The opinion of the court was delivered by: Weinstein, District Judge, and Helen E. Freedman, Supreme Court Justice.
On January 30, 1990 Kenneth R. Feinberg, Esq. was appointed
a federal Special Master and a state Referee by joint order of
the United States District Court for the Eastern District of
New York and the Supreme Court of the State of New York,
respectively. See In re Joint Eastern and Southern Districts
Asbestos Litigation; In re New York City Asbestos Litigation,
129 F.R.D. 434 (E.D.N.Y. & N.Y. Sup. Ct. 1990). Mr. Feinberg
was to act as a settlement master-referee, mediating between
the parties to avoid the necessity of extended trials in cases
involving asbestos exposure at the Brooklyn Navy Yard. He was
directed to attempt to settle the cases in four months, by June
Owens-Illinois, Inc., one of the defendants in these cases,
offered no objection during discussions with the court.
Nevertheless, Owens-Illinois sought on April 24, 1990 by motion
returnable May 15 to disqualify Mr. Feinberg. Its ground was
that some years ago he and his law firm, Kaye, Scholer,
Fierman, Hays & Handler, had acted on its behalf and that of
other asbestos manufacturers in connection with public
education and legislative efforts aimed at promoting
alternative compensation systems to mass tort litigation.
The motion must be denied because: (1) the special position
of a mediator renders inappropriate disqualification under the
circumstances alleged by the moving party; (2) it has already
been denied in connection with consolidated asbestos litigation
pending in Maryland in which Mr. Feinberg was appointed as
mediator; and (3) the motion is untimely.
Kenneth R. Feinberg, Esq. is a nationally recognized mediator
of great skill whose services have been frequently utilized by
private litigants and by courts. He has also taken a leading
role in legislative, bar association and academic circles in
connection with the development of important alternative
dispute resolution (ADR) innovations. In addition to his duties
as mediator in the Brooklyn Navy Yard cases, Mr. Feinberg was
appointed to a similar position last year by the Baltimore
Circuit Court for Baltimore City and charged with settling some
9000 consolidated asbestos personal injury cases in the state
of Maryland. That litigation is currently pending. Mr.
Feinberg, with the consent of the Maryland,
New York and federal courts, continues to act simultaneously as
a settlement master in both the Maryland and New York
From 1980 to 1983 Mr. Feinberg represented a group of
asbestos manufacturers known as the Asbestos Compensation
Coalition. The Coalition was formed to develop or respond to
federal legislative proposals and to other governmental
activities relating to alternative compensation systems for
asbestos claimants. During the course of his representation of
the Coalition Mr. Feinberg drafted legislative proposals for
alternative compensation systems and worked with congressional
personnel and representatives of other companies.
Owens-Illinois, the moving party in the instant case, was not
a member of the Coalition, although a number of the other
defendants in the instant case — none of whom have joined in
the motion to disqualify — were members.
In early 1983 the Coalition disbanded and in its place a
number of asbestos companies, including Owens-Illinois, formed
the Committee for Equitable Compensation, an organization with
purposes similar to that of the Coalition. Mr. Feinberg
personally represented the Committee through the end of 1983.
Neither he nor his firm represented or advised the Committee or
any of its individual members in the defense or settlement of
asbestos claims brought under existing laws. Mr. Feinberg
worked with Congress on behalf of the Committee looking towards
federal legislation establishing a no-fault administrative
compensation program for asbestos claimants to which the United
States Government would contribute. He and his firm also
undertook public education projects on the Committee's behalf
and reacted to proposals for a uniform national product
liability law. Although a number of the other defendants in the
instant litigation were members of the Committee, none have
joined Owens-Illinois' motion to disqualify.
Although his personal involvement had ceased by early 1984,
Mr. Feinberg's law firm and in particular, his colleague,
Lawrence Novey, continued to represent the Committee until
In January 1990, some five months into Mr. Feinberg's tenure
as settlement master in the Maryland asbestos litigation,
Owens-Illinois moved to disqualify him in that litigation. The
motion was denied by Judge Marshall A. Levin, who was
supervising the Maryland asbestos litigation, in February 1990.
See In re Asbestos Personal Injury Litigation, AMOF No.
87048500, (Balt. City Cir.Ct. Feb. 14, 1990) (Letter-Order)
(attached as appendix A). The Owens-Illinois appeal was
dismissed in April 1990 by the Maryland Court of Special
Appeals. See Owens-Illinois, Inc. v. Kenneth R. Feinberg, PHC
No. 93 (Ct. Special App. Apr. 19, 1990) (attached as appendix
B). In April 1990, after Mr. Feinberg was moving towards a
final critical phase of his mediation efforts in the Brooklyn
Navy Yard cases, Owens-Illinois moved to disqualify him in the
instant litigation. The Owens-Illinois papers are almost
verbatim copies of its papers in the Maryland litigation.
II. THE IMPORTANCE OF ALTERNATIVE DISPUTE RESOLUTION
ADVANCES AND PROPOSALS
Mediation in mass tort litigation such as the asbestos cases
is of vital importance to the public, interested parties, the
courts and the legal profession. The cost, both in specific
outlays of the parties and the burdens these complex cases
place on the courts by preventing or substantially delaying
adjudication in criminal and other civil matters, as well as in
high transactional costs that prevent claimants from obtaining
reasonable awards promptly, warrants every effort to avoid
expensive and unnecessary litigation. Without such mediation
efforts by judges, magistrates and others our calendar system
would break down. Many litigants would simply find the
courthouse door closed.
The mediator — whether judge or special master — must work
independently with each of the parties. It must be assumed that
the relationship between the mediator and each of the parties
and their counsel
will be open, candid and forthcoming. See, e.g., Henderson,
Settlement Masters, in Center for Public Resources Legal
Program, ADR and the Courts: A Manual for Judges and Lawyers
233 (E. Fine ed. 1987) (district judge's views on mediation
process). The settlement master must hold ex parte "frank,
confidential discussion(s)" with all parties so that each
privately can inform the master of the strengths and weaknesses
of its case and hear the master's evaluation of the case. Id.
at 235-36. Neither the judge nor opposing counsel is privy to
these individual discussions. Id. The parties engaged in a
mediated settlement process recognize that they must, if the
process is to work, fully disclose to the mediator their needs
and tactics — not only those that have been publicly revealed,
but also their private views and internal arrangements.
Information revealed to the mediator should include — absent a
confidential communication privilege — relationships to
insurers, overall strategy, corporate politics and the like.
Much the same position is taken when the court itself acts as
a mediator in the large number of cases in which a judge or a
magistrate works closely with the parties to assist them in
settling pending cases. It is standard practice for the
presiding judge or magistrate to meet separately with each of
the parties for a candid discussion of strategy and the needs
of the party. Sometimes these sessions will be attended by high
officials of one of the parties in addition to the attorneys.
Often insurance counsel will attend so that the judge can
appreciate fully the difficulties faced and positions taken by
each party and make helpful suggestions.
Thus the mediator, in the form of judge, magistrate, special
master, referee or other privately appointed person, must be
fully apprised if he or she is to take advantage of the special
circumstances of each case. The role of the mediator is often
that of the honest broker who must suggest a solution giving
advantage to both sides and minimizing the price that each must
pay. See generally W. Brazil, Effective Approaches to
Settlement (1988); D. Provine, Settlement Strategies for
Federal Judges (1986); R. Fisher and W. Vry, Getting to Yes
(1981); H. Will, R. Merhige, Jr. and A. Rubin, The Role of the
Judge in the Settlement Process (1977); F. Lacey, The Judge's
Role in the Settlement of Civil Suits (1977); Lynch and Levine,
The Settlement of Federal District Court Cases: A Judicial
Perspective, 67 Or.L.Rev. 239 (1988); Galanter, The Emergence
of the Judge as a Mediator in Civil Cases, 69 Judicature 256
(1986); Schuck, The Role of Judges in Settling Complex Cases:
The Agent Orange Example, 53 U.Chi.L.Rev. 337 (1986). Examples
of this technique are found in general litigation, mass torts,
labor and elsewhere. See, e.g., Center for Public Resources
Legal Program, ADR and the Courts: A Manual for Judges and
Lawyers 11, 207-255 (E. Fine ed. 1987); A. Talbot, Settling
Things (1983) (evaluating mediation of environmental disputes);
Rowe, Study on Paths to a "Better Way": Litigation,
Alternatives, and Accommodation, 89 Duke L.J. 824 (1989). A
considerable amount of teaching in the law schools is now
devoted to mediation and alternative dispute resolution. See,
e.g., N. Rogers and C. McEwen, Mediation: Law, Policy, Practice
(1989) (treatise); L. Riskin and J. Westbrook, Dispute
Resolution and Lawyers (1987) (casebook); L. Kanowitz, Cases
and Materials on ADR (1986) (casebook); Journal of Dispute
Resolution (published since 1984 by the University of Missouri
at Columbia School of Law).
III. ETHICAL OBLIGATIONS OF MEDIATOR
In general a special master or referee should be considered
a judge for purposes of judicial ethics rules. See Code of
Judicial Conduct For United States Judges, 69 F.R.D. 273, 286
(1975) (approved by Judicial Conference of the United States,
April 1973 and amended) (Code of Judicial Conduct applicable to
special masters); Standards Relating to Judicial Discipline and
Disability Retirement, Rule 1.2, Comment (same). Accord
Belfiore v. New
York Times Co., 826 F.2d 177, 185 (2d Cir. 1987) (Code of
Judicial Conduct For United States Judges applies to special
masters), cert. denied, 484 U.S. 1067, 108 S.Ct. 1030, 98
L.Ed.2d 994 (1988). This conclusion is not undermined by the
fact that the federal and state statutes governing the recusal
of judges, justices or magistrates, see 28 U.S.C. § 455 and
N YJud.Law § 14, do not by their terms cover special masters
The Court of Appeals for the Second Circuit appears not to
have explicitly addressed the question of whether the same
standard governing disqualification of a judge should apply to
special masters. See Rios v. Enterprise Ass'n of Steamfitters
Local 638, 860 F.2d 1168, 1173-74 (2d Cir. 1988) (observing
that federal case law is ambivalent regarding whether special
masters should be held to same standards of impartiality as
judges). Other federal courts have required special masters to
meet the same ethical standards as judges. See, e.g., Jenkins
v. Sterlacci, 849 F.2d 627, 630 n. 1, 631-32 (D.C. Cir. 1988)
("[I]nsofar as special masters perform duties functionally
equivalent to those performed by a judge, they must be held to
the same standards as judges for purposes of
disqualification."); United States v. Conservation Chemical
Co., 106 F.R.D. 210, 234 (W.D.Mo. 1985) (same). But see Morgan
v. Kerrigan, 530 F.2d 401, 426 (1st Cir.) (applying lower
standard of impartiality to masters than to judges), cert.
denied, 426 U.S. 935, 96 S.Ct. 2648, 49 L.Ed.2d 386 (1976).
Section 4301 of the New York Civil Practice Law and Rules
provides that a referee appointed to determine an issue or
perform an act "shall have all of the powers of a court in
performing a like function." Impliedly, then, the standards of
judicial conduct applicable to judges also apply to a referee.
See, e.g., Moers v. Gilbert, 175 Misc. 733, 25 N.Y.S.2d 114,
118 (Sup.Ct.), aff'd, 261 A.D. 957, 27 N.Y.S.2d 425 (1st Dep't
1941) (holding that the provisions of New York judicial
disqualification statute apply to court-appointed referees).
For purposes of deciding this motion we accept the movant's
proposition that special masters and referees should be held to
the same standards as judges. We see no need to distinguish
between state or federal appointees. Both should be held to
equally high standards. Both should be above suspicion. Since
the use of special masters for purposes of settlement is more
prevalent in the federal courts, the statutory and case
precedents are primarily federal.
Under federal law, a judge may be disqualified in two
situations that are relevant to the instant motion: 1) where
"impartiality might reasonably be questioned," 28 U.S.C. § 455(a),
and 2) where there is "a personal bias or prejudice
concerning a party, or personal knowledge of disputed
evidentiary facts concerning the proceeding." Id. § 455(b)(1).
Section 455(a) "sets out an objective standard for recusal,
creating the so-called `appearance of justice' rule." DeLuca v.
Long Island Lighting Co., 862 F.2d 427, 428 (2d Cir. 1988)
The federal test of impartiality "is what a reasonable
person, knowing and understanding all the facts and
circumstances, would believe." In re Drexel Burnham Lambert
Inc., 861 F.2d 1307, 1309 (2d Cir. 1988). As the legislative
history of the 1974 amendments to section 455 emphasizes when
explaining subsection (a):
[d]isqualification for lack of impartiality must
have a reasonable basis. Nothing in this proposed
legislation should be read to warrant the
transformation of a litigant's fear that a judge
may decide a question against him into a
"reasonable fear" that the judge will not be
H.R.Rep. No. 1453, 93d Cong., 2d Sess. 4-5, reprinted in 1974
U.S.Code Cong. & Admin.News 6351, 6354-55.
With regard to § 455(b)(1), any "alleged bias and prejudice
to be disqualifying must stem from an extrajudicial source and
result in an opinion on the merits on some basis other than
what the judge learned from his participation in the case."
United States v. Grinnell Corp., 384 U.S. 563, 583, 86 S.Ct.
1698, 1710, 16 L.Ed.2d 778 (1966). Accord People v. Moreno, 70
N Y2d 403, 407, 521 N.Y.S.2d 663, 666,
516 N.E.2d 200, 202-03 (1987) (holding New York State judges to
same disqualification standard) (citing Grinnell, 384 U.S. at
583, 86 S.Ct. at 1710).
The sole statutory authority for disqualification of a judge
under New York State law is Section 14 of the Judiciary Law.
That provision states that a judge may not take part in a
proceeding involving either the judge or the judge's relatives
up to the sixth degree of consanguinity or in a proceeding in
which the judge or relatives have a direct interest in the
litigation. The New York Court of Appeals has held that "absent
a legal disqualification under Judiciary Law § 14, a Trial
Judge is the sole arbiter of recusal." People v. Moreno, 70
N Y2d 403, 405, 521 N.Y.S.2d 663, 665, 516 N.E.2d 200, 201
There are also rules governing judicial conduct which are
made binding upon New York State Judges by the Rules of the
Chief Administrator of the Courts. See 22 N.Y.C.R.R. § 100.1 et
seq. These rules follow the language of the Code of Judicial
Conduct promulgated by the American Bar Association, adopted by
the New York State Bar Association and codified in Book 29 of
McKinney's Consolidated Laws of New York. Under the heading
"avoiding impropriety and the appearance of impropriety," Rule
100.2 of the New York Code of Rules and Regulations states that
a judge should "conduct himself or herself at all times in a
manner that promotes public confidence in the integrity and
impartiality of the Judiciary."
In defining avoidance of the appearance of impropriety, Rule
100.3 states a judge should disqualify himself or herself "in
a proceeding in which his or her impartiality might reasonably
be questioned" including situations in which "the judge served
as a lawyer in the matter in controversy. . . ." The
determination of impropriety in any given situation, however,
remains within the discretion of the judge. See People v.
Moreno, 70 N.Y.2d 403, 407, 521 N.Y.S.2d 663, 666,
516 N.E.2d 200, 202-03 (1987) (absent statutory disqualification, standard
of review is abuse of discretion); Johnson v. Hornblass,
93 A.D.2d 732, 461 N.Y.S.2d 277, 279 (1st Dep't 1983).
Owens-Illinois raises an additional issue concerning the
appointment of a referee under New York law, claiming that
consent of the parties is a prerequisite. While consent is
necessary for a referee appointed to hear and determine a
controversy pursuant to CPLR § 4317(a), it is not necessary for
an appointment under CPLR § 4311 or CPLR § 4320(a). The order
appointing Mr. Feinberg in no way authorizes him to hear and
determine controversies. Rather his position is to "assist the
parties and the courts in promptly settling these cases subject
to the further order of the courts." In re Joint Eastern and
Southern Districts Asbestos Litigation; In re New York City
Asbestos Litigation, 129 F.R.D. 434, 435 (E.D.N.Y. & N.Y. Sup.
This is the same role that Mr. Feinberg has played in
Maryland. If the settlement process is not successful, all
parties retain the right to a jury trial. Therefore, the
limitations imposed by CPLR § 4317 are irrelevant.
The issue of whether a judge should be disqualified requires
careful examination of the particular setting of the dispute to
determine whether the charge could reasonably be construed as
bringing into question the trier's impartiality. See In re
Drexel Burnham Lambert Inc., 861 F.2d 1307, 1309 (2d Cir.
Examination of the context is particularly important in the
case of mediators, where the courts have recognized that it is
inevitable that special masters — like court-appointed
experts, but unlike judges — will often be chosen from the
ranks of practicing attorneys who themselves have prior
expertise in the subject matter and prior association with
experts in the field. See Rios v. Enterprise Ass'n of
Steamfitters Local 638, 860 F.2d 1168, 1174-75 (2d Cir. 1988).
Cf. Scott v. Spanjer Bros., Inc., 298 F.2d 928, 931-32 (2d Cir.
1962) (finding that medical expert appointed by court to assist
court and jury need not be disqualified because he allegedly
had a great deal
of experience as "plaintiff's doctor"). In light of this
inevitability, the Court of Appeals for the Second Circuit has
found as a "general `rule that disqualification [of a special
master] is a matter for the exercise of discretion by the
district judge, unless actual bias has been demonstrated.'"
Rios v. Enterprise Ass'n of Steamfitters Local 638,
860 F.2d 1168, 1174 (2d Cir. 1988). Cf. Lipton v. Lipton, 128 Misc.2d 528,
489 N.Y.S.2d 994, 1000 (Sup.Ct. 1985) ("[A] referee should
be removed only for good and substantial reasons.")
As an officer of the court the special master remains bound
to respect the confidentiality of and refrain from using to
Owens-Illinois' disadvantage any information imparted to him
under seal of confidentiality by that company in the course of
his legislative or mediation ...