New Discovery Master Law Takes Effect on Nov. 1, 2015
By James C. Milton
Effective on Nov. 1, 2015, the Oklahoma Discovery Code will include a new statute that provides for discovery masters in civil litigation.1 The new statute will be codified as Section 3225.1 of the Discovery Code.
Section 3225.1 is based in large part on Rule 53 of the Federal Rules of Civil Procedure..2 Rule 53 allows for federal courts to appoint “judicial masters” to address complex issues in exceptional cases. Judicial masters are typically private attorneys, CPAs or other professionals who are appointed by courts to address complex issues in specific cases.
The goal of judicial masters, such as discovery masters, is to ensure efficiency in the court system. As stated in the comments to the 2003 amendment to Rule 53, “[t]he appointment of masters to participate in pretrial proceedings has developed extensively over the last two decades as some district courts have felt the need for additional help in managing complex litigation.”3 The use of masters in complex matters will help allow judges to address other matters on their dockets. As one commentator noted, “[t]he presence of complex cases directly affects a court’s average case resolution time.”4 “The objective of some state courts is to alleviate some of the caseload problems. The sheer magnitude of a complex case may overwhelm the time available to a judge who has other cases on their docket. Conducting a camera review of documents to review claims of privilege might take weeks or months of time, and many judges cannot fairly absent themselves from their other cases to devote this amount of time to a single case. Other courts appoint special masters to preside over discovery motions involving highly specialized issues.”5
Prior to the enactment of Section 3225.1, Oklahoma statutes provided for referees, but only in cases of accountings or with the consent of the parties.6 Some state court judges have used the Oklahoma referee statutes for the appointment of discovery masters, but in these cases the judge would need the parties’ consent. In some cases, a litigant who is engaged in aggressive discovery tactics or otherwise causing delay or expense to the litigation process may refuse to consent to the appointment of a discovery master. In other instances, one or more litigants may believe they benefit from delays in litigation and withhold their consent on this basis. The new statute will remove the ability of litigants to withhold their consent from the appointment of a discovery master, and at the same time will impose restrictions and requirements on the use of discovery masters.
Section 3225.1 implements a number of protections designed to prevent overuse or abuse of the discovery master tool. For example, before a discovery master can be appointed in the face of objection (or lack of consent) from the litigants, the judge must make special findings that the case is complex or otherwise exceptional and the benefit of appointment of a discovery master will outweigh the cost.7 The statute also allows the judge to allocate the cost of the discovery master based, among other things, on the litigants’ means to pay the costs and their responsibility for the discovery dispute requiring appointment of the discovery master.8
The following is a summary of the important components of the new statute:
Appointment on motion by party or the court’s own motion. The trial court can appoint a discovery master either on a party’s motion or on its own motion.9
Hearing must be held on appointment, unless waived. The court must give notice and hold a hearing on the appointment of a discovery master, unless the hearing is waived.10
Scope of a discovery master’s appointment. If the parties consent to the appointment of a discovery master, the discovery master can perform any duties related to discovery.11 In the absence of the parties’ consent, the discovery master may be appointed to address pretrial and post-trial discovery matters to facilitate an effective and timely resolution.12
Scope of a discovery master’s authority. Unless otherwise stated in the order of appointment, the discovery master may:
• Regulate all proceedings and respond to all discovery motions of the parties within the scope of appointment, including resolving all discovery disputes between the parties.13
• Call discovery conferences under District Court Rule 5, either on a party’s motion or the discovery master’s own motion.14
• Set procedures for the timing and orderly presentation of discovery disputes for resolution.15
• Take all appropriate measures to perform the assigned duties fairly and efficiently.16
• Exercise the trial court’s power to take and record evidence, including compelling appearances of witnesses or production of documents in connection with these duties.17
• Recommend sanctions.18
Required findings for order of appointment in the absence of consent. In the absence of the parties’ consent, the order appointing discovery master must contain the following findings:
• First, the trial court must find the appointment and referral are necessary in the administration of justice due to the nature, complexity or volume of the materials involved or for other exceptional circumstances.19
• Second, the trial court must find that the likely benefit of the appointment of a discovery master outweighs its burden or expense, considering the needs of the case, the amount in controversy, the parties’ resources, the importance of the issues at stake in the action and the importance of the referred issues in resolving the matter or proceeding in which the appointment is made.20
• Third, the trial court must find that the appointment will not improperly burden the rights of the parties to access the courts.21
In making these findings, the trial court must consider the fairness of imposing the likely expenses on the parties and shall protect against unreasonable expense or delay.22
Required contents of the order of appointment. Regardless of whether the parties consent, the order appointing a discovery master must contain the following:
• The order must require the discovery master to proceed with all reasonable diligence.23
• The order must state the discovery master’s duties, including any investigation or enforcement.24
• The order must state the circumstances, if any, in which the discovery master may engage in ex parte communications with the parties.25 For example, the trial court’s order may state that the discovery master must observe the same restrictions on ex parte communication as are applicable to judicial officers under Rule 2.9 of the Code of Judicial Conduct.
• The order must state any limitations on the discovery master’s communications with the court.26 By way of example, the trial court’s order may require that the discovery master must file with the court all reports or other communications with the court.
• The order must state the nature of the materials to be preserved and filed as the record of the discovery master’s activities.27 The order should require the discovery master to file a report, as well as any status reports that the trial court may wish to see. In addition, the order can be drafted in a manner that protects the discovery master’s draft reports. For example, the order of appointment might contain the following language: “It is the court’s intention that the discovery master shall perform her duties without concern for the potential disclosure of her drafts or work product. Accordingly, the court rules that the discovery master’s drafts and work product shall be protected from disclosure in the same manner as provided by Okla. Stat. tit. 12, §3226(B)(3) (2015).”
• The order must state the time limits, methods of filing the record, other procedures and standards for reviewing the discovery master’s orders, findings and recommendations.28
• The order must state the basis, terms and procedure for fixing the discovery master’s compensation.29
Preparing and amending the order of appointment. The trial court can prepare the order of appointment, or direct the discovery master to prepare and circulate the order.30 The order of appointment can be amended at any time after notice and hearing.31
Discovery master’s oath. The discovery master must execute and file an oath.32
Filing and review of discovery master’s orders, reports and recommendations. All orders, reports and recommendations issued by a discovery master must be filed with the court and promptly served on all parties.33 Once the discovery master’s order, report or recommendation is filed, the following rules apply:
• Unless otherwise ordered by the trial court, the parties have 14 days to object to a discovery master’s order, report or recommendation.34
• If an objection is filed, the other parties have 15 days to respond.35
• If the parties do not object to the discovery master’s order, report or recommendation, the trial court can approve the order, report or recommendation without further notice or hearing.36
• The trial court is to engage in de novo review of all objections to the discovery master’s conclusions of law.37
• The trial court is to review the discovery master’s procedural rulings on an abuse of discretion standard.38 The trial court can modify this standard of review for the discovery master’s procedural rulings, by setting forth the applicable standard of review in the order of appointment.39
• The trial court is to engage in de novo review of all objections to the discovery master’s findings of fact.40 If the parties stipulate, the trial court can modify the standard of review for the discovery master’s findings of fact.41 In this manner, the trial court can allow the discovery master’s findings of fact to become final without review, or provide for review of the discovery master’s findings of fact for clear error.
• In acting on a discovery master’s order, report or recommendations, the court may receive evidence, adopt or affirm, modify, wholly or partly reject or reverse or resubmit to the discovery master with instructions.42
Discovery master’s compensation. The trial court sets the basis and terms of the discovery master’s compensation.43 This information is to appear in the order of appointment.44 The trial court can change the basis and terms of the discovery master’s compensation, after notice and hearing.45 The trial court can order the discovery master’s compensation to be paid 1) by a party or parties or 2) from a fund that is the subject of the pending proceeding.46 If payment comes from a fund, the trial court must have jurisdiction over that fund.47 The new statute expressly provides that the discovery master’s compensation cannot be paid from the court fund.48
The trial court can allocate the discovery master’s compensation between and among the parties. This allocation can be done on an interim basis, and adjusted at the end of the proceeding. In making this allocation, the court must consider 1) the amount in controversy, 2) the parties’ means and 3) the extent to which any party is more responsible than the others for the need for a discovery master.49
Conflict of interest and disqualification. Discovery masters are subject to the same conflict-of-interest standards as judges.50 Any possible conflicts must be disclosed within 14 days of the appointment.51 Section 3225.1(B) provides a disqualification procedure that is based substantially on District Court Rule 15.52
Immunity. Discovery masters receive the same immunity provided to judicial officers.53
Authors note: By way of disclosure, the author was substantially involved in drafting this new law while serving as the OBA Civil Procedure and Evidence Committee chair. The author wishes to acknowledge the hard work of Sens. Anthony Sykes and Brian Crain, Reps. Jon Echols and John Paul Jordan, and Judge Linda Morrissey, among many others, for tireless work on the discovery-master proposal.
1. 2015 Okla. Sess. Laws c. 309, §1 (H.B. 1920). Gov. Fallin signed H.B. 1920 on May 12, 2015. The new statute will appear at Okla. Stat. tit. 12, §3225.1. The discovery master statute is derived from a proposal that was drafted by the Oklahoma Bar Association Civil Procedure & Evidence Committee and approved by the OBA House of Delegates in 2013.
2. Fed. R. Civ. P. 53.
3. Fed. R. Civ. P. 53, 2003 advisory note.
4. Lynn Jokela & David F. Herr, Special Masters in State Court Complex Litigation: An Available and Underused Case Management Tool, 31 William Mitchell L. Rev. 1299, 1320 (2005).
5. Id. at 1302.
6. Okla. Stat. tit. 12, §§612-624 (2011). Under these existing statutes, state court judges can only appoint referees 1) in cases of accountings or 2) with the consent of all parties. Id. §§612, 613.
7. Okla. Stat. tit. 12, §3225.1(A)(2) (effective Nov. 1, 2015).
8. Id. §3225.1(G)(3).
9. Id. §3225.1(A)(1).
10. Id. §3225.1(A)(1), (C)(1).
11. Id. §3225.1(A)(1)(a).
12. Id. §3225.1(A)(1)(b).
13. Id. §3225.1(D)(1)(a).
14. Id. §3225.1(D)(1)(b).
15. Id. §3225.1(D)(1)(c).
16. Id. §3225.1(D)(1)(d).
17. Id. §3225.1(D)(1)(e).
18. Id. §3225.1(D)(2). These sanctions can be based upon Okla. Stat. tit. 12, §§2004.1, 3226.1, 3237 (2015).
19. Okla. Stat. tit. 12, §3225.1(A)(2)(a) (effective Nov. 1, 2015).
20. Id. §3225.1(A)(2)(b).
21. Id. §3225.1(A)(2)(c).
22. Id. §3225.1(A)(3).
23. Id. §3225.1(C)(2).
24. Id. §3225.1(C)(2)(a).
25. Id. §3225.1(C)(2)(b).
26. Id. §3225.1(C)(2)(c).
27. Id. §3225.1(C)(2)(d).
28. Id. §3225.1(C)(2)(e).
29. Id. §3225.1(C)(2)(f).
30. Id. §3225.1(C)(2).
31. Id. §3225.1(C)(3).
32. Id. §3225.1(C)(4).
33. Id. §3225.1(E).
34. Id. §3225.1(F)(1).
35. Id. §3225.1(F)(2).
36. Id. §3225.1(F)(1).
37. Id. §3225.1(F)(4).
38. Id. §3225.1(F)(5).
40. Id. §3225.1(F)(3).
42. Id. §3225.1(F)(2).
43. Id. §3225.1(G)(1).
44. Id. §3225.1(C)(2)(f).
45. Id. §3225.1(G)(1).
46. Id. §3225.1(G)(2).
47. Id. §3225.1(G)(2)(b).
49. Id. §3225.1(G)(3).
50. Id. §3225.1(B)(1).
51. Id. §3225.1(B)(2).
52. Id. §3225.1(B)(3)-(6).
53. Id. §3225.1(I).
ABOUT THE AUTHOR
Jim Milton is a shareholder at Hall Estill. He graduated with honors from the University of Texas School of Law in 1995.
Originally published in the Oklahoma Bar Journal-- Sept. 12, 2015-- Vol. 86, No. 24