United States Court of Appeals For the First Circuit
No. 18-1405
ML-CFC 2007-6 PUERTO RICO PROPERTIES, LLC,
Plaintiff, Appellee,
v.
BPP RETAIL PROPERTIES, LLC,
Defendant, Appellant,
JLL PUERTO RICO REALTY GP, INC.; JONES LANG LASALLE AMERICAS, INC.; LNR PARTNERS, INC.,
Third-Party Defendants.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO
[Hon. Pedro A. Delgado-Hernández, U.S. District Judge]
Before
Howard, Chief Judge, Torruella and Barron, Circuit Judges.
Alfredo Fernández-Martínez, with whom Carlos R. Baralt Suárez and Gurley & Associates were on brief, for appellant. Joan Schlump Peters, with whom Nachman & Guillemard, PSC, was on brief, for appellee. February 28, 2020 BARRON, Circuit Judge. This appeal arises from a federal
district court's designation of a magistrate judge to "hear and
determine" -- pursuant to 28 U.S.C. § 636(b)(1)(A), a provision of
the Federal Magistrates Act that provides for limited review by
the district court -- a motion to appoint a receiver over certain
commercial properties that are the subject of a foreclosure action
under Puerto Rico law. The appellant contends that the motion to
appoint a receiver cannot be delegated to a magistrate judge under
§ 636(b)(1)(A). The appellant instead contends that the proper
delegation of such a motion must be made under § 636(b)(1)(B),
which permits a magistrate judge merely to issue a report and
recommendation on the motion, subject to the district court's
plenary review of any objections. We vacate and remand for further
proceedings.
I.
In early 2007, the appellee, BPP Retail Properties, LLC
("BPP"), borrowed over $90 million from Countrywide Commercial
Real Estate Finance Inc. in order to buy and develop six shopping
centers across Puerto Rico. Those same six shopping centers served
as collateral for the loan.
At some point, the appellant, ML-CFC 2007-6 Puerto Rico
Properties, LLC ("ML-CFC") became the holder of the loan. On
February 9, 2017, ML-CFC brought a foreclosure action against BPP
- 3 - under Puerto Rico law in the United States District Court for the
District of Puerto Rico, invoking its diversity jurisdiction under
28 U.S.C. § 1332.
ML-CFC alleges that when BPP's loan matured on February
8, 2012, BPP failed to repay the remaining balance. The balance
of the loan, ML-CFC asserts, remains outstanding.
After filing the foreclosure action in federal court,
ML-CFC moved for the District Court to appoint a receiver over the
six real estate properties it sought to recover. In its motion,
ML-CFC asserted that it had both a contractual right to the
appointment of a receiver1 under Puerto Rico law and that a receiver
1 In the event of a default, the mortgage deeds to each of the properties provides: Mortgagee shall as a matter of right and without regard to the solvency of the Mortgagor or the adequacy of the security for the indebtedness from Mortgagor to Mortgagee, be entitled to the appointment of a receiver for all or any part of the Mortgaged Property, whether such receivership be incidental to a proposed sale of the Mortgaged property or otherwise, and Mortgagor hereby consents to the appointment of such a receiver and agrees that it will not oppose any such appointment. Said receiver shall have the broadest powers and faculties usually granted to a receiver by the court and his/her appointment shall be made by the court as a matter of absolute right granted to the Mortgagee. Moreover, the Assignments of Leases and Rents for each property provides: At any time after the occurrence and during the continuance of an Event of Default, (i)
- 4 - should be appointed as a matter of equity. BPP opposed the motion
by contending that this Court's precedent did not provide for the
appointment of receivers solely as a matter of contract and that
ML-CFC could not show that it was entitled to the appointment of
a receiver as a matter of equity.
Initially, the District Court referred ML-CFC's motion
to appoint a receiver to a magistrate judge for a report and
recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). That
provision permits a district court to refer certain matters to
magistrate judges to issue "proposed findings of fact and
recommendations for [their] disposition" before entering a final
order, with de novo review by the district court of all of the
parties' objections to the magistrate judge's report and
recommendation. On February 6, 2018, however, the District Court
changed course. It determined that the motion to appoint a
receiver is the type of "pretrial matter" that a district court
may designate a magistrate judge to "hear and determine" pursuant
Assignee, without waiving such Event of Default, at its option, upon notice and without regard to the adequacy of the security for the Loan Obligations, either in person or by agent, upon bringing any action or proceeding, by a receiver appointed by a court, or otherwise, may take possession of the Property and have, hold, manage, lease and operate the same on such terms and for such period of time as Assignee may deem proper.
- 5 - to § 636(b)(1)(A). That provision allows district courts to
"designate a magistrate judge to hear and determine any pretrial
matter," such that the magistrate judge's ruling is treated as a
final order that can only be modified by a district court if it
"is clearly erroneous or contrary to law." Id.
BPP opposed this designation on the following ground.
It pointed out that, although 28 U.S.C. § 636(b)(1)(A) generally
authorizes the designation of magistrate judges to "hear and
determine any pretrial matter," that provision also bars district
courts from designating magistrate judges to "hear and determine"
certain enumerated types of motions, notwithstanding that they
concern matters that are preliminary to the trial.
Section 636(b)(1)(A) states in particular that magistrate judges
may not "hear and determine":
[M]otion[s] 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.
BPP argued that the motion to appoint a receiver in this
case was encompassed by the exception listed above for a "motion
for injunctive relief." Thus, BPP requested that the District
Court "revert[] its decision" and refer the motion to the
Magistrate Judge for a report and recommendation pursuant to
- 6 - § 636(b)(1)(B), such that the District Court would then review de
novo any objections to the Magistrate Judge's recommended findings
and conclusions.
The District Court rejected BPP's argument. It
determined that the motion to appoint a receiver was a "pretrial
matter" under § 636(b)(1)(A) that was not included in the list of
excepted motions in that provision, as the District Court found
that a receivership is not a form of injunctive relief. In doing
so, the District Court concluded that the motion was not
"dispositive of the parties' rights." United States v. High Plains
Livestock, LLC, No. 15-CV-680 MCA/WPL, 2016 WL 10591975, at *4
(D.N.M. Jan. 11, 2016).
Although § 636(b)(1)(A) does not use the word
"dispositive" that the District Court invoked, we note that Federal
Rule of Civil Procedure 72, which purports to set forth the
appropriate standard of review for magistrate judge rulings, does.
Specifically, Rule 72(a), which applies to "pretrial matter[s]
[that are] not dispositive of a party's claim or defense," provides
that the district court must "modify or set aside any part of" a
magistrate judge's decision in such a matter when it "is clearly
erroneous or is contrary to law." Rule 72(b), meanwhile, provides
that a magistrate judge must "enter a recommended disposition"
when assigned "to hear a pretrial matter dispositive of a claim or
- 7 - defense," objections to which the district court "must determine
de novo."
On March 29, 2018, the Magistrate Judge entered an
"Opinion and Order" that granted ML-CFC's motion to appoint a
receiver for the commercial properties in question. The Magistrate
Judge decided the matter solely on the basis of ML-CFC's first
argument -- that the loan agreement entitled it to that appointment
upon BPP's default -- without reaching the issue of whether ML-CFC
was entitled to the appointment as a matter of equity.
At that point, BPP filed motions to stay the appointment
of a receiver and to appeal the Magistrate Judge's decision to the
District Court. The District Court denied these motions in a short
opinion:
Nothing [BPP] states justifies deviating from the court's original ruling on this matter. The order granting appointment of a receiver was premised on the contractual right as set forth in the loan documents coupled with evidence of default, which based on the court's review of the record, [BPP] did not rebut despite ample opportunity to present evidence it considered favorable. In this way, two judicial officers have examined the evidence: U.S. Magistrate Judge Marcos E. López and the undersigned. But [BPP] failed to make the showing necessary to justify the stay request it has made, as [ML-CFC] has persuasively argued in its opposition, or to demonstrate that the Magistrate Judge's decision should be set aside. [BPP] signed a contract, and must live with the consequences of having done so.
- 8 - On April 23, 2018, BPP filed an interlocutory appeal
pursuant to 28 U.S.C. § 1292(a)(2), which allows for the immediate
appeal of "orders appointing receivers" to a court of appeals.
BPP appeals both the District Court's decision to refer the matter
to the Magistrate Judge for resolution pursuant to 28 U.S.C.
§ 636(b)(1)(A) and the merits of whether a receiver should have
been appointed pursuant to the contract. BPP does not appeal the
denial of its motion for a stay.
We heard oral argument and asked the parties at that
time to address an issue not considered in their briefs. That
issue concerned whether, if we disagreed with BPP's contention
that the appointment of a receiver is a form of "injunctive relief"
under § 636(b)(1)(A), and held that the Magistrate Judge could be
designated by the District Court to "hear and determine" the motion
pursuant to that provision, the Magistrate Judge's determination
of that issue would contravene Article III of the federal
Constitution, given the limited review that § 636(b)(1)(A)
empowered the District Court to exercise over that decision.
Following argument, we then called for two subsequent rounds of
briefing about the Article III concerns that we had raised at
argument. Thus, we have before us BPP's challenge to the District
Court's statutory authority to refer the motion to appoint a
receiver to the Magistrate Judge under § 636(b)(1)(A) and BPP's
challenge to the merits of the ruling granting that motion. But,
- 9 - we also potentially have before us the lurking Article III issue
that concerns whether, even if the Magistrate Judge had statutory
authority under § 636(b)(1)(A) to "hear and determine" the motion,
the Magistrate Judge was powerless to do so under Article III.
II.
We start with BPP's challenge to the District Court's
statutory authority to designate the Magistrate Judge to "hear and
determine" the motion to appoint a receiver pursuant to 28 U.S.C.
§ 636(b)(1)(A). We do so because, if that challenge has merit,
then we would have no occasion to consider either the
constitutionality of the designation or the merits of the order
granting the motion to appoint the receiver. Our review of this
pure question of law is de novo. See Williams v. Beemiller, Inc.,
527 F.3d 259, 264 (2d Cir. 2008) (noting that challenges to
referrals under 28 U.S.C. § 636(b)(1)(A) implicate "questions of
statutory interpretation" and are thus reviewed de novo).
BPP argues that "the appointment of a receiver . . .
should be considered -- both procedurally and substantively -- as
a preliminary injunction." BPP then contends that the motion at
issue is for that reason a motion for "injunctive relief" under
§ 636(b)(1)(A) and thus that a district court may not delegate the
motion to a magistrate judge to "hear and determine" subject only
- 10 - to its review of whether the magistrate judge's determination was
clearly erroneous or contrary to law.
In support of that contention, BPP emphasizes that both
the issuance of a preliminary injunction and the appointment of a
receiver are "pre-trial remed[ies] in equity," for which the
standard of review is abuse of discretion. And, BPP points out,
Congress permits parties to take interlocutory appeals with regard
to "orders appointing receivers, or refusing orders to wind up
receiverships or to take steps to accomplish the purposes thereof,
such as directing sales or other disposals of property," 28 U.S.C.
§ 1292(a)(2), much the same as Congress permits parties to do with
regard to preliminary injunctions.
But, BPP provides us with no precedential support for
the contention that the appointment of a receiver has historically
been viewed as a form of injunctive relief, and, in Highland Ave.
& B.R. Co. v. Columbian Equipment Co., 168 U.S. 627 (1898), the
United States Supreme Court indicated otherwise. There, the Court
considered whether, under a statute that permitted parties to file
interlocutory appeals of decisions "granting, continuing,
refusing, dissolving, or refusing to dissolve an injunction to the
circuit court of appeals," a party could file an interlocutory
appeal of an order appointing a receiver. Id. at 629-30 (emphasis
added). The Court concluded that an interlocutory appeal could
- 11 - not be taken from an order appointing a receiver under that statute
because injunctions and receiverships:
are, in the common understanding of the profession, entirely independent. The distinction between the two is clearly recognized in the text-books and in the reports. We have separate treatises on injunctions and on receivers. The separation between them is one which runs through the law, and while it is true that the mandatory features which, either expressly or by implication, attend orders appointing receivers, are sometimes made the matter of discussion in treatises on receivers, or the subject of comment in decisions concerning receivers, yet the distinction is never forgotten. Familiar, as it must be assumed to have been, with this generally recognized distinction, congress, if it had intended that appeals should be allowed from orders appointing receivers, as from orders in respect to injunctions, would doubtless have expressly named such orders.
Id. at 631.
It is true that 28 U.S.C. § 636(b)(1)(A) uses the phrase
"injunctive relief" rather than the word "injunction." But, that
terminological choice alone does not persuade us that Congress
intended to encompass an order to appoint a receiver within the
phrase "injunctive relief" when it is clear that, according to
Highland, such an order has traditionally been viewed as different
from an injunction along a number of dimensions. In fact, BPP's
own argument about the current interlocutory appeal statute
demonstrates that Congress continues to differentiate between the
issuance of an injunction and the appointment of a receiver. See
- 12 - 28 U.S.C. § 1292(a)(1) (providing for interlocutory appeals of
orders relating to injunctions); id. § 1292(a)(2) (providing for
interlocutory of appeals relating to receiverships).
Nevertheless, we conclude that there is a distinct but
closely related basis for deciding that the District Court's
referral of the motion to the Magistrate Judge to "hear and
determine" subject only to limited review was impermissible. That
neither of the parties developed this argument -- until one of
them referenced it in their reply brief filed in connection with
the second round of supplemental briefing -- does not prevent us
from ruling on this basis, especially given that doing so obviates
the need for us to address a constitutional question arising under
Article III. See U.S. Nat. Bank of Or. v. Indep. Ins. Agents of
Am., Inc., 508 U.S. 439, 447 (1993) ("[A] court may consider an
issue 'antecedent to . . . and ultimately dispositive of' the
dispute before it, even an issue the parties fail to identify and
brief." (second alteration in original) (quoting Arcadia v. Ohio
Power Co., 498 U.S. 73, 77 (1990))); Kamen v. Kemper Fin. Servs.,
Inc., 500 U.S. 90, 99 (1991) ("When an issue or claim is properly
before the court, the court is not limited to the particular legal
theories advanced by the parties, but rather retains the
independent power to identify and apply the proper construction of
governing law."); The Anaconda v. Am. Sugar Ref. Co., 322 U.S. 42,
- 13 - 46 (1944) (noting that parties "can not stipulate away" what
"Congress has so declared").
That distinct basis for so ruling rests on our prior
precedent, which accords with the precedents of other courts,
addressing the relationship between 28 U.S.C. § 636(b)(1) and
Federal Rule of Civil Procedure 72. As we will explain, that body
of precedent construes § 636(b)(1) and Rule 72 in a manner that
ensures that magistrate judges may act on what Rule 72(b) refers
to as "dispositive" motions only by issuing reports and
recommendations, with any objections to those recommendations
subject to de novo review by the district court, and that
magistrate judges may "hear and determine," subject to more limited
review by the district court, only what Rule 72(a) refers to as
"nondispositive" motions.
In the first of our decisions in this line of authority,
Phinney v. Wentworth Douglas Hospital, 199 F.3d 1, 5 (1st Cir.
1999), we held that a motion for discovery sanctions could, in
some circumstances, be delegated to a magistrate judge to "hear
and determine" as a "pretrial matter" under § 636(b)(1)(A), such
that it would be reviewed only for being clearly erroneous or
contrary to law, just as Rule 72(a) contemplates may be the case
for motions it terms "nondispositive." We explained that Rule 72
augmented the provisions in the Federal Magistrates Act,
"mirror[ing] the standard-of-review taxonomy described in section
- 14 - 636(b)(1)," id., by providing "that a magistrate's order on a
nondispositive motion shall be modified or set aside by the
district court only if 'found to be clearly erroneous or contrary
to law,'" but that "if a party contests a magistrate's proposed
findings and recommendations on a dispositive motion, the district
judge must 'make a de novo determination,'" id. (emphases added)
(quoting Fed. R. Civ. P. 72). We further explained "that the terms
dispositive and nondispositive as used in Rule 72 must be construed
in harmony with the classifications limned in section 636(b)(1),"
id., and that, in consequence, the "dispositive motions" referred
to in Rule 72 were not only "those excepted motions specifically
enumerated in section 636(b)(1)(A), and no others," id. Rather,
we clarified that the "enumeration" of motions in § 636(b)(1)(A)
"informs the classification of other motions as dispositive or
nondispositive," id. at 6, such that they, too, would be subject
to the standard of review for such motions prescribed by Rule 72.
Against that background, we held that the motion for
discovery sanctions at issue had been properly delegated under
§ 636(b)(1)(A) and Rule 72(a) because the magistrate judge acted
on the motion by imposing only a small monetary sanction. Id. We
did so because such a motion was not expressly "excepted under 28
U.S.C. § 636(b)(1)(A)" and, given the sanction ultimately issued,
was not of a type that, "in general," was "of the same genre of
the enumerated motions." Id. Accordingly, we treated that motion
- 15 - as "nondispositive" within the meaning of Rule 72(a), thereby
ensuring that the delegation to a magistrate judge to "hear and
determine" the motion, subject only to limited review by a district
court, would be in harmony with that part of Rule 72. We noted,
though, that a motion for discovery sanctions might be subject to
Rule 72(b), notwithstanding that it was not specifically excepted
from § 636(b)(1)(A), in the event that "a magistrate judge
aspire[d] to impose a sanction that fully dispose[d] of a claim or
defense," id., apparently on the understanding that such a
resolution of a discovery sanctions motion necessarily would
render the motion a "dispositive" one within the meaning of Rule
72(b), thereby implicating the requirements of that part of Rule
72.
We then drew upon Phinney's reasoning in PowerShare,
Inc. v. Syntel, Inc., 597 F.3d 10, 13-14 (1st Cir. 2010). We did
so in ruling that a motion to stay litigation pending arbitration
was a "pretrial matter" that could be delegated to a magistrate
judge for a final decision under 28 U.S.C. § 636(b)(1)(A), subject
only to review by the district court of whether that decision was
clearly erroneous or contrary to law. See id. at 14. And, once
again, we did so because we determined that such a motion was not
"dispositive" within the meaning of Rule 72(b). See id. We made
sure to note, however, that, pursuant to our approach in Phinney,
the list of "[d]ispositive" motions in § 636(b)(1)(A) that may not
- 16 - be delegated to a magistrate judge to "hear and determine" pursuant
to that provision is "not exhaustive" of the category, such that
Rule 72(b)'s de novo standard of review for "dispositive" motions
might apply to a motion that does not appear on the list, due to
constitutional concerns associated with allowing "magistrate
judges . . . [to] decide motions that are dispositive either of a
case or of a claim or defense within a case." Id. at 13.
Indeed, other courts have similarly recognized that the
"[t]he duty to avoid constitutional difficulties when interpreting
a statute warrants a narrow reading of the matters in which a
magistrate judge may enter orders without de novo Article III
review." Davidson v. Georgia-Pacific, L.L.C., 819 F.3d 758, 763
(5th Cir. 2016). On that basis, they, too, have favored a
construction of § 636(b)(1)(A) that harmonizes it with Rule 72's
distinction between the treatment of "dispositive" and
"nondispositive" motions and its concomitant use of distinct
standards of review for each type. See id.; Mitchell v.
Valenzuela, 791 F.3d 1166, 1168-69 (9th Cir. 2015) ("To determine
whether a motion is dispositive, we have adopted a functional
approach that looks to the effect of the motion, in order to
determine whether it is properly characterized as dispositive or
non-dispositive of a claim or defense of a party." (quoting Flam
v. Flam, 788 F.3d 1043, 1046 (9th Cir. 2015)); Vogel v. U.S. Office
Prods. Co., 258 F.3d 509, 514-15 (6th Cir. 2001) ("In determining
- 17 - whether a particular motion is dispositive, this court undertakes
functional analysis of the motion's potential effect on
litigation. The list of dispositive motions contained in
§ 636(b)(1)(A) is nonexhaustive, and unlisted motions that are
functionally equivalent to those listed in § 636(b)(1)(A) are also
dispositive.").2
Against this background, we conclude that,
notwithstanding our construction of "injunctive relief" in
§ 636(b)(1)(A), ML-CFC's motion is properly deemed "dispositive,"
despite the District Court's apparent contrary determination.3 The
2 A leading treatise provides: The rule's deviation from the language of the statute is not merely stylistic or a result of the distinct functions of the Act and the Federal Rules. It is meant to reflect the legislative history of the 1976 amendments, the considerations underlying the differing standards of review, and the body of case law that developed in practice under the provisions of Section 636(b)(1).
12 Charles Alan Wright et al., Federal Practice and Procedure § 3068.2 (3d ed. 2019). Indeed, even before Rule 72 was issued, the Supreme Court understood § 636(b)(1) to differentiate between "dispositive" and "nondispositive" motions. See United States v. Raddatz, 447 U.S. 667, 673-74 (1980) (deeming the eight excepted motions in 28 U.S.C. § 636(b)(1)(A) "dispositive" and suggesting that a "pretrial matter" must be a "nondispositive motion[]"). 3 One might question how the text of 28 U.S.C. § 636(b)(1)(A) permits a motion not listed in § 636(b)(1)(A) that otherwise qualifies as a "pretrial matter" to nonetheless be subject to the standard of review for "dispositive" motions set forth in Rule 72(b) rather than to the clearly erroneous/contrary to law standard of review set forth in Rule 72(a) and § 636(b)(1)(A), especially
- 18 - motion to appoint a receiver seeks to have a court undertake an
action that could have a significant impact on a party's ability
to manage and control its property during the course of litigation.
And thus, unsurprisingly, the law requires that a court, before it
may take such an action, must consider an array of factors as a
matter of equity, including the same critical merits-based factor
that a court must consider before granting what is clearly, in
this context, a "dispositive" motion -- a motion to issue a
preliminary injunction. That merits-based factor is a preliminary
determination of which party is likely to succeed on the merits.
See Consol. Rail Corp. v. Fore River Ry. Co., 861 F.2d 322, 326-27
given the fact that Rule 72 postdates the enactment of § 636(b)(1). But, as we have noted, Phinney and PowerShare concluded that such treatment was proper for all analogous "dispositive" motions, as have other courts. Moreover, the parties before us have not advanced any argument that those precedents were wrongly decided, nor have they argued that a motion to appoint a receiver is, by analogy to the conducting of voir dire in a felony trial, not a "pretrial matter" under § 636(b)(1)(A) even though it is made in advance of the trial. See Gomez v. United States, 490 U.S. 858, 874 n.28 (1989); United States v. Trice, 864 F.2d 1421, 1427-28 (8th Cir. 1988). We thus follow the parties in proceeding on the assumption that whether the motion is "dispositive" within the meaning of Rule 72 is, well, dispositive of whether this motion is encompassed by the standard of review set forth in § 636(b)(1)(A) rather than § 636(b)(1)(B), even if it is not a type of motion expressly included in the list of motions excepted from § 636(b)(1)(A). Both parties' implicit acceptance of the premise that a motion that is "dispositive" under Rule 72 must also not be determinable by a magistrate judge without de novo review under § 636(b)(1)(B) strengthens our conclusion that it is appropriate for us to resolve the case on the basis that the motion at issue is "dispositive" even if the parties elected to focus their arguments elsewhere.
- 19 - (1st Cir. 1988) (listing factors to be considered "when determining
the appropriateness of the appointment of a receiver," which
includes, among others, "imminent danger that property will be
lost or squandered, the inadequacy of available legal remedies,
. . . the plaintiff's probable success in the action[,] and the
possibility of irreparable injury to his interests in the property"
(internal citations omitted)); 75 C.J.S. Receivers § 4 (2019).
Of course, in this case, the Magistrate Judge purported
to base the granting of the motion to appoint a receiver on the
contract between the parties rather than on an equitable
determination. But, that fact makes the order here no less based
on the merits of the underlying foreclosure action and thus no
less "dispositive" in the relevant respect than a motion for a
preliminary injunction.
The Magistrate Judge granted the motion to appoint the
receiver as a matter of contract only after determining, in accord
with the contract, that there was an adequate showing that BPP had
defaulted on the loan. As that preliminary determination about
whether there was such a default is central to the merits of the
foreclosure action itself, the fact that the motion was granted on
the basis of the contract fails to provide a basis for concluding
that the motion was not, on this record, a "dispositive" one in
the relevant sense.
- 20 - Thus, because a motion for a preliminary injunction is
a motion encompassed by the list of prohibited motions in 28 U.S.C.
§ 636(b)(1)(A), and because we must construe that list to "inform[]
the classification of other motions as dispositive or
nondispositive," Phinney, 199 F.3d at 6, we conclude that this
motion to appoint a receiver was "dispositive" under Rule 72.4
And, in light of Phinney, PowerShare, and the related precedents
from other courts, we thus do not reach the merits of whether the
Magistrate Judge's decision was correct. Rather, in harmony with
Rule 72(b) and in accord with 28 U.S.C. § 636(b)(1), "we remand
for the district court to apply de novo review to the magistrate
judge's unauthorized order," after the parties have had a fresh
chance to submit objections to that order. United States v.
Rivera-Guerrero, 377 F.3d 1064, 1071 (9th Cir. 2004).5
4Motions to remand a case to state court are also generally not thought to be dispositive of a claim or defense, but that has not stopped other circuit courts from treating them as "dispositive" under Rule 72(b) in order to avoid constitutional questions. See First Union Mortg. Corp. v. Smith, 229 F.3d 992, 996 (10th Cir. 2000) ("Section 636 and Rule 72 must be read, where possible, so as to avoid constitutional problems, and '[t]he Constitution requires that Article III judges exercise final decisionmaking authority.'" (alteration in original) (quoting Ocelot Oil Corp. v. Sparrow Indus., 847 F.2d 1458, 1463 (10th Cir. 1988))). 5We note that although ML-CFC has argued throughout this litigation that the motion to appoint a receiver was "nondispositive" and therefore delegable as a "pretrial matter" under § 636(b)(1)(A), it has made no argument that, if the matter were "dispositive," then it was still proper for the Magistrate Judge to hear and determine the motion without de novo review
- 21 - III.
We vacate the District Court's decision overruling BPP's
objections to the Magistrate Judge's order and remand for further
proceedings consistent with this opinion. No costs are awarded.
rather than for the magistrate judge to merely issue a report and recommendation on the motion to be reviewed in accord with Rule 72(b). And, of course, BPP is in no position to object to the approach we take here in light of its arguments in favor of treating this motion as one that may be given to a magistrate judge to issue a report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). See New Hampshire v. Maine, 532 U.S. 742, 750 (2001) (noting that the doctrine of judicial estoppel may be used to "prohibit[] parties from deliberately changing positions according to the exigencies of the moment" (citing United States v. McCaskey, 9 F.3d 368, 378 (5th Cir. 1993)).
- 22 -