Court Opinion

ID: 4156640
Source: CourtListenerOpinion
Date Created: 2017-03-30 07:14:18.30383+00
Date Added: 2024-06-11T14:29:55.987130
License: Public Domain

2017 WI 26

                  SUPREME COURT              OF   WISCONSIN
CASE NO.:                 2016AP923-W
COMPLETE TITLE:           State of Wisconsin ex rel. Universal Processing
                          Services of Wisconsin, LLC,
                                    Petitioner,
                               v.
                          Circuit Court of Milwaukee County and the
                          Honorable John J. DiMotto, presiding, Samuel B.
                          Hicks and Merchant Card Services, Inc.
                                    Respondents.

                             SUPERVISORY WRIT BEFORE THE SUPREME COURT

OPINION FILED:            March 29, 2017
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:            November 1, 2016

SOURCE OF APPEAL:
   COURT:                 Circuit
   COUNTY:                Milwaukee
   JUDGE:                 John J. DiMotto

JUSTICES:
   CONCURRED:
   CONCURRED/DISSENTED:   ZIEGLER, J. concurs and dissents (Opinion
                          filed).
                          BRADLEY, R.G., J. joined by KELLY, J. concur
                          and dissent (Opinion filed).
  DISSENTED:
  NOT PARTICIPATING:

ATTORNEYS:

       For the petitioners, there was a brief by Ryan M. Billings,
Robert L. Gegios, Melinda A. Bialzik and Kohner, Mann & Kailas,,
S.C., Milwaukee, and oral argument by Ryan M. Billings.

       For the respondent the cause was argued by David C. Rice,
assistant attorney general, with whom on the brief(s) was Brad
D. Schimel, attorney general.
    For the respondent, there was a brief by Joan M. Huffman,
Paul R. Erickson and Gutglasas, Erickson, Bonville & Larson,
S.C., Milwaukee, and oral argument by Joan M. Huffman.

                                2
                                                                            2017 WI 26
                                                                    NOTICE
                                                      This opinion is subject to further
                                                      editing and modification.   The final
                                                      version will appear in the bound
                                                      volume of the official reports.
No.       2016AP923-W
(L.C. No.    2014CV7986)

STATE OF WISCONSIN                                :            IN SUPREME COURT

State of Wisconsin ex rel. Universal Processing
Services of Wisconsin, LLC,

              Petitioner,                                                 FILED
      v.
                                                                    MAR 29, 2017
Circuit Court of Milwaukee County and the
Honorable John J. DiMotto, presiding, Samuel B.                        Diane M. Fremgen
                                                                    Clerk of Supreme Court
Hicks and Merchant Card Services, Inc.,

              Respondents.

      PETITION       for    supervisory    writ.            Dismissed.            Rights

Declared.

      ¶1      SHIRLEY      S.   ABRAHAMSON,       J.      Universal         Processing

Services      of    Wisconsin,    LLC     d/b/a       Newtek,       the     plaintiff-

petitioner,        petitions    this    court,        pursuant     to     Wis.     Stat.

§ (Rule) 809.71 (2015-16),1 for a supervisory writ.                       Newtek asks

the court to exercise its constitutional authority to vacate an

      1
       All subsequent references to the Wisconsin Statutes are to
the 2015-16 version unless otherwise indicated.
                                                                                No.   2016AP923-W

order       of    the   Circuit        Court     for     Milwaukee          County,    John     J.

DiMotto, Judge, appointing retired Judge Michael Skwierawski as

the referee and to vacate unlawful orders of the referee issued

pursuant to the reference.                 Samuel Hicks and his Idaho company,

Merchant         Card   Services,        are    the     defendants-respondents.                The

Circuit Court for Milwaukee County and the Honorable John J.

DiMotto,         presiding,        are    also        named     as        respondents.         The

respondents oppose the petition.

       ¶2        Newtek       argues      that         the     circuit          court's     order

appointing the referee expanded the role of referee into the

role       of    de   facto    circuit         court    judge        in    violation      of   the

Wisconsin Constitution and Wis. Stat. § (Rule) 805.06, a rule

adopted          by   this    court.2           Newtek        does        not   challenge      the

constitutionality             of    Wis.       Stat.         § (Rule) 805.06,         governing

references to a referee.3

       2
       In adopting Wis. Stat. § (Rule) 805.06 in 1975, the court
adopted the pre-2003 version of Federal Rule of Civil Procedure
53 with minor modifications. The Wisconsin legislature amended
the language of Wis. Stat. § 805.06(1), (3), (4), and (5) set
forth in the supreme court order, making editorial, non-
substantive changes. Laws of 1975, ch. 218, §§ 158-164.
       3
       This court asked the parties to address in letter briefs
whether the circuit court's Order of Reference comports with or
contravenes the Wisconsin Constitution to the extent that the
Order comports with Wis. Stat. § (Rule) 805.06. In view of our
holding, we need not, and do not, address the constitutionality
of § (Rule) 805.06 or the extent to which a circuit court's
Order of Reference must comply with or may differ from the
provisions of § 805.06.

                                                 2
                                                                  No.      2016AP923-W

      ¶3     The    dispute    underlying    this    petition     arises      from   a

lawsuit initiated by Universal Processing Services of Wisconsin,

LLC   d/b/a    Newtek     (Newtek),     a    bankcard     processing         services

company,      the     plaintiff-petitioner,          against      one        of   its

independent sales agents, Samuel Hicks, and his Idaho company,

Merchant Card Services (collectively, Hicks), the defendants-

respondents.

      ¶4     The following issues are presented:

           1. Is Newtek's petition for a supervisory writ properly

             before this court?

           2. Has Newtek waived or forfeited its objection to the

             Order of Reference, is it estopped from challenging

             the Order, or has it impliedly consented to the Order?

           3. Does the circuit court's Order of Reference contravene

             Article VII, Section 2 of the Wisconsin Constitution

             vesting    judicial     power   of    this   state     in   a   unified

             court system?

           4. Does the circuit court's Order of Reference, including
             the provision that the circuit court's review of the

             referee's    "rulings"        shall    be    based     only     on   the

             referee's        "erroneous      exercise       of      discretion,"

             contravene        the   Wisconsin       Constitution          and    the

             Wisconsin statutes and rules regarding circuit court

             and appellate court authority and practice?

           5. Does the circuit court's Order of Reference contravene

             the    parties'    right   to   "obtain      justice    freely,      and
             without being obliged to purchase it," guaranteed by
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                                                                          No.        2016AP923-W

           Article I, Section 9 of the Wisconsin Constitution, or

           to    due   process       of    law,      guaranteed          by     Article      I,

           Section 1 of the Wisconsin Constitution, or Newtek's

           right    to    a    jury    trial,        guaranteed           by    Article      I,

           Section 5 of the Wisconsin Constitution?

         6. Should the orders of the referee to date be vacated

           and     should      the     parties            be    allowed         to     request

           substitution of the judge on remand?

    ¶5     For the reasons set forth, we conclude as follows:

         1. Newtek's petition for a supervisory writ does not meet

           the     requirements            set        forth        in          Wis.      Stat.

           § (Rule) 809.71.           The petition was not first filed in

           the court of appeals and Newtek has failed to show

           that it was impractical to file the petition in the

           court    of    appeals.             We    do,       however,       exercise      our

           constitutional superintending authority under Article

           VII,    Section     3(2)       of   the    Wisconsin         Constitution         to

           determine the validity of the Order of Reference.                                  A
           declaration of rights is an appropriate vehicle for an

           exercise of the superintending authority over circuit

           courts constitutionally granted to this court.4                                  See

           Part II, ¶¶36-50.

         2. Regardless of whether Newtek has waived or forfeited

           its    right   to    challenge           the    Order    of     Reference,        is

    4
       State ex rel. Memmel v. Mundy, 75 Wis. 2d 276, 281, 249
N.W.2d 573 (1977).

                                           4
                                                                    No.     2016AP923-W

  estopped from challenging the Order, or has impliedly

  consented to the reference, this court may resolve the

  issue of the validity of the Order of Reference under

  its constitutional superintending authority.                               See Part

  III, ¶¶51-55.

3. The Order of Reference impermissibly delegated to the

  referee     judicial        power         constitutionally              vested      in

  Wisconsin's unified court system.                            Accordingly, the

  Order      does      not        survive       Newtek's             constitutional

  challenge.        See Part IV, ¶¶56-82.

4. The circuit court's Order of Reference, including the

  provision       that     the     circuit          court's         review    of     the

  referee's       "rulings"         shall       be        based      only     on     the

  referee's         "erroneous             exercise            of      discretion,"

  contravenes       the      constitution           and     statutes         or    rules

  regarding circuit court and appellate court authority

  and   practice.            It    infringes          on    the      legislature's

  authority       to      define       a    circuit         court's         appellate
  jurisdiction.          See Part V, ¶¶83-88.

5. We do not decide the instant case on the basis of

  Article I, Section 9 of the Wisconsin Constitution,

  the due process clause of Article I, Section 1 of the

  Wisconsin Constitution, or the right to jury trial of

  Article I, Section 5 of the Wisconsin Constitution,

  but   we    note     that       reference          to    a    referee       is     the

  exception, not the rule; that there are constitutional
  limits     on     the    powers          of   a    referee;         and     that     a
                                   5
                                                                        No.       2016AP923-W

            reference can jeopardize a litigant's access to the

            justice      system,    due     process,      and     right       to    a   jury

            trial.       The Wisconsin Constitution requires the state

            to provide a judicial system for the resolution of

            disputes.         Access      to     state     courts        for       conflict

            resolution is thus implicit in the state constitution.

            We    express     our   concern       that     the    use        of    referees

            increases the costs of litigation and may cause delay

            and, in certain cases, may deprive litigants of access

            to courts.       See Part VI, ¶¶89-103.

          6. To the extent the parties have agreed to abide by an

            order or ruling of the referee relating to discovery,

            that    ruling    or    order      shall     stand.         To    the    extent

            either party has objected to an order or ruling of the

            referee relating to discovery, that ruling or order

            shall be vacated.          Any ruling or order of the referee

            on any dispositive motion is vacated.                            Either party

            may request substitution of the judge under Wis. Stat.
            §§ 801.58(1) and (7).             See Part VII, ¶¶104-110.

    ¶6      We begin in Part I by setting forth the procedural

facts relating to the appointment of the referee and the Order

of Reference.

                                          I

    ¶7      On     August    27,      2014,      after    nearly        a      decade     of

successful       collaboration      between       Newtek       and      Hicks,       Newtek

terminated      Hicks'    contract.         On   September        16,    2014,       Newtek
brought    an    action     against    Hicks      in     the    Circuit        Court     for
                                          6
                                                                           No.     2016AP923-W

Milwaukee County, John J. DiMotto, Judge, alleging breach of

contract,     tortious         interference             with        contract,     breach    of

fiduciary duty, and misappropriation of confidential information

and trade secrets.            Newtek demanded a jury trial.

      ¶8     The        contract     included        restrictive          covenants.       The

enforceability of these restrictive covenants is central to the

underlying dispute.             Hicks filed an answer to the complaint,

asserting     affirmative          defenses       and    counterclaims          and   seeking

nearly $17 million in damages.

      ¶9     Because the contract provided for injunctive relief,

Newtek     promptly       sought     and    received           an    ex   parte    temporary

restraining order from a duty judge just a few days after filing

the complaint.           The circuit court (Judge DiMotto) affirmed and

reaffirmed the temporary restraining order.

      ¶10    Over       the   course    of     the       next       several     months,    the

parties     began       extensive    discovery.            The       parties    periodically

appeared before the circuit court for scheduling conferences and

motion hearings.
      ¶11    In early 2015, Newtek moved to amend the scheduling

order to extend the deadlines for naming experts and providing

expert reports.           Hicks opposed the extension and filed a motion

to compel discovery.

      ¶12    On February 17, 2015, the circuit court held a hearing

on Newtek's motion to amend the scheduling order and decided to

appoint a referee to the case.                At the hearing, Newtek described

the   case   as     a    "classic     big     case"       with       numerous     issues   and

                                              7
                                                          No.    2016AP923-W

production of a substantial number of documents in discovery

(50,000 thus far):

    [W]hen we appeared before you in November [everyone]
    was overly optimistic in terms of what could be
    accomplished. In particular, overly optimistic in
    where we slotted the expert disclosures in relation to
    what . . . this litigation has spawned by way of
    discovery. We're approaching just on our side nearly
    40,000 pages of production, about which the other side
    is   still   complaining.      The  other   side   has
    produced . . . in the order of 10,000 [pages], about
    which we're complaining. . . .

    We have the classic big case with lots of issues now.
    We have more than one case in the sense that we have
    filed a complaint with numerous causes of action but
    there is a counter complaint. The counterclaims have
    been filed by the other side, and discovery is
    occurring    with   regard   to    both   of    those
    pleadings. . . .

    And so we are doing our best to produce without coming
    to the court . . . . And it has been a production that
    has gotten to the point of something like a thousand
    pages . . . that we are producing per day.      That's
    what the average is since this began.
    ¶13   The    circuit   court   granted     Newtek's      request    for

extension in part and also gave Hicks an extension.             The circuit
court   expressed    frustration   with      the   already       cumbersome

discovery, especially the attorneys' conduct, stating:

    Well you know, the one thing that I put a real high
    value on are [sic] attorneys being reasonable. Quite
    frankly, it seems to me that both sides here are not
    being——at least they're not being reasonable . . . .
    ¶14   Explaining that the circuit court had "some 450 cases"

on its docket, the circuit court stated that it was "not going

to expend a lot of time dealing with [the parties'] discovery
bickering."     Accordingly, the circuit court appointed retired

                                   8
                                                          No.    2016AP923-W

Judge    Michael    Skwierawski   as   the   referee   under    Wis.   Stat.

§ (Rule) 805.06, explaining the appointment as follows:

     I am going to be appointing . . . retired Judge
     Michael Skwierawski as the Special Master in this case
     under 805.06. . . . [Y]ou'll have to deal with him
     with respect to discovery disputes, etcetera, because
     I'm not going to waste precious court time that I can
     give to other cases to be your personal slave to your
     discovery disputes. So I just want you to know that.
     So the more reasonable you are with each other, the
     less likely you're going to need to pay the fees of
     retired Judge Michael Skwierawski. And he doesn't come
     cheap when it comes to being a Special Master. So I
     encourage you to be cooperative in your discovery,
     help each other out, get this case to mediation sooner
     than later. (Emphasis added.)
     ¶15    Although the circuit court uses the phrase "Special

Master," this opinion uses the word "referee," adhering to Wis.

Stat. § (Rule) 805.06, which uses the term "referee."             The term

"master" had such a pejorative connotation in 1848 at the time

of statehood, as we shall explain later,5 that the word "referee"

has been used in Wisconsin.6

     ¶16    The circuit court explained that it would call retired

Judge Michael Skwierawski to ask him if he would accept the

appointment.       The circuit court also explained that the referee

would draft the Order Appointing Special Master/Referee (Order

of Reference or Order)7 because the referee has a list of things
     5
         See ¶65, infra.
     6
         Federal Rule of Civil Procedure 53 uses the word "master."
     7
       The court order appointing a referee and describing the
referee's powers is called a "reference" or an "order of
reference."     Ehlinger v. Hauser, 2010 WI 54, ¶77, 325
Wis. 2d 287, 785 N.W.2d 328; Wis. Stat. § (Rule) 805.06(5)(a).

                                       9
                                                                      No.       2016AP923-W

that he requires.        Neither party objected to the circuit court's

decision to appoint the referee.

      ¶17   The circuit court directed Newtek to draft a proposed

order    memorializing     the      outcome    of    the    February       17    hearing,

including the referee's appointment.                 Newtek's counsel contacted

the referee on February 18 to confirm his availability before

drafting this order.           The referee said he was available and that

he had already submitted a proposed Order of Reference to the

circuit court; the referee directed counsel from each side to

submit any objections to the proposed order.

      ¶18   Newtek      told    the   referee     that     it   was     reviewing      the

Order of Reference and would submit objections, if any, as soon

as possible.      Less than a day after counsel received the Order,

the circuit court informed the parties that it had entered the

Order.      Thus, neither side was able to submit any objections

before the Order of Reference was signed.

      ¶19   The    Order       of     Reference      pertained        to    more      than

discovery issues.        In addition to authority to manage discovery,
the Order granted authority over nearly all aspects of the case

and   provided    for    limited      review    by   the     circuit       court.      The

reference provided, inter alia:

      • All motions, whether discovery or dispositive, were to be

         heard and decided initially by the referee.

      • The    referee's        written    rulings         would   be      adopted     and

         entered as the rulings of the court, automatically and

         without hearing, unless a party filed an exception within
         five days.
                                          10
                                                              No.    2016AP923-W

    • The referee could certify matters to the circuit court,

        and   the   circuit   court    could   refuse    to    decide      these

        matters.

    • The circuit court retained the power to modify or set

        aside a referee's ruling, but the circuit court could

        only do so if the ruling were based on an erroneous

        exercise of discretion.

    • The parties were to compensate the referee at $450 per

        hour plus reasonable and necessary expenses.                The parties

        were to divide the cost of the referee equally.                    (The

        total   cost   of   the   referee   thus   far   has        been   about

        $45,000.)

    ¶20   Three relevant provisions of the Order of Reference

are as follows (emphasis added):

    4.   The [referee] shall have the full authority of
    the Court    in coordinating and establishing all
    pretrial procedures.   The [referee] shall also have
    the full authority of the Court to hear and decide,
    subject to Court review as set forth below, any other
    matters assigned to him by the Court.     All motions
    filed,   whether  discovery  or   dispositive,  shall
    initially be heard and decided by the [Referee],
    subject to review processes available as described
    below.8

    7.   If the [referee] is of the opinion that a
    specific issue presented by the parties is of such
    fundamental importance to the progress or outcome of
    the case that effective case management would not be
    furthered by having the [referee] render a decision in

    8
       Requiring all motions to be filed with the referee was not
part of the referee's usual form order; this provision was added
at the circuit court's request.

                                      11
                                                                    No.    2016AP923-W

      the   first  instance,   the  [Referee]   may at  his
      discretion certify that issue to the Court.    As the
      final arbiter of case management, the Court may, but
      need not, accept the certification. . . .

      8.   Exceptions to any decisions made by the [referee]
      may be taken to this Court and must be filed with the
      Court within five (5) business days of the issuance of
      the decision.   Review by the Court shall be based on
      the materials and record before the [referee].       No
      additional filings will be permitted unless good cause
      and exceptional circumstances are demonstrated by the
      requesting Party.    The Court has full authority to
      modify or set aside the ruling of the [referee] but
      will do so only if the ruling is based on an erroneous
      exercise of discretion. Unless an exception is taken,
      any ruling by the [referee] shall automatically and
      without hearing be adopted and entered as a ruling of
      the Court within five (5) business days of submission
      by the [referee] to the Court and parties.          All
      decisions made by the [referee] shall be appealable
      after the final disposition of this case, to the full
      extent as if made by this Court.      A party need not
      take exception to a decision by the [referee] in order
      to preserve the issue for appeal, either on an
      interlocutory basis or as an appeal of a final order.
      ¶21     A copy of the complete order appointing the referee is

attached as Attachment A.

      ¶22     Shortly after the referee's appointment, Hicks moved

to   vacate    the   temporary       injunction    previously     issued      by    the

circuit court.       As counsel for both parties and the referee were

e-mailing     back     and   forth     about     this   motion    and     scheduling

issues, the circuit court (copied on the e-mail chain by the

referee) told the referee to handle this motion and any others

that would arise.

      ¶23     The    circuit       court    explained    to   the       referee:     "I

appointed     you    to    serve     as    [referee]    because     I     anticipated
extensive     motion      practice    and    discovery    issues/disputes          that

                                            12
                                                                       No.     2016AP923-W

would need [to be] addressed more quickly than I could do with

my 400+ case calendar.             I would like you to resolve these, and

all, pretrial motions/discovery issues."

      ¶24     The    parties       briefed    the      issue     of       vacating      the

temporary injunction; the referee heard oral argument and issued

a   written    order    that      granted     Hicks'    request       to     vacate     the

temporary injunction.            Newtek subsequently filed an exception to

this decision with the circuit court; the circuit court affirmed

the referee's decision.

      ¶25     After vacating the temporary injunction, the referee

ruled on more than 15 discovery motions and a few motions for

sanctions     (related      to    discovery    conduct)        over    the     course    of

several months.        Newtek objected to several of these orders, all

of which the circuit court affirmed without a hearing.

      ¶26     In    2015,   the    referee    was   asked      to     decide     multiple

dispositive motions.             In July 2015, Hicks filed two motions for

summary judgment; in October 2015, Newtek filed its own motion

for   summary       judgment.        These    motions     for       summary      judgment
primarily      involved      the     enforceability         of      the      restrictive

covenants and claims or discovery issues related thereto.                            Hicks

also sought a motion in limine barring Newtek from introducing

evidence at trial relating to the restrictive covenants.

      ¶27     Both     parties       submitted      briefs          and      evidentiary

materials on these motions and participated in a hearing before

the referee.         The referee recommended partially granting each

side's motion for summary judgment and granting Hicks' motion in
limine.       The    referee      recommended,      inter      alia,      that   summary
                                         13
                                                                          No.   2016AP923-W

judgment be granted to Newtek on certain of Hicks' counterclaims

and    found    that       some   restrictive       covenants      upon    which   Newtek

relied were unreasonable, invalid, and unenforceable under Wis.

Stat. § 103.465.

       ¶28     Newtek filed exceptions to these rulings, requesting

leave to submit additional briefing or evidence to the circuit

court regarding the referee's decisions.                        Newtek also asked the

circuit court to review the referee's orders de novo (rather

than    under        the    Order's      prescribed       "erroneous        exercise     of

discretion" standard of review) because the "magnitude of errors

that have plagued this case, if uncorrected, will necessitate an

interlocutory appeal."

       ¶29     Newtek also declared that "[a]s the parties were never

afforded an opportunity to object to the scope and terms of the

[referee's]         appointment,        Newtek    will    also    seek    to    brief   the

issue of the appointment of the [referee]."

       ¶30     The    circuit      court    agreed       to     review    the   referee's

recommendations on the dispositive issues de novo.                          In regard to
Newtek's       other       requests——to          brief    the     dispositive      issues

further, submit additional evidence, and brief the issue of the

appointment of the referee——the record is silent.                          Newtek claims

that the circuit court denied these requests at an off-the-

record status conference in chambers on January 12, 2016.

       ¶31     On    January      21,    2016,     the    circuit      court    issued    a

lengthy order on the parties' cross-motions for summary judgment

and on the exceptions taken to the referee's recommendations.
The    circuit        court       agreed     with        most     of     the    referee's
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                                                                            No.     2016AP923-W

recommendations, granting partial summary judgment to each party

and limiting the evidence that Newtek could present at trial to

prove its claims.

      ¶32      Although the circuit court's opinion states that it is

based     on    a    de    novo    review    of       the    record   and     the    parties'

submissions,         Newtek       contends   that       the    circuit      court    did      not

actually conduct a de novo review.9

      ¶33      On February 4, 2016, Newtek filed a petition with the

court of appeals for leave to appeal from the circuit court's

order granting partial summary judgment and limiting evidence at

trial.

      ¶34      In its February 2016 petition for leave to appeal,

Newtek detailed problems relating to the referee's appointment,

role, and lack of control by the circuit court, but it did not

request        the     court       of    appeals        to     vacate       the     referee's

appointment,          to    consider      any        constitutional      issues,         or    to

determine       the       referee's     authority       to    find    facts,      make    legal

conclusions, and issue orders.                    Newtek's major argument focused
on   substantive           legal   issues;      Newtek       argued    that    the    circuit

court and the referee ignored the record and misstated the law.

      ¶35      On April 6, 2016, the court of appeals denied the

petition for leave to appeal on a usually stated ground that the

"petition fails to satisfy the criteria for permissive appeal.

See Wis. Stat. § 808.03(2) (2013-14) . . . ."                            Newtek did not

      9
          Brief of Petitioner at 24.

                                                15
                                                                    No.    2016AP923-W

petition this court for review of the court of appeals' order

denying     the    petition   for    leave       to   appeal.      See    Wis.   Stat.

§ (Rule) 809.62.        Nor did Newtek petition the court of appeals

for   a    supervisory    writ      under    § (Rule) 809.51       to     vacate   the

circuit court's order appointing the referee.                      Instead, Newtek

sought a supervisory writ in this court on May 6, 2016.

                                            II

      ¶36    The     first    issue     presented        is      whether    Newtek's

petition for a supervisory writ asking the court to vacate a

circuit court order appointing retired Judge Michael Skwierawski

as the referee is properly before this court.                     We conclude that

the petition is not properly before this court, but we exercise

our superintending authority to vacate the Order of Reference.

      ¶37    The    Wisconsin       Constitution        grants     three    separate

powers to this court:         appellate and original jurisdiction; the

power to issue all writs necessary in aid of its jurisdiction;

and superintending authority over all courts.                     Wis. Const. art.

VII, § 3.10

      10
       State ex rel. Reynolds v. County Court, 11 Wis. 2d 560,
564, 105 N.W.2d 876 (1960).

     The original Article VII, Section 3 of the 1848 Wisconsin
Constitution provides as follows:

      The supreme court, except in cases otherwise provided
      in    this   constitution,   shall    have   appellate
      jurisdiction only, which shall be coextensive with the
      state; but in no case removed to the supreme court
      shall a trial by jury be allowed.    The supreme court
      shall have a general superintending control over all
      inferior courts; it shall have power to issue writs of
      habeas corpus, mandamus, injunction, quo warranto,
                                                      (continued)
                                            16
                                                            No.    2016AP923-W

    ¶38     We begin with the court's power to issue supervisory

writs.    Wisconsin Stat. §§ (Rules) 809.71 and 809.51 govern writ

practice.

    ¶39     Wisconsin Stat. § (Rule) 809.71 authorizes a person to

request     the   supreme   court     to   exercise     its       supervisory

jurisdiction over a court and the judge presiding therein by

filing a petition in accordance with § (Rule) 809.51.                Section

(Rule) 809.51     governs   the     contents   of     the     petition     and

supporting memorandum and provides that the court may grant or

deny the petition or order such additional proceedings as it

considers appropriate.      According to § (Rule) 809.71, a person

seeking a writ in the supreme court shall first file a petition

    certiorari, and other original and remedial writs, and
    to hear and determine the same.

     In April 1977, Article VII, Section 3             of the Wisconsin
Constitution was revised to read as follows:

    (1) The supreme court shall have superintending                  and
    administrative authority over all courts.

    (2) The supreme court has appellate jurisdiction over
    all   courts  and   may  hear   original actions  and
    proceedings. The supreme court may issue all writs
    necessary in aid of its jurisdiction.

    (3) The supreme court may review judgments and orders
    of the court of appeals, may remove cases from the
    court of appeals and may accept cases on certification
    by the court of appeals.

                                    17
                                                           No.    2016AP923-W

for a supervisory writ in the court of appeals unless it is

impractical to do so.11

       ¶40   Wisconsin Stat. § (Rule) 809.71, governing supervisory

writs in this court, provides as follows:

       809.71 Rule (Supervisory writ).   A person may request
       the   supreme  court   to  exercise   its  supervisory
       jurisdiction over a court and the judge presiding
       therein or other person or body by filing a petition
       in accordance with s. 809.51.      A person seeking a
       supervisory writ from the supreme court shall first
       file a petition for a supervisory writ in the court of
       appeals under s. 809.51 unless it is impractical to
       seek the writ in the court of appeals. A petition in
       the supreme court shall show why it was impractical to
       seek the writ in the court of appeals or, if a
       petition had been filed in the court of appeals, the
       disposition made and reasons given by the court of
       appeals.
       ¶41   Newtek did not first file a petition for a supervisory

writ    in   the   court   of   appeals   as   required   by     Wis.   Stat.

§ (Rule) 809.71.      Newtek claims that it was impractical to seek

the writ in the court of appeals because the court of appeals

denied its petition for leave to file an appeal, and that its

petition for leave to file an appeal sought the assistance of

the court of appeals for reasons similar to those offered in its

petition in this court for a supervisory writ.

       11
       See also Judicial Council Committee's Note, 1981, Wis.
Stat. § (Rule) 809.71 ("The supreme court will not exercise its
supervisory jurisdiction where there is an adequate alternative
remedy. Unless the court of appeals is itself the object of the
supervisory writ, usually there is an adequate alternative
remedy of applying to the court of appeals under Rule 809.51 for
the supervisory writ.").

                                     18
                                                                 No.       2016AP923-W

    ¶42     Newtek's interlocutory appeal to the court of appeals

primarily    focused    on   the   substantive      merits     of     the    summary

judgment    and    on    limiting    evidence         at     trial,        and    only

tangentially raised objections to the Order of Reference.                          The

court of appeals gave no specific explanation other than its

usually stated ground that the "petition fails to satisfy the

criteria    for   permissive   appeal.        See    Wis.    Stat.     § 808.03(2)

(2013-14) . . . ."       We therefore do not know why the court of

appeals denied the petition for leave to appeal.

    ¶43     The   grounds    for   the     court    of     appeals    to    grant    a

petition for leave to appeal12 are not necessarily the same as

the grounds for granting a supervisory writ.13                  On this record,

    12
       The grounds for the court of appeals to grant leave to
appeal are set forth in Wis. Stat. § 808.03(2) as follows:

    (2) APPEALS BY PERMISSION.    A judgment or order not
    appealable as a matter of right under sub. (1) may be
    appealed to the court of appeals in advance of a final
    judgment or order upon leave granted by the court if
    it determines that an appeal will:

    (a)   Materially advance the  termination of                            the
    litigation or clarify further proceedings in                            the
    litigation;

    (b) Protect the petitioner                 from        substantial       or
    irreparable injury; or

    (c) Clarify an issue of              general     importance       in    the
    administration of justice.
    13
         A party seeking a supervisory writ must demonstrate that:

    1. An appeal is an inadequate remedy;

    2. Grave hardship or irreparable harm will result;

                                                                       (continued)
                                      19
                                                                            No.    2016AP923-W

we cannot determine the ground on which the court of appeals

denied Newtek's petition for leave to appeal or whether it was

impractical for Newtek to seek a supervisory writ in the court

of    appeals      that     focused       on    the    validity       of     the   Order    of

Reference.

       ¶44    We      decline        to        extend      our        supervisory         writ

jurisprudence and cast doubt on the continued vitality of the

"impracticality" requirement of Wis. Stat. § (Rule) 809.71.                                 We

therefore decline to hold that Newtek has shown that it was

impractical for it to seek a supervisory writ in the court of

appeals      and     that    Newtek's       petition       for    a    supervisory        writ

complies with Wis. Stat. § (Rule) 809.71.

       ¶45    In     the    alternative,         Newtek     asks      that    we    use    our

constitutional         power    of    "superintending            authority"        over    all

Wisconsin courts, Wis. Const. art. VII, § 3(1), to review the

validity of the Order of Reference.

       ¶46    We can and should decide the issue of the validity of

the Order of Reference using our constitutional superintending
authority under the circumstances of this case.                            The validity of

the   Order     of    Reference       is   an       important     issue      for   Wisconsin

courts and the public.

       3. The duty of the trial court is plain and it must
          have acted or intended to act in violation of that
          duty; and

       4. The request          for     relief         is   made       promptly      and
          speedily.

                                               20
                                                                   No.     2016AP923-W

     ¶47    The     superintending         authority        provision        of     the

Wisconsin Constitution endows this court "with a separate and

independent jurisdiction, which enables and requires it in a

proper     case   to      control   the    course    of     ordinary       litigation

in . . . inferior courts . . . ."14             The nature and scope of the

superintending      authority       of   this   court     has   been   before      this

court numerous times since at least 1853.15                     The scope of this

authority is "as broad and as flexible as necessary to insure

the due administration of justice in the courts of this state."16

"In exercising this power of superintending control, this court

is not restricted to the use of common-law writs and is limited

See State ex rel. Three Unnamed Petitioners v. Peterson, 2015 WI
103, ¶26, 365 Wis. 2d 351, 875 N.W.2d 49; State ex rel. Two
Unnamed Petitioners v. Peterson, 2015 WI 85, ¶¶100-132, 363
Wis. 2d 1, 866 N.W.2d 165.
     14
       State ex rel. Fourth Nat'l Bank of Philadelphia                               v.
Johnson, 103 Wis. 591, 613, 79 N.W. 1081 (1899)).
     15
          See,    e.g.,    Attorney      General    v.    Blossom,     1 Wis. 317
(1853).
     16
       Madison Teachers, Inc. v. Walker, 2013 WI 91, ¶16, 351
Wis. 2d 237,   839 N.W.2d 388   (quoting In  re  Kading,  70
Wis. 2d 508, 520, 235 N.W.2d 409 (1975)).

                                          21
                                                                     No.   2016AP923-W

only by the necessities of justice."17                     But the superintending

authority of the court is not to be used lightly.18

       ¶48    The question of exercising the constitutional grant of

superintending authority is one of judicial policy rather than

one relating to the power of this court.                   To convince this court

to exercise this constitutional grant of power, a party must

establish that an appeal from a final judgment is inadequate and

that    grave    hardship    will    follow      a   refusal    to    exercise     the

power.19

       ¶49    Whether   an   erroneously        ordered     compulsory     reference

creates such a hardship is judged on the facts of the case.                        The

following        circumstances        compel         the     exercise         of   our

superintending      authority       over    circuit    courts    in     the    instant

case:

       17
       State ex rel. Reynolds v. County Court, 11 Wis. 2d 560,
565, 105 N.W.2d 876 (1960).    See also State v. Ernst, 2005 WI
107, ¶19, 283 Wis. 2d 300, 699 N.W.2d 92; Arneson v. Jezwinski,
206 Wis. 2d 217, 225, 556 N.W.2d 721 (1996).
       18
       See State ex rel. Hustisford Light, Power, & Mfg. Co v.
Grimm, 208 Wis. 366, 370, 371, 243 N.W. 763 (1932) (citing State
ex rel. Tewalt v. Pollard, 112 Wis. 232, 87 N.W. 1107 (1901);
State ex rel. City of Milwaukee v. Ludwig, 106 Wis. 226, 82 N.W.
158 (1900); State ex rel. Fourth Nat'l Bank of Philadelphia v.
Johnson, 105 Wis. 164, 83 N.W. 320 (1899); State ex rel. Meggett
v. O'Neill, 104 Wis. 227, 80 N.W. 447 (1899); State ex rel. v.
Nat'l Bank of Philadelphia v. Johnson, 103 Wis. 591, 612, 79
N.W. 1081 (1899)).
       19
            Hustisford, 208 Wis. at 370.

                                           22
                                                                       No.   2016AP923-W

         • The     Order    of    Reference      broadly     delegates          to     the

           referee the authority to decide all motions, whether

           discovery or dispositive.

         • The Order of Reference is apparently used with some

           frequency in Milwaukee County, and the appointment of

           referees may become an increasingly common practice in

           the circuit courts.

         • This court has not recently reviewed the permissible

           scope of references under Wisconsin law.

         • The    case     presents      significant    state          constitutional

           issues having statewide importance relating to core

           functions       of    the   circuit   courts     and    access       to    the

           courts.

         • If this court does not review the validity of the

           Order    of     Reference     at   this   time,       the    parties       will

           endure great hardship; they will have to submit to a

           long    and     expensive     reference    and    then       trial    before

           being    afforded       the    opportunity       to    seek       relief    on
           appeal.       And after trial and appeal if the reference

           is held invalid, the parties will again be at the

           discovery stage.20

    20
       Hustisford, 208 Wis.  at   371-72   (holding that  a
postjudgment appeal regarding a compulsory reference justifies
this court's exercise of supervisory power and issuance of a
writ of mandamus); Killingstad v. Meigs, 147 Wis. 511, 517, 133
N.W. 632 (1911) (holding that an unauthorized compulsory
reference is a material and reversible error).

                                         23
                                                                       No.    2016AP923-W

     ¶50    We     therefore    use       our     constitutional       superintending

authority to declare the rights of the parties in the instant

case.

                                           III

     ¶51    Hicks argues that Newtek has sat on its rights too

long by participating in proceedings with the referee for about

a year without objection to the Order of Reference and then

objecting only after it received an adverse summary judgment

ruling.     The argument is that Newtek has waived or forfeited its

right to challenge the Order, is estopped from challenging the

Order, or has impliedly consented to the Order.21                      We now turn to

whether this court should address the validity of the Order of

Reference     regardless       of        whether     Newtek     has     not    promptly

challenged the Order.

     ¶52    Hicks    raises    an        important    point:         Litigants   should

object to an Order of Reference promptly.                     Otherwise, litigation

will become more protracted and costly.                   "If a party wishes to

contest the reference, it should move the court to revoke the
reference."         Ehlinger        v.     Hauser,    2010 WI 54,    ¶77,    325
Wis. 2d 287, 785 N.W.2d 328.

     ¶53    Newtek offers reasons for its delay in objecting to

the reference.       We need not decide, however, whether Newtek was

justified     in    failing    to        object    more   promptly.           Rules   of

     21
       For a discussion of the                       concepts of waiver               and
forfeiture, see State v. Ndina,                       2009 WI 21, ¶29,                315
Wis. 2d 653, 761 N.W.2d 612.

                                            24
                                                                             No.       2016AP923-W

forfeiture and waiver are rules of judicial administration, and

thus, a reviewing court may disregard a waiver or forfeiture and

address the merits of an unpreserved issue in an appropriate

case.22

      ¶54       Hicks urges that Newtek's participation in proceedings

before the referee and Newtek's failure to seek relief from the

Order      of     Reference      promptly         were        tantamount          to    Newtek's

impliedly consenting to the reference and estop Newtek.                                   Newtek

responds that it is not estopped, that affirmative consent——

which      it   never     gave——is     necessary         to    bind     a    party       to    non-

judicial        dispute    resolution        (such   as        arbitration),            and    that

implied consent cannot provide a referee with authority the law

prohibits a referee from having, citing AT&T Technologies, Inc.

v.   Communications          Workers    of    Am.,       475 U.S. 643,       648     (1986)

(explaining       that     arbitration       requires          affirmative         agreement);

and Jovine v. FHP, Inc., 64 Cal. App. 4th 1506, 1531, 76 Cal.

Rptr.      2d   322     (1998)   (holding      that       a     party       must       explicitly

consent to a referee's making substantive rulings).                                See also In
re   L.J.,      157   Cal.    Rptr.    3d     197,       207    (Cal.       Ct.    App.       2013)

(explaining        that    unauthorized        referee          orders       are       void     and

consent is irrelevant).

      ¶55       When the     constitutional limitations of Article                             VII,

Section 2        of the Wisconsin Constitution on reference                               are at

      22
       See, e.g., State v. McKellips, 2016 WI 51, ¶47, 369
Wis. 2d 437, 881 N.W.2d 258; Vill. of Trempealeau v. Mikrut,
2004 WI 79, ¶17, 273 Wis. 2d 76, 681 N.W.2d 190; Bradley v.
State, 36 Wis. 2d 345, 359–359a, 153 N.W.2d 38 (1967).

                                             25
                                                                        No.    2016AP923-W

issue,     notions    of    waiver,     forfeiture,         estoppel,     and    consent

should not be dispositive.                  The constitutional limitations on

reference serve institutional and public interests that should

be protected.23        Because the issue presented is significant to

the functioning of the Wisconsin court system and to the public,

and because an important constitutional issue is presented, we

do   not    treat    Newtek's    failure      to     object     more    promptly      as   a

waiver, forfeiture, or estoppel to object to the validity of the

reference, or as implied consent to the reference.                            Rather, we

address      the     merits      of    the        issues    presented         under    our

constitutional superintending authority.

                                             IV

      ¶56    We     turn   now   to   decide       whether      the    circuit   court's

Order of Reference contravenes Article VII, Section 2 of the

Wisconsin Constitution, which vests the "judicial power" of this

state in a unified court system as follows:

      Art. VII. Sec. 2. The judicial power of this state
      shall be vested in a unified court system consisting
      of one supreme court, a court of appeals, a circuit
      court, such trial courts of general uniform statewide
      jurisdiction as the legislature may create by law, and
      a municipal court if authorized by the legislature
      under section 14.
      ¶57    The     phrase   "judicial       power"       is   not    defined   in    the

Wisconsin     Constitution.           Nor    does    the    Wisconsin     Constitution

vest "judicial power" in a referee.                    Newtek contends that the

      23
       Cf. Commodities Futures Trading Comm'n v. Schor, 478 U.S.
833, 848-49 (1986) (discussing Article III of the United States
Constitution).

                                             26
                                                                      No.    2016AP923-W

Order of Reference in the instant case enables the referee to

impermissibly wield constitutional "judicial power."

      ¶58    Constitutional judicial power was discussed in State

v. Williams, 2012 WI 59, 341 Wis. 2d 191, 814 N.W.2d 460.                            In

Williams, we addressed whether a circuit court commissioner's

issuance of a search warrant was an exercise of the judicial

power vested in the unified court system by Article VII, Section

2    of     the        Wisconsin       Constitution.          We      described     the

constitutional "judicial power" as the "ultimate adjudicative

authority         of      courts       to      finally     decide       rights      and

responsibilities          as       between    individuals."           Williams,     341
Wis. 2d 191,       ¶36.        Recognizing,        however,    that    the   Wisconsin

Constitution           contemplated         unelected     officers      (like     court

commissioners) exercising certain, limited judicial functions,

we   concluded         that    a    court    commissioner's     issuing      a   search

warrant     was    not    an       impermissible    exercise    of    constitutional

"judicial power."

      ¶59    No party in the instant case questions the power of a
circuit court to appoint a referee.24                    Used properly, a circuit

court's power to appoint and assign functions to a referee is

not unconstitutional and allows circuit courts to provide more

efficient dispute resolution to litigants.
      24
       Although there is no similar Wisconsin precedent, the
United States Supreme Court has declared that federal courts
have an inherent authority to appoint masters "to aid judges in
the performance of specific judicial duties, as they may arise
in the progress of a cause."   Ex parte Peterson, 253 U.S. 300,
312 (1920).

                                             27
                                                             No.        2016AP923-W

      ¶60    Indeed,   the   power    of     circuit    courts     to     appoint

referees to assist courts with limited functions can be traced

to   Wisconsin's    territorial      days.     This    historical        role   of

referees informs our decision.

      ¶61    Wisconsin's territorial statutes recognized the use of

special masters in any cause requiring                the examination of a

"long account."25      "Actions at law which involved the examination

of a long account might be compulsorily referred ever since the

constitution was adopted, and for a long time before."26

      ¶62    After adoption of the Wisconsin Constitution, statutes

authorized the appointment of referees to assist trial courts

with matters of long account and limited pretrial functions.

Actions not within the governing statutes could not be referred

to a referee.27

      25
       See Bd. of Supervisors of Dane Cty. v. Dunning, 20 Wis.
221 (*210), 228 (*216) (1866) ("In Wisconsin, a compulsory
reference was provided for in actions at law requiring the
examination of such accounts, as early as 1839. Stat. 1839, p.
209, § 84.").

     The Supreme Court of the Territory of Wisconsin declared
that a reference to a panel of referees to examine a long
account did not violate the United States Constitution's
guarantee of trial by jury.  See Rooker v. Norton, 1 Pin. 195
(1842).
      26
           Killingstad v. Meigs, 147 Wis. 511, 517, 133 N.W.2d 632
(1911).
      27
       Brown v. Runals, 14 Wis. 755, 761 (1861); Killingstad,
147 Wis. at 514-15.

                                      28
                                                                      No.   2016AP923-W

       ¶63     Shortly after adoption of the Wisconsin Constitution,

this        court    declared       that    limited     use    of     referees      was

constitutional            because   their    use   dated      to    pre-constitution

days.28       The state constitution "did not take away this right of

reference, but only provided that the right of trial by jury

should remain as it was before . . . ."29

       ¶64     Although these early cases recognized that a reference

was not a per se violation of the Wisconsin Constitution and

that a referee had only the functions conferred by the order of

reference,30        the    cases    also   recognized   that       appointment     of   a

referee is for the exceptional case,31 and that the power to

refer was not limitless.               For example, a referee's report was

       28
            Dunning, 20 Wis. at 228 (*216).
       29
       Dunning, 20 Wis. at 228 (*216); Stilwell v. Kellogg, 14
Wis. 499, (1861).
       30
       Best v. Pike, 93 Wis. 408, 414, 67 N.W. 697 (1896); Knips
v. Stefan, 50 Wis. 286, 6 N.W. 877, 880 (1880); Stone v.
Merrill, 43 Wis. 72 (1877).
       31
       Knips v. Stephan, 50 Wis. 286, 290, 6 N.W. 877 (1880)
("The right to have the issues determined by a referee and the
court,   against   the consent   of   either  party,   is  the
exception . . . .").

     See also Ehlinger v.                   Hauser,   2010 WI 54,    ¶89,    325
Wis. 2d 287, 785 N.W.2d 328.

                                            29
                                                                No.    2016AP923-W

not self-executing and required a court order to have the force

of law.32

       ¶65    Furthermore, Article VII, Section 19 barred the office

of   masters    in   chancery    entirely.33       Historically,      masters   in

chancery in equity cases had their functions balloon as courts

referred entire matters to them, and every proceeding before the

master carried a fee.           This use of masters to decide cases for

fees    led   to   substantial    abuses    that    increased   the    costs    of

litigation     and   caused     delays.     Prohibitive    costs      and   time-

consuming delay were viewed as violating a litigant's right to a

speedy trial as much as no trial at all.              As a result, the 1848

Wisconsin Constitution banned masters in chancery.34

       32
        Fairbanks v. Newton, 46 Wis. 644, 645, 1 N.W. 335 (1879)
("[T]he    report   of   itself   entitles  neither   party   to
judgment. . . . It is the duty of the circuit court thereupon,
before judgment, to hear the parties, and to make an order
sustaining or overruling the exceptions, and confirming, setting
aside or modifying the report.").
       33
       Article VII, Section 19 of the pre-1977 Wisconsin
Constitution provided: "The testimony in causes in equity shall
be taken in like manner as in cases at law, and the office of
master in chancery is hereby prohibited."

     This provision was repealed in April 1977 when Wisconsin
adopted the unified court system.  See 1975 J.R. 13, 1977 J.R.
6.
       34
       For discussions of the history of the abuses of masters
in chancery in state and federal courts relating to expense and
delay, see Simpson v. Canales, 806 S.W.2d 802, 806-08 (Tex. Dt.
Ct 1991); Linda J. Silberman, Masters and Magistrates Part II:
The American Analogue, 50 N.Y.U. L. Rev. 1297 (1975); Irving R.
Kaufman, Masters in the Federal Courts: Rule 53, 58 Colum. L.
Rev. 452, 452 n.4 (1958).

                                       30
                                                                    No.    2016AP923-W

      ¶66     Not    all   references    were      (or    are)   barred      by     the

Wisconsin      Constitution.       The    use    of      referees    serves       as    a

valuable adjunct to the judicial process.                 As judicial adjuncts,

however, referees have to be supervised by the circuit court and

their      functions   restricted.       The    history     of   the      masters       in

chancery teaches that we must guard against the unsupervised and

unrestricted use of referees.

      ¶67     The United States Supreme Court and federal courts of

appeal have recognized that judges bear primary responsibility

for the work of the courts and that a reference that would serve

to   relieve     a   court   of   its    primary      judicial      powers    is       not

permitted under Article III of the United States Constitution.35

      35
       La Buy v. Howes Leather Co., 352 U.S. 249, 256 (1957)
(appointment of a master to try a case "amounted to little less
than an abdication of the judicial function depriving the
parties of a trial before the court on the basic issues involved
in the litigation."); Ex parte Peterson, 253 U.S. 300, 312
(1920). See also Webster Eisenlohr, Inc. v. Kalodner, 145 F.2d
316 (3d Cir. 1944), cert. denied, 325 U.S. 867 (1945), and
federal court of appeals cases cited by 9 James Wm. Moore &
Joseph C. Spero, Moore's Federal Practice § 53.03[3], n.13 (3d
ed. 2016).

     Courts have expressed concern over the appointment of
masters to consider dispositive pretrial motions.    The Federal
Advisory Committee Note to Federal Rule of Civil Procedure 53
states:    "At the extreme, a broad delegation of pretrial
responsibility as well as a delegation of trial responsibilities
can   run  afoul   of  Article   III  [of   the  United   States
Constitution]."

                                                                          (continued)
                                         31
                                                                      No.    2016AP923-W

Article     III    preserves         to    litigants    their      interest      in     an

impartial and independent federal adjudication of claims within

the   judicial      power      of    the    United   States     and    serves     as     a

significant       part   of    the    constitutional     system       of    checks    and

balances,     preventing       legislative       transfer     of   jurisdiction         to

emasculate the constitutional courts.36

      ¶68    Federal     courts      have    attempted    to    delineate        when   a

master      assists      a     federal       judge     versus      when      a   master

unconstitutionally displaces a federal judge as adjudicator.

      ¶69    In La Buy v. Howes Leather Co., 352 U.S. 249 (1957),

the Court affirmed the Seventh Circuit's issuance of a writ of

mandamus directing the district court to vacate a reference to a

special     master.          The    reference    essentially       transferred        the

     For discussions of the use and limitations of masters in
the federal courts, see Margaret G. Farrell, The Function and
Legitimacy of Special Masters: Administrative Agencies for the
Courts, 2 Widener L. Symp. J. 235 (1997); Irving R. Kaufman,
Master in the Federal Courts: Rule 53, 58 Colum. L. Rev. 452
(1958); 9C Charles A. Wright & Arthur R. Miller, Federal
Practice and Procedure 2601-15 (3d ed. 2008); 9 James Wm. Moore
& Joseph C. Spero, Moore's Federal Practice ch. 53 (3d ed.
2016).

     For   a  discussion   of   Article   III  courts   and the
congressional power to create legislative courts, see Erwin
Chemerinsky, Federal Jurisdiction ch. 4 (7th ed. 2016).

     For discussions of referees in Wisconsin and Wis. Stat.
§ (Rule) 805.06, see 3A Jay E. Grenig, Wisconsin Practice
Series:   Civil Procedure § 506.1-.8 (4th ed. 2010); Patricia
Graczyk, The New Wisconsin Rules of Civil Procedure Chapters
805-807, 59 Marq. L. Rev. 671, 680-85 (1976).
      36
       Commodity Futures Trading Comm'n v. Schor, 478 U.S. 833,
850 (1986).

                                            32
                                                                No.     2016AP923-W

entire case, including the trial, to the master.                      Giving such

broad duties to a special master "amounted to little less than

an abdication of the judicial function depriving the parties of

a trial before the court on the basic issues involved in the

litigation." La Buy, 352 U.S. at 256.                  The Court noted that

while masters could "aid judges" in the performance of limited

duties, they could not be permitted to "displace the court."                     La

Buy, 352 U.S. at 256.

       ¶70     Although the issue in La Buy was a trial conducted by

a special master, the language and reasoning of the opinion have

been applied by federal and state courts to the use of special

masters or referees at all stages of litigation.                     These courts

have scrutinized appointments of special masters or referees to

prevent them from replacing the judge in settings beyond the

trial itself.

       ¶71     When a federal district judge "referred an apparently

urgent and contentious civil controversy to a special master,

virtually for all purposes," the federal Court of Appeals for
the District of Columbia Circuit instructed the district judge

to   revise     the   order    of   reference    and   "not   delegate    to    the

special      master   [   ]   the   core    function   of   making    dispositive

rulings, including findings of fact and conclusions of law on

issues of liability."37         The D.C. Circuit Court of Appeals struck

down    this    broad     reference    because    trial     courts    "ha[ve]    no

       37
       In re Bituminous Coal Operators' Ass'n, 949 F.2d 1165,
1166 (D.C. Cir. 1991).

                                           33
                                                                     No.     2016AP923-W

discretion to impose on parties against their will 'a surrogate

judge,'        a    substitute    from    the     private     bar     charged      with

responsibility for adjudication of the case."38

     ¶72       The concern that a master will effectively replace the

trial     judge        is    especially    apt     when     the     master     decides

dispositive motions.             "Determining bottom-line legal questions

is the responsibility of the court itself."39

     ¶73       In United States v. Microsoft Corp., 147 F.3d 935,

954-955 (D.C. Cir. 1998), the federal Court of Appeals for the

District of Columbia Circuit vacated a reference to a special

master to determine compliance under a consent decree.                              The

court     of       appeals   rejected    the    United    States'    argument      that

having a special master oversee the implementation of a consent

decree is a "well-established tradition."                   Microsoft Corp., 147
F.3d at 954.            Reasoning, instead, that the special master's

duties involved interpretation and were "no more 'remedial' than

would be those of any total referral of a contract case," the

court held that the reference was fatally flawed because it

     38
       In re Bituminous Coal Operators Ass'n, 949 F.2d at 1168;
Stauble v. Warrob, 977 F.2d 690, 695 (1st Cir. 1992) ("Because
Rule 53 cannot retreat from what Article III requires, a master
cannot supplant the district judge.     Determining bottom-line
legal questions is the responsibility of the court itself."
(citation omitted)).
     39
       Stauble v. Warrob, Inc., 977 F.2d 690, 695 (1st Cir.
1992); accord Prudential Ins. Co. v. U.S. Gypsum Co., 991 F.2d
1080, 1084 (3rd Cir. 1993) (explaining that summary judgment and
other dispositive motions "must be resolved prior to trial" and
"traditionally have been decided by judges").

                                           34
                                                                    No.    2016AP923-W

turned    on    the     "determination      of     rights . . . ."         "[S]pecial

masters may not decide dispositive pretrial motions."                      Microsoft

Corp., 147 F.3d at 954 (citing In re United States, 816 F.2d
1083, 1090 (6th Cir. 1987)).40

     ¶74       Several state courts also have not permitted circuit

courts     to    delegate         authority      to    a     non-judge    to    decide

dispositive      motions      or    make   legal      determinations      of   rights.

See, e.g., Salt Lake City v. Ohms, 881 P.2d 844, 848 (Utah 1994)

(referees       cannot    "exercise        th[e]      judge's   ultimate       judicial

power,    for    such    is   a    nondelegable       core    judicial    function");

Jovine v. FHP, Inc., 64 Cal. App. 4th 1506, 1509, 1523-24 (1998)

(deciding dispositive motions is beyond a referee's authority;

the responsibility to decide cannot be delegated without the

express consent of the parties; the state constitution governs

delegation of judicial power); Russell v. Thompson, 619 P.2d
537, 539 (Nev. 1980) (a general reference by the circuit court

of nearly all contested issues, giving the master the authority

to decide substantially all issues in the case, as well as to be
the fact finder, resulted in "the trial court's function [being]

reduced to that of a reviewing court" and "this type of blanket

     40
       See also Beazer East, Inc. v. Mead Corp., 412 F.3d 429,
442 (3rd Cir. 2005) (holding that a special master could not
perform CERCLA equitable allocation involving "a complex and
delicate determination of equities"); Burlington N.R.R. v. Dept.
of Rev. of Wash., 934 F.3d 1064, 1073 (9th Cir. 1991) (district
court's wholesale reference of the entire case to a master and
rubber stamping of the master's order was abdication of judicial
responsibility and violation of Article III of the United States
Constitution).

                                            35
                                                    No.   2016AP923-W

delegation approaches an unallowable abdication by a jurist of

his constitutional responsibilities and duties;" although the

master's report must be confirmed by the court before it is

final, the reference is not saved "because the scope of review

is so limited.").

     ¶75    Our court, however, has not decided the outer limits

placed by the state constitution on the use of referees.         But

the Wisconsin Supreme Court very early declared that referees

may share in judicial labor but cannot assume the place of the

judge.     "[C]onstitutional judges . . . can take [no power] from

the legislature, to subdelegate their judicial functions."41

     41
       In Van Slyke v. Trempealeau Co. Farmers' Mut. Fire Ins.
Co., 39 Wis. 390, 392, 396 (1876), the court stated:

     It seems too manifest for discussion that, under the
     constitution, no one can hold a circuit court but a
     circuit judge. . . . If the statute before us could be
     upheld, we do not see why one could not which should
     assume to give to the parties, in all actions, in all
     courts, power to stipulate the judges off the bench,
     and private persons into their seats.    Judicial power
     is one of the attributes of sovereignty, necessarily
     delegated in its exercise.   The constitution does not
     leave the delegation loose at the discretion of the
     legislature.    It delegates the judicial power to
     constitutional courts, to be held by constitutional
     judges. And these constitutional judges take no power
     from the constitution, can take none from the
     legislature, to subdelegate their judicial functions.

            . . . .

     [T]he   circuit  judge   might    be   likened  to   the
     sun . . . and [the referee] to    the moon . . . shining
     with delegated jurisdiction.       But the constitution
     mars the comparison.        For    by the astronomical
     constitution the sun appears to   take power to delegate
                                                       (continued)
                                 36
                                                                                No.    2016AP923-W

     ¶76    Because courts cannot delegate their judicial power,

the reasoning of the federal and state cases barring courts from

delegating       core    judicial      powers——that               is,    powers       to   conduct

trials,    decide       dispositive      motions,            or    determine          fundamental

rights——provides         a     compelling       measuring               stick    to    determine

whether    the    circuit      court     in    the       instant         case    impermissibly

delegated judicial power to the referee.

     ¶77    In    the    instant     case,         as    we       stated    previously,         the

Order of Reference enables the referee to hear and decide all

motions    filed,       whether    discovery            or    dispositive,            subject   to

review under the standard of erroneous exercise of discretion.

We   conclude           that      this        Order          impermissibly              delegates

constitutional "judicial power" to a referee, prohibiting the

circuit court from freely rejecting the referee's rulings and

conducting its own independent inquiry and reducing the function

of the circuit court to that of a reviewing court.

     ¶78    Insofar as the Order of Reference in the instant case

gave the referee the "full authority of the [circuit] Court to
hear and decide" all motions filed, including the authority to

     his functions of lighting the world; while the state
     constitution   tolerates   no  such   delegation,  and
     appoints a sun only, without any moon, as luminary of
     the    circuit  court,   whose   "gladsome   light  of
     jurisprudence" must be sunshine only, not moonshine.
     Commissioners, masters, referees, and like judicial
     subordinates, may share in judicial labor and lighten
     it; but they cannot change places with the judge on
     the bench or share in the final judgments of the
     court.

                                              37
                                                                  No.   2016AP923-W

hear    and   decide       motions    for   injunctive     relief,   for   partial

summary judgment, or to limit evidence at trial, counsel for the

circuit      court   and    Judge     DiMotto    makes   two   arguments   in   the

Order's defense.

       ¶79    Counsel for the circuit court and Judge DiMotto first

argues that the circuit court decided these issues de novo even

though the Order of Reference declared that the circuit court

would use the erroneous exercise of discretion standard, and

that this de novo review of the referee's rulings cured any

constitutional defects.              Second, counsel argues that this court

should postpone ruling on whether the                    Order of Reference is

valid in authorizing the referee to decide these issues until a

possible ultimate appeal on the merits.

       ¶80    We disagree with counsel.              Although Newtek contends

that the circuit court did not actually exercise de novo review,

we need not decide the actual nature of the circuit court's

review of the referee's rulings.                 Our focus in the instant case

is on the validity of the Order, not on the conduct of the
circuit court.42

       42
       Some federal courts have concluded that an improper
delegation of traditional adjudicatory functions is not saved by
de novo district court review of the master's ruling.        See
Microsoft Corp., 147 F.3d at 956 (citing Stauble v. Warrob,
Inc., 977 F.2d 690, 698 n.13 (1st Cir. 1992), and In re
Bituminous Coal Operators' Ass'n, 949 F.2d 1165, 1168 (D.C. Cir.
1991). See also Beazer East, Inc. v. The Mead Corp., 412 F.3d
429, 444-45 (3d Cir. 2005).

                                            38
                                                                               No.     2016AP923-W

       ¶81    We also are not willing to delay consideration of the

validity of the Order until after judgment is entered because,

as    we    previously        explained,        the    parties     will     be       irreparably

harmed      should      a     decision     on    the    validity       of      the     Order   of

Reference be delayed until after final judgment and appeal.

       ¶82    In       sum,    we     conclude       that   the    Order         of    Reference

impermissibly            delegated         to     the       referee       judicial          power

constitutionally vested in Wisconsin's unified court system.                                    A

referee may share judicial labor, but the Order of Reference may

not    allow       a    referee       to   assume       the    place        of       the   judge.

Accordingly, the Order does not survive Newtek's constitutional

challenge.

                                                 V

       ¶83    We       examine      whether      the     provision        in     the       circuit

court's Order of Reference that the circuit court's review of

the referee's "rulings" shall be based only on the referee's

"erroneous exercise of discretion" contravenes the constitution43

and statutes or rules44 regarding circuit court and appellate
court authority and practice.

       ¶84    The      Order     of    Reference        provides      for      circuit      court

review of a referee's ruling under the erroneous exercise of

discretion standard.

       43
            See, e.g., Wis. Const. art. VII, §§ 2, 8.
       44
            See, e.g., Wis. Stat. ch. 808.

                                                39
                                                                           No.     2016AP923-W

      ¶85       This standard is not the same standard as a court's de

novo review.           In a de novo review, the reviewing court reaches

whatever decision it would reach independently of the decision

of the prior decision maker.                   In contrast, a circuit court that

reviews     a    referee's          ruling    under     the   erroneous        exercise    of

discretion standard is using the standard of review an appellate

court ordinarily uses to review certain rulings of a circuit

court.

      ¶86       Under the erroneous exercise of discretion standard,

an appellate court may affirm the circuit court's ruling even

though the appellate court would not necessarily reach the same

decision independently of the prior decision maker.                                Thus, the

Order of Reference gives the appearance of an abdication of the

circuit court's responsibility to exercise independent judgment.

      ¶87       The Order of Reference further gives the appearance of

granting     appellate            authority    to    the    circuit      court     when   the

legislature has not granted such appellate authority.                                Article

VII, Section 8 of the Wisconsin Constitution provides that "the
circuit court shall have . . . such appellate jurisdiction in

the   circuit         as    the    legislature      may    prescribe      by     law."    The

legislature           has    not     granted     the      circuit       courts     appellate

jurisdiction over rulings by referees.

      ¶88       We    therefore       conclude       that     the   provision        in   the

circuit     court's         Order    of   Reference        that   the    circuit     court's

review      of       the    referee's     "rulings"         shall   be     based     on   the

referee's        "erroneous         exercise    of     discretion"       contravenes      the

                                               40
                                                               No.    2016AP923-W

constitution, statutes, and rules regarding circuit court and

appellate court authority and practice.

                                     VI

     ¶89    We turn to the question of whether the circuit court's

Order of Reference contravenes the parties' right to "obtain

justice    freely,   and   without   being   obliged      to    purchase      it"

guaranteed    by     Article   I,    Section     9   of        the    Wisconsin

Constitution, or with due process of law, guaranteed by Article

I, Section 1 of the Wisconsin Constitution, or with Newtek's

right to a jury trial, guaranteed by Article I, Section 5 of the

Wisconsin Constitution.45

     ¶90    Newtek argues that the Order of Reference deprived it

of its constitutional rights to present its claims and defenses

to a court of competent jurisdiction.

     ¶91    Wisconsin's    constitutional      framers,    taking      heed    of

Article 40 of the Magna Carta,46 provided in Article I, Section 9

as follows:

     45
       Newtek asserts that the substantive rulings of the
referee regarding its property interests in confidential
information and its contractual rights to prevent Hicks from
improperly using Newtek's goodwill and proprietary information
deprived Newtek of property rights without due process, namely
the right to be heard by the circuit court. We need not reach
this issue.
     46
       Article 40 of the Magna Carta provides: "To none will we
sell, to none will we deny, or delay, right or justice".

                                                                     (continued)
                                     41
                                                                No.   2016AP923-W

       Every person is entitled to a certain remedy in the
       laws for all injuries, or wrongs which he may receive
       in his person, property, or character; he ought to
       obtain justice freely, and without being obliged to
       purchase it, completely and without denial, promptly
       and without delay, conformably to the laws.
Wis. Const. art. I, § 9.

       ¶92    The guarantee of Article I, Section 9 that "[e]very

person is entitled to a certain remedy in the laws" does not

mean    a    remedy   that   must   be   accompanied   by   a    certainty    of

recovery.      This provision guarantees to every litigant a day in
a court of competent jurisdiction to present claims for judicial

relief; the litigant may either win or suffer defeat, according

to the case presented.47

     See, e.g., Aicher ex rel. LaBarge v. Wis. Patients Comp.
Fund, 2000 WI 98, ¶42, 237 Wis. 2d 99, 121, 613 N.W.2d 849, 862
("Our decisions trace [art. I, § 9's] origin to Paragraph 40 of
the Magna Carta, which states: "To none will we sell, to none
will we deny, or delay, right or justice.") (citing Vol. I
Wisconsin Statutes 1898, Sanborn and Berryman's Annotations at
9).
       47
       New York Life Ins. Co. v. State, 192 Wis. 404, 412, 211
N.W. 288 (1926), error dismissed, 276 U.S. 602 (1928).

                                         42
                                                               No.     2016AP923-W

     ¶93   Article   I,    Section   9     does   not   bar    litigants      from

having to pay reasonable court costs and fees, including referee

fees.48

     ¶94   Neither party argues that the $45,000 fee amounts to a

bribe or was unreasonable in amount.                Neither party seeks a

partial or full refund of the fees paid.

     ¶95   The   circuit    court    was    right   when      it    advised    the

parties that the referee "doesn't come cheap."                     It encouraged

the parties to consider the cost of the referee in deciding

whether to raise issues and in making settlement decisions.                      A

referee's fees increase the costs of litigation and thus may

have a chilling effect on litigants.              If the expenses are not

circumscribed,     people     with       meritorious       claims      will     be

     48
       For discussions of Article I, Section 9, see, e.g.,
Aicher v. Wis. Patients Comp. Fund, 2000 WI 98, ¶¶41-47, 237
Wis. 2d 99, 613 N.W.2d 849; Makos v. Wis. Masons Health Care
Fund, 211 Wis. 2d 41, 52-54, 59-68, 78-87, 546 N.W.2d 662
(1997); Treiber v. Knoll, 135 Wis. 2d 58, 72-74, 398 N.W.2d 756
(1987); Manitowoc v. Manitowoc & N. Traction Co., 145 Wis. 13,
18, 129 N.W. 925 (1911) (granting relief should not be made
dependent on ability to furnish bond); Reistad v. Manz, 11
Wis. 2d 155, 159, 105 N.W.2d 324 (1960), overruled on other
grounds by Hansen v. A.H. Robins, Inc., 113 Wis. 2d 550, 335
N.W.2d 578   (1983);   Mulder   v.  Acme-Cleveland   Corp.,   95
Wis. 2d 173, 189, 290 N.W.2d 276 (1980); Portage Cty. v.
Steinpreis, 104 Wis. 2d 466, 476-77, 312 N.W.2d 731 (1981);
Christianson v. Pioneer Furniture Co., 101 Wis. 2d 343, 347-48,
77 N.W. 174 (1898); State ex rel. Baker v. Cty. Court of Rock
Cty., Branch I, 29 Wis. 2d 1, 12, 138 N.W.2d 162, 168 (1965)
(Article I, Section 9 "guarantees that persons will not have to
bribe or make arbitrary payments to officials in order to obtain
justice.").

                                     43
                                                                              No.     2016AP923-W

discouraged        from    pursuing      them        in    court     because      they   cannot

afford to go to court.

      ¶96     A reference to a referee in effect requires litigants

to pay for the court system twice——once through the tax system

and a second time by paying fees to a referee for resolution of

their suit.

      ¶97     We need not decide this case on the basis of Article

I,   Section      9.      Nevertheless,         we        note    that   appointment         of   a

referee is for the exceptional case; it is not the general rule.

Furthermore, as Hicks correctly acknowledged, referee fees may

offend constitutional mandates "if they chill advocacy severely

enough      to    'effectively          end   the         litigation'       or      impose    'an

intolerable        burden     on    a    losing       litigant,'"          citing     Peter       v.

Progressive Corp., 986 P.2d 865, 873 (Alaska 1999).                                 Hicks notes

that Newtek has not attempted to demonstrate that the referee's

fees in the instant case rise to this level.                                We therefore do

not rest our decision on Article I, Section 9 of the Wisconsin

Constitution.
      ¶98     The costs of litigation can price people out of the

constitutionally established state judicial system.                                 Yet justice

should   be       available    to       all   persons            regardless      of   financial

means.      The Wisconsin Constitution embodies the principle that

courts      are    an     essential       and        integral       part    of      Wisconsin's

government, open to the people, and the cost thereof is borne as

a public expense.

      ¶99     Circuit courts must heed the admonitions of the Alaska
Supreme Court, which warned of denying litigants the right of
                                                44
                                                                    No.   2016AP923-W

access to courts and due process by appointment of referees as

follows:

      More fundamentally, all potential litigants——not just
      those who are indigent——have a constitutional right in
      Alaska of meaningful access to the justice system.
      Prohibitively high master's fees could potentially
      jeopardize such access. . . . Even if an imposition of
      costs or fees is valid on its face, it may offend due
      process because it operates to foreclose a particular
      party's opportunity to be heard. We believe the
      ultimate test . . . is whether the [cost] is so great
      that it imposes an intolerable burden on a losing
      litigant which, in effect, denies the litigant's right
      of access to the courts.
Peter v. Progressive Corp., 986 P.2d 865, 872-73 (Alaska 1999)

(internal     quotation     marks      and    citations       omitted).           The

California court of appeals similarly stated:

      Allowing trial courts routinely to shift their
      responsibilities to private judges unfairly requires
      the litigants, who are already paying taxes to fund
      the operation of the courts, to also bear the very
      substantial cost of private judges . . . . [S]uch a
      burden ultimately could discourage . . . meritorious
      claims . . . .
Jovine v. FHP, Inc., 64 Cal. App. 4th 1506, 1531 (1998).
      ¶100 In addition to raising Article I, Section 9 concerns

and access to justice concerns, Newtek also raises due process

issues.     Basic to due process is procedural fairness——notice,

the   opportunity    to    be   heard,       and    the    accurate       and    fair

adjudication    of   disputes.         Delay       and    expense     may   deprive

litigants of the fair adjudication of their disputes guaranteed

by due process.

      ¶101 Newtek    asserts    that    the    substantive     rulings      of    the
referee     regarding     its   property       interests      in      confidential

                                       45
                                                         No.   2016AP923-W

information and its contractual rights to prevent Hicks from

improperly using Newtek's good will and proprietary information

deprived Newtek of property rights without due process, that is,

the right to be heard by the circuit court.

      ¶102 We need not and do not decide the instant case on the

due process clause of Article I, Section 1.          It is important,

however, to take note of the court's statement in Piper v. Popp,

167 Wis. 2d 633,   644,   482 N.W.2d 353   (1992),   describing   the

constitutional creation of the court system and due process as

ensuring access to the courts as follows:

      [W]e begin with the axiom that before the state may
      deprive an individual of life, liberty or property,
      the state must accord the individual a meaningful
      opportunity to be heard.      In other words, litigants
      must be given their day in court.         Access to the
      courts   is    an     essential   ingredient    of  the
      constitutional guarantee of due process. Whatever the
      precise status of the right of access to the courts,
      due process is satisfied "if the procedures provide an
      opportunity to be heard at a meaningful time and in a
      meaningful matter."49
      ¶103 Finally, Newtek asserts, inter alia, that the Order
contravenes Newtek's constitutional right to a trial by jury by

      49
       Piper v. Popp, 167 Wis. 2d 633, 644, 482 N.W.2d 353
(1992) (footnote omitted) (citing State ex rel. Strykowski v.
Wilkie, 81 Wis. 2d 491, 512, 261 N.W.2d 434 (1987) (citing
Mathews v. Eldridge, 424 U.S. 319, 335 (1976))).       See also
Penterman v. Wis. Elec. Power Co., 211 Wis. 2d 458, ¶25, 565
N.W.2d 521 (1997) (the right of access to the courts is secured
by the First and Fourteenth Amendments and "exists where the
claim has a 'reasonable basis in fact or law'"; "Judicial access
must be 'adequate, effective and meaningful'" (quoted sources
omitted).).

                                    46
                                                                            No.    2016AP923-W

authorizing the referee to make binding determinations of fact,

citing In re Peterson, 253 U.S. 300, 310-11 (1920).50                             In view of

our decision that the Order of Reference contravenes Article

VII,    Section        2    of     the    Wisconsin        Constitution,      which       vests

judicial power in the unified court system, we need not and do

not    reach     the       issue    of    whether     the     Order    comports     with     or

contravenes the right to jury trial guaranteed by Article I,

Section 5.51

                                               VII

       ¶104 The last two issues we must address are whether any

orders      of   the       referee       survive     and    whether    we    should       grant

Newtek's request that we direct that a new judge be assigned on

remand.

       ¶105 Certain          discovery       orders        survive.     Insofar       as    the

Order of Reference in the instant case authorized the referee to

supervise        pretrial          discovery       disputes,     the     Order      did    not

contravene       the       Wisconsin       Constitution's        vesting      of    judicial

power in a unified court system.                           Discovery issues are often

       50
       The court held in In re Peterson, 253 U.S. 300, 310-11
(1920), that the appointment of an auditor by the federal judge
to make and file a report with a view to simplifying the issues
for the jury but not to finally determine any of the issues in
the action was not an unconstitutional interference with the
jury's determination of fact; the auditor's report was to be
admitted at the jury trial as evidence of the facts and findings
embodied therein.
       51
       We note that the 2003 revised version of Federal Rule of
Civil Procedure 53 permits appointment of a trial master in an
action to be tried by jury only if the parties consent.

                                               47
                                                                   No.    2016AP923-W

referred to a master in federal courts.               9C Charles A. Wright &

Arthur R. Miller, Federal Practice and Procedure § 2602.1 (3d

ed. 2008).     Indeed, masters have been particularly helpful for

overseeing discovery in complex federal cases.                       9 James Wm.

Moore     &    Joseph     C.    Spero,        Moore's        Federal       Practice

§ 53.10[3][c][ii] (3d ed. 2016).

    ¶106 Accordingly, if neither party raised an objection to a

referee's ruling or order on discovery, that ruling or order

remains in full force and effect.                 If, however, either party

raised an objection to a referee's ruling or order on discovery

(whether or not reviewed by the circuit court), that ruling or

order is vacated.

    ¶107 Because        the     Order        of     Reference       impermissibly

authorized the referee to rule on dispositive motions, any such

referee   rulings   and   the   circuit       court's   orders      adopting     the

referee's recommended rulings on dispositive motions, such as

the parties' motions for summary judgment, are vacated.

    ¶108 Finally, Newtek requests that we direct that a new
judge be assigned to the matter on remand.                      Counsel for the

circuit   court   objects,     observing      that    Wis.   Stat.       § 801.58(7)

permits a party to request substitution of a judge, within 20

days after the remittitur is filed in the circuit court, "[i]f

upon an appeal from a judgment or upon a writ of error the

appellate     court . . . reverses       or       modifies   the     judgment     or

order . . . ."

    ¶109 True, the statute limits substitution to appeals and
writs of error, and a petition for a supervisory writ is neither
                                        48
                                                                             No.    2016AP923-W

an appeal nor a writ of error.                    But, as counsel for the circuit

court forthrightly explains, this court has stated that Wis.

Stat. § 801.58(7) "'creates an unqualified right to substitution

when further trial court proceedings are necessary after remand

from    an   appellate         court.'"       State       ex    rel.   J.H.       Findorff     v.

Circuit      Court    for      Milwaukee       County,         2000 WI 30,     ¶13,      233
Wis. 2d 428,        608 N.W.2d 679         (quoting         State   ex    rel.       Oman   v.

Hunkins, 120 Wis. 2d 86, 91, 352 N.W.2d 220 (Ct. App. 1984)).

       ¶110 Because we reverse orders of the circuit court and

remand this matter to the circuit court for further proceedings,

and this matter seems to fall within the reach of Wis. Stat.

§ 801.58(7), we permit either party to seek a substitution of

judge    pursuant         to   the    procedures         set     forth      in     Wis.     Stat.

§ 801.58(1) and (7).             Because there is no record in this court

in the instant case to be remitted, the 20-day period provided

in Wis. Stat. § 801.58(7) should be triggered by this court's

transmittal of its judgment and opinion to the circuit court.

See Wis. Stat. § (Rule) 809.26(2).
       ¶111 For the reasons set forth, we conclude as follows:

          1. Newtek's petition for a supervisory writ does not meet

              the     requirements             set        forth        in        Wis.     Stat.

              § (Rule) 809.71.              The petition was not first filed in

              the court of appeals and Newtek has failed to show

              that it was impractical to file the petition in the

              court       of   appeals.           We     do,    however,         exercise      our

              constitutional superintending authority under Article
              VII,    Section        3(2)    of    the    Wisconsin         Constitution        to
                                              49
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           determine the validity of the Order of Reference.                                 A

           declaration of rights is an appropriate vehicle for an

           exercise of the superintending authority over circuit

           courts constitutionally granted to this court.52

         2. Regardless of whether Newtek has waived or forfeited

           its   right   to     challenge          the   Order     of     Reference,        is

           estopped from challenging the Order, or has impliedly

           consented to the reference, this court may resolve the

           issue of the validity of the Order of Reference under

           its constitutional superintending authority.

         3. The Order of Reference impermissibly delegated to the

           referee     judicial      power         constitutionally            vested       in

           Wisconsin's unified court system.                        Accordingly, the

           Order     does     not        survive         Newtek's         constitutional

           challenge.

         4. The circuit court's Order of Reference, including the

           provision     that     the     circuit         court's        review      of    the

           referee's     "rulings"         shall         be    based      only     on      the
           referee's        "erroneous             exercise        of       discretion,"

           contravenes      the     constitution,             statutes,        and        rules

           regarding circuit court and appellate court authority

           and   practice.          It    infringes           on   the    legislature's

           authority     to     define         a    circuit        court's       appellate

           jurisdiction.

    52
       State ex rel. Memmel v. Mundy, 75 Wis. 2d 276, 281, 249
N.W.2d 573 (1977).

                                          50
                                                                No.        2016AP923-W

5. We do not decide the instant case on the basis of

  Article I, Section 9 of the Wisconsin Constitution,

  the due process clause of Article I, Section 1 of the

  Wisconsin Constitution, or the right to jury trial of

  Article I, Section 5 of the Wisconsin Constitution,

  but    we   note    that      reference         to     a    referee        is     the

  exception, not the rule; that there are constitutional

  limits      on   the    powers       of    a    referee;           and     that     a

  reference can jeopardize a litigant's access to the

  justice     system,     due     process,        and        right    to     a    jury

  trial.      The Wisconsin Constitution requires the state

  to provide a judicial system for the resolution of

  disputes.          Access     to     state       courts          for      conflict

  resolution is thus implicit in the state constitution.

  We    express    our    concern       that       the       use     of     referees

  increases the costs of litigation and may cause delay

  and, as a practical matter, may deprive litigants of

  access to the courts.
6. To the extent the parties have agreed to abide by an

  order or ruling of the referee relating to discovery,

  that   ruling      or   order      shall       stand.         To    the     extent

  either party has objected to an order or ruling of the

  referee relating to discovery, that ruling or order

  shall be vacated.           Any ruling or order of the referee

  on a dispositive motion is vacated.                         Either party may

  request     substitution        of   the       judge       pursuant       to    Wis.
  Stat. § 801.58(1) and (7).
                                51
                                                No.   2016AP923-W

    By the Court.—The petition for supervisory writ is denied.

Rights declared.

                             52
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ATTACHMENT A

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                                                            No.    2016AP923-W.akz

       ¶112 ANNETTE KINGSLAND ZIEGLER, J.           (concurring in part,

dissenting in part).       The court denies Newtek's petition for a

supervisory writ.    I join that denial.          I depart, however, from

the court's decision to nevertheless address broader underlying

issues because this court's determination should end with the

fact that Newtek's petition fails for procedural reasons.                         I

will now discuss why I depart from my colleagues.

       ¶113 Under Wis. Stat. § (Rule) 809.71:

       A person seeking a supervisory writ from the supreme
       court shall first file a petition for a supervisory
       writ in the court of appeals under s. 809.51 unless it
       is impractical to seek the writ in the court of
       appeals. A petition in the supreme court shall show
       why it was impractical to seek the writ in the court
       of appeals . . . .
Wis.   Stat.   § (Rule)    809.71.       Newtek   did     not     first   file    a

petition for a supervisory writ in the court of appeals.                         Nor

did Newtek provide an adequate justification for its failure to

do so (Newtek points only to the fact that the court of appeals

denied its procedurally and substantively dissimilar request to

appeal from a nonfinal order).
       ¶114 Even if Newtek had met Wis. Stat. § (Rule) 809.71,

under our precedent "[a] petition for a supervisory writ will

not be granted unless," inter alia, "the request for relief is

made promptly and speedily."          Burnett v. Alt, 224 Wis. 2d 72,

96-97,   589 N.W.2d 21   (1999)    (quoting     State    ex     rel.    Oman    v.

Hunkins, 120 Wis. 2d 86, 91, 352 N.W.2d 220 (Ct. App. 1984) (per

curiam)).      Newtek did not meet that condition in this case.

Instead, Newtek failed to take meaningful steps toward obtaining
relief for months while the referee ruled on numerous motions.
                                     1
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    ¶115 Thus, the court is correct to deny Newtek's petition

for a supervisory writ, and that should be the end of the case.

Nonetheless,      the       court     proceeds       to    address        a     number    of

constitutional       issues     and     ultimately         grants     Newtek         relief

anyway.     I do not agree with court's decision to do so.                              While

the court raises important issues, it finds itself in a less

than desirable position to fully address these issues.                                  What,

precisely, occurred below was not adequately briefed or argued.

We remain without the benefit of all of the circuit court's

reasoning in its review of the referee's determinations.                                  The

court     proceeds     to    determine        the    underlying      issues         without

knowing whether the circuit court agreed or disagreed with the

referee or reached its own conclusions.                      If the judge did so

independently rule, it could be that it is, at most, harmless

error to have assigned such broad authority initially to the

referee.     Because this case should be decided on more narrow

grounds     and   we    are     without       a     full   record,        I     would    not

unnecessarily        delve     into     the       many     complex        constitutional
questions the court feels compelled to address.

    ¶116 Newtek petitioned this court for a supervisory writ.

Simply stated, it did not meet the requirements for the issuance

of the writ.      This should end the analysis.                 Because the court

continues further, I respectfully concur in part and dissent in

part.

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     ¶117 REBECCA         GRASSL           BRADLEY,      J.     (concurring             in      part,

dissenting       in     part).             Universal          Processing          Services        of

Wisconsin, LLC, doing business as Newtek, petitioned this court

for a supervisory writ only after first acquiescing to discovery

under the Order of Reference (the "Reference"), receiving an

adverse summary judgment decision, and failing to persuade the

court of appeals to grant interlocutory review.                                    Now, Newtek

raises    various       challenges          to   the    Reference,             under     which    it

engaged    in    discovery        without          objection        for        nearly     a    year.

Because Newtek's objections are untimely and not properly before

this court, I concur in the majority's decision to deny the

petition for a supervisory writ.1

     ¶118 Nevertheless,                I     respectfully            dissent            from     the

majority's       declaration          of     rights     pursuant          to     this         court's

superintending          authority          under     the      Wisconsin           Constitution.

Although     I    agree        with    the       majority's         conclusion          that     the

Reference        impermissibly              delegated          the        circuit             court's

constitutionally         vested        judicial        power        to     the     referee,2        I
disagree with its decision to grant retrospective relief to a

party     that    sat     on     its       rights      and    did        not     follow        proper

     1
       Accordingly, I agree with and join the majority opinion’s
analysis in Part II to the extent it concludes "the petition is
not properly before this court." Majority op., ¶36.
     2
       I join parts I and V of the majority opinion.
Additionally, I join Part IV of the majority opinion, except its
determination that "the parties will be irreparably harmed
should a decision on the validity of the Order of Reference be
delayed until after final judgment and appeal."    Majority op.,
¶81. I would not reach the issues discussed in Part VI of the
majority opinion.

                                                 1
                                                             No.   2016AP923-W.rgb

procedures when petitioning this court.3             The majority opinion,

in effect, grants the writ despite technically denying it.                      I

disagree with the majority's approach and would instead employ

this court's superintending authority to prospectively vacate

the   Reference     to    the      extent   it    violates     the     Wisconsin

Constitution.4

                                        I

      ¶119 Two procedural deficiencies hamper Newtek's petition.

First, Newtek skipped the court of appeals without an adequate

justification     and    instead    filed   its   petition     first    in   this

court.    Second, Newtek failed to timely object to the Reference.

Either deficiency alone provides a sufficient basis for denying

the writ; together, they prove fatal.             See Burnett v. Alt, 224
Wis. 2d 72, 96, 589 N.W.2d 21 (1999).

                                        A

      ¶120 Wisconsin Stat. § (Rule) 809.71 (2015-16)5 establishes

the procedure for asking this court to issue a supervisory writ:

      A person may request the supreme court to exercise its
      supervisory jurisdiction over a court and the judge
      presiding therein or other person or body by filing a
      petition in accordance with s. 809.51.       A person
      seeking a supervisory writ from the supreme court

      3
       I therefore agree with much of Part III of the majority
opinion, except that I would discuss the merits of the petition
prospectively only with respect to these parties, so as to
provide guidance to courts and litigants.
      4
       As a result, I do not join Part VII of the majority
opinion.
      5
       All subsequent references to the Wisconsin Statutes are to
the 2015-16 version unless otherwise indicated.

                                        2
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       shall first file a petition for a supervisory writ in
       the court of appeals under s. 809.51 unless it is
       impractical to seek the writ in the court of appeals.
       A petition in the supreme court shall show why it was
       impractical to seek the writ in the court of appeals
       or, if a petition had been filed in the court of
       appeals, the disposition made and reasons given by the
       court of appeals.
In this case, Newtek did not file a petition for a supervisory

writ in the court of appeals before filing its petition in this

court; consequently, this court will grant the writ only if

Newtek "show[s] why it was impractical to seek the writ in the
court of appeals," as § (Rule) 809.71 requires.                              See Burnett,
224 Wis. 2d at 96.         To justify ignoring the words of the statute

and filing with us first, Newtek explains it "determined that it

would be impractical to petition the court of appeals to issue a

writ    directing    the    circuit       court    to     vacate      the    appointment"

after "the court of appeals declined to review the referral on

Newtek's petition for interlocutory review."

       ¶121 Like the majority, I am not persuaded that the court

of appeals' denial of interlocutory review made it impractical

for Newtek to seek a supervisory writ from that court.                                    See

majority   op.,     ¶¶41-44.        Interlocutory          review      and    supervisory

writs are distinct procedural devices and implicate different

legal    standards.          The     court        of    appeals       may      permit      an

interlocutory appeal if it determines that immediate review of a

non-final order will "[m]aterially advance the termination of

the     litigation     or      clarify          further     proceedings            in    the

litigation,"       "[p]rotect       the    petitioner          from    substantial         or
irreparable    injury,"        or     "[c]larify          an     issue        of   general

importance    in     the    administration         of     justice."           Wis.      Stat.
                                            3
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§ 808.03(2)(a)-(c).               By       contrast,       a       "supervisory

writ . . . serves a narrow function:              to provide for the direct

control of lower courts, judges, and other judicial officers who

fail   to   fulfill    non-discretionary      duties,     causing    harm    that

cannot be remedied through the appellate review process."                   State

ex rel. Kalal v. Circuit Ct. for Dane Cty., 2004 WI 58, ¶24, 271
Wis. 2d 633, 681 N.W.2d 110.

       ¶122 Although    both   legal   standards       account    for   possible

irreparable harm in the absence of extraordinary review, they

otherwise diverge:       a request for interlocutory review focuses

on efficient resolution of the litigation, whereas supervisory

writ proceedings evaluate whether a judicial officer complied

with obligations under the law.            A circuit court's actions may

not    warrant   interlocutory     review     on    the   merits     but    could

nevertheless require correction by an appellate court exercising

its supervisory authority.

       ¶123 Newtek     presents    solely     a    conclusory       claim    that

petitioning the court of appeals for a supervisory writ was
impractical, and as the majority correctly holds, we should not

"cast doubt on the continued vitality of the 'impracticality'

requirement."        Majority op., ¶44.           Because Newtek failed to

follow the statutory procedure for issuance of a writ, this

court should deny the petition.

                                       B

       ¶124 Also problematic for Newtek is its substantial delay

in raising any objection to the Reference.                Even if this court
were to look past Newtek's failure to comply with the procedures

                                       4
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in   Wis.    Stat.     § (Rule) 809.71,        Newtek's      year-long      compliance

with the Reference undermines the merits of its petition.                              To

obtain a supervisory writ, a party must make four showings:                          (1)

appeal      is    an     inadequate      remedy;       (2)    grave       hardship    or

irreparable       harm    will   result    from      inaction;     (3)     the   circuit

court's duty is plain, and the court violated or intends to

violate that duty; and (4) the request is prompt and speedy.

State ex rel. Two Unnamed Petitioners v. Peterson, 2015 WI 85,

¶80,     363 Wis. 2d 1,     866 N.W.2d 165         (citing       Kalal,     271
Wis. 2d 633, ¶17).

       ¶125 Here,      Newtek    fails    to       satisfy   the   fourth     criterion

because its request was neither prompt nor speedy.                          Instead of

challenging the Reference on the record as soon as the circuit

court entered the order, Newtek assented to discovery under the

referee's        supervision     for     months,      accepting     many      discovery

rulings     without      objection.       Indeed,      Newtek's     only    objections

came when it received unfavorable decisions from the referee:

it objected to some of the referee's discovery decisions under
the procedure specified in the Reference, and it aggressively

challenged the referee's summary judgment determinations in the

circuit court, the court of appeals, and now this court.

       ¶126 Newtek's        delayed        objection         to     the       Reference

illustrates why a writ will issue only when a party makes a

prompt and speedy request for relief.                        In the absence of a

timely-request           requirement,          a      strategic          party      could

intentionally wait to file a petition for a writ until after the
referee made an adverse decision.                     That way, the party could

                                           5
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accept    favorable          decisions       while    preserving          a        method       of

collaterally attacking an unacceptably unfavorable one.                                   If the

party    suspected      or    knew    from    the    outset      that     constitutional

deficiencies      marred      the     reference,     it    could    then           rely    on    a

supervisory writ to secure a "do-over," essentially using the

supervisory writ as an interlocutory appeal——even though a "writ

of supervision is not a substitute for an appeal."                                 Kalal, 271
Wis. 2d 633, ¶17 (quoting State ex rel. Dressler v. Circuit Ct.

for Racine Cty., 163 Wis. 2d 622, 630, 472 N.W.2d 532 (Ct. App.

1991)).

       ¶127 Nothing prevented Newtek from petitioning the court of

appeals for a supervisory writ as soon as the circuit court made

the Reference.          Newtek's counsel acknowledged as much during

oral    arguments    before         this   court.      The    serious          problems         we

identify with the Reference suggest Newtek likely possessed a

meritorious claim, had it promptly pursued a remedy.                               But it did

not do so.       Because Newtek instead challenged the Reference only

after    losing    on     summary     judgment,      it    failed       to     timely       seek
relief.     This failure, coupled with its failure to seek relief

from the court of appeals before petitioning this court for a

supervisory       writ,      warrants      denial    of    its     petition          and     the

retrospective relief it requested.

                                             II

       ¶128 Despite          the    procedural       deficiencies             in     Newtek's

petition,    I    agree      with    the   majority       that    this        court       should

address the merits of the constitutional questions raised by
this Reference.         See Kalal, 271 Wis. 2d 633, ¶26 ("Although the

                                             6
                                                                  No.    2016AP923-W.rgb

Kalals have failed to establish the existence of a plain duty

and are not entitled to a supervisory writ, we will address the

statutory     interpretation      question         presented     by     this    case.").

Referees offer circuit courts a valuable tool for efficiently

allocating     court    time    and    resources,       so    questions        about    the

constitutionally permissible scope of an order of reference are

likely   to    continue    to    arise.         After     thorough       briefing       and

argument by adverse, interested parties, this petition offers

the court an opportunity to evaluate a particular order for

compliance with the referee statute.                  Examining the proper use

of statutorily permissible referees allows us to give guidance

to   courts     and     litigants,       thus      mitigating         uncertainty       in

Wisconsin     courts.     In    support       of   that      endeavor,    I     write   to

supplement the already comprehensive discussion in Part III of

the majority opinion.

     ¶129 Our evaluation of the Reference at issue here must

begin with the text of Wis. Stat. § 805.06, which authorizes the

appointment     of    referees,       establishes       the    circumstances       under
which a circuit court may make a reference, and delineates some

powers and tasks that a circuit court may permissibly delegate.

"A court in which an action is pending may appoint a referee,"

§ 805.06(1), but "[a] reference shall be the exception and not

the rule," § 805.06(2).           Subsection (2) goes on to explain when

a court may appoint a referee:

     In actions to be tried by a jury, a reference shall be
     made only when the issues are complicated; in actions
     to be tried without a jury, save in matters of account
     and of difficult computation of damages, a reference

                                          7
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    shall be made only upon a showing                                  that      some
    exceptional condition requires it.
Subsection       (3)    then    lays      out    the    referee's      powers     and    the

circuit court's ability to describe and restrain them:

         The order of reference to the referee may specify
    or limit the referee's powers and may direct the
    referee to report only upon particular issues or to do
    or perform particular acts or to receive and report
    evidence only and may fix the time and place for
    beginning and closing the hearings and for the filing
    of   the   referee's   report.       Subject  to   the
    specifications and limitations stated in the order,
    the referee has and shall exercise the power to
    regulate all proceedings in every hearing before the
    referee and to do all acts and take all measures
    necessary or proper for the efficient performance of
    duties under the order.    The referee may require the
    production of evidence upon all matters embraced in
    the reference, including the production of all books,
    papers, vouchers, documents, and writings applicable
    thereto. The referee may rule upon the admissibility
    of evidence unless otherwise directed by the order of
    reference and has the authority to put witnesses on
    oath and may personally examine them and may call the
    parties to the action and examine them upon oath.
    When a party so requests, the referee shall make a
    record of the evidence offered and excluded in the
    same manner and subject to the same limitations as a
    court sitting without a jury.
Wis. Stat. § 805.06(3).              Under the limited circumstances when a

reference    is    appropriate,           § 805.06      affords   the       circuit     court

significant       flexibility        in    assigning      responsibilities         to    the

referee.

    ¶130 When          making   a    reference         under   Wis.    Stat.     § 805.06,

however,     a     circuit       court          must    remain      mindful       of     its

responsibilities under the Wisconsin Constitution.                            Cf. Marbury

v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803) ("[A]n act of the
legislature,      repugnant         to    the   constitution,         is    void.").      In

Wisconsin, "The judicial power of this state shall be vested in
                               8
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a unified court system consisting of one supreme court, a court

of   appeals,       a    circuit      court,         such    trial       courts           of    general

uniform statewide jurisdiction as the legislature may create by

law,       and     a      municipal         court           if      authorized                 by      the

legislature . . . ."            Wis. Const. art. VII, § 2.                          Analogizing to

the federal Constitution, this court has explained that "the

judicial power is the power to hear and determine controversies

between parties before courts," which means that "the judicial

power      is    the     ultimate     adjudicative           authority              of    courts        to

finally         decide      rights        and        responsibilities                    as     between

individuals."             State     v.     Williams,          2012 WI 59,           ¶36,    341
Wis. 2d 191, 814 N.W.2d 460.

       ¶131 As      the    majority       describes,             "[a]    referee              may    share

judicial        labor,    but   the      Order       of    Reference         may     not        allow   a

referee to assume the place of the judge" by exercising the

judicial        power     the   constitution              confers       on    circuit           courts.

Majority op., ¶82.              The judicial power vested in the circuit

courts by the constitution places an outer limit on the scope of
permissible delegation to referees.                         For help identifying that

constitutional boundary, federal appellate court decisions offer

two key insights.6
       6
       "It is a well-settled principle of Wisconsin law 'that
where a Wisconsin Rule of Civil Procedure is based on a Federal
Rule of Civil Procedure, decisions of the federal courts, to the
extent they show a pattern of construction, are considered
persuasive authority.'"     J.L. Phillips & Assocs. v. E & H
Plastic Corp., 217 Wis. 2d 348, 356, 577 N.W.2d 13 (1998)
(quoting Neylan v. Vorwald, 124 Wis. 2d 85, 99-100, 368
N.W.2d 648 (1985)). The current language of Wis. Stat. § 805.06
parallels the language of Rule 53 as it existed before 2003.
See Fed. R. Civ. P. 53, 28 U.S.C. 782 (2000) (amended 2003).

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       ¶132 First, as the majority notes, an order of reference is

an improper delegation of the judicial power when it grants the

authority        to    make     dispositive      decisions.          See       majority    op.,

¶67 n.35, ¶¶72-74.              "The use of masters is to aid judges in the

performance           of     specific       judicial        duties . . . and         not       to

displace the court."                La Buy v. Howes Leather Co., 352 U.S. 249,

256 (1957) (internal quotation mark omitted) (quoting Ex parte

Peterson, 253 U.S. 300, 312 (1920)).                         A court issuing an order

of reference must ultimately retain the adjudicative authority

implicated by the judicial power derived from the applicable

constitution.              See United States v. Microsoft Corp., 147 F.3d
935,   954   (D.C.           Cir.   1998)     ("The   concern      about       nonconsensual

references turns on the determination of rights . . . .                                   It is

for this reason that special masters may not decide dispositive

pretrial motions."); Stauble v. Warrob, Inc., 977 F.2d 690, 696

(1st Cir. 1992) ("[R]eference of fundamental issues of liability

to a master for adjudication is not consonant with either Rule

53   or    Article         III.");     Burlington       N.    R.R.      Co.    v.   Dep't      of
Revenue, 934 F.2d 1064, 1072 (9th Cir. 1991) ("[T]he district

court's 'rubber stamp' of the master's order is an inexcusable

abdication of judicial responsibility and a violation of article

III of the Constitution."); In re United States, 816 F.2d 1083,

1091      (6th        Cir.     1987)    ("[E]ven       though        the       reference       of

nondispositive             discovery    matters       may    be   justified . . . ,            it

will   be    the       extremely       rare    case    where      the      reference      of   a

dispositive matter (be it a pretrial motion for summary judgment
or the actual trial) will be appropriate.").

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       ¶133 Second,    the    exceptional      circumstances             justifying    an

order of reference do not exist where the trial court is merely

busy, dealing with a case involving a large number of parties,

or    working   with   an    unfamiliar      area     of    law.         Most    federal

appellate courts point to the Supreme Court's opinion in La Buy

v. Howes Leather Co., 352 U.S. 249 (1957), which made quick work

of several proffered justifications.                 The Court first concluded

that "congestion [on a court's docket] in itself is not such an

exceptional circumstance as to warrant a reference to a master."

Id. at 259.       Neither did the Court accept the case's "unusual

complexity      of . . . both     fact       and     law"    as     an     exceptional

circumstance,            observing                 that,            "[o]n             the

contrary, . . . [complexity] is an impelling reason for trial

before a regular, experienced trial judge rather than before a

temporary substitute appointed on an ad hoc basis."                        Id.    "Nor,"

the Court added, "does . . . the great length of time [that]

trials will require offer exceptional grounds."                    Id.

       ¶134 In the decades since the Supreme Court decided LaBuy,
federal appellate courts have maintained a high bar to meet the

exceptional circumstances requirement.                     See, e.g.,        Prudential

Ins. Co. of Am. v. U.S. Gypsum Co., 991 F.2d 1080, 1086-87 (3d

Cir. 1993) (observing that no special masters employed in two

cases involving, respectively, 24 foreign electronics producers

and    30,000   school      districts    across      54     jurisdictions        (first

citing In re Japanese Elec. Prods. Antitrust Litig., 723 F.2d
238 (3d Cir. 1983) (subsequent history omitted); then citing In
re Sch. Asbestos Litig., 977 F.2d 764 (3d Cir. 1992))); Stauble,

                                        11
                                                               No.   2016AP923-W.rgb
977 F.2d at 695 (declining to "forge an 'exceptional condition'

test for cases of blended liability and damages"); In re United

States, 816 F.2d at 1089 ("[T]he interest in a quick resolution

of the case is simply an alternative way of asserting calendar

congestion and the possibility of a lengthy trial as exceptional

conditions . . . ."); Madrigal Audio Labs., Inc. v. Cello, Ltd.,

799 F.2d 814, 818 & n.1 (2d Cir. 1986) (rebuking trial judge for

appointing special master because the judge stated he did not

"understand anything about the merits of any patent or trademark

case" and was "not about to educate [himself] in that jungle");

Jack Walters & Sons Corp. v. Morton Bldg., Inc., 737 F.2d 698,

712 (7th Cir. 1984) (concluding no exceptional condition existed

in case involving "several thousand pages" of documents when

trial court felt it "did not have time for a long trial").

    ¶135 In light of these principles, the deficiencies in the

Reference here are readily apparent.                When informing the parties

of its intent to appoint a referee, the circuit court cited the

450 cases on its docket, explaining that it did not want "to
expend   a   lot   of    time   dealing      with   [the    parties']    discovery

bickering"    or    be    a     "personal     slave    to    [their]     discovery

disputes."     The court did not want to "waste precious court

time" that it could "give to other cases."                    On its face, the

final Reference granted the referee "the full authority of the

[c]ourt to hear and decide, subject to [c]ourt review . . . ,

any other matters assigned . . . by the [c]ourt.                      All motions

filed,   whether    discovery      or   dispositive,        shall    initially   be

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heard and decided by the [referee], subject to review processes"

as described elsewhere in the Reference.

       ¶136 Put plainly, because the circuit court was busy and

did not want to deal with the parties, it gave the referee

authority     over       all      matters          in     the       litigation——including

dispositive      pretrial      motions.            That       delegation          "amounted      to

little    less    than      an       abdication          of       the     judicial       function

depriving the parties of a trial before the court on the basic

issues involved in the litigation."                      LaBuy, 352 U.S. at 256.

                                            III

       ¶137 It    is    with      regard      to        invocation         of     this      court's

constitutional         superintending         authority             that    I     depart        most

significantly        from      the     majority          opinion.               The      Wisconsin

Constitution         provides:         "The        supreme              court     shall         have

superintending and administrative authority over all courts."

Wis.   Const.    art. VII,        § 3.        This       court      has     interpreted          its

superintending         authority       as     "a        grant       of     power"        that    is

"unlimited in extent" and "indefinite in character," State v.
Jerrell C.J., 2005 WI 105, ¶40, 283 Wis. 2d 145, 699 N.W.2d 110

(quoting State v. Jennings, 2002 WI 44, ¶13, 252 Wis. 2d 228,

647 N.W.2d 142), although the precise scope of that authority is

not without controversy, see id., ¶146 (Prosser, J., concurring

in part, dissenting in part).

       ¶138 Superintending           authority          is    a    power    that      the     court

does not and should not use lightly.                          Arneson v. Jezwinski, 206
Wis. 2d 217, 226, 556 N.W.2d 721 (1996) (citing In re Phelan,
225 Wis. 314,     321,      274 N.W. 411       (1937)).            At   its    core,

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superintending       authority     "enables         the   court    to    control     the

course of ordinary litigation in the lower courts of Wisconsin."

Id. (first citing Phelan, 225 Wis. at 320-21; then citing State

ex rel. Fourth Nat'l Bank of Phila. v. Johnson, 103 Wis. 591,

613, 79 N.W. 1081 (1899)).             Similar to the court's standard for

issuance of a supervisory writ, "to invoke the superintending

power to correct an error of the trial court, it is necessary to

establish that an appeal from a final judgment is inadequate,

and that grave hardship will follow a refusal to exercise the

power."       State ex rel. Hutisford Light, Power & Mfg. Co. v.

Grimm, 208 Wis. 366, 371, 243 N.W. 763 (1932); see also Jerrell

C.J., 283 Wis. 2d 145, ¶145 (Prosser, J., concurring in part,

dissenting     in    part)     ("The    purpose      of   this     ['superintending

control over inferior courts'] jurisdiction is to protect the

legal   rights      of   a   litigant    where      the   ordinary       processes    of

action, appeal and review are inadequate to meet the situation,

and where there is need for such intervention to avoid grave

hardship      or    complete     denial        of    rights."      (alterations      in
original) (quoting John D. Wickhem, The Power of Superintending

Control of the Wisconsin Supreme Court, 1941 Wis. L. Rev. 153,

161-62)).

    ¶139 Retrospective             application             of       this       court's

superintending authority is not appropriate in this case because

Newtek's delay in seeking relief from the Reference discredits

its claim of grave harm.               By objecting to the Reference only

after   the    referee       decided    the    motion     for     summary    judgment,
Newtek showed its hand: it challenges the referee's authority as

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a     means    to     achieving            a        different    outcome         on    the     merits.

Presumably, Newtek would not have pursued extraordinary relief

to    vacate    the      Reference             if     the    referee      had    decided       summary

judgment       and       the     other          challenged          discovery         decisions      in

Newtek's favor.                Those decisions present questions reasonably

handled by means of an ordinary appeal, and Newtek should not

now receive extraordinary relief when it submitted to months of

decisions by the referee, protesting only after receiving an

adverse result.

       ¶140 At       the       same        time,        the     circuit         court's      improper

delegation          of     the     judicial             power       reflects      an      undeniable

constitutional deficiency in the Reference.                                    Allowing the case

to proceed under the Reference without alteration could lead to

the     nonsensical           result           of     the    parties      completing         pretrial

proceedings under an order that this court declared partially

unconstitutional.                To    the          extent    any    additional         proceedings

occur    under       the      Reference,             the    right    of    all    parties       to   an

adjudication by a circuit court vested with the judicial power
under    the    Wisconsin          Constitution               remains     squarely        at    issue.

Accordingly, prospectively vacating the order to the extent it

contravenes          the       Wisconsin             Constitution         is     an    appropriate,

limited       application             of        our     superintending           authority          over

Wisconsin courts for the purpose of preserving the rights of

these parties going forward.

                                                      IV

       ¶141 On       the       whole,           Wisconsin's          circuit      courts       do    an
admirable      job       of      resolving            complex    disputes         amidst       crowded

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dockets, and the rules of civil procedure permit them to appoint

a referee to facilitate expeditious resolution of some of those

cases   under      exceptional   circumstances.          But    when     making    a

reference as allowed by rule, the circuit courts must heed their

responsibilities       under     a   higher      authority,      the     Wisconsin

Constitution.        By improperly delegating judicial power to the

referee, the Reference at issue here transgressed an important

constitutional limitation.           Although I would deny the petition

for a supervisory writ because Newtek did not timely present it

in a procedurally proper manner, I conclude that the Reference's

constitutional infirmities require a limited exercise of this

court's     superintending       power    to     prospectively        vacate      the

Reference     to     the   extent    it       denies   these     parties       their

constitutional rights.         I therefore respectfully concur in part

and dissent in part.

    ¶142 I am authorized to state that Justice DANIEL KELLY

joins this opinion.

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