Opinion ID: 685182
Heading Depth: 3
Heading Rank: 1

Heading: Review of Special Master's Report

Text: 31 Fed.R.Civ.P. 53(e)(2) provides that in non-jury actions, the court shall accept the master's findings of fact unless clearly erroneous. See also Martin v. University of S. Ala., 911 F.2d 604, 608 (11th Cir.1990); Wooldridge v. Marlene Indus. Corp., 875 F.2d 540, 544 (6th Cir.1989); Stone v. Commissioner, 865 F.2d 342, 347 (D.C.Cir.1989); Williams v. Lane, 851 F.2d 867, 884 (7th Cir.1988), cert. denied, 488 U.S. 1047, 109 S.Ct. 879, 102 L.Ed.2d 1001 (1989); Henry A. Knott Co. v. Chesapeake & Potomac Tel. Co., 772 F.2d 78, 85 n. 11 (4th Cir.1985); Milliken Research Corp. v. Dan River, Inc., 739 F.2d 587, 592 (Fed.Cir.1984); Potucek v. Cordeleria Lourdes, 310 F.2d 527, 530 (10th Cir.1962), cert. denied, 372 U.S. 930, 83 S.Ct. 875, 9 L.Ed.2d 734 (1963). Fed.R.Civ.P. 52(a) provides in pertinent part that [t]he findings of a master, to the extent that the court adopts them, shall be considered as the findings of the court. The district court reviews the master's legal conclusions de novo. See Polin v. Dun & Bradstreet, Inc., 634 F.2d 1319, 1321 (10th Cir.1980); see also Stauble v. Warrob, Inc., 977 F.2d 690, 697 (1st Cir.1992); Martin, 911 F.2d at 608; Williams, 851 F.2d at 885; Apex Fountain Sales, Inc. v. Kleinfeld, 818 F.2d 1089, 1097 (3rd Cir.1987); cf. NLRB v. Monfort, Inc., 29 F.3d 525, 528 (10th Cir.1994) (in case where appellate court directly reviews special master's report, the court reviews master's conclusions of law de novo). But see Wooldridge, 875 F.2d at 544 (stating that the district court should review the special master's findings of fact and conclusions of law under the clearly erroneous standard). 32 The standard by which we review the decision of the district court in turn reviewing the report of the special master is slightly more complex, particularly where the district court disagrees with the special master. Generally, we review a district court decision awarding attorneys' fees for an abuse of discretion. Pelican Prod. Corp. v. Marino, 893 F.2d 1143, 1148 (10th Cir.1990). In this case, we review a district court decision partially accepting and partially rejecting a master's report. In addition, the district court made factual findings of its own. Application by a district court of an erroneous standard of review in passing upon the master's recommendation constitutes an abuse of discretion. National R.R. Passenger Corp. v. Koch Indus., Inc., 701 F.2d 108, 111 (10th Cir.1983). Similarly, misapplication of the relevant law or finding clearly erroneous facts constitutes an evident abuse of discretion. Where the district court rejects a factual finding by the master, we, like a majority of circuit courts, directly review the findings of the special master, thereby effectively ignoring the district court's review of the master's findings. See Potucek, 310 F.2d at 530 (A majority of the courts of appeals have held that where the district court rejects a referee's findings as clearly erroneous, the court of appeals applies the clearly erroneous test to the decision of the referee.); see also McDonald v. United Airlines, Inc., 745 F.2d 1081, 1088 (7th Cir.1984) cert. denied, 471 U.S. 1065, 105 S.Ct. 2139, 85 L.Ed.2d 497 (1985); Uviedo v. Steves Sash & Door Co., 738 F.2d 1425, 1428 (5th Cir.1984) reh'g granted, 753 F.2d 369 (5th Cir.1985), cert. denied, 474 U.S. 1054, 106 S.Ct. 791, 88 L.Ed.2d 769 (1986); In re Multiponics, Inc., 622 F.2d 709, 722 (5th Cir.1980); O'Rieley v. Endicott-Johnson Corp., 297 F.2d 1, 4-5 (8th Cir.1961); Lines v. Falstaff Brewing Co., 233 F.2d 927, 930 (9th Cir.), cert. denied, 352 U.S. 893, 77 S.Ct. 129, 1 L.Ed.2d 88 (1956); Ferroline Corp. v. General Aniline & Film Corp., 207 F.2d 912, 920 (7th Cir.1953) cert. denied, 347 U.S. 953, 74 S.Ct. 678, 98 L.Ed. 1098 (1954); Mt. Clemens Pottery Co. v. Anderson, 149 F.2d 461, 465 (6th Cir.1945), rev'd, 328 U.S. 680, 66 S.Ct. 1187, 90 L.Ed. 1515 (1946). 9 33 This case also raises the question of what deference, if any, should be afforded the master's selection of the method for awarding attorneys' fees, where the governing law permits either of two methods, depending on the particular circumstances of the case. In this case, the master selected the percentage fee method, after carefully reviewing the fee applications, the supporting documentation and exhibits, and the evidence and arguments presented by the applicants and the objectors. Report at 3, Appellants' J.A. at 1459. The master made many factual findings concerning the fee applications and the effectiveness of various counsel's work. These factual findings must be accepted by the district court unless they are clearly erroneous, and the district court explicitly concluded that none of these findings were clearly erroneous. 34 In our view, the master's assessment of the particular circumstances of the case, while not a credibility determination, is similar to a credibility finding. National R.R. Passenger Corp., 701 F.2d at 111 (holding that a master's conclusion that a jury verdict was a compromise verdict, based upon the closeness of a hotly contested liability issue, is like a credibility determination which is not to be lightly disturbed). The district court should therefore have given some deference to the master's assessment that the percentage method was more likely to result in a reasonable fee in this particular case. 10 Instead, the district court simply rejected the use of the percentage fee method, for reasons largely unrelated to the particular circumstances of this case, concluding summarily that the special master's reasons for selecting it were not persuasive. 35 We therefore hold that the fee award in this case should be calculated using the percentage fee method, and that the district court abused its discretion in rejecting the special master's selection of that method and replacing it with the lodestar plus multiplier method. We need not remand this case to the district court for its own selection of a percentage fee, however, because the 22.5% selected by the master is well within the range of permissible reasonable fee awards, and is reasonable in this case. See, e.g., Uselton v. Commercial Lovelace Motor Freight, Inc., 9 F.3d at 849, 853-54 (10th Cir.1993); Brown v. Phillips Petroleum Co., 838 F.2d 451, 455 & n. 2 (10th Cir.1988); 1 Alba Conte, Attorney Fee Awards, Secs. 2.08, 2.32 Chart (2d. ed. 1993 & Supp.1994); Lapointe, supra, at 868 n. 170; cf. Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370, 1376 (9th Cir.1993) (holding that twenty-five percent of the common fund is the benchmark award which can be adjusted, or replaced by the lodestar calculation, in special circumstances), cert. denied sub nom. Reilly v. Tucson Elec. Power Co., --- U.S. ----, 114 S.Ct. 2707, 129 L.Ed.2d 834 (1994).