52 NEW JERSEY LAWYER | JUNE 2018 NJSBA.COM

Employment of a special master in litigation can

be very useful to both court and counsel alike.

Special discovery masters, who manage and

supervise discovery, are not unusual, but special

masters can assume other helpful roles to the

bench and bar alike, and have done so histori-

cally in state and federal courts.

THE UTILITY OF ASPECIAL MASTERby Harriet Derman

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In both venues, special masters are

employed on the court’s own initiative,

by motion of one party, or by the con-

sent of the parties.

In New Jersey State CourtsIn New Jersey, the appointing rule is

Rule 4:41-1, which provides as follows:

the reference for the hearing of a matter

by a judge of the superior court shall be

made to a master only upon approval by

the assignment Judge, and then only

when all parties consent or under extraor-

dinary circumstances. the order of refer-

ence shall state whether the reference is

consensual and, if not, shall recite the

extraordinary circumstances justifying the

reference. (emphasis added).

The appointment of discovery mas-

ters has been approved for such matters

as review and allocation of counsel fees,1

assistance to a court in a valuation dis-

pute in a matrimonial matter,2 oversee-

ing an election dispute with respect to

absentee ballots of nursing home resi-

dents,3 and reviewing large numbers of

privileged documents.4 In N.J. Dep’t. of

Envtl. Prot. v. Occidental Chem. Corp., the

special master was even authorized to

hear motions to dismiss filed by third-

party defendants under Rule 4:6–2(e).5

In New Jersey, special masters have a

long and respected history of dealing

with controversial constitutional issues,

such as assisting “municipal officials in

developing constitutional zoning and

land use regulations”6 in Mt. Laurel mat-

ters and the development of an eviden-

tial record in the school funding contro-

versy.7 In criminal matters, masters

determined the basic scientific reliabili-

ty of breath tests for determining offens-

es under drunk driving statutes8 and

have been helpful to the Supreme Court

in determining whether there is evi-

dence of race of victim or race of defen-

dant discrimination in New Jersey’s cap-

ital sentencing scheme.9

The Supreme Court has acknowl-

edged the importance of special masters

in Mt. Laurel matters where they are

required to assist municipal officials in

developing constitutional zoning and

land use regulations, calling them

“hybrid masters.”10 The Court noted

that these impartial experts use their

skills to help the parties formulate a

remedy that will comply with the trial

court’s order and supply information

that the parties may not have available

to them.11 While traditional masters usu-

ally serve as fact-finders and supervise

procedural tasks, hybrid special masters

work with the parties to devise a remedy

that will meet with the court’s

approval.12

The Mt. Laurel Court praised the use

of such a master:

in our view the master is of potential help

to all concerned: to the municipality, to the

plaintiffs, to the court and counsel. he or

she is an expert, a negotiator, a mediator,

and a catalyst—a person who will help the

municipality select from the innumerable

combinations of actions that could satisfy

the constitutional obligation, the one that

gives appropriate weight to the many con-

flicting interests involved, the one that sat-

isfies not only the constitution but, to

some extent, the parties as well.13

On the other hand, a case where dis-

covery has run “out of control” or where

the matter is legally complex should not

invite, without extraordinary circum-

stances, the appointment of a special

master. In the context of remedial

actions brought pursuant to the Law

Against Discrimination (LAD)14 and the

New Jersey Conscientious Employee

Protection Act (CEPA),15 the Appellate

Division, in Zehl v. City of Elizabeth Board

of Education,16 emphasized the “high

threshold of extraordinary circum-

stances’” and pointed to the require-

ment of the “imprimatur of the assign-

ment judge.”17 The court reversed the

appointment of a special discovery mas-

ter by a trial judge, who had noted the

over-litigation by counsel, but not the

rights of the LAD or CEPA plaintiff that

were being vindicated.

Although the utilization of special

masters can be utilitarian in “protracted

cases involving voluminous documents

and complex legal issues and in com-

plex litigation involving scores of depo-

sitions, interrogatories and other discov-

ery techniques,”18 for cases involving

remedial legislation with fee shifting,

the threshold is not met simply because

a matter is aggressively litigated.

The court noted the enormous pres-

sure on the trial judge in the matter, but

refused to consider that the burden con-

stituted extraordinary circumstances. The

appellate court required a “case-centric,”

rather than systemic analysis, especially

for a case involving parties of unequal

means19 where payment of the special

master’s fees could be burdensome.

The appointment of a master is appro-

priate where “the interest in alleviating

administrative burdens harmonizes with

litigants’ interest in swift and economical

resolution of their disputes.”20 Despite

noting that “courts may have limited

time and resources to engage in the req-

uisite review and analysis without the

assistance of masters,”21 appointments of

special masters should nevertheless be

“judicious and limited.”22

In every case, the implementing

order should provide for the scope of

the master’s authority, specifying or lim-

iting the master’s power and “may direct

the master to report only upon particu-

lar issues or to do particular acts or to

receive and report evidence only.”23 The

master has the authority to “do all acts

necessary or proper for the efficient per-

formance of the duties directed by the

order,”24 and the master has the author-

ity to call witnesses and hear their testi-

mony under oath.25

If a meeting or hearing is required,

Rule 4:41-4 provides the protocol.

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Thereafter, if required by the order of

appointment, the master shall prepare a

report “upon the matters submitted

including any findings of fact and con-

clusions of law.”26 The master shall file

the report with the court within 10

days.27 In non-jury actions, “the court

shall accept the master’s findings of fact

unless contrary to the weight of the evi-

dence.”28 In the interim 10 days, any

party may serve written objections and

the court “may adopt the report, modify

or reject it in whole or in part, receive

further evidence, or recommit it with

instructions.”29 In jury trials, the mas-

ter’s findings are admissible as evidence

and may be read to the jury, “subject to

the ruling of the court upon objections

to the report or the evidence.”30

Whatever the delegation of authority,

“[a] court may not abdicate its ‘supervi-

sory duty over a master.”31 The same

standard applicable to trial judges (i.e.,

deference to findings supported by cred-

ible evidence in the record) is applicable

to the findings and conclusions of spe-

cial masters before an appellate court.32

Masters are subject to the same strict

conflict of interest rules of the Judiciary

even if their role is only advisory.33

In Federal CourtIn federal court, the appointing rule

under Fed. R. Civ. P. 53 is as follows:

a. appointment.

1. Scope. Unless a statute provides other-

wise, a court may appoint a master only

to:

(a) perform duties consented to by the

parties;

(b) hold trial proceedings and make or

recommend findings of fact on issues

to be decided without a jury if

appointment is warranted by:

(i) some exceptional condition; or

(ii) the need to perform an accounting

or resolve a difficult computation

of damages; or

(c) address pretrial and post trial matters

that cannot be effectively and timely

addressed by an available district judge

or magistrate judge of the district.

Federal special masters, in addition to

undertaking similar responsibilities as in

state court, have been particularly help-

ful in complex and multi-district litiga-

tion in federal courts.34 The federal

courts have used masters in more spe-

cialized roles as auditors,35 determining

amounts to be paid to claimants,36 class

action masters,37 technology masters,38

coordinating masters,39 monitors of

prison conditions,40 union membership

practices,41 and settlement masters.42

Disqualification of a special master is

tested by the rule requiring disqualifica-

tion for a judge under 28 U.S.C. § 455.

The order of appointment is issued only

after the master files an affidavit disclos-

ing whether there is any ground for dis-

qualification under the statute.43 The

rule specifically directs the appointing

judge to consider the “fairness of impos-

ing the likely expenses on the parties

and must protect against unreasonable

expense or delay.”44 Masters may impose

non-contempt sanctions and recom-

mend contempt sanctions against a

party and sanctions against a nonparty.45

Litigants have 21 days to object.46

Procedural matters are set aside only

if there is an abuse of discretion.47 The

court must decide de novo all objections

to findings of fact made or recommend-

ed by the master unless the parties have

agreed to a clear error standard or unless

the appointment of the master had been

consented to by the parties or the mat-

ters involve pretrial and post-trial mat-

ters that “cannot be effectively and

timely addressed by an available district

judge or magistrate judge.”48 With

respect to objections to conclusions of

law, the court must decide these deter-

minations made by the master de novo.49

Under the federal rules, a court of

appeals may also appoint a special mas-

ter “to hold hearings, if necessary, and

to recommend factual findings and dis-

position in matters ancillary to proceed-

ings in the court.”50

CompensationCompensation of the special master

is generally an hourly rate as set forth in

the appointing order or by reference

made to the special master’s regular

billing rate. The order sets forth the allo-

cation of payment (i.e., 50 percent by

plaintiffs and 50 percent by defendants).

It may also be paid out of a fund as the

court directs.51 The order may also

authorize the special master to modify

the allocation if one party’s conduct

causes the involvement of the special

master. The federal rules specifically

require the court to allocate the pay-

ment after considering the “nature and

amount of the controversy, the parties’

means, and the extent to which any

party is more responsible than other

parties for the reference to a master.”52

Where constitutional issues are not

implicated, courts clearly have to consid-

er the cost to the litigants in appointing

special masters,53 but in matters where

the parties have the resources and espe-

cially where they consent, the special

master can provide prompt access, deci-

sions, and results. Motions can be

promptly decided with special attention,

in camera reviews can be facilitated

whether they are of medical records or

tax returns, and refusal to answer ques-

tions at depositions can be addressed

with the assistance of an available special

master who can make immediate rulings,

whether in attendance or by telephone,

while the court is not interrupted.

The order may provide for additional

financial details, such as how frequently

the special master should bill and

whether the special master is authorized

to utilize legal associates or to hire

experts.

ConclusionBoth under the state and federal

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rules, special masters can assist the court

in fact finding and supervising discov-

ery in cases involving substantial judi-

cial intervention and time. The use of a

special master represents an efficient

and effective technique for moving mat-

ters in litigation. A special master can

also assist the courts in fashioning,

implementing, and supervising reme-

dies. The special master provides an

effective and efficient methodology for

moving cases as long as the parties con-

sent or the Rules of Court for appoint-

ment are satisfied. �

Harriet Derman is a retired chancery

and probate judge and formerly presiding

judge of the Civil Division of Vicinage XIII,

now providing mediation and arbitration

services as chair of the alternative dispute

resolution group at DiFrancesco Bateman,

P.C. in Warren. She has frequently served as

a special master in state and federal courts.

Endnotes1. Stanley & Fisher, P.C. v. Sisselman, 215

N.J. Super. 200 (App. Div. 1987); In

re Unanue, 311 N.J. Super. 589 (App.

Div.), certif. denied, 157 N.J. 541

(1998), cert. denied, 526 U.S. 1051

(1999).

2. Levine v. Wiss & Co., 97 N.J. 242, 250

(1981).

3. Petition of Battle, 96 N.J. 63 (1984).

4. Rivard v. Am. Home Products, Inc.,

391 N.J. Super. 129, 153 (App. Div.

2007).

5. New Jersey Dep’t of Envir. Prot. v. Occi-

dental Chem. Corp., 2012 WL

1392597,

at *2 (App. Div., April 24, 2012).

6. S. Burlington Cty. N.A.A.C.P. v. Mount

Laurel Twp., 92 N.J. 158, 281–82

(1983).

7. Abbott ex rel. Abbott v. Burke, 206 N.J.

332 (2011).

8. State v. Chun, 194 N.J. 54, 92 (2008).

9. In Re Proportionality Review Project

II, 165 N.J. 206, 226 (2000).

10. S. Burlington Cty. N.A.A.C.P. v. Mount

Laurel Twp., supra, 92 N.J. at 281.

11. Id., citing 78 Colum. L. Rev. at 794.

12. Id., citing 78 Colum. L. Rev. at 805

and 84 Yale L.J. at 1344.

13. Id. at 283.

14. N.J.S.A. 10:5-1 to -42.

15. N.J.S.A. 34:19-1 to -8.

16. Zehl v. City of Elizabeth Board of Edu-

cation, 426 N.J. Super. 129 (App. Div.

2012).

17. Id. at 142.

18. Id.

19. Id.

20. Id. at 137.

21. Id. at 142.

22. Id.

23. Rule 4:41-3.

24. Id.

25. Id.

26. Rule 4:41-5(a).

27. Id.

28. Rule 4:41-5(b).

29. Id.

30. Rule 4:41-5(c).

31. Rivard, supra, 391 N.J. Super. at 153,

citing St. Joseph’s v. Muifield Constr.

Co., 362 N.J. Super. 540 (App. Div.

2003).

32. Abbott ex rel. Abbott v. Burke, 199 N.J.

140, 146, n.2 (2009).

33. Deland v. Twp. of Berkeley Heights,

361 N.J. Super. 1, 12 (App. Div.), cer-

tif. den., 178 N.J. 32 (2003).

34. In re: Diet Drugs (Phentermine, Fenflu-

ramne, Dexfenfluramine) Products

Liab. Litig., 1999 WL 782560 at *2

(E.D. Pa. Sept. 27, 1999).

35. Arthur Murray, Inc. v. Oliver, 364 F.2d

28 (8th Cir. 1966).

36. United States v. Mastellone, 2011 WL

4031199 (S.D.N.Y. Sept. 12, 2011).

37. Sullivan v. DB Invs., Inc., 667 F.3d

273 (3d Cir. 2011).

38. Cobell v. Norton, 184 F. Supp. 2d 1

(D.C. Ct. 2002).

39. In re United States, 1998 WL968487

(Fed. Cir., Dec. 23, 1998).

40. Brown v. Plara, 563 U.S. 493 (2011).

41. Local 28 of Sheet Metal Workers’ Int’l.

Ass’n. v. EEOC, 478 U.S. 421 (1986).

42. In re Austrian & Germ. Bank Holocaust

Litig., 317 F.3d 91 (2d Cir. 2003).

43. Fed. R. Civ. P. 53(b)(3).

44. Fed. R. Civ. P. 53(a) (3).

45. Fed. R. Civ. P. 53 (c) (2).

46. Fed. R. Civ. P. 53(f)(2).

47. Fed. R. Civ. P. 53(f)(5).

48. Fed. R. Civ. P. 53 (f)(3)(A) and (B).

49. Fed. R. Civ. P. 53(f) 4.

50. Fed. R. App. P. 48 (a).

51. Rule 4:41-2 and Fed. R. Civ. P. 53(g).

52. Fed. R. Civ. P. 53(g)(3).

53. Zehl, supra, 426 N.J. Super. at 140.

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