Adverse rulings are always possible in federal litigation. This post explores how insureds can respond to adverse rulings issued by federal magistrate judges during pretrial litigation.
Congressional statute assigns magistrate judges broad authority to issue pretrial orders and opinions. In first-party property cases, magistrate judges often issue (1) orders on discovery issues and (2) reports and recommendations on case dispositive motions. Case dispositive motions include motions for summary judgment and motions to dismiss. If insureds receive an adverse opinion from a magistrate judge, insureds have the right to petition the district judge to reject the magistrate judge’s position.1
One of the most important considerations when determining whether to seek review of a magistrate judge’s opinion is the standard of review that the district judge must employ. Standards of review are important because they inform the district judge’s decision on how much deference to provide to the magistrate judge’s opinion.
The district court’s deference to the magistrate judge is at its zenith when the magistrate judge enters an order that is not case dispositive. For non-dispositive motions, the district court reviews the order under the clearly erroneous standard. To prevail, the petitioning party must leave the district court with a definite and firm conviction that the magistrate judge made a mistake or failed to apply (or misapplied) the correct law or procedural rule. The standard of review is extraordinarily deferential to the magistrate judge’s order. Under this standard, the petitioner must essentially convince the district judge that the magistrate judge’s order was so incorrect that no reasonable judge applying the correct law could have arrived at the same decision. If a party does not object to the magistrate judge’s order within 14 days, all objections to the order may be waived.
Magistrate judges often issue their opinions through a report and recommendation. In a report and recommendation, the standard of review often depends on whether the petitioner filed a timely objection to the order. Parties must lodge objections to the magistrate judge’s report and recommendation within 14 days. For issues that drew objection, the district judge must look at the entire relevant record and make its own determination of the correct outcome. This means that no deference (with the potential exception of witness credibility) is afforded to the magistrate judge’s determination. Any portion of the report and recommendation that drew no objection is reviewed under the clearly erroneous standard. After review, statute authorizes the district court to accept, reject or modify the magistrate judge’s findings.
Insureds and their attorneys must also consider the issue of issue waiver for circuit-level appeals. In some circumstances, failing to object to a magistrate judge’s order or report and recommendation can deprive the litigant of the opportunity to submit the error to the federal circuit courts of appeal or seek appellate review under a more favorable standard.
One other consideration insureds must consider is whether the adverse ruling really affects the ultimate merits of the case. Sometimes, a magistrate judge’s ruling on discovery or other issues provides clarity to the parties on important—but not dispositive— issues. Even if the insured’s requested relief was denied or the magistrate judge decided contrary to the desires of the insured, sometimes the best course of action is to move on and litigate the next issue. But if the magistrate judge issued an opinion that negatively affects the case, an insured might have no option but to appeal to the district court.
1 This discussion assumes that the parties have not consented to the jurisdiction of the magistrate judge to enter all orders and judgment in the case.