On this episode, host Paul W. Grimm talks with retired U.S. Magistrate Judge John Facciola about his ongoing work as a special master in complex litigation cases. They discuss the origins of the term “special master,” why certain complex cases (especially mass tort MDLs) warrant special masters, their role in these cases, and how they can serve as effective resources to counsel and the district court judge. Their conversation emphasizes that, when used effectively and creatively, special masters can reduce the cost of federal litigation to expand access to justice.
BACKGROUND
Rule 53 of the Federal Rules of Civil Procedure authorizes judges to appoint a “master” to assist the court when exceptional conditions prevent the assigned judge from handling all matters associated with a case. Commonly referred to as “special masters,” these judicial adjuncts address pretrial and posttrial matters that “cannot be effectively and timely addressed by an available district judge or magistrate judge.” Frequently they oversee the discovery process and resolve disputes when they arise, supervise settlement discussions, perform accountings, or compute damages. The order appointing the master must direct them to proceed with all reasonable diligence, and clearly state the scope of their duties, including any limits to it.
Paul W. Grimm: Welcome to Order in the Court, the podcast that explores topics that enable lawyers and judges to more effectively, efficiently and fairly resolve civil and criminal cases. And in doing so, minimize the burden and expense on the parties.
My name is Paul Grimm. I’m a retired United States district judge and the director of the Bolch Judicial Institute at Duke Law School. My guest today is my dear friend, retired U.S. Magistrate Judge John Facciola. Judge Facciola and I met in “Baby Judge School” back in 1997, and we have worked closely together ever since then. John, welcome.
John Facciola: Good to be with you.
Paul W. Grimm: It’s a pleasure to have you, my friend. Today, we’re going to discuss the use of special masters, or as Federal Rule of Civil Procedure 53 provides, masters in civil cases.
John, since you retired from the bench, you have had rather extensive experience serving as a master in a complex multidistrict litigation case that I presided over before I retired. And previously, when you were a U.S. magistrate judge for the District of Columbia, you performed many of the same functions that special masters perform with respect to numerous cases in that court Now, I suspect that most of our listeners have some familiarity with the work that masters do in civil litigation in federal court. They most likely have heard the title referred to as “special masters,” which was the term used at the common law. But as you know, in 2006, the Federal Rules of Civil Procedure in the Amendments to Rule 53 shortened the official title to “masters.” But for the sake of this episode, use of the familiar phrase “special masters” continues to be prevalent, we’ll go ahead and use that.
Now, before we jump into your experience and your thoughts about the most effective use of special masters in civil litigation in federal court, I think I’d like to set the stage by reviewing the criteria for appointing special masters found at Federal Rule of Civil Procedure 53.
Rule 53, John, makes it clear that the master should not be appointed if a magistrate judge is available to perform the duties. When you were a judge, if I recall correctly, you did perform duties — whether the title special master was given to you or whether it was just assigned to you — very similar to those that you’re now performing as a special master following your retirement.
Can you give us an idea about the kind of cases that you handled when you were a magistrate judge that gave you the experience to step right into the current function you serve as a special master?
John Facciola: Well, the first kind of cases was the referral of discovery disputes to the magistrate judge. I suppose when we met in “Baby Judge School,” we never knew we’d be talking about machine learning and databases and all that other wonderful stuff. And it turned out in a remarkable way that magistrate judges, because they had no choice, built up a significant expertise in electronic discovery. So, those often came to me. I also did many cases in which the assignment to me was for all purposes. There was not a precise definition of what I was to do. I was to take over the case and handle everything that came up. The third example is where I was specifically told that I should hold an evidentiary hearing and make findings of fact and conclusions of law for submission to the district court judge.
That occurred in very peculiar circumstances in the District of Columbia where foreign governments, such as Iran, would default in cases involving terrorist activity. It fell to me to hold the hearing and recommend the damages that would be awarded against the defaulting party. Then, after I retired, my first special master assignment came from the court of claims, [from] my good buddy Judge Allegra. There are allegations that the Department of Justice has acted improperly. Again, I was directed to hold the hearing and make findings of fact and conclusions of law. So those were the kinds of things I did. But I did preside over discovery disputes in a monster MDL case — very similar to the one you and I had — and it involved freight shipments all over the United States. And regrettably, I understand it’s entering its second decade, but it was unusual because the presiding judge, Judge Friedman, had a very interesting idea. He appointed me to handle all the discovery. He appointed my colleague and fellow magistrate judge, Judge Kay, as the magistrate judge for settlement to see if he could work out a settlement while I did what I had to do. So, in all of them, they were very creative uses, I think, of the special master responsibility.
Paul W. Grimm: I’m going to talk about that with you in just a minute because I think that one of the things, despite the detail in Rule 53, the fundamental idea is that special masters should be used creatively in ways that help them accomplish the goal of the appointment.
We’ll talk about this next aspect a little bit more in just a second, but I think it’s also safe to say that one of the functions that a special master is frequently asked to undertake in civil litigation in federal court is to explore settlement. I know that for the 20 plus years that you served as a magistrate judge, that you handled if not thousands, then at least [hundreds of] settlement conferences as well. So I take it that you had your share of experience trying to bring parties together in some very complex and challenging cases. Am I right about that?
John Facciola: That’s certainly right. We estimated, I did some time studies of myself, and in any given period about 60% of my time was given over to trying to settle cases.
Paul W. Grimm: Let’s jump into the MDL that you and I worked on together. Now because this case is ongoing and you continue to serve as a special master under the supervision of the new district judge, our listeners will understand that you can’t discuss the specifics about any particular matter that you were involved in as a special master, but you can certainly talk about the kinds of things that you were called upon to do and to share your thoughts about best practices.
We can set the stage this way. The MDL was a large data security breach. There were five separate tracks. Each track had its own set of plaintiffs’ counsel and its own set of defense counsel. So we had multiple tranches of leadership. We had many different types of claims, including the largest claims, the consumer claims that brought causes of action, class action cases from all 50 states, each claim having four or five separate causes of action. Some of the tracks were individual claims brought by individual parties. Some cases were pending in the U.S. District Court for the District of Maryland where I was sitting. Others were pending in other jurisdictions and were assigned by the Judicial Panel on Multidistrict Litigation. Before we get into sort some of the specific functions that you performed so capably in that case, [do you] care to comment on the complexity and magnitude of that MDL? Just so we can get some idea about why a special master made so much sense in that case.
John Facciola: Well, the complexity is the fact of what you just said. It’s a moving target. It has so many claims, so many possibilities that have to be pursued and thought about that it is a challenge that is unique. It is unique in the sense that it really demands the constant attention of one human being. It’s not like another case which you can put on a back burner for a while and hope it settles itself. It doesn’t work that way. The MDL is a daily business and must be attended daily or it will quickly get out of hand. So, I think that is the most extraordinary aspect about it. It makes it unique from anything else I have ever handled. To give you an example of what I was talking about, one of the first times I wanted to print [the] I think the names of the lawyers took about 40 pages, which is mind-boggling because it was each firm and all of the people in it. So you learn early on that it just keeps growing. And you have to manage it if you’re going to have any hope of being productive.
Paul W. Grimm: So, I’m going to start with how you were appointed. One of the things that occupied a good deal of my time at the start of the MDL and is so important of getting it from the time that the starting gun goes off, making sure that it’s effective and efficient, particularly when you have five separate tracks that you’re trying to deal with, is you have a lot of conversations with the parties about managing the case. You have to first of all get through the appointment of leadership for the plaintiffs, talk about the phasing of the case and how the most effective way to do it, and I recall in one of those early meetings, that the parties came to me and they said, “We have conferred and we would both like to request that the court appoint a special master to assist. And we’ve conferred and we agree that the special master that we would like to recommend is retired U.S. Magistrate Judge John Facciola.” Well, to say that I was surprised and delighted was an understatement. Of course, they could not have picked a better person for it. Sometimes, though, I’ve been told by other folks that parties may come first to a particular lawyer or retired judge to see if they would be willing to do it before they even go to the court and make the recommendation. I understand from talking with you that nobody contacted you, so this was a surprise to you as it was to me when the parties came forward, is that right? “
John Facciola: That’s true.
Paul W. Grimm: All right, so let’s just jump into it. The key I think to getting the special master off and running correctly is that initial order of appointment. What kind of functions were you tasked with in the MDL. And based on your experience, not just with the MDL but elsewhere, what advice do you have for judges and lawyers about determining the terms of the appointment order? What is it critical to include?
John Facciola: Well, I think it’s critical first of all to decide what the authority of the special master is going to be. In our case, I think the words in the order are “for discovery purposes.” So I was assigned specifically for that. That would be different from the assignments when I was a magistrate judge, which were “for all purposes.” My advice to the judges who are considering doing this would be to think it through with counsel as to what exact authority you want to give. If you want to handle a precise matter, you should say so. For example, if you’re going to get a special master because of that special master’s technical expertise, you want to say that and indicate what your expectations are. Because if you’re going to a hire a Craig Ball or a Maura Grossman to handle a specific discovery issue that has arisen, you must say so they know what they’re doing.
In all other cases, I would be broad in the language such as your language “for discovery” or “for all purposes,” which would work with a magistrate judge but not a special master. So, with a special master, you still have an obligation to define it, but too much precision can be troubling because things are going to happen. And the district court judge has other things to do except to be bothered every 20 minutes as to whether this does or does not fall into the special master’s authority. If that sounds dangerous because you’re giving that person a lot of authority, I would point out if you don’t trust them, don’t appoint that person as special master. Because it was my experience, it has been my experience, things happen. They may not fall precisely in the scope of that. And it is simply easier to handle it under a border grant of authority. And if necessary make a single phone call to the district court judge to double check on that is his or her honor’s intention. So I don’t think it’s a good idea to try to be more precise than the subject matter will permit you to be.
Paul W. Grimm: And I think that is wise advice because one of the issues that sometimes eludes folks when they’re trying to conceive of what the special master is to do, is they’re focused on a particular phase of the litigation rather than the whole arc of what’s going to happen. And so if they too narrowly circumscribe what the special master is supposed to do, then that flexibility to address things that come up and take advantage of opportunities to cut costs and to be effective can be a problem. And my experience has been that special masters are loathe to do anything that is not clearly identified in the order, and you don’t want to be constantly going to the district court with a motion to amend the order to try to change it.
So the idea, if I hear you correctly is, think clearly from the very beginning, make it clear but also make it as broad as you think will be necessary to give the latitude to the special master because you’re not appointing that person if you don’t have the confidence in them to handle what needs to be done to make that case management efficient, is that correct?
John Facciola: That’s exactly right, and I think it will pay off in the long run with a very smooth transition from up duties as they go back and forth. The thing I would point out is special masters who have not been judges — that is working lawyers or other working professionals — they are not going to be used to, as I was as a magistrate judge, to how a judge exercises authority. So, as you said judge, they might be troubled to go an inch further than they think they can go. One of the ways to give them what they need to do is to make the grant of authority broad. They will respect, that and they will appreciate it.
Paul W. Grimm: What I like to talk about now is the language in Rule 53, which I’ve always thought was kind of tantalizing in that Rule 53 says that among the things that the order is to address [are] the circumstances in which the special master can have ex parte communications, either with the court or with other parties.
Now, when you read that, there’s a tendency to be taken aback by that because as judges were schooled from day one that you can’t have ex parte communications with the parties — certainly not about anything substantive that may affect the outcome of the case. And so, you have a rule that doesn’t tell you when it would be appropriate for a magistrate judge serving in that role if they’re a serving judge or a special master after they’ve retired or if they’re a private attorney. It doesn’t specify what kinds of circumstances would be appropriate for ex parte communication between the special master in the court and which would not be appropriate. So, I’d like to have you just share your thoughts about ex parte communications. Of course, the advisory committee note says that ex parte communications are disfavored but that they are permitted, and if permitted, they should be at least referenced in the appointment order.
Can you help us understand what kinds of circumstances might be appropriate for ex parte communications, what would be not appropriate, so we can get a triangulation about what that somewhat cryptic language might really mean in practice?
John Facciola: Well, I think the first thing is always to maintain the confidence of the lawyers with whom you’re dealing and never be tempted to speak about what they have told you in confidence to the district court judge because if you breach that confidence they will never trust you again. So, the special master has to be sensitive. There are certain conversations he has had with counsel, which he shouldn’t fairly communicate with the district court judge, lest they be misconstrued as blaming one of the lawyers for revealing something that the lawyer didn’t want the district judge to know. So I think there has to be a sensitivity that you are having these informal conversations with counsel.
During the course of that conversation, for example, you may think that we hit a point here where it might be valuable for you to step back a bit and give some thought to see if you want [the special master] to hold settlement discussions.
Now, that’s the last thing on earth I would ever tell the district court judge about. First, because it raises expectations. And second, because I just spoke to counsel about it, and counsel may not want the district court judge to know they are interested in doing that now. So, in that particular situation, the lawyers may come to you and say, “Can you see if you could get the district court judge to stay her hand so we can talk to you about settlement.” A quick conversation with a district court judge that says, “Judge, would you mind just not handling that motion for a little while, I’ve got something to do with counsel?” That should be enough to tip off to the district court judge that there is a valid reason to discuss this matter with him or her.
Paul W. Grimm: So, if I understand you correctly, the appropriate time to have ex parte communications with the parties is in that what you say, “settlement role.” It is very, very, very clear that if you are trying, if the parties have come to you to ask your help in trying to see if the case can be settled, that process requires an effective mediator to speak privately with each side to get their sense of what their objectives are, their concerns are, what their range of possibilities might be before going to the other side and not revealing confidential information but exploring what their thoughts are to then determine the most effective way to proceed. But there’s that fine line that you can’t cross when you’re settling cases with parties about disclosing from party one to party two information that party one doesn’t want disclosed. And that’s key to making sure that before you want to disclose something that you clear that with the party that you’ve discussed it with.
Then as you’ve said, when you let the district judge know, “Hey give me some time before we rule on this, I need to explore some things with the parties.” That would be the type of appropriate ex parte communication with the trial judge because you’re not discussing anything substantive. It would be improper, for example, to say, “Well they have a dispute about this subject and one side’s argument is this and the other side’s argument is that. That seems pretty weak to me, and I’m going to have a hearing and give a recommendation.”
That is the off-limits area that you wouldn’t get into. Is that how you try to triangulate that?
John Facciola: Yeah, and then you also have to be sensitive to [the fact that] sometimes emergencies are going to occur. We had one situation where they wanted to take a deposition in India, and we all did not realize you need an order from the high court [in India] to do it. It was a Thursday night. Just to make it even more interesting, one of the poor guys they wanted to depose had COVID and was in India. All right, and if you remember, I picked up the phone and we chatted because I knew it may need emergency action by you over the weekend. So, I told you what the problem was, got back to them. We resolved it, and I came to you and got the order I needed to go forward. That’s going to happen.
In many respects, the model rules of professional responsibility and the section of them that deals with judges is really very unrealistic in that if you applied it without some nuance to the relationship between the special master and the district court judge — that has to be flexible and will in no way invade anybody’s privacy or cause the district court judge to think less of any lawyer. You would never do that, but emergencies are going to happen, and you may have to talk. And to condemn that out of hand, it’s just silly.
Paul W. Grimm: I think that most of the case law that I’m familiar with where an issue has been raised to an appellate court about whether ex parte communication was [appropriate] — the appellate courts found that in those instances they involved the kind of exigent circumstances that you made reference to that justified it — particularly when the care was taken not to disclose anything substantive that would involve a ruling that the court had to make, so that the court never had any sort of information about a dispute and the merits of the dispute but rather was advised of procedures that needed to be addressed.
John Facciola: The rules of judicial conduct speak to the legitimacy of the magistrate judge and therefore the special master of speaking to one side without the other present in settlement discussions. So I think we’ve all been around enough settlement discussions to know that they’re very much like the high school dance where the first half hour is deciding whether the boys will ask the girls to dance or the girls will ask the boys to dance. You are going to get a phone call from a lawyer and saying, “Judge or special master, could we talk?”
“What’s the problem?”
“Well, I think I may be able to talk turkey to the other side, but I don’t want them to think that I’m ready to throw in the towel. Can you help me?”
The answer to that case is yes. You figure out how to talk to the other side without putting that person in jeopardy that he made the first step. This is a nuanced thing. It requires judgment, and it may require you to speak to some people ex parte every once in a while, but keep your mouth shut when the district court judge asks you what that person said.
Paul W. Grimm: One of the most important functions that you served in the MDL was to superintend the discovery process. I think back on this, and it causes me to scratch my head when I realized how complicated this case was. We had one track where there were banks that were trying to recover what they claimed were costs and expenses they incurred as a result of what was alleged to have been done improperly by the defendants. We had a city that was trying to enforce one of its ordinances involving privacy of the residents of that city. We had an enormous [number of] consumer claims. And we had a derivative action where there was discovery. And one of the tracks was a private securities [litigation]reform act case where there could be no discovery until motions practice had concluded. How did you go about structuring five different tracks worth of discovery? And what procedures did you put in place to keep track of something as enormous as this?
John Facciola: It was my experience in the years I worked on this that most of the battling was going on in the consumer track, which had a lot of different lawyers. We jointly reached an understanding that instead of calling me when something arose, we would meet every week on Thursday afternoons, and we would meet by virtue of Zoom. The purpose of that meeting was just to see what was happening, and we began to develop an agenda because we would discuss something in the first meeting and then say that somebody had to do something by the next meeting. So, at the next meeting naturally we took that up. I would insist on that. I would insist that as many counsels as could possibly make it be on the phone with me, and I would insist that we go through an agenda so we had responsibilities given to everyone.
I also found that it was extremely valuable to hit the button I’m looking at that says record. I would record each of those. On occasion, they would be transcribed for me using a kind of AI — it’s very simple to do that. But better, I would listen to the recording of the prior week an hour or two before the meeting of the new week so that I would have in my own mind all that we did. There were several purposes of that. One, would be to keep us on track. The second one was to keep small problems from becoming big problems. So if somebody said, “We have to take these depositions next week and this person is not available but I’m available,” I would get into the nitty-gritty of finding a date that people could work out and bang heads together until we got one. So, the meetings we were holding served the purpose simply of keeping us on track but also of permitting me to resolve problems before they got any bigger than they did.
And I borrowed that from what I had done in a former MDL because I had found it so useful. I should add the motivation to do it actually came from counsel to me as to whether we could do it. It was also very useful in the sense of my getting to know them and their getting to know me. I think it’s very important for the special master to [not] have a bad case of what I used to call “the robe,” i.e., I’m a judge, and I descend from heaven, and I speak, and then I go back. It really requires hands-on treatment with professionals who know what they’re doing, and treating them maturely and professionally and kindly at times paid off immeasurably in getting done what we had to get done.
You set some tough deadlines, and you were not to be trifled with when those deadlines were not kept. So the heart and soul of what we did was try to keep everybody in a position to meet the deadlines you had set because we were all desperately conscious of the fact of getting finished when we were supposed to finish. I can’t emphasize more strongly than I’m trying to do now how important those deadlines are because MDLs have a way of sprawling. They’re like eating Jello with a fork. They just keep going on and on. If you don’t say, “Okay, we’re going to do this by Wednesday and finish,” you’re doomed because all you will be doing will be holding endless meetings for agendas that breed another meeting with another agenda. You want to get things finished. And I think that’s absolutely crucial.
Paul W. Grimm: Well, one of the things that you did that I was so impressed with is a technique that I tried to use in my cases that I handled without a special master or when I was a magistrate judge before I became a district judge. As you know, no matter how professional lawyers are and how skillful and how responsible they are in trying to avoid unnecessary disputes, there will be discovery disputes that come up. There will be a need for the parties to be able to brief it up and to put their positions in writing and get the special master to give a ruling.
One of the challenges that you have under the Federal Rules of Procedure is that they give an amount of time to respond to motions, and if you have a motion filed and someone takes two to three weeks to respond to the motion and someone then takes two to three weeks to reply, then you’ve got a month that has gone by while this dispute has not been resolved. It’s not unusual to have two or three disputes at the same time.
One of the things that you did that I thought was so effective, I’d like you just to share with our listeners, is you got the parties to agree to brief letter submissions, two or three pages, single space with an initial letter and a response. You could ask for a reply if you wanted one and short deadlines. But then the thing that most impressed me was you put yourself under the toughest time restriction of anybody in the case. You imposed upon yourself an obligation to rule in an extraordinarily fast time. Talk about how you did that. This was not easy for you to do, but I think it had enormous impact on the efficiency of the case and the respect that the parties had for your commitment to helping them move the case forward.
John Facciola: Thank you, and in terms of what the lawyers did you had imposed a briefing in the form of letters. And I always recall the wonderful advice by the columnist George Will, which is that a writer’s best friends are a page limitation and a deadline. They are, so we had both.
I’m smiling because being lawyers, you got to love them, when we said three pages, you may have noticed, they had very small margins and wrote with the smallest font. So, fortunately, computers permit me to enlarge that or else I would’ve gone blind. So, the first thing was that the idea that this is a discovery dispute. It’s not Brown vs. the Board of Education. It should be able to be done in a few pages.
Now remember, we can do it quickly. If you really believe it would help the meeting move along faster and you want to discuss it at our next meeting in the form of a mini hearing, we can do that as well. So please get that stuff in when I say it gets in, and then I can go to work.
I resolved myself early on that — in the spirit of [John] Paul Jones who never asked his men to do what he would not do — that it would be not fair of me to have short deadlines and short page limitations and not impose them on myself. So, I kept a very careful record of when I got something and had a deadline. I don’t think I ever got anything to you and to them more than 10 days after the last filing, and I held myself to that deadline. That worked very, very well.
I think it’s crucial that the special master communicate to the counsel that he or she has skin in the game, that I am as anxious as you are to finish this on time. To that end, what you get from me will not be Brandeis — he used to have 15 drafts, okay? It’s not Brandeis, but it’s a function of my experience and my research, and I hope it’s useful. And that worked very, very well.
You have to appreciate that counsel are not robots. They’ve got families. They’ve got other obligations and so forth, so you have to work with them. A day here, a day there isn’t going to kill anybody, but if you are reasonable, you will find a ready compliance with reasonable deadlines, and that’s all anybody can ask for. That was crucial, too. Not to be imperial, not to say, “Well the federal rules provide 14 days and seven days.” That’s really not what we’re about here. We’ll never get finished. This is a discovery dispute. Now, for the substantive matters that [go] before Judge Grimm, that’s a different ball game. But here, let’s bear in mind what we’re doing.
Paul W. Grimm: Well, what’s interesting to me is that my knowing that you had imposed upon yourself that same obligation to rule in a very short period of time [caused me to feel] the same obligation to try to do that. Now, I’m not sure my track record was as remarkably good as yours. I may have taken a little bit longer in some instances than the 10 days, but I know that I was mindful of that as well. When the parties were working their hardest to try to work with you to get what you needed within the time limits that you were imposing, and you were imposing upon yourself that same obligation to make your recommended findings and rulings, when there were challenges — it wasn’t very often, and when there were challenges, they were usually to one part, not to the entire thing — [then I held myself] to a similar tight schedule and tried to rule as quickly as possible. So this is one of those things where not only did your professionalism inure to the benefit of the parties, but I think it also made me a better district judge in handling those as well.
We’ve mentioned the lawyers a lot. I want to just take a moment and pause here. The relationship that a special master develops, I think, with the parties in the case is critical to the success or failure of the effort of the special master. I know I said this on the record many times, so I’m not afraid of saying it here in what will be a publicly disseminated fashion, but the lawyers in this case were phenomenal. They were so skillful. They were so experienced. They were so professional. They fought on the issues and not on the personalities. When they fought, they generated light but not heat. It was a privilege to watch lawyers this good operating. That said, they were all single-minded and tough in the way in which they approached it.
Can you talk about how the special master needs to develop a relationship with the lawyers as they’re doing their job and your observations of how essential it is to [their] success to have a good relationship with the lawyers?
John Facciola: Well, it’s absolutely crucial. First of all, please bear in mind that these lawyers, as you say, are exceptionally exceptional, but they also can bring and do bring to their task remarkable resources that can be very valuable to the special master. I mean the work is going to be excellent, and if you need an exhibit, for crying out loud, it’ll be here by FedEx in a half an hour. They know what they’re doing and they are not afraid to put the resources on the case that it deserves. That is crucial that you have that understanding that they are doing that, and this is a crucially important thing that requires the allocation of resources to it that they did.
In terms of dealing with the lawyers, I deal with them professionally, but I also remember they’re human beings. So I mean we took a minute to congratulate one on the birth of his child. He also had become a partner, and I teased him about that, and then we moved on. So I just felt always that I was dealing with people who knew what they were doing and with whom I could become a friend.
As I say, you’re not mother superior — leave the robe home. Bear in mind these cases are brutal. They can just tear you up at knots. They’re just so broad. They’re here, they’re there. They’re everywhere. Everybody is involved in trying to strangle them into submission. You have no place to try to be, as I say, imperial. Try to figure out what their needs are, how they can be met, and how you can get them where you want them to go in doing their work so you can get your work done as well. I think it’s a question of professionalism and professional courtesy, and to use a word you so rarely hear in our society anymore, the word “kindness.”
So for example, if I were doing it now, I would be very conscious that we’re entering a holiday period where people are traveling to meet their families. So we might take a day or two more than we otherwise would to accommodate people to do that. I think you’ve got to do that because it’s a unique relationship that flows from a unique obligation. These cases are not like other cases. They never will be, either. And it’s interesting that when they ask judges why they take these cases, one of the main motivations is the excellence of counsel. So you’re going to be given tools to work with that you have to work with them in a professional way.
Paul W. Grimm: I think that everybody involved in the process is trying to play at their best level when they’re dealing with lawyers who are this competent and this skillful, they truly were. So I want to talk about what I think is just a problem that is really, I think, insoluble.
As you know in the management of an MDL, the MDL judge is really assigned to the case for pretrial resolution. The theory is that once you’ve gotten through all the motions to dismiss and the discovery and class certification and expert discovery and any Daubert hearing and you have a case ready for trial, that at that point, the transferee judge will remand the case back to the district where it was originally filed for trial, unless one of two things happens. Number one, the parties agree that the transferee judge will preside over a trial — whether it’s an individual trial or a series of cases or what they refer to as Bellwether trials.
The other instance in which the MDL judge can try the case is if the particular case to be tried was filed in the district of the MDL judge, and so, it was always in that court. So, really the function of an MDL judge is to manage the pretrial process. Many of these cases, and I think the most significant cases, are going to involve class action cases, and the critical juncture of a class action case after it has gone beyond the initial motion to dismiss is class certification. Everybody wants — from the plaintiff’s side and the defense side — wants class certification to be resolved because if it is certified as a class, then that has enormous significance. And if it’s not certified, then that may mean the case goes away. The challenge is that when you’re focusing on the factors under Rule 23(a) — numerosity, commonality, typicality, adequacy, predominance of common issues of law [or] fact, the great minds of the appellate courts tell [us] that the discovery is not merits-based discovery but should be discovery that is focused on the decisions that have to be resolved to certify the class.
That is not a neat dividing line, and when you’re trying to focus on what you have to know about to talk about the Rule 23 factors, it is very hard not to bleed into merits discovery. [This was true] particularly in our case, as you know so well, when one of the issues that had to be resolved as part of the [class certification] that actually involved a remand after I was no longer in the case was an affirmative defense, which is not typically something that is looked at in the class certification [phase].
How do you approach a situation where you’re told this is not comprehensive discovery on the merits, but it’s only the discovery necessary to allow the parties to make the arguments on class certification when it seems like there’s so much overlap? You’re trying to keep from having repetitive sequential discovery of the same facts at different times because that can be so expensive. Is this one of those famous Facciola circumstances where you can’t square the circle? How do you do it?
John Facciola: You can’t, and I think we should abandon it. As I said to you in my comments there, right after I figure out why a beneficent God permits evil, I will turn to the difference between merits-based discovery and the other discovery. The only rule that pertains to this other than in the minds of court appeals judge is Rule 26 and it talks about proportionality. It talks about being relevant to a claim and defense, and it talks the importance of the discovery to the issue being before the court. All of those mandate an analysis that has nothing to do with an abstract and obtuse distinction between merits discovery and whatever the other kind of discovery is. A cat can look at a king. I’m a lowly little special master, so I would not and did not let that intimidate me because, as you just said, it was impossible to look at the discovery issue without looking at the merits issue.
I mean, if you have the issue of whether we’re going to certify this class, and that involves an expert witness explaining, for example, evaluation theory. The fact that he will promulgate that theory at the eventual trial of this case does not mean that discovery into the nature of the opinion he has is inappropriate in the discovery stage when the discovery is going to be devoted to the question of class certification. So I think it is a false distinction. I wish it would be abandoned, and it just seems to put metaphysics into this where it doesn’t belong. So those are my views. I can tell you when I thought about these issues, I’m afraid I didn’t spend too much time on that distinction because I’ve always found it problematical and not being much help.
Paul W. Grimm: I think that one of the things that made it possible to get through the complexities was that by the time that phase in the case had occurred, you had worked so well with the parties that even if one party might have thought, “Well, this is not proper for class discovery,” and another person said, “Well, but it really is,” you were able to get through it in a way that it never went so far down a track that it was abusive, and there was always the reservation, if I recall, that this was without prejudice to the party’s ability to argue that they needed an additional discovery down the line once the issues involving class certification had been resolved.
A similar thing I want to talk about and just have you share your thoughts about in the MDL was that —and this so often occurs as well — we talked about the impact of merits-based discovery and class-based discovery and how they can overlap. Another dynamic that you handled well in this case was we had extensive expert discovery. Part of the motions practice on class cert involved a very sophisticated Daubert motion that the defense filed regarding a particular expert involving enormously complex issues of economic theory. One of the things that collectively occurred was a somewhat unusual approach to a hearing with the experts.
I want to share, not the details of it, but just the procedure itself and whether you thought that that was effective in terms of allowing the record to show what was key for the parties to be able to argue the issues on a Daubert challenge, while getting from these enormously qualified experts in this very, very, very challenging area of economics, an opportunity for the court to be able to get information to be able to do the role of the court under Rule 104A in determining whether the expert opinions were permissible to rely upon in the case.
John Facciola: Well, I think what you did was absolutely crucial. They had produced massive reports which relied on massive exhibits as well, and you issued an order that sharpened what they were supposed to do. You send them out with yellow highlighters to go through there to underline and bring to your attention what desperately you had to do. I was very surprised because I was a party to that phone call. They jumped on that opportunity. It’s as if you read their minds as what they wanted to do was to take this massive amount of information and narrow it down to what you really needed in terms of expert discovery. Because the reports were extensive, most of the depositions they took focused on those reports, and we had very little controversy about that except in one instance, and we handled it with a supplemental hearing.
So, the expert discovery in this case, I think, was less problematic than it could have been, but your idea of taking this massive amount of information and narrowing down to what you needed was absolutely crucial, I think, in moving the case to the next stage, which was your order certifying the class. The second thing, of course, was your appointment of an expert for yourself to wade through this hideously complicated matter. You can speak much better than I on what difference that made. But I think it is crucial for everybody — district court judge and special master — to realize that the expert discovery has an enormous number of problems with it, and they should be segregated and dealt with. They include: What is the report is going to contain? What are the exhibits? What kind of discovery will be of those materials in addition to what exactly the expert has relied upon? And how do you shape that discovery so that it meets?
I would like to see the number of depositions in this area go down. In my practice, I was used to the lawyers who would tell me, “I don’t want to take this expert’s deposition because I’m not about to telegraph how I’m going to cross examine him. I have a 200-page report. I know what he’s going to say.” I don’t know if most lawyers agree with that, but it always struck me as one of the things the rule is trying to encourage by having reports be made available during the discovery process.
So, I think that the management of discovery is sui generis. It’s got to be devoted to a significant plan, and particularly because it may raise issues of privilege in terms of discussions between the lawyers and the experts. That has to be fleshed out as well.
Paul W. Grimm: I want to ask you a question about the compensation for the special master. This was an enormously complicated case. You spent a lot of time, and the parties were spending enormous amounts of time. The rule says that the judge has a lot of flexibility to say who should bear the cost, and it can be evenly divided. It can be divided in less than equal shares. I know because I was remarkably impressed by, I suspect that the actual time sheets that you submitted to the parties for payment did not reflect the total amount of time that you put into it.
I’d like you to just comment about that because I think sometimes people think, well, is this feather bedding? I know a colleague of mine on the bench, he’s retired now, but when he would appoint a special master, he had a phrase that he said, “Well, I’m applying the leech,” to imply that they were going to bleed the parties. That certainly didn’t happen in your case — either in the rates that you charged or in the hours that you submitted. How did you approach this? What was your loadstar here?
John Facciola: Well, I spent nine years of my life in private practice where I grew to hate hourly billing as much as a human being can. The problem I’ve always had, brother, is sometimes in this case just to get my head on straight, I’d ride my bicycle over at Fort Hunt Park, and I would have great ideas while I rode my bicycle. I couldn’t bring myself to come back and say “bicycling” and charge somebody for it. But the notion that you only think about these things when you’re sitting at your desk is downright silly because thoughts come to you all the time.
And the constraints of billing by the hour have always troubled me. I’m not very good at it, but I try to bear in mind that my job was designed to expedite things to make them cheaper in the long run. It would’ve been counterintuitive to see how rich I could get by doing this. So, I was always conscious of that fact and conscious of drawing distinctions between wool-gathering — or when I was just thinking about the issue — and, finally, when I sat down at this computer and began to type, research, write, or when I spoke to counsel.
I think you just have to be careful about that, and you and I reviewed fee petitions. I always loved doing this because I’d always could find the one lawyer who always exaggerated his hours. If I could find that one, I could get through them very quickly. I think you have to be just very, very careful in your billing and be reasonable, and it pays off. This is a lot of fun. It’s very enjoyable, and if you price yourself out of the market, who will want to use you or who will use you?
Paul W. Grimm: Well, John, this has been a delightful opportunity to chat with you. I want to give you one final opportunity if you want to [share] any parting thoughts that you have about the role of a special master and how it can assist the parties in the court in resolving complex cases. We’ve talked about an MDL, but of course special masters don’t necessarily have to be appointed only in MDLs. It can be in any kind of a case where that would be necessary. But [do you have] any concluding thoughts that you’d like to share with our audience about the benefit that a special master can bring to resolving complex litigation in federal court?
John Facciola: Well, I think in certain instances in the MDL, it’s invaluable because, as I say, it’s the kind of thing that needs daily attention. The district court judge doesn’t have that time with a burdensome calendar. So I think, as I say, the importance can’t be exaggerated, and it’s a very good idea provided that the compensation is reasonable and the special master shows restraint in using his time or her time as effectively as possible.
To speak a little more broadly, you and I have always been concerned throughout our judicial careers with access to justice, and one of the saddest things I saw in my years on the bench is I watched the middle class disappear from the federal courts. They were just priced out of the place, except for fee-shifting statutes. So I think we have to be very conscious of that and try to do what we are doing as efficiently as possible so the cost of litigation doesn’t keep growing and growing and growing.
A special master can play a very special role in alleviating the district court judge from burdensome activities that are terribly expensive for the court system, for the parties, for counsel, and for everyone else. So, in a way, you might say, well, who is this person we’re compensating? Everybody else in the building just gets their salary, the government employees, but we hope we could shape that in such a way that it increases access to justice. This isn’t something rich people do, and maybe we are on the cusp of using it even more effectively than we have in the interest of keeping costs and time down.