Advanced Microtherm, Inc. v. Norman Wright Mechanical Equipment Corporation et al

Filing 784

ORDER re 674 & 749 Granting Plaintiffs Request to Seal Response to Special Master's Declaration and Tentatively Granting Plaintiffs Motion for Leave to Submit the Response to the Court In Camera; and REPORTS AND RECOMMENDATIONS re Special Masters Report #39. Signed by Judge Patricia V. Trumbull on 10/10/08. (pvtlc1) (Filed on 10/10/2008)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ADVANCED MICROTHERM, INC., et al., ) ) Plaintiffs, ) ) v. ) ) NORMAN WRIGHT MECHANICAL ) EQUIP. CORP., et al., ) ) Defendants. ) ___________________________________ ) Case No.: C 04-2266 JW (PVT) OR D ER GRANTING PLAINTIFFS' REQUEST T O SEAL RESPONSE TO SPECIAL MASTER'S DEC LA R A TIO N AND TENTATIVELY GR A N TIN G PLAINTIFFS' MOTION FOR LEA V E TO SUBMIT THE RESPONSE TO THE CO U R T IN CAMERA; AND REPO R TS AND RECOMMENDATIONS RE SPEC IA L MASTER'S REPORT #39 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION

On August 8, 2008, District Judge Ware referred this matter to this court for a determination of the nature of the arrears reported by Special Master Denver and to resolve any payment disputes. See CIVIL L.R. 72-1, and 28 U.S.C. § 636(b)(1) & (e)(6)(B)(iii). On August 14, 2008, this court set a briefing schedule for this issue. On August 25, 2008, the Special Master filed his declaration. On September 9, 2008, Plaintiffs filed an administrative request to file under seal and submit in camera review its Response to Special Master's Declaration in Support of Unpaid Invoices. No opposition to the request for in camera review was filed. On September 12, 2008, Defendant F.W. Spencer & Son, Inc. ("F.W. Spencer") filed its response. On September 18, 2008, Special Master Tom Denver filed a Reply in Support of Unpaid Invoices, in which he notes he cannot reply to Plaintiffs because the Plaintiffs' response was submitted in camera. Based on the briefs and supporting papers submitted by the parties, OR D E R, page 1

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IT IS HEREBY ORDERED that Plaintiffs' request to file their response under seal is GRANTED. IT IS FURTHER ORDERED that Plaintiffs' request to submit their response to the court in camera is TENTATIVELY GRANTED, subject to review and ultimate determination by District Judge Ware. (Plaintiffs' in camera submission is being forwarded to District Judge Ware.) IT IS HEREBY REPORTED to District Judge Ware that the unpaid invoice issue cannot be resolved at this time because no hourly rate of compensation, or other basis for compensation, for the Special Master's services has yet been set by the court. Federal Rules of Civil Procedure 53(b)(2)(E) provides that the order appointing a Special Master "must state * * * * the basis, terms, and procedure for fixing the master's compensation under Rule 53(g)." Rule 53(g)(1) provides that "Before or after judgment, the court must fix the master's compensation on the basis and terms stated in the appointing order, but the court may set a new basis and terms after giving notice and an opportunity to be heard." It appears that the court has not yet set the compensation for Special Master Denver. Because there is no court approved hourly rate or other basis for the Special Master's compensation, there is no legal authority upon which to base a resolution of the unpaid invoices. Special Master Denver argues that the parties never objected to the rate he is charging. He does not, however, cite any legal authority for the proposition that a Special Master may set his own compensation. After the hourly rate or other basis for the Special Master's compensation has been set either by District Judge Ware, or, if that matter is referred, by Magistrate Judge Trumbull, this court will resume consideration of the unpaid invoice issues (if they have not by then otherwise been resolved by the Special Master and the parties involved). IT IS FURTHER REPORTED that there appears to be some confusion regarding the apportionment of the fees of the Special Master. Defendant F.W. Spencer notes that the Notice of Intent to Appoint Special Master requires that, unless the court receives a recommendation from the Special Master for some other apportionment, each party must bear the cost on a per capita basis. The Special Master has been treating Plaintiffs John Karamanos, Advanced Microtherm, Inc., and HVAC Sales, Inc. as just one party rather than three. Rather than rather splitting his fees pro rata OR D E R, page 2

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among the five remaining parties, the Special Master has been splitting his fees three ways, with the three Plaintiffs being treated as one party. F.W. Spencer notes it has been billed for one third of the fees rather than just one fifth of the fees as the court's order currently appears to require. The Special Master, in his reply, explains how he decided on the current apportionment and his rationale for doing so. It appears he did not, however, previously submit any recommendation to the court for the current apportionment. Nonetheless, IT IS RECOMMENDED that the court adopt the Special Master's apportionment of his fees. It does not appear that Defendant F.W. Spencer ever complained of the current apportionment prior to filing its response brief. IT IS FURTHER REPORTED that Plaintiffs have indicated, in the papers submitted in camera, that they can no longer ask the Special Master to continue performing work. It appears from the record that only five parties remain active in this action. Thus, based on the Plaintiffs' in camera submission and the change in circumstances in this case, IT IS RECOMMENDED that the Special Master be relieved of his duties and that all further discovery and disclosure matters be re-referred to a Magistrate Judge. Dated: 10/10/08 PATRICIA V. TRUMBULL United States Magistrate Judge

OR D E R, page 3