In TB Foods USA, LLC v. American Mariculture, Inc., No. 22-12936 (11th Cir. June 18, 2024), the Eleventh Circuit holds that even when the parties agree to a substitution of a magistrate judge to receive the verdict at the end of a jury trial, they do not necessarily consent to the magistrate performing Article III duties, such as responding to a jury’s questions and ruling on a motion to clarify the verdict.
The underlying case was a trade secrets dispute about whether the defendants poached on the plaintiff’s creation of a disease-resistant line of shrimp. The case proceeded to a jury trial. “During trial, the district judge told the parties that the trial needed to end by a certain date because he had to catch a flight. The district judge threatened a mistrial if the parties failed to finish by his deadline. He said, ‘In terms of running out the clock, y’all know what the clock is. . . . And, if you run out, I’ll see you next year. We’ll do [the whole trial] again.’”
While counsel abided by the deadline, the jury did not reach a verdict soon enough for the judge to make his plane. “The next day, with the jury still deliberating, the district judge met with counsel and proposed without objection that a magistrate judge preside in his absence . . . . ‘[A]lthough I moved back my flight, apparently, not far enough. I need to be out of here at 3:30. My proposal is that we have the Magistrate Judge who has been assigned to the case take my place in terms of receiving the verdict from the jury.” The parties agreed to this plan on the record. (Where the Article III judge was headed on his flight, and why, is not revealed in the opinion.)
“The magistrate judge began presiding that afternoon, and over the next three days, the magistrate judge responded to six notes or questions from the jury. One question concerned how to calculate damages. The magistrate judge resolved that request by instructing the jury to ‘refer to the evidence of record and the instructions supplied to you by the Court.’” The jury awarded $4.95 million in damages to the plaintiff. The plaintiff moved for clarification of the jury’s verdict, which the magistrate denied.
While both sides filed post-trial motions, no one challenged the power of the magistrate judge to preside over the last three days of the trial.
The Eleventh Circuit vacates and remands for a new trial. “We conclude that because the district judge did not receive the parties’ consent to have a magistrate judge perform non-ministerial functions, the magistrate judge improperly exercised Article III authority.”
Had the magistrate judge done nothing more than receive the jury’s verdict, the panel holds, that would have been within the parties’ verbal consent on the record per the Federal Magistrates Act, which provides that “[u]pon the consent of the parties,” a magistrate judge “may conduct any or all proceedings in a jury or nonjury civil matter and order the entry of judgment in the case, when specially designated to exercise such jurisdiction by the district court.” 28 U.S.C. § 636(c)(1). Merely accepting a jury verdict is a ministerial task that a magistrate may perform even without the parties’ consent under 28 U.S.C. § 636(b)(3).
But nowhere on the record, holds the panel, did the parties consent to the magistrate exercising Article III powers. “The district court did not seek, and the parties did not express, any agreement to have the magistrate judge perform the Article III functions of responding to jury questions or ruling on a request to have the jury clarify the verdict.”
That the defendants did not raise the issue below was, by the panel’s lights, immaterial to whether the magistrate properly exercised federal judicial power, because the defect went to the court’s jurisdiction, an argument that is never waived.
The panel also rejects the plaintiff’s contention that defendants impliedly consented to the magistrate’s acts. “Neither the district judge nor the magistrate judge told the parties that they had a right to proceed before a district judge when the jurors had questions or when a party had objections to the verdict form. When the parties are not made aware of the need for consent and their right to refuse it, consent cannot be implied.”
Concurring, Judge Jordan notes an intra-circuit conflict between “civil and criminal decisions dealing with forfeited challenges to the participation of magistrate judges” and urges plain or harmless error review for all such challenges.
“I do not, of course, know the exact reason for the defendants’ failure to object to the magistrate judge’s participation in the post-trial motions, but I have a suspicion. Had the defendants objected, I am confident that the district court would have held an evidentiary hearing to figure out the extent and limits (if any) of the defendants’ consent to the magistrate judge’s participation. At that hearing, the defendants and their trial counsel might have had to explain, under oath, what they knew, discussed, and understood about their right to refuse consent and the extent of their consent. And only heaven knows what that testimony, subject to cross-examination, would have revealed.
“By objecting to the magistrate judge’s participation for the first time in their initial brief on appeal, the defendants avoided what might have been a problematic evidentiary hearing. If that is what happened, it does not seem right to me that the issue they failed to raise below is now being reviewed de novo on appeal without any plain error or harmless error inquiry.”
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