NO.
`
`In the Supreme Court of the United StatesIn the Supreme Court of the United States
`In the Supreme Court of the United States
`
`In the Supreme Court of the United StatesIn the Supreme Court of the United States
`
`DARYL K. WASHINGTON, SUNDAY PLAYERS, INC.,
`Petitioners,
`
`v.
`
`KELLWOOD COMPANY,
`
` Respondent.
`
`On Petition for Writ of Certiorari to the
`United States Court of Appeals for the Second Circuit
`
`PETITION FOR WRIT OF CERTIORARI
`
`Aubrey “Nick” Pittman
` Counsel of Record
`THE PITTMAN LAW FIRM, P.C.
`100 Crescent Court, Suite 700
`Dallas, Texas 75201-2112
`214-459-3454
`pittman@thepittmanlawfirm.com
`
`Counsel for Petitioners
`
`Becker Gallagher · Cincinnati, OH · Washington, D.C. · 800.890.5001
`
`
`
`In the Supreme Court of the United StatesIn the Supreme Court of the United States
`In the Supreme Court of the United States
`
`In the Supreme Court of the United StatesIn the Supreme Court of the United States
`
`DARYL K. WASHINGTON, SUNDAY PLAYERS, INC.,
`Petitioners,
`
`v.
`
`KELLWOOD COMPANY,
`
` Respondent.
`
`On Petition for Writ of Certiorari to the
`United States Court of Appeals for the Second Circuit
`
`PETITION FOR WRIT OF CERTIORARI
`
`Aubrey “Nick” Pittman
` Counsel of Record
`THE PITTMAN LAW FIRM, P.C.
`100 Crescent Court, Suite 700
`Dallas, Texas 75201-2112
`214-459-3454
`pittman@thepittmanlawfirm.com
`
`Counsel for Petitioners
`
`Becker Gallagher · Cincinnati, OH · Washington, D.C. · 800.890.5001
`
`
`
`i
`
`QUESTIONS PRESENTED
`
`This case asks the Court to consider questions
`left open in several previous cases: whether it is
`unconstitutional to permit U.S. judge magistrates
`to issue final judgments, unchecked by Article III
`district courts, that create legal precedent not
`unlike that of article III judges; whether consent
`is valid under 28 U.S.C. § 636 when obtained
`through coercive trial delays; whether 28 U.S.C.
`§ 636 requires that a magistrate overseeing a
`trial possess a trial skill level comparable to that
`of an article III judge.
`
`case presents equally
`this
`In addition,
`important—but distinct—factual and
`legal
`questions whether a magistrate’s vacatur of a
`jury verdict, despite the presence of undisputed
`industry evidence; and blanket exclusion of all
`expert and business owner testimony
`is
`erroneous when the rulings conflict with
`decisions in virtually every other circuit.
`
`This case involves the second circuit’s dramatic
`expansion of the powers of a non-article III magistrate
`judge, with little or no trial experience in a judicial
`capacity, to vacate a valid jury verdict by a wholesale
`exclusion of a previously vetted expert and categories of
`evidence that are admissible in virtually every other
`circuit. It also involves a scenario where the alleged
`consent by the parties was less than ideally obtained
`and the magistrate did not allow the article III district
`court to decide a motion to vacate her assignment or to
`review the final judgment. Although this Court has
`referred to consent authority on occasions, it has not
`addressed directly
`the questions of
`(i)
`the
`
`
`
`ii
`
`constitutionality of a magistrate assignment where the
`district judge maintains no reviewing authority over the
`magistrate’s dispositive rulings; (ii) the constitutionality
`of apparent coerced consent; (iii) the constitutionality of
`allowing a magistrate judge’s rulings to create legal
`precedent for the respective circuit, merely upon the
`consent of private parties; and (iv) the right of parties to
`have a magistrate judge with trial experience in a
`judicial capacity equivalent to that of the Article III
`judges who direct parties to agree that a magistrate
`should try a case.
`
`Thus, this case presents the following formal
`questions:
`
`1. Whether it is constitutional under 28 U.S.C. § 636
`for a district court to assign, with or without consent, a
`dispositive function to a magistrate judge where the
`district court retains no authority to review the
`magistrate’s final decision or to vacate the assignment.
`
`2. Whether 28 U.S.C. § 636 permits a magistrate
`judge to conduct a trial where the parties were
`pressured to litigate involuntarily before a non-Article
`III magistrate.
`
`3. Whether 28 U.S.C. § 636 permits a case to be
`reassigned, with or without objection, from a magistrate
`judge with substantial trial experience to a magistrate
`judge with little or no trial experience in a judicial
`capacity.
`
`4. Whether the second Magistrate Judge’s vacatur
`of the jury verdict and blanket exclusion of any expert or
`business owner testimony conflicts with the decisions of
`other United States courts of appeals departs from the
`accepted and usual course of judicial proceedings.
`
`
`
`iii
`
`LIST OF PARTIES
`
`Petitioners, who were Plaintiffs-Appellants-Cross-
`Appellees below, are Daryl K. Washington and Sunday
`Players, Inc.
`
`Respondent, who was Defendant-Appellee-Cross-
`Appellee below, is Kellwood Company.
`
`
`
`iv
`
`CORPORATE DISCLOSURE STATEMENT
`
`Pursuant to Rule 29 of this Court’s Rules,
`Petitioners certify that Sunday Players, Inc. is a
`privately held corporation organized under the laws of
`Texas and does not have a parent company, nor does a
`publicly traded company hold more than 10% of its
`stock.
`
`
`
`v
`
`TABLE OF CONTENTS
`
`QUESTIONS PRESENTED . . . . . . . . . . . . . . . . . . .
`
`i
`
`LIST OF PARTIES . . . . . . . . . . . . . . . . . . . . . . . . .
`
`iii
`
`CORPORATE DISCLOSURE STATEMENT . . . .
`
`TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . .
`
`iv
`
`ix
`
`PETITION FOR CERTIORARI . . . . . . . . . . . . . . . . 1
`
`OPINIONS AND ORDERS BELOW . . . . . . . . . . . . 2
`
`BASIS FOR JURISDICTION . . . . . . . . . . . . . . . . . . 2
`
`STATUTORY PROVISIONS INVOLVED . . . . . . . . 2
`
`STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . 5
`
`A. The Sunday Players Brand and
`Compression-wear Market . . . . . . . . . . . . 5
`
`B. The Initiation and Termination of the
`Exclusive License Agreement . . . . . . . . . . 6
`
`C. The District Court Delays in Advancing
`the Case to a Jury Trial
`. . . . . . . . . . . . . . 7
`
`D. The Courtroom Deputy Contacts the
`Parties and Originates Discussion
`Regarding Trial by Magistrate . . . . . . . . . 8
`
`to
`the Case
`E. Judge Batts Assigns
`Magistrate Judge Michael Dolinger . . . . . 8
`
`F. The Case is Reassigned, Without Notice
`to the Parties, to Magistrate Judge Sarah
`Netburn . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
`
`
`
`vi
`
`G. Based on The Evidence Presented, the
`Jury Ruled in Petitioners’ Favor . . . . . . . 9
`
`H. Magistrate Netburn Vacates the Jury
`Verdict; Grants, then Denies, a New
`Trial; and Excludes all Testimony by
`Experts and Business Owners . . . . . . . . 10
`
`the
`I. The Second Circuit Validates
`Reassigned Magistrate Judge’s Rulings 11
`
`REASONS FOR GRANTING THE PETITION . . . 12
`
`I.
`
`THE DECISION AFFIRMING THE
`MAGISTRATE JUDGE’S RULINGS IS
`CONTRARY TO THE PLAIN TEXT OF
`SECTION 636 AND CONGRESS’
`PURPOSES
`IN ESTABLISHING THE
`MAGISTRATES ACT . . . . . . . . . . . . . . . . . . 17
`
`A. The Consent Was Clearly Not
`Voluntary . . . . . . . . . . . . . . . . . . . . . . . . . 20
`
`B. Magistrate Michael Dolinger Determined
`a Trial Was Proper . . . . . . . . . . . . . . . . . 24
`
`II.
`
`THE REASSIGNMENT OF THE CASE,
`WITHOUT NOTICE, TO MAGISTRATE
`NETBURN VIOLATES SECTION 636 . . . . 25
`
`A. The Magistrates Act is Violated if an
`Assigned Magistrate Does Not Possess
`the Minimum Trial Proficiency of an
`Article III Judge . . . . . . . . . . . . . . . . . . . 25
`
`
`
`vii
`
`B. The Magistrates Act Was Violated When
`the Parties Were Not Advised They Could
`Withhold Consent
`from Allowing
`Magistrate Netburn to Try the Case . . . 28
`
`C. Magistrate Judge Netburn’s Ruling
`on the Motion to Vacate Violated Section
`636 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
`
`A D I S T R I C T C O U R T ’ S C A S E
`ASSIGNMENTS TO MAGISTRATES FOR
`TRIAL, WITHOUT MAINTAINING THE
`RIGHT TO REVIEW
`IT, VIOLATES
`SECTION 636 . . . . . . . . . . . . . . . . . . . . . . . . 30
`
`IF NOT
`THE DECISION BELOW,
`REVERSED, PRESENTS A SERIOUS AND
`WIDESPREAD THREAT TO ALL LAWFUL
`VERDICT WINNERS AT THE HANDS OF
`UNTRIED ARBITERS WHOSE OPINIONS
`ARE NOT SUBJECT TO REVIEW BY AN
`ARTICLE-III DISTRICT JUDGE . . . . . . . . 33
`
`III.
`
`IV.
`
`CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
`
`APPENDIX
`
`Appendix A Summary Order in the United States
`Court of Appeals for the Second
`Circuit
`(November 2, 2017) . . . . . . . . . . . App. 1
`
`Appendix B Opinion and Order in the United
`States District Court for the Southern
`District of New York
`(September 6, 2016) . . . . . . . . . . App. 14
`
`
`
`viii
`
`Appendix C Order Denying Petition for Rehearing
`and Petition for Rehearing En Banc in
`the United States Court of Appeals
`for the Second Circuit
`(December 20, 2017)
`. . . . . . . . . App. 32
`
`Appendix D Opinion and Order in the United
`States District Court for the Southern
`District of New York
`(December 4, 2015)
`
`. . . . . . . . . . App. 34
`
`Appendix E Comparison of Yardstick
`Companies . . . . . . . . . . . . . . . . . App. 41
`
`Appendix F 28 U.S.C. § 636 . . . . . . . . . . . . . . App. 42
`
`
`
`ix
`
`TABLE OF AUTHORITIES
`
`CASES
`
`Allen v. Wine,
`297 Fed. Appx. 524 (7th Cir. 2008) . . . . . . . . . . 30
`
`Calderon v. Waco Lighthouse for the Blind,
`630 F.2d 352 (5th Cir. 1980) . . . . . . . . . . . . . . . 21
`
`Collins v. Foreman,
`729 F.2d 108 (2d Cir.1984)
`
`. . . . . . . . . . . . . 31, 32
`
`Commodity Futures Trading Comm’n v. Schor,
`478 U.S. 833 (1986) . . . . . . . . . . . . . 13, 17, 18, 19
`
`Cooper Indus., Inc. v. Leatherman Tool Grp., Inc.,
`532 U.S. 424 (2001) . . . . . . . . . . . . . . . . . . . . . . 33
`
`Cooper v. Pacific Life Ins. Co.,
`2007 WL 430693 (S.D.Ga. Feb. 6, 2007) . . . . . . 35
`
`Dowell v. Blackburn,
`932 F.2d 963 (4th Cir. 1991) . . . . . . . . . . . . . . . 29
`
`Fellman v. Fireman’s Fund Ins. Co.,
`735 F.2d 55 (2d Cir. 1984) . . . . . . . . . . . . . . . . . 29
`
`Franceschi v. Hosp. Gen. San Carlos, Inc.,
`420 F.3d 1 (1st Cir.2005) . . . . . . . . . . . . . . . . . . 35
`
`Frank Sullivan Co. v. Midwest Sheet Metal Workers,
`335 F.2d 33 (8th Cir.1964) . . . . . . . . . . . . . . . . . 36
`
`Frazer v. Miller-Stout,
`2006 WL 3842152 (E.D. Wash. Dec. 28, 2006) . . 29
`
`G.M. Brod & Co., Inc. v. U.S. Home Corp.,
`759 F.2d 1526 (11th Cir.1985) . . . . . . . . . . . . . . 35
`
`
`
`x
`
`Geras v. Lafayette Display Fixtures, Inc.,
`742 F.2d 1037 (7th Cir.1984) . . . . . . . . . . . . . . . 23
`
`Glover v. Alabama Board of Corrections, et al.,
`660 F.2d 120 (5th Cir. 1981) . . . . . . . . . . . . . . . 21
`
`Gomez v. United States,
`490 U.S. 858 (1989) . . . . . . . . . . . . . . . . . . . 13, 17
`
`Gonzalez v. United States,
`553 U.S. 242 (2008) . . . . . . . . . . . . . . . . . . . 25, 26
`
`Heatransfer Corp. v. Volkswagenerk, A.G.,
`553 F.2d 964 (5th Cir.1977) . . . . . . . . . . . . . . . . 35
`
`Hopkins v. Steele,
`2010 WL 4340257 (E.D. Mo. Oct. 27, 2010)
`
`. . . 29
`
`Interactive Pictures Corp. v. Infinite Pictures, Inc.,
`274 F.3d 1371 (Fed.Cir.2001)
`. . . . . . . . . . . . . . 36
`
`Knapp v. Cate,
`2012 WL 5354928 (E.D. Cal. Oct. 29, 2012) . . . 29
`
`Lehrman v. Gulf Oil Corp.,
`500 F.2d 659 (5th Cir.1974) . . . . . . . . . . . . . . . . 35
`
`Lightning Lube, Inc. v. Witco Corp.,
`4 F.3d 1153 (3d Cir.1993)
`. . . . . . . . . . . . . . . . . 36
`
`Mathews v. Weber,
`423 U.S. 261 (1976) . . . . . . . . . . . . . . . . . . . . . . 13
`
`Mechanical Wholesale, Inc. v. Universal-Rundle
`Corp., 432 F.2d 228 (5th Cir.1970) . . . . . . . . . . 35
`
`Milhous v. Metro Govt.,
`221 F.3d 1335 (6th Cir. 2000) . . . . . . . . . . . . . . 29
`
`
`
`xi
`
`MindGames, Inc. v. W. Publ’g Co. Inc.,
`218 F.3d 652 (7th Cir. 2000) . . . . . . . . . . . . . . . 35
`
`Northern Pipeline Construction Co. v. Marathon Pipe
`Line Co., 458 U.S. 50 (1982)
`. . . . . . . . . . . . 13, 30
`
`Pacemaker Diagnostic Clinic, Inc. v.
`Instromedix, Inc.,
`725 F.2d 537 (9th Cir. 1984) . . . . . . . . . 23, 30, 31
`
`Peretz v. United States,
`501 U.S. 923 (1991) . . . . . . . . . . . . . . . . . . . . . . 12
`
`Plaut v. Spendthrift Farm, Inc.,
`514 U.S. 211 (1995) . . . . . . . . . . . . . . . . . . . . . . 18
`
`Sockwell v. Phelps,
`906 F.2d 1096 (5th Cir. 1990) . . . . . . . . . . . . . . 30
`
`Station Enter., Inc. v. Ganz, Inc.,
`2009 WL 3059148 (E.D.Mich. Sept. 24, 2009) . . 36
`
`Story Parchment Co. v. Paterson Parchment
`Paper Co., 282 U.S. 555 (1931) . . . . . . . . . . . . . 34
`
`Syufy Enters. v. Am. Multicinema, Inc.,
`793 F.2d 990 (9th Cir.1986) . . . . . . . . . . . . . . . . 35
`
`Tampa Bay Shipbuilding & Repair Co. v. Cedar
`Shipping Co., 320 F.3d 1213 (11th Cir.2003) . . 36
`
`United States v. Johnston,
`258 F.3d 361 (5th Cir. 2001) . . . . . . . . . . . . . . . 23
`
`United States v. Raddatz,
`447 U.S. 667 (1980) . . . . . . . . . . . . . . . . . . . 13, 31
`
`Wellness Int’l Network, Ltd. v. Sharif,
` — U.S. ----, 135 S. Ct. 1932 (2015) . . . . . . . . . . 32
`
`
`
`xii
`
`Wharton-Thomas v. United States,
`721 F.2d 922 (3d Cir. 1983) . . . . . . . . . . . . . . . . 24
`
`CONSTITUTION AND STATUTES
`
`U.S. Const. Art. III . . . . . . . . . . . . . . . . . . . . . passim
`
`U.S. Const. amend. VII . . . . . . . . . . . . . . . . . . . . 3, 33
`
`28 U.S.C. § 631(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 32
`
`28 U.S.C. § 631(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
`
`28 U.S.C. § 636 . . . . . . . . . . . . . . . . . . . . . . 17, 28, 30
`
`28 U.S.C. § 636(b)(1)(A)
`
`. . . . . . . . . . . . . . . . . . . . 3, 4
`
`28 U.S.C. § 636(c)
`
`. . . . . . . . . . . . . . . . . . . . 14, 20, 31
`
`28 U.S.C. § 636(c)(1) . . . . . . . . . . . . . . 4, 5, 13, 20, 31
`
`28 U.S.C. § 636(c)(2) . . . . . . . . . . . . . . . . . . . . passim
`
`28 U.S.C. § 636(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . 32
`
`28 U.S.C. § 636(c)(4) . . . . . . . . . . . . . . . . . . . . . . . . 28
`
`28 U.S.C. § 1254 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
`
`RULE
`
`Fed. R. Civ. P. 73 . . . . . . . . . . . . . . . . . . . . . 14, 27, 29
`
`OTHER AUTHORITIES
`
`1977 Annual Report of the Director of the
`Administrative Office of the United States
`Courts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23, 24
`
`2016 Report, http://www.uscourts.gov/sites/default/
`files/data_tables/jff_1.1_0930.2016.pdf . . . . . . . 24
`
`
`
`xiii
`
`TIMOTHY A. BAKER, The Expanding Role of
`Magistrate Judges in the Federal Courts, 39 Val.
`U. L. Rev. 661 (2005) . . . . . . . . . . . . . . . . . . . . . 14
`
`Cong. Rec. H5056 (daily ed. June 25, 1979)
`(statement of Mr. Danielson)
`. . . . . . . . . . . . . . 21
`
`Cong. Rec. H8725 (daily ed. Sept. 28, 1979)
`(statement of Mr. Kastenmeier) . . . . . . . . . . . . 21
`
`H.R.Rep. No. 94-1609 (1976)
`
`. . . . . . . . . . . . . . . . . 19
`
`H.R.Rep. No. 96-287 (1979)
`
`. . . . . . . . . . . . . . . . . . 26
`
`H.Rep. No. 1364, 95th Cong., 2d Sess. 12 (1978) . . . 20
`
`http://www.uscourts.gov./statistics-reports/us-
`magistrate-judges-judicial-business-2016 . . . . 15
`
`Reinier H. Kraakman, Note, Article III Constraints
`and the Expanding Civil Jurisdiction of Federal
`Magistrates: A Dissenting View, 88 YALE L.J.
`1023 (1979) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
`
`Litigation Services Handbook: The Role of the
`Financial Expert(4th ed. 2007) . . . . . . . . . . . . . 36
`
`Moore’s § 59.13[2] [g][iii] . . . . . . . . . . . . . . . . . . . . . 35
`
`Restatement (Second) of Contracts § 352 . . . . . . . . 35
`
`S.Rep. 94-625 (1976) . . . . . . . . . . . . . . . . . . . . . . . . 19
`
`S.Rep. No. 96-74 (1979) . . . . . . . . . . . . . . . . . . . . . . 18
`
`Carroll Seron, The Roles of Magistrates: Nine Case
`Studies 84 (Federal Judicial Center 1985) . . . . 22
`
`U.S.Code Cong. & Admin.News 1979 . . . . . . . . . . . 18
`
`
`
`1
`
`PETITION FOR CERTIORARI
`
`In 2003, the parties entered into a three-year, with
`optional renewal, exclusive license agreement for the
`manufacture, marketing, promotion, and sales of
`Petitioners’ compression athletic wear, a rapidly
`expanding market niche of apparel. Respondent
`terminated the agreement prematurely and Petitioners
`filed Complaint in the Southern District of New York
`on November 29, 2005. After several years, the district
`court ruled on a partial motion to dismiss and
`Petitioners filed an Amended Complaint on June 25,
`2009. Over the next few years, hearings were canceled,
`the case languished with inactivity, and it was shuttled
`back and forth between district judges.
`
`Finally, nine years later, in 2014, after Petitioners
`continually asked for a trial date, the parties were
`contacted by the courtroom deputy and informed that
`they needed to consent to a magistrate judge to avoid
`further delays. Realizing they had no option, the
`parties signed the form. Initially, an experienced
`magistrate was assigned and made rulings
`in
`Petitioners’ favor on summary judgment and Daubert
`motions. After these rulings, the case was reassigned,
`over an objection, to one of the newer magistrates, who,
`as Petitioners discovered much later, had little or no
`trial experience in a judicial capacity. Although
`Respondent asked to vacate the assignment of the new
`magistrate, the magistrate took up the motion herself
`and denied it. Eventually, after a jury trial, the new
`magistrate proceeded to, inter alia, (i) vacate the entire
`jury verdict; (ii) preclude all testimony from an expert
`who had previously been thoroughly vetted by the
`experienced Magistrate during robust Daubert
`
`
`
`2
`
`proceedings; (iii) grant, then vacate the ruling on, the
`motion for new trial; (iv) preclude Petitioners from
`utilizing any expert in a new trial and (v) preclude all
`testimony from business owners as to damages.
`
`Review by this Court is necessary to address the
`unconstitutionality of the trial court’s rulings, the
`undeniable conflict among the courts of appeal
`regarding the categories of evidence and witnesses the
`magistrate excluded, and to prevent the decision below
`by a non-Article III judge from eviscerating the
`protections of Article III in direct contravention of
`Congress’ and the Framers’ mandates.
`
`OPINIONS AND ORDERS BELOW
`
`The Second Circuit’s panel decision is reported at
`2017 WL 4994467 and reproduced at App.1. The
`Second Circuit’s order denying rehearing en banc is
`reproduced at App.32. The district court’s decision
`vacating the jury’s verdict is reported at 2016 WL
`4619207 and reproduced at App.14.
`
`BASIS FOR JURISDICTION
`
`its decision on
`The Second Circuit entered
`November 2, 2017 and denied the petition for rehearing
`on December 20, 2017. This Court has jurisdiction
`under 28 U.S.C. § 1254.
`
`STATUTORY PROVISIONS INVOLVED
`
`Article III, section 1, of the U.S. Constitution
`provides:
`
`The judicial power of the United States, shall be
`vested in one Supreme Court, and in such
`inferior courts as the Congress may from time to
`
`
`
`3
`
`time ordain and establish. The judges, both of
`the supreme and inferior courts, shall hold their
`offices during good behavior, and shall, at stated
`times, receive for their services, a compensation,
`which shall not be diminished during their
`continuance in office.
`
`U.S. Constitution - Amendment VII provides:
`
`In Suits at common law, where the value in
`controversy shall exceed twenty dollars, the
`right of trial by jury shall be preserved, and no
`fact tried by a jury, shall be otherwise re-
`examined in any Court of the United States,
`than according to the rules of the common law.
`
`The Federal Magistrates Act (the “Magistrates Act”)
`provides in relevant part:
`
`Magistrates Act - 28 U.S.C. § 636(b)(1)(A)
`
`[A] judge may designate a magistrate judge to
`hear and determine any pretrial matter pending
`before the court, except a motion for injunctive
`relief, for judgment on the pleadings, for
`summary judgment, to dismiss or quash an
`indictment or
`information made by the
`defendant, to suppress evidence in a criminal
`case, to dismiss or to permit maintenance of a
`class action, to dismiss for failure to state a
`claim upon which relief can be granted, and to
`involuntarily dismiss an action. A judge of the
`court may reconsider any pretrial matter under
`this subparagraph (A) where it has been shown
`that the magistrate judge’s order is clearly
`erroneous or contrary to law.
`
`
`
`4
`
`28 U.S.C. § 636(b)(1)(A). The Act also prescribes the
`circumstances under which consent can be provided,
`
`Magistrates Act - 28 U.S.C. § 636(c)(1), (2)
`
`(1) Upon the consent of the parties, a full-time
`United States magistrate judge or a part-time
`United States magistrate judge who serves as a
`full-time judicial officer 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 or courts he serves. Upon
`the consent of the parties, pursuant to their
`specific written request, any other part-time
`magistrate judge may exercise such jurisdiction,
`if such magistrate
`judge meets the bar
`membership requirements set forth in section
`631(b)(1) and the chief judge of the district court
`certifies that a full-time magistrate judge is not
`reasonably available
`in accordance with
`guidelines established by the judicial council of
`the circuit. When there is more than one judge of
`a district court, designation under
`this
`paragraph shall be by the concurrence of a
`majority of all the judges of such district court,
`and when there is no such concurrence, then by
`the chief judge.
`
`(2) If a magistrate judge is designated to
`exercise civil jurisdiction under paragraph (1) of
`this subsection, the clerk of court shall, at the
`time the action is filed, notify the parties of the
`availability of a magistrate judge to exercise
`such jurisdiction. The decision of the parties
`shall be communicated to the clerk of court.
`
`
`
`5
`
`Thereafter, either the district court judge or the
`magistrate judge may again advise the parties of
`the availability of the magistrate judge, but in so
`doing, shall also advise the parties that they are
`free to withhold consent without adverse
`substantive consequences. Rules of court for the
`reference of civil matters to magistrate judges
`shall
`include procedures
`to protect
`the
`voluntariness of the parties’ consent.
`
`28 U.S.C. § 636(c)(1), (2). The Magistrates Act is
`reproduced at App.42-51.
`
`STATEMENT OF THE CASE
`
`A. The Sunday Players Brand and
`Compression-wear Market
`
`The origins of this suit date back to 2003, when
`Daryl Washington (“Washington”), an attorney, sports
`agent, and former accountant started Sunday Players
`(“SP”), a compression athletic-wear brand. Washington
`owns the trademarks “Sunday Players” and a logo of a
`stylized running person with an elliptical design and
`branded his apparel with this logo and name. Initially,
`Washington and his partners marketed the SP brand
`themselves by attending major trade shows, publishing
`product catalogs, visiting teams and colleges and
`making other personal sales calls. One SP principal,
`Izell Reese, is a former high-profile NFL defensive back
`who introduced the brand to customers and developed
`interest in the products among professional football
`players in NFL locker rooms. Another SP principal,
`Curley Kelly, a football, basketball, baseball, and
`volleyball coach, was head of team sales and developed
`relationships with coaches and teams throughout the
`
`
`
`6
`
`country. Through these efforts, SP made relatively
`substantial sales to high schools, colleges, and retail
`stores. Christopher Plumlee served as SP’s Vice
`President of Sales. Plumlee had 25 years of sales and
`marketing experience and helped develop the brand’s
`marketing strategy it wanted Kellwood to help
`implement. SP believed that it should base its strategy,
`in part, on a proven marketing strategy like that of
`Under Armour (“UA”). UA was a new leader in the
`compression market and was founded by a college
`football player. During the relevant time, UA’s
`revenues grew from $5.3 million in 2000 to $242.2
`million in 2005. SP’s principals testified they studied
`the compression market for years, had actual market
`experience, and felt SP could compete in the market.
`
`Before Kellwood Company took over SP’s operation,
`the SP brand was gaining nationwide recognition and
`was seen worn by well-known athletes such as NFL
`Hall of Fame quarterback and NASCAR car owner
`Roger Staubach, NBA Hall of Famer Earvin “Magic”
`Johnson, and former No. 1 ranked female pool player
`in the world, Jeanette “Black Widow” Lee.
`
`B. The Initiation and Termination of the
`Exclusive License Agreement
`
`In November 2003, SP entered into an exclusive
`license agreement (the “Agreement”) with Kellwood,
`whereby Kellwood agreed to manufacture, market and
`promote the SP brand and products as exclusive
`licensee. No one disputes that Kellwood’s financial
`strength, high quality
`compression-wear
`manufacturing, demonstrated record of brand
`development, and relationships with national
`retailers—as well as experience turning new brands
`
`
`
`7
`
`into extremely profitable brands—enticed SP to enter
`into the Agreement. And SP was an attractive partner
`for Kellwood, who was seeking licensing agreements to
`increase sales and ensure future success. The
`Agreement’s term was three years (until 2007) with an
`electable option to renew for three additional years.
`
`Kellwood terminated the Agreement prematurely in
`March 2005.
`
`C. The District Court Delays in Advancing
`the Case to a Jury Trial
`
`SP filed its Complaint in the Southern District of
`New York on November 29, 2005. In February 2006,
`Kellwood filed a partial motion to dismiss, but the
`district court did not rule on it until March 24, 2009,
`and in response to that Order, SP filed a Second
`Amended Complaint on June 25, 2009. The first
`scheduling order issued on October 30, 2009, but no
`trial date was scheduled. The second scheduling order
`issued on October 8, 2010, but, again, no trial date was
`scheduled. On April 21, 2011, an Order issued
`scheduling dates for Daubert expert-related motions.
`Consistent with District Judge Deborah A. Batts’s
`Order, both parties filed their Daubert motions on May
`20, 2011, and briefing was complete by June 24, 2011.
`A Motion Hearing on the Daubert Motions was set for
`July 12, 2011 before Judge Batts, but the hearing was
`later cancelled.
`
`On October 5, 2011, the case was reassigned to
`District Judge J. Paul Oetken. On October 18, 2011,
`the case was reassigned to Judge Batts. For the next
`three years, no substantive court activity was held on
`the case.
`
`
`
`8
`
`D. The Courtroom Deputy Contacts the
`Parties and Originates Discussion
`Regarding Trial by Magistrate.
`
`During 2011-2014, Petitioners’ counsel occasionally
`contacted the courtroom deputy to ask for a trial
`setting, to no avail. In addition to telephone calls, both
`parties sent correspondence to the district court in July
`2011 and July 2013 seeking a setting for motions and
`trial. Each time contact was made with the court, the
`delays would continue. Then, in September 2014,
`district Judge Batts’s courtroom deputy contacted the
`parties to discuss the parties “agreeing” to a trial by a
`magistrate. It was represented that allowing a
`magistrate to try the case was the only way to “avoid
`further delay.” Because of the already substantial
`delays, and the implication from the courtroom deputy
`that non-consent would result in further delays, the
`parties agreed (clearly under pressure) to allow a
`magistrate
`to handle
`the case. According
`to
`Respondent’s recollection, it agreed only to allow
`Magistrate Judge Dolinger to hear the case since,
`based on Kellwood’s research of Magistrate Dolinger, it
`believed Magistrate Dolinger had the requisite trial
`experience to hear a case of this significance.
`
`E. Judge Batts Assigns the Case to
`Magistrate Judge Michael Dolinger
`
`On October 6, 2014, the case was assigned to
`Magistrate Dolinger. On April 21, 2015, Magistrate
`Dolinger made rulings on the Daubert motions that had
`been pending for years and ruled that most of SP’s
`expert testimony was admissible under Daubert. On
`October 14, 2015, Magistrate Dolinger denied
`Kellwood’s summary judgment motion and granted
`
`
`
`9
`
`SP’s summary judgment motion in part, holding that
`Kellwood breached the Agreement in two ways.
`Magistrate Dolinger held, “a trial is warranted to put
`a dollar value on this infraction.”
`
`F. The Case is Reassigned, Without Notice to
`the Parties, to Magistrate Judge Sarah
`Netburn
`
`On October 14, 2015, without notice, the case was
`reassigned to Magistrate Judge Sarah Netburn, who
`scheduled a status conference for October 28, 2015.
`During the status conference, Respondent’s counsel
`indicated that it would file a motion to vacate
`Magistrate Netburn’s assignment, which it did.
`However, instead of the Article III district judge ruling
`on the Motion to Vacate, Magistrate Netburn herself
`entered an order denying the Motion. Magistrate
`Netburn set trial for February 3, 2016.
`
`G. Based on The Evidence Presented, the
`Jury Ruled in Petitioners’ Favor
`
`On the eve of trial, Kellwood filed a motion in limine
`to restrict the testimony of SP’s expert Scott Barnes
`(“Barnes”), and Magistrate Netburn excluded parts of
`Barnes’s testimony. Nevertheless, the jury returned a
`verdict that Kellwood breached the Agreement and
`awarded SP $4.35 million in lost profits damages and
`$500,000 in lost market value damages. During trial,
`seven industry-knowledgeable witnesses agreed that
`advertising, athletic-sponsorships, and direct consumer
`marketing were necessary to sell SP’s products. The
`witnesses also effectively agreed that had Kellwood
`used its corporate strength, financial resources, sales
`and marketing expertise, and retailer contacts to
`
`
`
`10
`
`market/promote the brand, Kellwood/SP, exercising
`reasonable efforts, would have achieved substantially
`more sales, in the figures provided at trial.
`
`The jury also heard that SP spent years comparing
`competitors’ products; visiting stores to see points of
`sale; observing consumer behavior; studying how
`compression products were marketed; talking to
`consumers about brand name and philosophy;
`obtaining feedback from coaches, team equipment
`managers and athletes about what they liked and
`would buy; attending seminars regarding the market;
`and speaking with representatives at trade shows and
`store owners. Thus, SP’s principals routinely conducted
`research to determine whether Kellwood/SP could
`compete in the rapidly expanding compression apparel
`market. Kellwood presented no experts or lay witnesses
`refuting testimony that those who researched, helped
`develop, and participated in the market considered
`Kellwood/SP sufficiently comparable to early-UA. See
`Yardstick Comparison at App.41. Moreover, Kellwood’s
`expert performed no Yardstick analysis and offered no
`alternative Yardstick company.
`
`Further, the Magistrate Judge did not demonstrate
`during the trial that she had any independent expertise
`in the compression-wear market with which to evaluate
`evidence differently from the jury.
`
`H. Magistrate Netburn Vacates the Jury
`Verdict; Grants, then Denies, a New
`Trial; and Excludes all Testimony by
`Experts and Business Owners
`
`Nonetheless, after trial, Magistrate Netburn
`vacated the jury’s verdict and granted Kellwood’s
`
`
`
`11
`
`conditional request for a new trial on damages but held
`that that SP would not be permitted to offer any expert
`testimony at a new trial. SP then prepared to make its
`case without an expert, indicating that it would use
`competent and admissible lay witness testimony to
`establish SP’s damages from Kellwood’s breaches. After
`SP had prepared for trial once again, and again on the
`eve of trial, Magistrate Netburn reversed course. She
`granted Kellwood’s omnibus motion in limine to
`exclude all of SP’s damages evidence, precluded SP’s
`lay witness testimony on damages, cancelled the new
`damages trial, and retroactively granted Kellwood’s
`post-trial judgment as a matter of law. SP moved for
`reconsideration, making detailed offers of evidence
`demonstrating what it would have established at the
`damages trial, but Magistrate Netburn refused to
`consider any of the evidence, or allow SP to use expert
`testimony, before entering an order of final judgment
`awarding nominal damages of $1.
`
`I. The Second Circuit Validates the
`Reassigned Magistrate Judge’s Rulings.
`
`Peitioners appealed to the Second Circuit, notifying
`it that the parties were effectively required to consent
`to a magistrate to get a trial date and that Magistrate
`Netburn made the decision herself [improperly] to deny
`Respondent’s Motion to Vacate her assignment. See
`Plaintiffs-Appellants-Cross Appellees’ Br. (docketed by
`2nd Cir. January 13, 2017); p. 2. Petitioners also
`explained that Magistrate Netburn erred when she
`(i) vacated the jury verdict after making credibility
`determinations and improperly weighing the evidence;
`(ii) reversed the Order of a new damages trial,
`prohibiting Petitioners from introducing any evidence
`
`
`
`12
`
`to support damages; (iii) excluded Petitioners’ expert,
`who had already been throroughly vetted during
`Daubert proceedings conducted by the previous
`Magistrate; and (iv) precluded admissible evidence
`supporting damages. See Plaintiffs-Appellants-Cross
`Appellees’ Br.; Plaintiffs-Appellants-Cross Appellees’
`Response and Reply Br. (docketed by 2nd Cir. July 15,
`2017).
`
`The Second Circuit rejected, without thorough
`explanation, the evidence from SP, Kellwood and MTV
`and retailer statements that established lost profits
`and
`lost business value based,
`in part, on
`Kellwood/SP’s statuts as a yardstick to early-UA,
`including because of their: almost exclusive focus on
`compression; manufacturing prowess and capabilities;
`proposed advertising partner
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