 F.2d kA

537 (C.A. 8, 1946),

“The defendant may not justify its use of the

plaintiff's trademark upon the grounds that the

plaintiff's volume of business was comparatively

small...”

Such a conflict deserves resolution by this Court since

it deals with a problem common to all forms of trade-

mark and service mark litigation brought by a small en-

trepreneur against a giant competitor or appropriator.

Comparative size alone should have no place in the as-

sessment of the proof submitted by the small enterpre-

neur to show “‘likelihood of confusion.”

Needless to say, the significance of the foregoing con-

flicts is in no way diminished by the First Circuit’s gra-

tuitous comment (p. A. 27, infra) that “the most exact-

ing search for proof [of the likelihood of confusion] would

SL 8 ATIC Ae i aR di is

not have produced more”’ than the six witnesses that were

produced, Those six witnesses testified at the original

jury trial as to their actual confusion and any further

testimony, considering the identity of the marks, the

express finding of piracy by respondents, and the fact that

several marks rather than just one were misappropriated,

would merely have been cumulative. Volkswagenwerk

Aktiengesellschaft v, Rickard, 492 F.2d 474 (C.A. 5, 1974).

CONCLUSION

For the foregoing reasons, this petition for a writ of

certiorari should be granted.

Respectfully submitted,

ALAN T. DWORKIN

809 Industrial Bank Building

Providence, Rhode Island 02903

LEONARD MICHAELSON

300 Industrial Bank Building

Providence, Rhode Island 02903

EUGENE GRESSMAN

1828 L Street, N.W.

Washington, D.C. 20036

Counsel for Petitioner

November 21, 1975

United States Court of Appeals

For the First Circuit

No. 74-1391

VICTOR DeCOSTA,

PLAINTIFF, APPELLEE,

Vv.

COLUMBIA BROADCASTING SYSTEM, INC.,

CAPITAL CITIES BROADCASTING CORPORATION,

axp CBS FILMS, INC.,,

DEFENDANTS, APPELLANTS.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF RHODE ISLAND

Before Corriy, Chief Judge,

Avpricw and McEwter, Circuit Judges.

Eugene L. Girden, with whom Enight Edwards, Edwards ¢ Angell, Carleton

G. Eldridge, Jr., Coudert Brothers, John M. Keene III, Michael J. Calvey,

and David Wolf were on brief, for appellants.

Alan T. Dworkin, with whom Leonard Michaelson was on brief, for appellee.

June 24, 1975

Corrin, Chief Judge. Plaintiff, a dozen years ago, began

this suit against the Columbia Broadcasting System, Inc.

and allied corporations (CBS) to seek compensation for their

unauthorized use of a character concept he had developed,

embodying a costume, slogan, name, and symbol. A me-

chanic living in Cranston, Rhode Island, his avocation had

been to don an all black cowboy suit, with a St. Mary’s

medal affixed to his flat crowned black hat, a chess symbol to

his holster, and an antique derringer secreted under his

arm, and make public appearances at rodeos and other

| eeetieete a Te VAR Pmt athe enw ea Me lB a

Sle RNB 8 AE RION it As OROERIRBN, BOATENG IA UY Ss MI the Pe

A. 2

DE COSTA UV. COLUMBIA BROADCASTING SYSTEM, LINC.

events, meeting innumerable children, and passing out his

card, inscribed with a chess set knight, proclaiming ‘‘ Have

Gun Will Travel, Wire Paladin, N. Court St., Cranston,

R.I.’’ We described these events in greater detail when this

case was before us on appeal from the first count! in his

complaint, Columbia Broadcasting System, Inc. v. DeCosta,

(DeCosta I), 377 F.2d 315 (1967), cert. denied, 385 U.S. 1007

(1968). As every well-versed television viewer of the late

fifties and early sixties knows, the gestalt conveyed by

plaintiff’s costume and accessories found its way into de-

fendants’ television series, ‘‘ Have Gun Will Travel’’, which

enjoyed enormous popularity for over eight years in its

initial run, grossing in excess of fourteen million dollars.

The claim below, in the remaining counts two and three of

the complaint, asserted a wilful and intentional infringe-

ment of plaintiff’s common law trademark and/or service

mark and unfair competition. The plaintiff sought both

injunctive and monetary relief, including an accounting for

all profits made by defendants in broadcasting ‘‘Have Gun

Will Travel’’. The first count had been tried before a jury.

When this court reversed the result obtained in that trial,

the case was returnd to the district court where the parties

entered into a stipulation that counts two and three be deter-

mined by the district judge on the basis of the trial tran-

script, including all exhibits, together with a stipulation of

additional testimony. 382 F. Supp 326, 327.

Subsequent to this stipulation the following order was

entered by the district court on October 5, 1973:

‘*Pursuant to stipulation of the parties on each side

and of counsel on each side, the above captioned case is

referred, under authority of 28 U.S.C. 636, to United

States Magistrate Jacob Hagopian for hearing and de-

termination to be had on or before November 5, 1973.’’

1 The first count charged a wilful misappropriation through copying plaintiff’s

idea and character.

KL ele Ad <i

A. 3

OPINION OF THE COURT.

Six months later, on April 15, 1974, a report was filed by

the magistrate setting forth his findings of fact and con-

clusions of law Sustaining the plaintiff’s position. Five

days after,this report was filed, the defendants objected to

the reference for the first time and argued that the parties

were without authority to consent to reference and that the

decision of the magistrate had been ultra vires. The district

court ruled that the consensual reference granted the magis-

trate the power to ‘‘determine”’ the issues in the case. It

therefore held the magistrate’s exercise of jurisdiction

legitimate and restricted its own review to a search for

“‘manifest error’’ of fact or law. Finding none, it affirmed

the magistrate’s decision and entered judgment thereon.

This appeal challenges both the propriety of the reference

and the decision on the merits.

I. The Reference.

The defendants’ argument to the district court and to us

on appeal may be reduced to the following syllogism: (1)

the order of reference in effect authorized the magistrate

to act as special master; (2) the United States Magistrates

Act, 28 U.S.C. §§ 631-6392 provides for appointment of

magistrates as masters only under the auspices of the Fed-

eral Rules of Civil Procedure; (3) Rule 53(b) provides that

‘*in actions to be tried without a jury, save in matters of

2 28 U.S.C. § 636(b) provides:

‘Any district court of the United States... may establish rules pursuant

to which any... United States magistrate, ... may be assigned . . . such

additional duties as are not inconsistent with the Constitution and laws of

the United Staets. The additional duties authorized by rule may include,

but are not restricted to

**(1) service as a special master in an appropriate civil action, pursuant

to the applicable provisions of this title and the Federal Rules of Civil

Procedure for the United States district courts;

**(2) assistance to a district judge in the conduct of pretrial discovery

proceedings in civil or criminal actions; and

**(3) preliminary review of application for post-trial relief made by indi-

viduals convicted of criminal offenses, and submission of a Teport and

recommendations to facilitate the decision of the district judge having

jurisdiction over the case as to whether there should be a hearing.’?

ae = 5

Sie

A. 4

DE COSTA UV. COLUMBIA BROADCASTING SYSTEM, INC.

account, and of difficult computation of damages a reference

shall be made only upon a showing that some exceptional

condition requires it’’; (4) since there is not such excep-

tional condition here, the reference was improper and the

magistrate was without jurisdiction to hear the case; and

(5) since this is a jurisdictional matter, it cannot be waived

by counsel. They further argue that even if the consent of

the parties ratifies the reference, the district court employed

an inappropriate standard of review, and the governing

standard should not have been manifest error of fact or law,

but errors of law and clearly erroneous findings of fact as

provided in Rule 53.

The district court’s analysis began with a holding that a

consensual reference to a magistrate was not a reference to

a special master within the meaning of 28 U.S.C. § 636(b) (1)

and was instead governed by that part of §636(b) which

provides: ‘‘any district court ... may establish rules pur-

suant to which any full-time United States magistrate .. .

may be assigned .. . such additional duties as are not incon-

sistent with the Constitution and laws of the United States.’’

Reviewing the law governing the powers of non-Article III8

judges to hear and determine cases, it held that there was

no statutory or constitutional bar to the magistrate adjudi-

cating a civil case on the basis of the litigants’ consent. And

to determine the scope of review, the district court examined

Kimberly v. Arms, 129 U.S. 512 (1889), which treated

district court review as limited to the question of ‘‘manifest

error’’ in law or fact. 383 F. Supp. at 336-337.

Defendants argue that it is constitutionally impermissible

for an Article III judge to abjure decision making respon-

sibilities and that the judge is therefore without power to

3U. 8. Const. Art. III. A magistrate is an Article I judge, being a ‘‘ tribunal

inferior to the Supreme Court’’ and appointed pursuant to Congressional power

under U. 8. Const. Article I, Section 8, clause 9. See Glidden Co. v. Zdanok,

370 U.S. 530, 543, 552 (1962).

ELMORE MELA AMON AM An AEA CAGES Sela aad g As by maton

A. 5

OPINION OF THE COURT.

invest other non-Article ITI judicial officers or parajudges,

such as magistrates, with broad authority. However per-

suasive such an argument may be where governmental sanc-

tion is threatened,4 indicating a strong public interest in the

outcome of litigation5 and creating a countervailing neces-

sity for extending the full measure of judicial process to

the defendant,$ or where parties to civil litigation properly

before the federal judiciary insist on judicial resolution,?

quite different policy and precedent should apply where the

4 Notwithstanding such an argument, the Congress did extend to magistrates

the authority to try minor offenses when all parties consent.

5 For example, in arbitration cases public policy considerations and Con-

gressional intent have an impact on the available forum. See, ¢.g., Wilko v.

Swan, 346 U.S. 427 (1953) (the non-waiver provision in the Securities Act

forbids bargaining away any right under that Act, including the choice of

forum); A¢E Plastik Pak Co. v. Monsanto, 396 F.2d 710 (9th Cir. 1968) (the

validity of a contract under the Sherman Antitrust Act is not an arbitrable

issue); American Safety Equip Corp. v. J. P. Maguire ¢ Co., 391 F.2d 821

(2d Cir. 1968) (a claim under the antitrust law states a claim in the public

interest which Congress intended the courts to resolve). Similarly in Wingo v.

Wedding, 418 U.S. 461 (1974), the Supreme Court limited its inquiry as to the

propriety of a magistrate holding evidentiary hearings in habeas corpus cases

to the question of whether the demonstrated Congressional intent of the

Habeas Corpus Act, 28 U.S.C. § 2243 and the Magistrate’s Act, 28 U.S.C.

§ 636(b) (3) precluded such a result.

5 See Crowell v. Benson, 285 U.S. 22, 51 (1932); see also discussion of applic-

ability of the doctrine to judicial reference in Note, Masters and Magistrates

in the Federal Courts, 88 Harv. L. Rev. 779, 787-789 (1975).

7In the pre-Magistrates Act case of La Buy v. Howes Leather Co., 352 U.S.

249 (1957), the district court had referred the private antitrust suit sua sponte

to a master for hearing and preparation of findings after the judge had heard

In TPO, Inc. v. McMillen, 460 F.2d 348 (7th Cir. 1972), the defendant had

pressed for an early trial date, the judge sua sponte ordered reference to a

magistrate of a motion to dismiss. Objection was made. After an exhaustive

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DE COSTA UV. COLUMBIA BROADCASTING SYSTEM, INC.

parties to a civil dispute themselves select another forum.

Under such circumstances, it is inappropriate to evaluate

the problem as one of the right of the judiciary to relinquish

its authority.8 The issue is not the power of the judge to

refer, but the power of the parties to agree to another

arbiter, absent overriding constitutional considerations.

There is old authority for consensual reference for

decision after court proceedings have been instituted. In

Heckers v. Fowler, 69 U.S. 123 (1864), the parties agreed to

a reference under the terms of which the report of the

referee was to ‘‘have the same force and effect as a judg-

ment of the court.’’ Id. at 127. In responding to a challenge

to the power of a federal court to authorize such a proceed-

ing, the Court endorsed the holding of an earlier case that

‘fa trial by arbitrators, appointed by the court, with the

consent of both parties, was one of the modes of prosecn-

ting a suit to judgment as well established and as fully

warranted by law as a trial by jury....’’ Jd. at 128-129. It

also recognized that, assuming the preservation of excep-

tions to acceptance of the report and a sufficient record, the

same scope of appellate review would be available as in the

case of appeal from an ordinary trial court judgment. See

also Newcomb v. Wood, 97 U.S. 581 (1878). And, in Kim-

berly v. Arms, 129 U.S. 512 (1889), the Court said:

‘*A reference by consent of parties, of an entire case

for the determination of all its issues, though not

strictly a submission of the controversy to arbitration

—a proceeding which is governed by special rules —

8 Our own prior cases on magistrates deal with euch situations and are not

apposite here. O’Shea v. United States, 491 F.2d 774 (1st Cir. 1974), was a

habeas corpus case which allowed more latitude to the istrate than was

subsequently approved in Wingo v. Wedding, 418 U.S. 461 (1974). In Rainha v.

Cassidy, 454 F.2d 207 (1st Cir. 1972), this court faced another habeas corpus

case. And in Reed v. Board of Election Comm'rs of City of Cambridge, 459

F.2d 121 (1st Cir. 1972), there was no consent or understanding by the parties

as to the scope of the reference, and we disapproved the procedure as we had

intimated we would do in Devcon Corp. v. Woodhill Chemical Sales Corp., 455

F.2d 830 (1972).

SANE RSet Mentha rR ON ie

eS Rete Sed apttase eee ©

OPINION OF THE COURT.

is a submission of the controversy to a tribunal of the

parties’ own selection, to be governed in its conduct by

the ordinary rules applicable to the administration of

justice in tribunals established by law.’’ Id. at 524.9

We would add that we find nothing in La Buy v. Howes

Leather Co., 352 U.S. 249 (1957) to cast doubt on the pro-

priety of truly consensual reference. The Court in La Buy

was concerned with the wholesale resort to references to

private masters ordered, despite objection, by district

courts attempting to deal with crowded dockets, such refer-

ences having gained notoriety for their delay and high cost.

We see none of these problems in truly consensual refer-

ences to magistrates.

Both Heckers and Kimberly spoke in terms of arbitra-

tion supervised by the Court even though both cases long

antedated the present availability of authorization for bind-

ing private agreement to arbitrate future disputes. In that

era, an agreement to arbitrate a dispute that might arise

was not judicially enforceable,10 although an arbitration

award, once granted, was treated as the equivalent of ad-

judication by the courts.11 There was a long history in the

field of arbitration of unwillingness on the part of the judi-

ciary to relinquish power to decide cases properly before

the courts.12 With the adoption of the Federal Arbitration

Act, 9 U.S.C. §$§ 1-14, this judicial hostility toward enforce-

® Despite its reference to ‘‘the ordinary rules applicable .. . in tribunals

established by law’’, the Court, in the succeeding sentence, said that review

would lie to correct ‘‘ manifest error in the consideration given to the evidence,

or in the application of the law, but not otherwise.’’ Jd. This not only seems

to us an internal inconsistency but introduces us to a concept currently without

content.

10 W. Sturges, Commercial Arbitration and Award, §15 (1930).

117d. at § 235 at 613; S. Williston, Law of Contracts § 1919 (3d ed. 1938):

Simpson, Specific Performance of Arbitration Contracts, 83 U. Pa. L. Rev.

160, 163-164 (1934).

12 See Kulukundis Shipping v. Armtorg Trading Corp. (Frank, J.), 126 F.2d

978 (2d Cir. 1942).

ORL NEN LEE AAA lA ORI Hs Rs BATS ON aS INS BUTE DIO IS

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DE COSTA UV. COLUMBIA BROADCASTING SYSTEM, INC.

ment of arbitration agreements had gradually changed to

approval of this mode of dispute resolution.13 Under sec-

~ tion 9 the court must enter judgment upon the award of the

arbitrators unless certain abuses are apparent.14 The

authority of the courts to relinquish their decision making

authority in favor of the arbitrators to the extent described

in a private contract has long been assumed to have passed

constitutional muster.15

From a constitutional viewpoint, we can see no significant

difference between arbitration and consensual reference for

decision to magistrates. In both situations the parties have

freely and knowlingly agreed to waive their access to an

Article III judge in the first instance. Or put another way,

they have chosen another forum. Indeed, the decision to

waive in the case of a consensual refer2nce is more knowl-

edgeable than in the case of an agreement to arbitrate a

future dispute because it is made after the issue has

crystallized. Both modes of conflict resolution serve the

same goals of relieving scarce judicial resources and of

accommodating the parties. If it be queried whether the

dignity of Article III is being compromised by entering

judgments on awards made by non-Article III personnel,

the sufficient rejoinder is that judgments are entered on

arbitrators’ awards.

Defendants, however, urge that, even if there is no con-

13 See Note, The Consequences of a Broad Arbitration Clause Under the

Federal Arbitration Act, 52 B.U. L. Rev. 571 (1972).

149 U.S.C. § 9 provides that judgment ‘‘shall be entered upon the award...

unless the award is vacated, modified or corrected as prescribed in sections 10

and 11.’’ Under these latter sections the court’s authority to vacate an award

is limited to situations of fraud, bias, or misconduct and its power to modify

or correct is limited to material miscalculations or assumption of en

not granted to the arbitrator.

15 See Prima Paint Corp. v. Flood ¢ Conklin Mfg. Co., 388 U.8. 395 (1967);

Bernhardt v. Polygraphic Co. of America, 350 U.S. 198 (1956); see also United

oa of America v. Warrior ¢ Gulf Navigation Co., 363 U.S. 574, 578

1960).

1S ah

SI eS SOS Re

A. 9

OPINION OF THE COURT.

stitutional defect vitiating consensual references to magis-

trates, such are now proscribed by the Magistrates Act in

light of its legislative history. It is true that the legislative

history of the Act clearly demonstrates an intent to subject

the court’s power to compel a reference of ordinary cases

to the limitations of the Federal Rules (including Rule

03(b), preconditioning reference on a finding of exceptional

conditions). That question, however, is not now before us.

The question here is whether the legislative history indi-

cates that the same strictures were to be placed on con-

sensual reference. Very little was said on this subject.

Most of the voluminous testimony and written presentations

were concerned with the duties which, as of course, could be

assigned to magistrates. But what little was said makes

it clear that it was assumed as given that consensual refer-

ences were available. Defendants have not seen fit to

acknowledge the relevant legislative history.

In the first place, the draft of the legislation which was

to become the Magistrates Act was accompanied, as early

as April of 1966, by a Senate subcommittee staff memor-

andum, quoted by the district court, stating: ‘‘The use of

magistrates for duties that do not require the employment

of an Article III judge, or in cases in which the parties con-

sent to the use of a magistrate, may do much to increase the

efficiency of the Federal Courts.’ Hearing on S. 3475

before the Subcom. on Improvements in Judicial Machinery

of the Senate Comm. on the Judiciary, 89th Cong., 2d Sess.,

at 14 (1966).

A second indication of Congressional intent stems from

the subcommittee’s concern over the challenge made by then

Assistant Attorney General Fred M. Vinson, Jr. to the pro-

posed assignment of magistrates to try minor offenses if

NAL C IM RES AS A NR BERRA Si ald ators

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DE COSTA UV. COLUMBIA BROADCASTING SYSTEM, INC.

the defendant knowingly and intelligently consented.16 The

subcommittee then charged its staff to make a study, which

resulted in a memorandum addressed to ‘‘ The Constitution-

ality of Trial of Minor Offenses by U. S. Magistrates’’.

Hearings on S. 945 before the Subcom. on Improvements in

Judicial Machinery of the Senate Comm. on the Judiciary,

90th Cong., at 246-256 (1967). The memorandum concluded

that the proposed minor offense provision of the Magis-

trates bill was constitutional, drawing on factors supported

by three separate lines of authority: (1) the fact that the

magistrate would be an officer of the court and subject to its

control ; (2) the necessity of consent [‘‘If any ‘right’ to trial

by a good-behavior tenure judge exists, it is a due process

right, which is waivable like other due process rights.’’] ;

and (3) the preservation of a right of appeal to the court.

Id. at p. 254.17 In the course of the memorandum, a separate

subsection entitled ‘‘Consensual reference to special mas-

ter’’ noted that ‘‘In ordinary practice before the Federal

district courts, the parties can also consent to delegation of

judicial responsibility to a court officer — a special master.”’

and quoted from Kimberly v. Arms, supra. Id. at p. 253.18

Finally, in the Senate Report presenting the legislation

to the Senate, S. Rep. No. 371, 90th Cong., Ist Sess. (1967),

16 Mr. Vinson’s testimony and prepared statement are at pages 107-131 of

these Hearings. Defendants cite the point made by this witness as throwing

doubt on the capacity of parties to waive trial before an Article III judge in

all cases. They do not refer to the subsequent developments referred to in the

text. See also n. 4 supra.

17 We do not pase on the validity of these perceptions as applied to criminal

cases today, but employ them only to establish the Congressional perspective

at the time of enactment.

18 It may be of some significance that the Committee in quoting the language

we have alluded to in n.9, supra, saw fit to italicize the words ‘‘but not

otherwise’’. While it thus called attention to the ‘‘ manifest error’’ language

of Kimberly, it also indicated that it understood the law to be that while a

special master’s report under a compelled reference is advisory only, ‘‘it is

just as conclusive as the decision of the court when the litigants consent to the

reference.’’ Id. at 253.

_ecetatessae craps MRT LTE OL Ki

the

A. 11

OPINION OF THE COURT

following passage, quoted by defendants, appears at

p. 25:

“*(1) A magistrate may be assigned to serve as a spe-

cial master in an appropriate civil action, under the

conditions imposed by pertinent provisions of Federal

Rules of Civil Procedure. This latter requirement was

added as a clarification in response to comments made

by the Committee on the Administration of the Crim-

inal Law of the Judicial Conference. In particular,

rule 53(b) provides that a reference to a master shall

be the exception and not the rule; that in actions tried

by a jury a reference shall be made only when the

issues are complicated ; and that in actions tried with-

out a jury, save in matters of account, a reference shall

be made only upon a showing that exceptional circum.

stances require it. These conditions, which in essence

reflect the rule laid down by the Supreme Court in

LaBuy v. Howes Leather Company, 352 U.S. 249

(1957), protect against any abdication of the decision.

making responsibility that is properly that of the

district courts.’’

Defendants omitted the subsequent sentence, which con-

cluded the paragraph:

‘‘A memorandum entitled ‘Restrictions on the Use of

Special Masters,’ prepared by the staff of the Sub-

committee on Improvements in J udicial Machinery and

published at pages 281-283 of the hearings before that

subcommittee on the Federal Magistrates Act, pro-

vides an analysis of rules relevant to the assignment

of magistrates as masters.”

Recourse to the memorandum referred to reveals a para-

graph entitled ‘‘General Restrictions’, which ends as

follows:

‘*Furthermore, a reference cannot be made to a master

PAPER

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DE COSTA UV. COLUMBIA BROADCASTING SYSTEM, INC.

if it would result in an infringement of a party’s right

to trial by judge and/or jury or on any other substan-

tive right. Schwimmer v. United States, 232 F.2d 855

(8th Cir.), cert. denied, 352 U.S. 833 (1956). But a

party can waive these rights by consenting to a refer-

ence. Allen Bradley Co. v. Local 3, IBEW, 51 F. Supp.

36 (S.D.N.Y.), reversed on other grounds, 145 F.2d 215

(2d Cir.), which was reversed, 325 U.S. 797 (1943) ; see

Harte v. Williams, 202 F.2d 190 (D.C. Cir. 1952).’’

Hearings on S. 945, supra at 282.

We see no contrary references in the legislative history.

It therefore seems clear to us that the Congressional intent

was to leave untouched the tradition, as Congress under-

stood it, that parties could, without violation of Article III

freely consent to refer cases to non-Article III officials for

decision. We see no suggestion in the committee reports

and no reason of policy which would limit consensual refer-

ence to ‘‘some exceptional conditions’’ as required by F. R.

Civ. Pro. 53(b). As we have indicated above, the factors

triggering the decision in La Buy are not present when the

parties knowingly and freely agree to a reference to a mag-

istrate. Indeed, on occasion, perhaps when the legal issue

is closely balanced and the stakes are not high, or when

expedition and expense are dominating factors, parties may

prefer prompt decision, though by a magistrate, to decision

by a judge. This avenue ought not to be barred. But in

order that such references not be subtly coerced by a har-

ried court, intentionally or not, district courts should adopt

a procedure such as requiring that the parties file with the

clerk of the court a letter of consent to have the magistrate

render decision in the case, the clerk being bound not to

disclose the identity of any who consent or who withhold

consent.

That it is constitutionally and statutorily permissible to

A it LATED BION NEL OCPD BEETS

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OPINION OF THE COURT

refer cases, with the consent of all parties, for initial deci-

sion is clear. What does not appear at all clear to us is

whether the decision of the referee once rendered is by

Statute subject to very limited review or to review for any

prejudicial legal error as required by F. R. Civ. Pro.

03(e)(4). Mr. Justice Black observed in Commonwealth

Coating Corp. v. Casualty Co., 393 U.S. 145, 149 (1968), in

@ case involving an arbitrator charged with partiality,

“‘[W]e should, if anything, be even more scrupulous to

safeguard the impartiality of arbitrators than judges, si >

the former have completely free rein to decide the law as

well as the fact and are not subject to appellate review.”’

If review of arbitration awards can be limited to issues

involving the integrity of the process (not the correctness

of the decision), it may well be that review could be simil-

arly limited as to consensual references for decision. But

the actual scope of review that has been provided in the

past is unclear. Various references we have cited suggest

that the report of a referee to whom a case has been con-

sensually referred for decision stands in the same position

as a district court decision, reviewable by a court of appeals

for clearly erroneous factual findings and errors of law.

This would avoid an added tier of decision, but at the

expense of losing the benefit of the district court’s delib-

eraiton. The ‘‘manifest error’’ language in Kimberly would

ndicate a reduced standard, which the district court

plied in this case. We have indicated our feeling that as

applied to legal error, the term lacks content. It is possible

that, following the analogy of arbitration, a truncated re-

view to insure integrity of the process could be devised.

But in the present state of the law we would be reluctant to

approve even a clearly worded consensual reference to a

magistrate which purports to finally bind the parties to his

rulings of law. Until Congress, on reviewing the experience

under the Federal Magistrates Act, fashions a review pro-

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DE COSTA U, COLUMBIA BROADCASTING SYSTEM, INC.

cedure for consensual reference for final (or semi-final)

determination of all issues of law and fact, it might be

better to rely on the formulation contained in Rule

53(e) (4).19

We need attempt no categorie answer to this issue since

the reference in this case was not clear enough by its own

terms to support the conclusion that the parties consented

to a grant of power to the magistrate greater than that

outlined in Rule 53 Fed. R. Civ. Pro.20 The district court

relied on the language of the order indicating that the

parties agreed to ‘‘hearing and determination’’. But this

language is fully compatible with the magistrate as trier

of fact whose rulings on the facts are final under Rule

53(e)(4), but whose legal rulings have no binding force.

We agree with the district court that the defendants’

motion for summary judgment is some evidence of an intent

to have the magistrate rule on issues of law, but, in light of

the absence of any specific court rule addressing itself to

the effect of a magistrate’s decision and the failure to

include in the order of reference a provision for entry of

judgment upon the magistrate’s award, we do not find this

sufficient.

We must, therefore, treat the district court’s failure to

review the magistrate’s decision on the law under Rule 53

as error. It may well be noted that, deciding that a differ-

ent standard of review should be applied, logic should com-

19 Rule 53(e) (4) reads as follows:

‘* Stipulation as to Findings. The effect of a master’s report is the same

whether or not the parties have consented to the reference; but, when the

parties stipulate that a master’s findings of fact shall be final, only ques-

tions of law srising upon the report shall thereafter be considered.’’

20 The district court itself recognized that the wording of the order was

ambiguous, 383 F. Supp. at 331, n. 9, but rejected any constitutional challenge

premised on that lack of precision, citing Yascavage v. Weinberger, 379 F. Supp.

1297, 1303 (M.D. Pa. 1974). We think that case is not authority for the one

now before us. Where the scope of the arbiter’s authority is to be determined

by a voluntary undertaking, the document must clearly demonstrate the terms

of the referral.

A SOLOS DL AAAI nS AOL OGLE asec 0 he

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OPINION OF THE COURT

pel us to remand to the district court. But we would have

to repeat the legal review and we see no favor to the parties

in prolonging further these aging proceedings. We proceed,

then, treating the factual findings of the magistrate adopted

by the district court as subject to the clearly erroneous

standard of Rule 02(a), and treating the legal decision of

the magistrate as subject to the full review of this court.

II. The Merits.

We proceed to review the magistrate’s findings in the

light of the pleadings, the evidence, and the law. In

DeCosta I we considered only the first cause of action in the

complaint — that for misappropriation of “the idea and

character’’, seeking damages based on defendants’ unjust

enrichment. Before us now are plaintiff’s second and third

causes of action, for trademark and/or service mark

infringement and for unfair competition. In the second

cause of action, plaintiff alleges that the slogan ‘* Have Gun

Will Travel’’, together with a figure of a knight chess piece

and the words ‘‘ Wire Paladin’’, as used in his calling cards,

constituted his distinctive common law service mark or

marks, which defendants intentionally infringed, appropri-

ating the goodwill created by plaintiff, causing him serious

financial damage. In the third cause of action plaintiff

alleges that defendants intentionally copied plaintiff's sery-

ice marks and his manner of dress (black outfit. white tie,

mustache, ete.), and passed off their television character

of Paladin as the original Paladin portrayed by plaintiff,

profiting and diluting plaintiff's established goodwill,

thereby deriving unjust profits. Plaintiff sought injunctive

relief, an accounting for all Profits. a trebling of ** profits

lost and damages suffered by plaintiff’, plus a separate

item of $2,000,000 damages.

A RS Beate

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The magistrate’s well ordered opinion on cross motions

or summary judgment was divided into findings of fact,

a discussion of preemption and other threshold legal issues,

and conclusions of law. After rehearsing the general factual

background described in DeCosta I, 377 F.2d at 316-317, he

made the following critical findings: (1) As to secondary

meaning — some 21 witneses knew plaintiff as Paladin, 18

had seen him pass out his cards, and plaintiff received

cards and letters addressed to him as Paladin; (2) As to

confusion — the card and costume marks and dress of plain-

tiff were identical to those used in defendants’ TV series,

with attendant ‘‘great likelihood of confusion’’; 21 wit-

nesses discerned a similarity between plaintiff and the tele-

vision Paladin, six first thought the television Paladin was

plaintiff; (3) As to plaintiff’s commercial activity — he

‘*commercially held himself out to be ‘Paladin’ ’’ and used

his marks in interstate commerce to advertise his services

as an entertainer, and in connection with his appearances at

his pony ring where children paid for rides, and appear-

ances at paid admission rodeos.

In his legal discussion the magistrate held that DeCosta I

had not precluded recovery on the second and third causes

of action; that the Sears-Compco decisions2! had not pre-

empted application of the common law of service marks and

unfair competition or of the Lanham Act, 15 U.S.C. §§ 1125

and 1127; that a belated res judicata claim of defendants

based on a trade mark administrative proceeding was not

available; that plaintiff was not barred by laches in bring-

ing this action six years after the alleged infringement; and

that New York policy and law (as well as the Lanham Act,

which is consistent therewith) applied.

Finally, the magistrate concluded that plaintiff’s marks

were not within the scope of copyright laws; that they had

21 Sears Roebuck $ Co. v. Stiffel Co., 376 U.S. 225 (1964) ; Compco Corp. v.

Day-Brite Lighting, Inc., 376 U.S. 234 (1964).

NCS Be 1 S

SORIA GRAG Ro wt ied a

IPE AHL yn fo ML NR Ba a

A. 17

OPINION OF THE COURT

been used in interstate commerce, and had acquired a sec-

ondary meaning; and that, although there was no direct

competition involved defendants had infringed, had falsely

advertised them to be their own, and had therefore unfairly

competed. He held that defendants should account to plain-

tiff for all profits arising from the use of plaintiff’s service

marks,

We note at the outset of our analysis that two allegations

of the complaint meet with no response in the findings of

the magistrate; in the second cause of action the allegation

of financial damage, and in the third cause of action, the

allegation of “passing off’’. Since plaintiff's role-playing

as Paladin was uncompensated, we think that any finding of

financial damage would have been unsupported. We say

_ the same about “passing off’’; there is no evidence that the

CBS nationwide television venture ever sought to draw

luster from the Cranston paradigm. We recognize that

precision of pleading no longer can be an absolute deter-

minant of either liability or remedy. What, if any, effect

these gaps between pleading and proof have we leave for

later analysis.

~ Picking our way through the cluster of issues in several

related but different fields of the law, we start where we

left off, at DeCosta I. We there gave what has since been

characterized as an expansive reading to Sears and Compco.

See, e.g., Comment, Copyright Pre-emption and Character

Values; The Paladin Case as an Extension of Sears and

Compco, 66 Mich. L. Rev. 1018 (1967-1968). We held that

“if a ‘writing’ is within the scope of the constitutional

clause, and Congress has not protected it, whether delib-

erately or by unexplained omission, it can be freely copied.”’

377 F.2d at 319. Since the cards — including the photo-

graph — ‘‘were unquestionably ‘writings’ within the mean-

ing of the copywright clause, and arguably were copyright-

FOF a LEON enV MW Sate, ae Sit

lebeneieenina etek ke ae 2

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DE COSTA U. COLUMBIA BROADCASTING SYSTEM, INC.

tainment of others.’’ Plaintiff testified that he never used

the name ‘‘Paladin’’, the slogan or the chess piece for any

business use, and never published any advertisements; that

he did not even receive his expenses for appearances at horse

shows and rodeos; and that the distribution and mailing

of pictures and cards was costly to him. The closest point to

commercialism that plaintiff came was in conducting a horse

trading business at a ranch, where he stapled some of his

cards to some beams near the ceiling of a barn. In 1953, he

left that ranch and established a pony ranch, sold rides and,

in costume, passed out cards and photographs to children.

This business ended in September of 1957, when plaintiff

had to move out. Ironically, this was the month when de-

fendant’s television series commenced. From tnen through

1964 plaintiff continued to appear in parades, at hospitals,

and at other gatherings, but was not, apart from his em-

ployment as a mechanic, associated with any business

venture.

While the magistrate found that plaintiff ‘‘commercially

held himself out’’ to be ‘‘Paladin’’, and that he used his

service marks in interstate commerce to advertise his

services, we interpret his holdings not as purely factual

ones but as decisions combining both law and fact. That is,

the findings could not, on this record, be that plaintiff was

engaged in a remunerative business, sparked by the profit

motive. Rather, they were findings that plaintiff regularly

(on week-ends) held himself out as a personality and enter-

tainer, appearing in various states, and that, even though

he incurred expense without receiving income, this activity

constituted the rendering of service in interstate commerce.

The Lanham Act, 15 U.S.C. § 1127, is, for our purposes,

delphic, that is, circular in its relevant definitions. It de-

fines a service mark as ‘‘a mark used in the sale or adver-

tising of services to identify the services of one person and

BO VIER ate CER CAE Bi TE! SPOOR El Remi Na rns mh et AT

A. 2]

OPINION OF THE COURT

distinguish them from the Services of others.’’24 ‘‘Com-

merce’’ means ‘‘all commerce which may lawfully be regu-

lated by Congress”’ and a service mark is deemed to be used

in commerce ‘‘when it is used or displayed in the sale or

advertising of services and the services are rendered in

commerce, or... in more than one State... and the person

rendering the services is engaged in commerce in connection

therewith.’’

Defendants rely on cases such as Hanover Star Milling

Co. v. Metcalf, 240 U.S. 403 (1916) and United Drug Co. v.

Rectanus Co., 248 U.S. 90 (1918), for support of the propo-

sition that a trade mark is inseparable from the goodwill

of a business. Defendants also cite the recent case, Heine-

‘mann v. General Motors Corp., 342 F. Supp. 203 (N.D. Ill.

1972), aff'd, 478 F.2d 1405 (7th Cir. 1973). In that case a

plaintiff had ‘‘modified”’ an ancient Model A Ford and had

named it ‘‘The Judge’’, efter the well known skit in ‘‘Laugh

In’’, a television show. He raced and exhibited his car,

occasionally receiving a mileage allowance, radio adver-

tising, and free entry in a race. He intended to open an

automobile equipment shop and capitalize on the good will

generated by the slogan. After defendant General Motors

brought out a new Pontiac called ‘‘The J udge’’, plaintiff

adopted another name. The court rejected plaintiff’s claims

for trade and service mark infringement and unfair com-

petition, holding, citing only Rectanus, supra, that the

slogan, to be profitable, must be used in connection with a

trade or business at the time of the infringing activity.

All plaintiff had was the desire to open a business in the

future, together with the hobby of racing and displaying his

automobile.

From a policy point of view, the functions served by a

241t adds, ‘Titles, character names and other distinctive features of radio

or television programs may be registered as service marks notwithstanding that

they, or the programs, may advertise the goods of the sponsor.’’

SAIS Bei OS SY RINE ene NS AOR LPI SBS nar

A 7

DE COSTA U. COLUMBIA BROADCASTING SYSTEM, INC.

trademark (or service mark)—an indication of origin, a

guarantee of quality, and a medium of advertisement, 3

Callman, § 66.3, p. 36—suggest association with enterprises

selling their goods or services. Callman refers to a service

mark as ‘‘the mark of a business that only renders service

and is not engaged in the manufacture or sale of goods.’’

Id. § 68.1, p.69. And, again, ‘‘The service mark must, of

course, be used as an identification mark, and it must per-

form the same functions in the selling and advertising of

services that a trademark traditionally performs in respect

of goods.’’ Id. § 68.1, p. 71.25 Our impression, derived from

our scrutiny of the cases, the treatises with their myriads of

citations, and the periodical literature including the Trade

Mark Reporter, is that virtually all the litigation and doc-

trine center about the pursuit of economic gain.

We say ‘‘virtually’’ because the law of unfair competition

now protects ‘‘eleemosynary organizations [which] function

in commerce and, in form, resemble business enterprises ....

The happenstance that they are nonprofit-seeking ventures,

and therefore removed, as such, from the rigors of business

competition, neither eliminates the element of competition

nor disentitles them to protection against the unfair compe-

tition of similar organizations.’’ Callman, Vol. 1, $1.1, p. 4.

See, e.g., The President and Trustees of Colby College v.

Colby College—New Hampshire, 508 F.2d 804 (1st Cir.

1975). While the quoted passage speaks only of protection

against unfair competition from similar institutions, we

have no doubt that a non-profit institution may protect its

name against filching by a commercial company. It is not a

big step in theory to say that an individual who develops and

promotes for entertainment purposes a specialty character

associated with a distinctive name, costume, slogan, and

25 See, also, Callman, Vol. 1, § 2.2 for a discussion of good will, in which the

common core, whatever may be the generating cause, is economic and pecuniary:

advantage of a going concern.

. i a DAI AR AES HO

r RDI ES EIN 00-1 oO ODIO" Ih A Le

A. 23

OPINION OF THE COURT

other marks, but who never charges a fee, is also entitled to

protection under the common law doctrine relating to trade-

marks and unfair competition. But, if the step were taken,

what principle should both guide and limit? If plaintiff is

recognized as one who performs services in commerce, what

about the hobbyist magician, Square dance caller, story

teller, amateur actor, singer, barbershop quartette, stand-up

comic? How frequent must be the appearances? How prom-

inent the mark? How often must the performer appear in

other states to enjoy Lanham Act protection? We know of

no logical or obvious line of demarcation. The price of an

open-ended extension of protection for some creative activity

is, pro tanto, a curtailment of the borrowing, poaching,

imitation which underlie so much other innovative activity.

Protection at present has the merits of inherent limita-

tions: the existence of a trade, business, or profession where

the ‘‘good will’’ to be protected has been subject to the acid

test of the willingness of people to pay for goods or services;

or, in the case of nonprofit institutions, the voluntary invest-

ment in time, effort, and money of many individuals to

create and maintain a program of sufficient interest to con-

Sumers, members, and sponsors to warrant protection. We

hesitate to take the step of offering common law unfair com-

petition protection to eleemosynary individuals. Whether

legislatures are better equipped than courts to deal with this

problem, we cannot clearly say, but in our posture of doubt

would prefer to see expansion of protection come from that

source.

Having exposed our misgivings, we do not rely on a

holding that the absence of a profit-oriented enterprise

disqualifies plaintiff from protection. We shall assume,

therefore, that plaintiff’s marks meet the requirements of

common law service marks. We also shall assume that they

are distinctive enough so that proof of secondary meaning

A. 24

DE COSTA VU. COLUMBIA BROADCASTING SYSTEM, INC.

is not essential. In the alternative, we shall accept the find-

ing of the magistrate, adopted by the district court, that, at

least among some people, plaintiff’s name and card had come

to be associated with him.

This brings us to the critical issue: whether there was a

deceiving of the public as the result of defendants’ actions.

As we have noted, there was not and could not supportably

have been a finding that defendants passed off or palmed off

their ‘‘ Paladin’’ and television program as the creations of

plaintiff. Having already decided in DeCosta I that there

was no culpable misappropriation, we are left with the issue

of confusion, or its likelihood.26 As Callman has said, ‘‘It is

the gravamen of an action for trademark infringement that

the defendant’s use of a trademark similar to the plaintiffs’

created a likelihood of confusion.’’ Callman, Vol. 3, § 80,

p. 538. He states further that ‘‘ There is a confusion of goods

when an ‘ordinarily prudent purchaser would be liable to

purchase one product in the belief that he was purchasing

the other,’’ Id. at 541 [footnote omitted]. In resolving this

issue there are several guidelines: there need not be a simi-

larity of competing activities, id. at 539, or goods or services

of the same description; confusion may consist in misleading

as to the identity of goods, or of source, or of a relationship

to the originator, id. at 543-546; and ‘‘ Mere visual or side-

by-side comparisons of the trademarks will not alone suffice.

Extrinsic facts are highly significant, as, for example, the

types of goods, the classes of prospective purchasers, the

competitive relationship of the parties, third party regis-

trations, the extent of the public’s awareness of the plain-

tiff’s trademark, the manner of trademark use (visual, audi-

26 This is consistent with the approach of the magistrate, who held that. New

York law was applicable. He cited and quoted, inter alia, Geisel v. Poynter

Products, Inc., 238 F. Supp. 261 (S.D. N.Y. 1968), which, in applying New

York law, said, ‘‘The plaintiff is not required to prove actual palming-off.

_ A showing of the likelihood of customer confusion as to the source of the

; goods is sufficient.’’

A. 25

OPINION OF THE COURT

tory, or mental), the degree of the defendant’s necessity

to use his mark, and the trend towards expansion in the

respective trade or industry as to territory or line of mer-

chandise.27 Jd. at 556.

There is another factor, we think, which should guide a

judgment as to likelihood of confusion—the time when the

evidence is submitted. There is ample reason, at the incip-

iency of an alleged infringement, in a suit seeking injunctive

relief, for a plaintiff to argue and a court to rule that the

similarity of marks is such that confusion is all too likely to

ensue. Plaintiff should not be expected to stand by and

await the dismal proof. Callman, Vol. 3, § 80.6, pp. 559-560.

‘*(C]onversely’’, adds Callman, ‘‘after the lapse of substan-

tial time if no one appears to have been actually deceived

that fact is strongly probative of the defense that there is no

likelihood of deception arising out of the use of the mark in

question.’’ Jd. at 562. Defendants have urged that plaintiff,

having delayed for almost the entire limitations period

before bringing suit, should be barred by the doctrine of

estoppel by latches from further prosecution of this litiga-

tion. Plaintiff’s rejoiner is that he was, during this period,

going from attorney to attorney, seeking assistance before

he was able to make progress. We do not find in the authori-

ties sufficient support, where defendants’ action was found

by the jury to be deliberate and knowing, to invoke this

doctrine. Nevertheless, we do say that the delay, for reasons

stated, increases the quantum of proof of confusion which

the plaintiff has the obligation to supply.

When we examine the magistrate’s opinion on this issue,

we find only a finding as to the identical nature of the marks

used by plaintiff and defendants and the resulting ‘‘great

likelihood of confusion”’ therefrom, and another that ‘At

27 Following the passage, Callman adds, in his 1974 Cumulative Supplement,

p. 46, ‘‘Such extrinsic facts may be so controlling that, notwithstanding the

identity of the conflicting trademarks, there is no likelihood of confusion.’’

mmenietbeinienta tein CR te ee —

A. 26

DE COSTA UV. COLUMBIA BROADCASTING SYSTEM, INC.

least 6... witnesses testified that they had at first thought,

on viewing the television program, that Richard Boone was

the plaintiff Mr. DeCosta until they learned the contrary

from viewing the credits of the show, or otherwise.’’28 The

paucity of these findings takes on some significance when we

note that after remand of the case to the district court in

1968, following our decision in DeCosta I, the plaintiff was

given the opportunity to supplement the record in support of

his second and third causes of action. The quoted findings

are the result.

The magistrate’s findings being treated as final, they are

here subject to the same standard of review as are district

court findings under Fed. R. Civ. Pro. 52(a). They must be

accepted unless clearly erroneous. On this issue, however,

we see no alternative to saying the finding is not supported.

If the identity of the marks settled the question of likelihood

of confusion, there was no need for further evidence after

DeCosta 1; we had taken some pains to make the point. But,

in fact (rather, in law) extrinsic evidence, as we have noted,

should be considered. Here, the disparities are substantial.

Plaintiff’s enterprise was localized; defendants’ was nation-

wide. Plaintiff’s appearances were simple happenings, pass-

ing out cards and pictures, riding, occasionally walking his

horse, and executing a quick draw gun maneuver; defend-

ants’ extrinsic television series portrayed an elegant hired

gun on manifold missions. Plaintiff’s ‘‘customers’’ were

attendees at rodeos and parades, patients at hospitals, etc. ;

defendants’ purchasers were its program’s sponsors, who

in turn were responsive to the nation’s television audience.

Moreover, plaintiff’s suit was not brought in 1957 when the

alleged infringement began; the testimony as to likelihood

of confusion was introduced by affidavit eleven years later,

28 Another finding, that 21 witnesses thought on viewing the television pro-

gram that ‘‘There was a physical similarity’’ between plaintiff and the tele-

vision character falls short of proof that they were ‘‘actually deceived’’.

BEDNAR Bigs h AMAE S50 tS WARPED AT AE LS CAE RENT RIOR cs Pas Rat A DUE EG a 0 wt

ae a

CONCURRING OPINION—-ALDRICH, J.

when the first run of defendants’ series had terminated.

After this lapse of time, the testimony of six witnesses that

they thought, on first viewing the program, that the tele-

vision character Paladin was plaintiff is sufficient evidence

of likelihood of confusion to support an accounting of de-

fendants’ profits froma highly successful, 225 episode series

grossing over fourteen million dollars, seems to us either no

evidence at all or so minimal as not to support a finding of

likelihood of confusion. We do not blame plaintiff or

counsel; we suspect that the most exacting search for proof

would not have produced more.

We recognize that plaintiff has lost something of value to

him. The very success of defendants’ series saturated the

public consciousness and in time diluted the attractiveness

of plaintiff’s creation, although he continued his appear-

ances longer than defendants’ first run. While he was not

injured financially, there can be no doubt that he has felt

deprived. As a commentator has observed, ‘‘[I]t could be

argued that the most appropriate measure of damages would

be the emotional harm that he suffered when CBS exploited

his character and lured his audience away.’’ 66 Mich. L.

Rev. at 1034. But to give any relief, however tailored, we

need a predicate of liability. Absent the ultimate fact of

confusion, we cannot find a basis for liability for common

law service mark infringement or unfair competition.

Judgment reversed. Remanded with instructions to enter

judgment for defendants.

Aupricn, Senior Judge, (concurring). I concur in the

court’s opinion, except in the possibilities it leaves open with

respect to review of a magistrate’s rulings of law. On that

issue the court states that it is ‘‘not at all clear... whether

DE COSTA UV. COLUMBIA BROADCASTING SYSTEM, INC.

the decision ... is by statute free of any review, subject to

very limited review, or must be held at least to review for

any prejudicial legal error as required by F.R.Civ.P.

§ 53(e)(4).’’ It is true that the court adopted the final alter-

pative, but this was because the reference had not made

clear that review would be any more restricted. I am tron-

bled that other pussibilities should even be contemplated.

As to the first mentioned, it is true that arbitrators are

normally free of review, legal as well as factual. I do not

believe, however, that the magistrate system was provided

by Congress to furnish free arbitration service. If parties

are content to work outside the judicial system, well and

good, but I cannot think Congress intended to pay for it,

even though, in a broad sense, a non-reviewable magistrate

would ‘‘assist’’ the courts more than one subject to review.

I adi that to have such unlimited power would not be good

for magistrates themselves, who must normally function in

a framework of assistance, not of final decision. Cf. O’Shea

v. United States, 1 Cir., 1974, 491 F.2d 774.

At least non-review would be a recognizable procedure.

The intermediate suggestion, that magistrates should, with

the consent of the parties, make rulings of law are subject to

review for manifest error, only, to me makes no sense what-

ever. It would be an anomaly in the law. I do not know the

standard it suggests, or how one would apply it. In the case

of an alleged manifest error of fact, if the evidence supports

a finding either way the magistrate’s choice will be final.

How does a magistrate have discretion to choose between

two rulings of law? The law is the law. Of course there may

be a non-prejudicial error, but that is not what the court is

talking about. Secondly, why should a magistrate be given

such power? The court’s recognition of such a possibility

seems to me both unworkable and unwarranted.

It is true that in the case of Kimberly v. Arms, 1889, 129

i ZF

CONCURBING OPINION—ALDRICH, J.

U.S. 512, the Court might be thought of having spoken of

such a form of review. I believe, however, that the language

should be taken as a whole. At page 524 appears the

following:

‘‘A reference by consent of parties, of an entire case

for the determination of all its issues, though not

strictly a submission of the controversy to arbitration—

a proceeding which is governed by special rnles—is a

submission of the controversy to a tribunal of the

parties’ own selection, to be governed in its conduct by

the ordinary rules applicable to the administration of

justice in tribunals established by law. Its findings,

like those of an independent tribunal, are to be taken as

presumptively correct, subject, indeed, to be reviewed

under the reservation contained in the consent and order

of the court, when there has been manifest error in the

consideration given to the evidence, or in the application

of the law, but not otherwise.’’

If by this language the Court meant that the errors of law,

there by a special master, were less reviewable than what

has since been fully understood to be the normal scrutiny

applied to masters, and certainly is applied to rulings of

Article III judges, I believe it was an inadvertence. If not,

it has never been repeated. I see no basis for suggesting

that a magistrate should be in such a unique position that

he is less reviewable than anyone else in the judicial system,

and I regret that my brethren should be willing even to

contemplate it.

Adm. Office, U. S. Courts — Thayer-Dearing Company Legal Printers Boston

A.30

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

[SEAL]

No. 74-1391.

VICTOR DeCOSTA,

Plaintiff, Appellee,

¥.

COLUMBIA BROADCASTING SYSTEM, INC., ET AL.,

Defendants, Appellants.

JUDGMENT

Entered June 24, 1975

This cause came on to be heard on appeal from the

United States District Court for the District of

Rhode Island , and was argued by counsel.

Upon consideration whereof, It is now here ordered,

adjudged and decreed as follows:

The judgment of the district court is vacated and

the cause is remanded with instructions to enter judg-

ment for defeandant.

No Costs.

By the Court:

Enter: Coffin, Ch. J. Dana H. Gallup

Clerk.

[cc: Messrs Girden and Dworkin.]

GE LPL IOLA TESS SIM

A. 31

DISTRICT COURT OF THE UNITED STATES

For tHE District or Ruope Istanp

Civil Action No. 3130

{Same Trrie]

OprINIon

September 23, 1974

Pettine, Chief Judge. The question being decided by

the Court today is whether an order of reference to the

Magistrate of this district for ‘‘hearing and determina-

tion’’ of a civil non-jury case by stipulation of the parties

and counsel was ultra vires and beyond the jurisdiction

delegated to United States Magistrates under Title 28

U.S.C. §636(b); violative of defendants’ constitutional

rights and void ab initio.

A three count complaint was filed in this controversy

and by agreement of the parties Count One was tried to

a jury before another judge of this Court with Counts Two

and Three, dealing with infringement of a claimed com-

mon law service mark and alleged unfair competition, re-

served for disposition by the Court sitting without a jury.

On August 6, 1973, subsequent to the trial on Count

One, the parties executed a stipulation that Counts Two

and Three be determined by this judge on the basis of the

trial transcript including all exhibits, together with a

stipulation of additional testimony. On October 5, 1973

by agreement of all the parties concerned an order was

entered referring the matter to the Magistrate under

authority of 28 U.S.C. § 636."

Briefs were submitted to the Magistrate and oral argu-

ments, electronically recorded, were considered not only

A. 32

on the merits of the case but also on motions directed to

him by the defendants to add the affirmative defense of

res adjudicata. On April 15, 1974 a report was filed by

the Magistrate setting forth his findings of fact and con-

clusions of law sustaining the plaintiff’s position. On

April 19, 1974 for the first time the defendants objected

to this procedure and argue ‘‘they nor their attorneys

were actually aware, or had any reason to be aware of

their lack of capacity to ratify the reference ... that con-

sent to a procedure that is statutorily ultra vires and

constitutionally infirm in the first instance is without

effect.’’ (Defs.’ memo, pp. 16-17.) This Court granted

a stay of all further proceedings pending determination

of the validity of the referral.

he need to relieve the burdening case load of federal

courts has spawned the Federal Magistrates Act which

became law on October 17, 1968. The assistance to district

judges which a magistrate can render as set forth in the

Magistrates Act encompasses a variety of functions in-

cluding the broad power vested in the court to assign to

magistrates as ‘‘Article 1? judges,’’ ‘‘such additional

duties as are not inconsistent with the Constitution and

laws of the United States.’’* Through this mechanism

judges can best relieve the congestion of overcrowded

dockets.‘ However, the extent of the judges’ authority to

delegate and the scope of review are not entirely clear.

Both are being defined through the evolving process of

decisional law which, since the enactment of the Magis-

trates Act, has not spoken to the precise issues at stake in

this controversy.®

This entire discussion of the legality and constitutional-

ity of the reference to the United States Magistrate made

herein must be prefaced by citation to the myriad of provi-

sions pursuant to which the reference was made. The order

of reference (note 1, swpra) was not simply an ad hoc de-

termination by the Court, but was premised not only on

Sainte RE,

A. 33

the consent of the parties, but in addition on the following

statutory provisions and rules:

(1) The United States Magistrates Act, 28 U.S.C.

§ 631 et seq., especially § 636(b), (note 3, supra);

(2) Rule 32 of the Local Rules of the United

States District Court for the District of Rhode Is-

land ;®

(3) The ‘‘Standing Order Providing for the Util-

ization of United States Magistrates’’ of the United

States District Court for the District of Rhode Is-

land, as amended.”

The background of the reference made herein is high-

lighted by two very important factors, which will be de-

veloped more fully infra:

(1) The consent of the parties to a ‘‘hearing and

determination’’ by the Magistrate, including the de-

fendants’ specific invocation of the magistrate’s

powers subsequent to the reference with regard to a

motion to amend, and;

(2) The opportunity reserved to the parties for

review of the Magistrate’s findings by the referring

judge.

On the basis of these two factors, the authority cited by

the defendants can clearly be distinguished. The signifi-

cance of the consent by the parties cannot be ignored nor

be negated by the unbecoming statement of defense counse]

that, ‘‘Neither they [clients] nor their attorneys were ac-

tually aware, or had any reason to be aware of their lack

of capacity to ratify the reference.’’ Such self deprecation

after adverse findings might have served a useful purpose

if this Court could accept the premise that the delegation

was in the first instance an unconstitutional abdication of

this Court’s judicial function as an ‘‘ Article 3 judge.’’

A. 34

To me decisional law and the Magistrates Act itself®

leaves little doubt that consensual references in civil mat-

ters are authorized.

EXTENT oF ORDER OF REFERENCE

It has been stated, with respect to orders of reference

to a master, that such an order is ‘‘at once the chart and

limitation of the master’s authority.’’ Ferguson Contract-

ing Co. v. Manhattan Trust Co., 118 F. 791, 794 (6th Cir.

1902). See 5A, J. Moore Federal Practice, paragraph 53.06

at 2966. The same is undoubtedly true as to references to

a mavistrate. While the instant order denominated the

reference as one ‘‘for hearing and determination,’’ it is

clear that this order, when read in light of the Loca! Rules

and the Standing Order, see notes 6 and 7 supra, reflects

that the parties consented to a hearing and determination

by the Magistrate, which, of course, is subject to review by

the referring judge.® The issue to be determined as dis-

cussed infra is the standard of review. The defense argu-

ment that this consensual reference was ultra vires as a

reference for final determination is simply without merit.

AUTHORITY TO Rerer UnpeR FEDERAL

Macistrates Act Broaper THAN

Unver Rute 53, Fep.R.Crv.P.

Defendants press their objection to the reference herein

beyond the above erroneous assumption that the magistrate

was delegated the authority to enter a final judgment not

subject to review by the district judge. Such further ob-

jection is apparently premised on the theory that reference

to the magistrate in a civil action of matters going to

the merits of the litigation must be made, if at all, in ac-

cordance with the strict requirements of a reference to

a master under Rule 53, Fed.R.Civ.P. In particular, the

<a>

Lo gibt Rhee AAI E BN os i Me Oi ARIAS hte SA LM IR ole

A. 35

defendants attach overriding consideration to the fact that,

under Rule 53(b) ‘‘[a] reference to a master shall be the

exception and not the rule’’ and that no ‘‘exceptional

conditions’’ existed in the instant case to justify the refer-

ence, despite consent of the parties. See LaBuy v. Howes

Leather Company, 352 U.S. 249, 77 S.Ct. 309 (1957) (con-

gested calendar not ‘‘exceptional condition’’ justifying

reference to master under Rule 53(b)).

Defendants overlook, however, the fact that reference

to a United States Magistrate pursuant to 28 U.S.C.

§ 636(b) may be broader than reference to a master under

Rule 53(b), and indeed should be in order to accomplish

the broad goals that the Magistrates Act was designed to

facilitate.

In Yascavage v. Weinberger, F.Supp. (#72-232

Civil, M.D.Pa., May 15, 1974), the court, in considering an

appeal from an administrative decision denying certain

Social Security benefits to petitioner, referred the Govern-

ment’s motion for summary judgment to the magistrate

for report and recommendation to the district judge. Upon

motion to vacate the referral, on the grounds that it ex-

ceeded the parameters of a referral to a master as em-

bodied in Rule 53(b), the court in upholding the referral

made particular note of the following language from the

statute:

‘‘(the magistrate] may be assigned such addi-

tional duties as are not inconsistent with the Con-

stitution and laws of the United States. The addi-

tional duties authorized by rule may include, but

are not restricted to—

(1) Service as a special master in an appropriate

civil action... .’’ (emphasis added)

The court in Yascavage in criticizing and specifically reject-

ing the narrow reading of the Act in Ingram v. Richardson,

471 F.2d 1268 (6th Cir. 1972) noted that the limitation of

magistrate utilization to the duties enumerated in § 636(b)

A. 36

was an ‘‘unduly restrictive’’ view of the Act in light of

the ‘‘additional duties’’ language highlighted above.’

‘*There is no indication [in the legislative history

of the Magistrate’s Act] ... that it was considered

that all matters referred to a magistrate are

referrals as a master under Rule 53(b), and the

language of §636(b), of course, would not justify

any such construction of the Act.’’™

Thus, $636 is an express legislative recognition that

the magistrate may be assigned any duties which are not

inconsistent with the Constitution and laws of the United

States. The issue herein is therefore quite narrow—is the

reference to a United States Magistrate, of cross-motions

for summary judgment, upon the express consent of the

parties with the right of review to the referring judge, a

delegation of authority in contravention of the Constitu-

tion and laws of the United States. I find the reference

made herein was entirely within the scope of 4§636(b)

and was entirely consistent with the Constitution.

Defendants rely heavily on the Seventh Circuit’s deci-

sion in TPO, Incorporated v. McMillan, 460 F.2d 348 (7th

Cir. 1972), in which case the court concluded

. that magistrates have no power to decide

motions to dismiss or motions for summary judg-

ment, both of which involve ultimate decision mak-

ing, and the district courts have no power to delegate

such duties to magistrates.”’

While the broad holding in TPO appears to favor de-

fendants’ position, I cannot accept this decision as prece-

dent for the case at bar, for a closer examination of the

entire opinion reveals a number of facts which would

distinguish the reference made therein from the instant

ease. In TPO the decision to refér the case to the magis-

trate was that of the court, without the consent of the

A. 37

parties. The party opposing the reference made an

immediate motion to vacate the reference, which was

denied. After the magistrate entered an order denying

the motion to dismiss (the subject matter of the reference),

the party opposing the reference immediately sought relief

from the order of reference by means of a mandamus

petition to the appellate court. At the time of the ref-

erence, neither the local rules or the order of reference

provided for review of the magistrate’s finding by the

district court. A totally dissimilar situation is before me,

in that total and unfettered consent of the parties was

obtained prior to the reference, no efforts were made to

vacate the order of reference until the Magistrate had

completed his assignment, and right to seek review from

the referring judge was preserved.’?

Analogously, consensual references to a master to hear

auld decide all issues and to report his findings of fact and

law have previously been found not to offend the Con-

stitution, at least insofar as a right to review in the district

court is preserved. See Kimberly v. Arms, 129 U.S. 512,

9 S.Ct. 355 (1889); Davis v. Schwartz, 155 U.S. 631, 15

S.Ct. 237 (1895); Eichberg v. United States Shipping

Board Emergency Fleet Corporation, 273 F. 886 (D.C.Cir.

1921). It is true that these cases enumerated a more

restrictive standard of review in the district court in situa-

tions in which reference to the master was consensual. It

is equally true that such a distinction as to standard of re-

view enumerated in those cases has been abrogated by Rule

53(e) (4), Fed. R. Civ. P.1* However, the precedential value

of the decision in Kimberly v. Arms, supra, and its progeny

is not that they represent the current status of the law

with regard to reference to a master, but more importantly

for our purpose, that they stand for the clear approval by

the Supreme Court that a consensual reference to other

than an Article III judge, even if accompanied by less than

de novo review by the district court, is not inconsistent

with the Constitution of the United States. Viewed in this

A. 38

light it is clear that a consensual reference to a magistrate,

even if beyond the rigid requirements of a Rule 53 refer-

ence, is still a constitutional reference within the para-

meters of the ‘‘additional duties’’ provision of the Magis-

trates Act.

I fail to find the rationale behind the restrictions on

Rule 53 references to masters to be applicable to consensual

references to the magistrate. In LaBuy v. Howes Leather

Company, supra, the court reiterated the admonition in

Rule 53 itself that reference to a master ‘‘shall be the ex-

ception and not the rule’’ and that ‘‘save in matters of

account and of difficult computation of damages, a refer-

ence shall be made only upon a showing that some excep-

tional condition requires it.’’ The court clearly favored,

‘*. . trial before a regular, experienced trial judge

rather than before a temporary substitute appointed

on an ad hoc basis and ordinarily not experienced

in judical work.’’ 352 U.S. at 259.

In enacting the Magistrates Act, however, Congress has ex-

pressly provided for safeguards to the dangers of delay,

incompetency and conflict of interest which the Supreme

Court in LaBuy found endemic in the system of reference

to a master. See United States v. Eastmount Shipping

Corporation, supra.* It is easy to see, therefore, why

Congress did not limit the use of a magistrate to service

as a master but indeed broadened the potential scope of his

authority to include ‘‘additional duties not inconsistent

with the Constitution and laws of the United States.”’

Furthermore, even as to references to a master, LaBuy

does not address itself to the question of a consensual

reference, since the reference therein was made by the court

sua sponte without the consent of the parties and was con-

tested by all parties prior to compliance with the order

through motions to vacate the reference. Upon denial of

those motions in the district court, the parties sought im-

. “ ws Tie CR A ee

a Os. eeieaall pilin ania is REALESTATE LEAN LD

A. 39

mediate relief in the Court of Appeals by seeking man-

damus against the referring judge. As in TPO, supra, the

question of a consensual reference to a duly authorized

Article I judge in a civil case was simply not dealt with

by the Supreme Court in LaBuy.

ConsENT AND WAIVER

The assumption behind a ‘‘waiver’’ theory is that the

reference was initially invalid but that the defendant, by

consenting to and acquiescing in the magistrate’s considera-

tion of the issues, defendant waived any objection to the

reference itself (wholly apart from objections on the merits

to the findings of fact and conclusions of law by the magi-

strate). As discussed previously, I do not find that the

reference was improper. However, even under a restric-

tive view of the Magistrates Act, I find plentiful support

in the decisional law to the effect that the consent of the

defendants to reference to a master under Rule 53, without

timely objection to the order of reference, constitutes a

waiver of objections to the reference. McGraw-Edison

Company v. Central Transformer Corporation, 308 F.2d

70 (8th Cir. 1962) ; First Iowa Hydro-Electric Cooperative

v. Iowa-Illinois Gas and Electric Company, 245 F.2d 613

(8th Cir.) 355 U.S. 871 (1957) ; Hart v. Williams, 202 F.2d

190 (D.C.Cir. 1952); Westchester Fire Insurance Co. v.

Bringle, 86 F.2d 262 (6th Cir. 1936); Smith v. Brown, 3

F.2d 926 (5th Cir. 1925).?° There is simply no support for

defendants’ theory that a consensual reference to a master

under Rule 53, even if arguably beyond the ‘‘exceptional

conditions’’ language of the Rule, is void ab initio.’® Nor

is the analogy to the rule that subject matter jurisdiction

cannot be conferred on a court by consent valid as to a

consensual reference to a magistrate.’

es ~

ee Y beware

A. 40

StTaNDARD or ReEvIEw

The final inquiry concerns the weight to be given to the

magistrate’s findings of fact and conclusions of law upon

review by the district judge. The Standing Order of this

Court as to the utilization of United States Magistrates,

as amended, is cited in pertinent part in note 7, supra.

While the Standing Order makes no distinction between

the standard of review as it pertains to consensual or non-

consensual references, I find that Paragraph 13.1 sets the

standard of review only for reconsideration of non-consen-

sual references. If the Magistrates Act is to achieve the

formidable goal of relieving the burgeoning case load of

the district courts, the findings of a magistrate following

a consensual reference to him must be taken as presump-

tively correct upon review by the district judge. Thus the

standard of review adopted by the Supreme Court in Kim-

berly v. Arms, supra, pertaining to review following a con-

sensual reference to a master, will be adopted by this Court

for review following a consensual reference to a magistrate.

In Kimberly, the court stated:

“Tt is not within the general province of a

master to pass upon all the issues in an equity

case, nor is it competent for the court to refer

the entire decision of a case to him, without the

consent of the parties. It cannot, of its own motion,

or upon the request of one party, abdicate its duty

to determine by its own judgment the controversy

presented, and devolve that duty upon any of its

officers. But when the parties consent to the

reference of a case to a master or other officer to

hear and decide ali the issues therein, and report

his findings, both of fact and of law, and such

reference is entered as a rule of the court, the

master is clothed with very different powers from

those which he exercises upon ordinary references,

without such consent; and his determinations are not

IDI EN EO

A. 41

subject to be set aside and disregarded at the mere

discretion of the court. A reference, by consent

of parties, of an entire case for the determination

of all its issues, though not strictly a submission

of the controversy to arbitration,—a proceeding

which is governed by special rules,—is a submission

of the controversy to a tribunal of the parties’ own

selection, to be governed in its conduct by the

ordinary rules applicable to the administration of

justice in tribunals established by law. Its find-

ings, like those of an independent tribunal, are to

be taken as presumptively correct, subject, indeed,

to be reviewed, under the reservation contained in

the consent and order of the court, when there has

been manifest error in the consideration given to

the evidence, or in the application of the law, but not

otherwise. The reference of a whole case to a

master, as here, has become in late years a matter

of more common occurrence than formerly, though

it has always been within the power of a court of

chancery, with the consent of parties, to order such

a reference. Haggett v. Welsh, 1 Sim. 134; Dowse

v. Coxe, 3 Bing. 20; Prior v. Hembrow, 8 Mees. &

W. 873. The power is incident to all courts of

superior jurisdiction. Newcomb v. Wood, 97 U.S.

581, 583. By statute in nearly every state, pro-

vision has been made for such references of contro-

versies at law. And there is nothing in the nature

of the proceeding, or in the organization of a court

of equity, which should preclude a resort to it in

controversies involving equitable considerations.

By the consent in the case at bar it was intended

that the master should exercise power beyond that

of a reporter of the testimony. If there had been

such a limitation of his authority, there would have

been no purpose in adding to his power ‘to hear

the evidence’ the power to ‘decide all the issues

A. 42

between the parties, and make his report to the

court, separately stating his findings of law and

of fact,’ together with the evidence. To disregard

the findings, and treat the report as a mere presenta-

tion of the testimony, is to defeat, as we conceive,

the purpose of the reference, and disregard the

express stipulation of the parties. We are there-

fore constrained to hold that the learned court below

failed to give to the findings of the master the weight

to which they were entitled, and that they should

have been treated as so far correct and binding

as not to be disturbed, unless clearly in conflict

with the weight of the evidence upon which they

were made.’’

129 U.S. at 524-25, 9 S.Ct. at 359-60 (emphasis

added).

The Court is mindful that the standards for review set

down in Kimberly are no longer applicable to consensual

references to a master by virtue of Rule 53(e)(4),

Fed.R.Civ.P. See note 13, supra. However, because the

Magistrates Act was specifically designed to overcome the

problems inherent in the system of references to a master,

Yascavage v. Weinberger, supra; Comment, 40 U.Chi.L.Rev.

584 (1973), and since the Magistrates Act expressly per-

mits references beyond those which would be permitted

to masters under the strictures of Rule 53, this Court

is not bound to follow the review standards currently in

effect as to Rule 53 references with regard to review of

a magistrate’s finding following a consensual reference.

All that is required under the ‘‘additional duties’’ language

of 28 U.S.C. §636(b), is that the reference (and hence

the review thereof) not offend the Constitution and laws

of the United States. The holding of the Supreme Court

in Kimberly v. Arms, supra, stands’as clear and un-

ambiguous authority that the ‘‘presumptively correct’’

and ‘‘manifest error’’ standards enumerated therein, as

—

my a edt SRA ARNT TP 07 eS D DANA CTI LS NI HORE

to both findings of fact and conclusions of law, are con-

stitutionally valid criteria for district court review follow-

ing a consensual reference to the magistrate, despite the

fact that Rule 53, Fed.R.Civ.P. has modified those stand-

ards with regard to consensual references to a master.

The defendants having filed a timely motion for recon-

sideration of the Magistrate’s findings,’® the Court will

proceed to review said findings pursuant to the standards

as set forth in Kimberly v. Arms, supra.

Review or MaGIsTRATE’s FINDINGS

As discussed supra, the question before this Court on

review of the Magistrate’s rescript is whether there is

‘‘manifest error’’ in the Magistrate’s findings of fact and

conclusions of law. Upon a careful reading of the Magis-

trate’s rescript and of the post-hearing briefs and the

record, I find there are several novel and provocative issues

of law which are determinative of the rights of the respec-

tive parties to this action. Among these, I particularly note

the following:

(1) What is the legal basis upon which a common

law property right in a service mark or trade dress

is acquired? Has plaintiff acquired such rights?

Must use of an entertainer’s service mark be in con-

nection with an established ‘‘trade or business,”’ i.c.,

to identify the origin of a valuable commercial good-

will? Is the rationale enunciated in Heitvemann v.

General Motors Corp., 342 F.Supp. 203 (N.D. I.

1972) dispositive of this issue? Is the common law

in relation to the acquisition of trademarks funda-

mentally different than for an entertainer’s acquisi-

tion of service marks?

(2) The Magistrate found (findings of fact +21-

93) that the plaintiff was the first to create and use

the ‘‘Paladin’’ marks in interstate commerce and

A. 44

that they were commercially used by him to identify

and advertise his services as an entertainer and per-

former. Does such a finding meet the test for the

creation of a common law property right in the

marks, and is such a finding supported by the evi-

dence?

(3) Conceding, as defendants do (Defs.’ memo-

randum at 27) that a trademark or service mark need

not be appurtenant to a profit-making business or

trade, is it relevant whether the plaintiff herein per-

formed his entertainment services for a fee?

(4) Are the Magistrate’s findings as to ‘‘likeli-

hood of confusion’’ to the public (findings of fact

#17 and +18) pertinent to the infringement or un-

fair competition claims? (Defs.’ memorandum at

33-37).

(5) Was the First Circuit opinion in Columbia

Broadcasting Sysiem, Inc. v. DeCosta, 377 F.2d 315

(1967) (in reversing jury verdict as to Count I of

the complaint) res judicata or otherwise dispositive

of plaintiff’s claims of service mark infringement

and unfair competition (Counts II and III)? Can it

be said that under federal law plaintiff’s alleged

‘‘marks’’ and ‘‘trade dress’’ have been placed in the

public domain under the theory of Sears, Roebuck

€ Co. v. Stiffel Company, 376 U.S. 225 (1964) and

Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S.

234 (1964), or are they to be considered true service

marks exempted from the thrust of the Sears-Compco

decisions and thus afforded protection under state

Jaw.

(6) Is New York law the appropriate choice

under Rhode Island choice of law principles, and

does New York law of unfair competition (and/or

the federal law, 15 U.S.C. § 1125(a)) support judg-

ment for plaintiff in addition to and/or wholly apart

from the common law of service mark infringement?

J Bate Whee oe ee Res oe me we. at Owe ve.

} ga lea

A. 45

I recognize the complexity of these issues and that reso-

lution of this matter, whether in favor of plaintiff or de-

fendants, requires extended analysis of legal principles in

the context of a rather unique and novel factual record.

This case involves subtle shadings of interpretation of the

law which are not easily isolated but which are dispositive

of the legal rights of the instant parties. I hasten to add

that the travel of this complex litigation has not been

typical. As the oldest case on the docket of this Court, it

had been pending for more than ten years when the parties

finally agreed in no uncertain terms to have this matter

‘‘heard and determined’’ by the Magistrate.

Without an appellate type of review but rather apply-

ing merely a ‘‘manifest error’’ standard of evaluation, I

am not prepared to hold that the Magistrate’s findings of

fact and conclusions of law are unequivocally wrong.

It appears to me that a ‘‘manifest error’’ standard of

review by the district court is not only constitutionally

appropriate when restricted to a consensual reference as I

have discussed, supra, but it also gives full meaning to the

Congressional intent that magistrates relieve the work-load

in federal trial courts. If this is not so, then cases such as

the one at issue will result in no savings of time to the court

and litigants. On the contrary, it will only add an additional

and time-consuming tier to the judicial process and effect

little or no case backlog relief. The parties themselves

sought the services of such a forum; a forum created by

Congress pursuant to the Constitution, see note 2, supra;

and in this case it was to resolve, with least possible future

delay, a matter that had been pending an incredibly long

period of time.

By ‘‘manifest error,’’ we mean ‘‘evident error,’’ ‘‘ob-

vious,’’ ‘‘capable of being easily understood or recognized

at once by the mind.’’ (Webster’s Third New International

Dictionary).

yeriae ea +

A. 46

I am well aware of our appellate court’s admonition that

a pro forma “laying of hands’’ upon a magistrate’s report

will not be sanctioned following a reference. This teaching,

however, involved two cases, namely, Rainha v. Cassidy,

454 F.2d 207 (1st Cir. 1970) and Reed v. Board of Election

Commissioners of City of Cambridge, 459 F.2d 121 (1st Cir.

1972), which are distinguishable. See note 5, supra.

I make no pretense of either affirming or reversing the

Magistrate. I simply find no manifest error and, there-

fore, while neither affirming or reversing, I deny the de-

fendants’ motion to vacate the Magistrate’s rescript, adopt

the Magistrate’s report and enter a final and appealable

judgment based thereon.

RayMmonpb J. PETTINE

Chief Judge

September 23, 1974

+ " ‘ oN R ask

EE ie SR AINA ha Ham ~ ay

RAN caer

A. 47

FOOTNOTES

‘ “ORDER

Pursuant to stipulation of the parties on each side and of counsel

on each side, the above captioned case is referred, under authority

of 28 U.S.C. 636, to United States Magistrate Jacob Hagopian for

hearing and determination to be had on or before November 5,

Ta.”

? The use of the title “Article I Judge” merely indicates that the

magistrate’s powers stem solely from the Congress, by legislative

enactment, and not from Article III of the Constitution. This

does not mean, however, that the position of United States Magistrate

constitutes “a tribunal inferior ta.the Supreme Court” pursuant to

Article I, Section 8, Clause 9 of the Censtitution. As the Supreme

Court made clear in Glidden Company v. Zdanok, 370 U.S. 530,

82 S.Ct. 1459 (1962):

“The Constitution nowhere makes reference to ‘legislative

courts.” The power given Congress in Art. I, § 8, cl. 9, ‘To

constitute Tribunals inferior to the Supreme Court,’ plainly

relates to the ‘inferior Courts’ provided for in Art. III, § 1; it

has never been relied on for establishment of any other tri-

bunals.”

370 U.S. at 543, 82 S.Ct. at 1469.

The Supreme Court in Glidden went on to explain the test of

when a tribunal is to be recognized as one created under Article III:

. . whether a tribunal is to be recognized as one created

under Article III depends basically upon whether its establish-

ing legislation complies with the limitations of that article;

whether, in other words, its business is the federal business there

specified and its judges and judgments are allowed the in-

dependence there expressly or impliedly made requisite.”

370 U.S. at 552, 82 S.Ct. at 1474.

And, of course, the powers enumerated in Article III, Section 2 of

the Constitution can be exercised only by judges who are afforded the

protections of Article III, Section 1 (tenure for good behavior and

assurance against diminution of salary). It is clear that the magi-

strate is not granted Article III powers nor is he afforded Article III

protections. He is granted certain powers by Congress only as

supportive of the district judge, and not as an independent Article

III tribunal. Since he is not vested with the powers enumerated in

Article III, his duties are limited to those provided for in the statute

A. 48

by which the office was created. I make no pretense of holding

that a magistrate has the power, as an indepedent tribunal, to exercise

final decision-making authority as to purely Article III “cases” or

“controversies.” However, as noted infra, the Magistrates Act author-

izes the magistrate to perform such additional duties as are not in-

consistent with the Constitution and laws of the United States. The

Supreme Court, in Kimberly v. Arms, 129 U.S. 512, 9 S.Ct. 355

(1889), discussed in more detail infra, teaches us that a consensual

reference to a non-article III officer, with review in the district court

limited to the question of “manifest error” is an entirely constitutional

delegation and not an abdication of power by the Article III judge.

328 U.S.C. § 636(b) provides:

“(b) Any district court of the United States, by the con-

currence of a majority of all the judges of such district court,

may establish rules pursuant to which any full-time United

States magistrate, or, where there is no full-time magistrat>

reasonably available, say part-time magistrate specially desig-

nated by the court, may be assigned within the territorial

jurisdiction of such court such additional duties as are not

inconsistent with the Constitution and laws of the United States.

The additional duties authorized by rule may include, but are

not restricted to—

(1) service as a special master in an appropriate civil

action, pursuant to the applicable provisions of this title and

the Federal Rules of Civil Procedure for the United States

district courts;

(2) assistance to a district judge in the conduct of pretrial

or discovery proceedings in civil or criminal actions; and

(3) preliminary review of applications for posttrial relief

made by individuals convicted of criminal offenses, and sub-

mission of a report and recommendations to facilitate the

decision of the district judge having jurisdiction over the case

as to whether there should be a hearing.”

* The broad goal of the Magistrates Act was stated in the House

Report on the bill:

“.. . to cull from the ever-growing work-load of the U.S.

district courts matters that are more desirably performed by

a lower tier of judicial officers.” H.Rep. No. 1629, 90th Cong.,

2d Sess. (U.S. Code Cong. and Admin. News, 1968, at 4255).

>It should be noted that the recent Supreme Court decision in

Wingo v. Wedding, 42 U.S.L.W. 5167 (U.S. June 26, 1974) is

not pertinent to the instant matter. In Wingo a magistrate, by

Ree ee een Sr oe te eens

A. 49

local rule of the district court, was authorized to conduct evi-

dentiary hearings in federal habeas corpus actions. The Supreme

Court held that the Habeas Corpus Act was an express legislative

determination that such hearing must be held by a “judge” of the

district court, and on that basis found the local rule to be contrary

to the Congressional mandate. The Court never reached the ques-

tion of whether Congress could enact Constitutionally permissible

legislation expressly giving a magistrate the power to hold evi-

dentiary hearings on petitions for habeas corpus. /d. at n. 4.

Nor has the First Circuit expressly ruled on the question of

consensual referrals to a magistrate in civil matters.

In O’Shea v. United States, 491 F.2d 774 (Ist Cir. 1974) a

habeas petition was referred by the district court to a magistrate

who recommended that the case be dismissed, without discussing

any law on the subject. The court, thereupon, without affording

the petitioner an opportunity to be heard, dismissed the petition

without opinion. While the court’s holding with reference to the

power of a magistrate to hold evidentiary hearings on habeas corpus

petitions has been modified by the Supreme Court’s holding in

Wingo, supra, the court expressly approved the use of the magistrate

to report and recommend to the district court on applications for

post-trial relief made by individuals convicted of criminal offenses,

although the particular procedure followed by the magistrate therein

was criticized. The court’s holding goes no further than defining

a Magistrate’s power, and the weight to be given a magistrate’s

report by the district court, under 28 U.S.C. § 636(b)(3) (applica-

tions for post-trial relief). No mention was made concerning con-

sensual references in civil matters.

In Rainha v. Cassidy, 454 F.2d 207 (lst Cir. 1972), the

district court was criticized for a “pro forma laying on of hands”

in approving the magistrate’s findings of fact in a habeas proceed-

ing. Again, the court was not faced with a consensual reference

to the magistrate in which the parties retained a right to review

by the district court. Also in Reed v. Board of Election Com-

missioners of City of Cambridge, 459 F.2d 121 (1st Cir. 1972),

the court disapproved of a blanket approval by the district court

of a magistrate’s report on a motion for preliminary injunction with-

out itself having the record before it. Once again, an entirely

different issue is presented regarding the consensual reference herein,

in that the court presently has before it the entire record that the

magistrate had before him, and the magistrate’s findings are subject

to review by this Court. ;

Met SAR ABBE PGES n Set Kah IA eis neat

. RULE 32

United States Magistrates

(a) Duties in general. Full-time United States Magistrates of

this district or, where there is no full-time magistrate reasonably

available, any part-time magistrate specially designated by the court,

shall, when directed by the court:

(1) Serve as a special master in appropriate civil actions

pursuant to the applicable provisions of Title 28 United States

Code and the Federal Rules of Civil Procedure for the United

States District Courts; and

(2) Assist the district judges in the conduct of pretrial or

discovery proceedings in civil or criminal actions; and

(3) Review applications for post-trial relief made by indi-

viduals convicted of criminal offenses, and submit reports and

recommendations thereon to facilitate the decision of the district

judge having jurisdiction over the case as to whether there

should be a hearing; and

(4) Perform such other duties as are not inconsistent with

the Constitution and laws of the United States and as may be

assigned by the court.

(b) Powers. Unless otherwise provided by Fed.R.Civ.P. 53

or other statute or rule, the magistrate shall have authority to con-

duct the proceedings specified in the order of reference and to

m. ke such orders as may be incidental or necessary to the com-

pletion thereof, subject to review by the judge as herein provided.

ing, the magistrate shall file with the clerk his findings, report and

recommendations, a certificate of service thereof upon the parties,

and any waiver by the parties of appeal to the judge. He shall

separately lodge with the clerk all papers, documents, exhibits and

briefs presented during the reference hearings.

(d) Objections; review. Any party who has not waived an

appeal to the judge may serve and file written objections to the

magistrate’s report within 5 days after service of the report. Opposi-

tion to the objections shall be served and filed within 5 days after

service of the objections. The clerk shall thereupon promptly set

and notice the review hearing to ti disposed of by the judge to

whom the case is assigned.

(e) Submission of proposed order. Within ten days after dis-

position of the objections filed pursuant to subparagraph (d) hereof,

oii

A. 51

counsel shall submit a proposed form of Order in accordance with

the court’s ruling.

7 Paragraph 12 of the Standing Order, effective May 7, 1973,

provides:

12. DESIGNATION OF MAGISTRATE TO Assist DisTRICT JUDGES

Pursuant to the rule making power conferred on the Court

by 28 U.S.C. 636, the Court may, without further formal order,

from time to time refer civil and criminal motions to the

magistrate as it deems proper for hearing, determination, recom-

mendation, or report, and the magistrate shall render such other

assistance to a district judge of the Court as may be directed of

him by the Court.

The Standing Order was amended on June 4, 1973, adding

Paragraph 13.1:

13.1. RECONSIDERATION OF MAGISTRATE’S RULING BY

DISTRICT JUDGE

A magistrate’s ruling on a motion, not incident to the exercise

of his trial jurisdiction, shall be final and conclusive unless a

party thereto moves for reconsideration by a district judge. A

motion for reconsideration shall be made within five (5) days

of the magistrate’s ruling. Reconsideration shall not be de novo

but shall be the same as on an appeal on a question of law.

§ “Since full-time magistrates under the new system are supposed

to spend all their time on their official duties, it is appropriate to

allow the district court to make whatever use of their services as it

sees fit, in addition to the functions that the statute assigns to them.

. . . The use of magistrates for duties that do not require the em-

ployment of an Article III judge, or in cases in which the parties

consent to the use of a magistrate, may do much to increase the effi-

ciency of the Federal Courts.” (emphasis added)

Hearings Before the Subcomm. on Improvements in the Judicial

Machinery of the Senate Comm. on the Judiciary on S. 3475, 89th

Cong., 2d Sess. 14 (1967).

Sze Comment, “An Adjudicative Role for Federal Magistrates in

Civil Cases,” 40 U.Chi.L.Rev. 584 (1973).

® That the wording of the order of reference may have lacked

precision on the question of review by the district court, such “uncasi-

ness with the wording of an order is a flimsy basis on which to mount

a constitutional attack.” Yascavage v. Weinberger, — F.Supp. —

(No. 72-232 Civil, M.D. Pa., May 15, 1974) slip op. at 11.

A. 52

19 The court in Yascavage also noted that a Social Security appeal

was a particularly appropriate case for reference to a magistrate, in

that it is to be decided on an administrative record and thus involves

no trial, no introduction of evidence and no witnesses to be heard.

All the material before the magistrate was thus equally available to

the reviewing judge, who would not be deprived of any opportunity

to weigh the credibility of live witnesses. Compare Wingo v. Wed-

ding, supra.

In the instant case the factual record was equally complete before

reference to the magistrate occurred. The majority of applicable

evidence was contained in the transcript and exhibits of the trial on

Count I of the complaint, held before Judge Edward W. Day in 1956.

Additional testimony was set forth in a stipulation filed June 7, 1973.

Thus, this Court in reviewing the magistrate’s finding has before it the

entire record upon which the magistrate made his findings and, in

addition, the tape recordings of the argument before the magistrate.

This case, as in Yascavage, did not involve the holding of an

evidentiary hearing where the resolution of credibility of witnesses

may be important. Compare Rainha v. Cassidy, supra (habeas

corpus proceeding referred to magistrate in which Court of Appeals

questioned the propriety of a magistrate conducting the evidentiary

hearing); Reed v. Board of Election Commissioners of City of Cam-

bridge, supra (magistrate held evidentiary hearing as to motion for

preliminary injunction—district court criticized for approving report

of magistrate without having record before it).

11 Referring specifically to the “additional duties” which may be

assigned to the magistrate under section 636(b) of the Federal

Magistrates Act, the Senate report accompanying the Act said:

“If district judges are willing to experiment with the assign-

ment to magistrates of other functions in aid of the business of

the courts, your committee believes that there will be increased

time available to judges for the careful and unhurried per-

formance of their vital and traditional adjudicatory duties, and

consequent benefit to both efficiency and the quality of justice in

the Federal Courts.” S. Rep. No. 371, 90th Cong. Ist Sess. 26.

(hereinafter, “Senate Report’)

The remarks of Senator Tydings, Chairman of the Senate Subcom-

mittee on Improvement in Judicial Machinery and major sponsor of

the Act are also instructive:

“The Magistrates Act specifies these three areas [§ 636(b)

(1), (2) and (3)] because they came up in our hearings and

ee ee eee

PSs

A. 53

we thought they were areas in which the district courts might be

able to benefit from the magistrate’s services. We did not limit

the courts to the areas mentioned. Nor did we require that they

use the magistrates for additional functions at all.

“We hope and think that innovative, imaginative judges who

want to clean up their caseload backlog will utilize the U.S.

magistrates in these areas and perhaps even come up with new

areas to increase the efficiency of their courts.” (emphasis

added)

Hearings on S. 945 before Subcomm. No. 4 of House Comm.

on the Judiciary, 90th Cong., 2d Sess., ser. 17, at 81.

12 T recognize that dicta in the TPO case might arguably blunt the

distinctions I have outlined as to the effect of consent of the parties

and review by the district judge. 460 F.2d at 360-61, n. 62. As to

review by the district court, I am convinced that Congress intended

to sanction @ wide variety of references to the magistrate so long as

review to the district court was insured. See Senate Report, supra,

at 27. The Second Circuit has explicitly approved the reference cf

dispositive motions to the magistrate under the Local Rules of the

United States District Court for the District of Connecticut which

provide for review of the magistrate’s “proposed memorandum of

decision” by the district judge who may adopt, modify or reject the

magistrate’s findings in whole or in part. Remington Arms Company,

Inc. Vv. United States, 461 F.2d 1268 (2d Cir. 1972) (motion for

summary judgment); Givens v. W.T. Grant Company, 457 F.2d 612

(2d Cir. 1972) (motion to dismiss), vacated on other erds 409 US.

56 (1972).

As to the effect of consent, the TPO court recognized that “. . .

consent of all parties would change the situz’i-n somewhat, {but] it

would introduce other difficulties.” 460 F.2d at 361 n. 62. The only

“other difficulty” mentioned by the court was the danger of “coerced

consents” by parties who would fear inciting the wrath of a district

judge by refusing to consent to referral thus intruding upon the

judge’s time. Such a fear, while at best speculative, evidences an

uncanny lack of faith in the integrity of the federal judiciary. Even

if an allegation of “coerced consent” were arguable in a particular

case, appellate review rather than a broad prohibition against con-

sensual references would appear to be the wiser course. Other courts

have recognized that certain matters delegated to magistrates over the

objections of a party would be permissible with consent of the Parties.

See United States v. Eastmount Shipping Corporation, 62 F.R.D. 437

(S.D.N.Y. 1974).

TEE me

A. 54

13 Rule 53(e) (4), Fed. R.Civ.P., provides in pertinent part:

“The effect of a master’s report is the same whether or not

the parties have consented to the reference... .”

See 5A, J. Moore, Federal Practice, paragraph 53.15:

“Any prior case law to the effect that a reference [to a master]

with consent compels extraordinary weight to be given to the

master’s report is no longer in point, whether the case be a jury

or non-jury case.”

14 The Magistrates Act 28 U.S.C. § 632 et seq. provides, inter

alia:

(1) that appoinument shall be by concurrence of a majority

of all judges in the district;

(2) that magistrates must be a member of the bar;

(3) that he not be related by blood or marriage to a judge

of the appointing court;

(4) that full-time magistrates not engage in the practice of

law and that part-time magistrates so limit their practice so as

to avoid conflicts of interests;

(5) fixed term, subject to removal only for incompetency,

misconduct, neglect of duty or physical or mental disability;

(6) fixed salary and full-time magistrate’s salary cannot te

reduced during term;

(7) clerical and secretarial assistance provided by the Gov-

ernment;

(8) training programs at Federal Judicial Center.

6 “Failure to make timely objection to the appointment of a

Master either at the time of the order or promptly thereafter con-

stitutes a waiver of error and objections made only to the Master are

unavailing.” First lowa Hydro Electric Cooperative v. lowa-lIllinois

Gas and Electric Company, supra, 245 F.2d at 628.

*® Defendants cite Wilver v. Fisher, 387 F.2d 66 (10th Cir.

1967); Bartlett-Collins Company v. Surinam Navigation Company,

381 F.2d 546 (10th Cir. 1967); and Cadermartori v. Marine Mid-

land Trust Company of New York, 18 F.R.D. 277 (S.D.N.Y. 1955),

for the proposition that consent cannot validate an otherwise wrongful

reference to a master under Rule 53. In Wilver, the Court was

especially concerned with the fact that the consensual reference

therein gave to the master extraordinary power to restate the parties’

- 7

interrogatories and to recommend the answers thereto. The case

stands for the proposition that the delegation of such extraordinary

powers, which are properly exercisable only by the parties themselves,

cannot be assumed by a master even upon consent of the parties.

Wilver lends little support to the theory that any abuse of discretion

in referring to a master upon consent of the parties is void ab initio.

In Bartlett-Collins, supra, there is dicta which strongly disap-

proves of references to a master in the absence of exceptional circum-

stances, even upon consent of the parties. Yet, the fact that the

master’s report, and subsequent approval and confirmation

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