The Texas Rules of Civil Procedure allow the appointment of a “master in chancery” “in exceptional cases” and “for good cause.” Tex. R. Civ. P. 171. Such appointments may be by agreement. But oftentimes that appointment may be contested—and appellate lawyers may be consulted in advising a client about, and ultimately briefing issues related to, such an appointment.

A recent decision from the First Court of Appeals gives some guidance that may be relevant to contested special master appointments. In re Orsak, No. 01-21-00481-CV (Tex. App.—Houston [1st Dist.] Aug. 25, 2022, orig. proceeding). This decision is likely to be helpful to Houston appellate practitioners both in advising clients on a contested special master appointment and in strategizing in how to build a record to support such an appointment should it be challenged via mandamus.

I. Rule 171.

As with any rule-based analysis, the analysis should begin with the text of the rule. The rule controlling masters in chancery, Rule 171, is lengthy:

The court may, in exceptional cases, for good cause appoint a master in chancery, who shall be a citizen of this State, and not an attorney for either party to the action, nor related to either party, who shall perform all of the duties required of him by the court, and shall be under orders of the court, and have such power as the master of chancery has in a court of equity.

The order of references to the master may specify or limit his powers, and may direct him to report only upon particular issues, or to do or perform particular acts, or to receive and report evidence only and may fix the time and place for beginning and closing the hearings, and for the filing of the master’s report. Subject to the limitations and specifications stated in the order, the master has and shall exercise the power to regulate all proceedings in every hearing before him and to do all acts and take all measures necessary or proper for the efficient performance of his duties under the order. He may require the production before him of evidence upon all matters embraced in the reference, including the production of books, papers, vouchers, documents and other writings applicable thereto.

He may rule upon the admissibility of evidence, unless otherwise directed by the order of reference and has the authority to put witnesses on oath, and may, himself, examine them, and may call the parties to the action and examine them upon oath. When a party so requests, the master shall make a record of the evidence offered and excluded in the same manner as provided for a court sitting in the trial of a case.

The clerk of the court shall forthwith furnish the master with a copy of the order of reference.

The parties may procure the attendance of witnesses before the master by the issuance and service of process as provided by law and these rules.

The court may confirm, modify, correct, reject, reverse or recommit the report, after it is filed, as the court may deem proper and necessary in the particular circumstances of the case. The court shall award reasonable compensation to such master to be taxed as costs of suit.

Tex. R. Civ. P. 171.

II. Uncontested special masters are subject to a different analysis.

The Supreme Court has noted that the appointment of a special mater that is consented to by both parties is “ordinarily not subject to challenge”:

We note at the outset that this is not a case in which the appointment was by consent of the parties. It has long been recognized that a reference premised on the consent of the parties is not subject to the same strictures as one imposed by the court. To the extent the parties consent to the reference it will ordinarily not be subject to challenge.

Simpson v. Canales, 806 S.W.2d 802, 811 (Tex. 1991) (internal citations omitted).

Both Houston courts have recently noted the same. Orsak, slip op. at 7 (citing In re Coastal Nejapa, Ltd., No. 14-09-00239-CV, 2009 WL 2476555, at *3 (Tex. App.—Houston [14th Dist.] Aug. 13, 2009, orig. proceeding)).

The considerations below, thus, do not apply to an agreed-to special master. The most straightforward way to ensure appointment of a special master, should a party desire such an appointment, is to reach an agreement with all parties.

III. Appointment over an objection is only proper in “exceptional cases.”

In addressing contested appointments of special masters, the Supreme Court has emphasized the opening language to this rule. A contested appointment is only proper in “exceptional cases,” lest the court saddle litigants with the costs of “referring matters which the judge might easily hear and determine for himself.” Simpson, 806 S.W.2d at 808. The policy rationale for this requirement is based on the view that “[s]ystematic use of masters would threaten to deprive citizens of the judiciary’s expertise, as judges would be free to delegate their decision-making authority to special masters.” Orsak, slip op. at 9.

The threshold requirement that must be satisfied before securing the appointment of a special master is making a showing that the case is an “exceptional” one. “By its plain language, Rule 171 restricts the appointment of special masters to ‘exceptional cases’ only; routine matters do not qualify.” Id. at 8.

But what dos “exceptional” mean? Sufficient justification has been found in the following types of cases:

• Texas courts have found “sufficient justification for the appointment of a master to supervise discovery questions which require extensive examination of highly technical and complex documents by a person having both a technical and a legal background.” Id. at 9.
• Special masters may be appropriate “in a toxic tort case like Simpson.” Id. at 15.
• Special masters may be appropriate in cases “involving comprehensive analyses of highly technical data.” Id. at 15.

The First Court gave some examples of considerations that do not warrant the appointment of a special master:

• “Texas courts generally do not consider divorce proceedings ‘exceptional,’ necessitating a discovery master, even where the marital estate may be substantial or disputed.” Id. at 13. This includes a case involving “discovery
  . . . regarding several corporate entities for purposes of characterizing separate and community property and valuating the interests in such property.” Id. at 2.
• “This standard cannot be met merely by showing that a case is complicated or time-consuming, or that the court is busy.” Id. at 9 (internal citations omitted).
• “[T]he congest[ed] status of a trial court’s calendar cannot transform an otherwise unexceptional case into a case warranting the appointment and expense of a special master.” Id. at 1. Similarly, the reasoning that “the trial court’s duty to timely rule on discovery issues [has] been delayed as a result of the trial court’s docket . . . does not justify” the appointment of a special master. Id. at 16 (internal citations omitted).
• Numerous or complex discovery disputes may not be sufficient to show good cause for a special master. A trial court can “not look simply to the number of motions filed, or the number of pages in the motions, as the arbiter of complexity.” Id. at 13. A “single hearing” on the alleged complex issues was insufficient to show good cause for appointment of a special master. Id. at 11. “While thirty-four discovery motions certainly cannot be said to be insignificant, we must also acknowledge that cases with numerous and/or complex discovery disputes are not uncommon among the trial courts of this state.” Id. at 12.
• Nor does a “court’s congested docket, exacerbated by the Covid-19 pandemic and a fire in the Galveston County courthouse” “transform” a case “into an exceptional case warranting the appointment of a Rule 171 master in chancery.” Id. at 2.

In short, the Orsak opinion illustrates that an appointment cannot be “justified . . . on the ground [of] exceptional events . . . .” Id. at 16-17. “Rule 171 demands an ‘exceptional case[],’ not exceptional events or circumstances.” Id. (quoting Tex. R. Civ. P. 171). The analysis on the appointment of a special master should, therefore, focus on the nature of the case itself.

IV. The appointment of a contested special master is reviewable by mandamus.

Appellate practitioners should be aware that the appointment of a contested special master is reviewable by mandamus. The First Court confirmed that “[a] trial court’s order appointing a master in chancery or special discovery master is reviewable by mandamus because requiring parties ‘to reserve their complaint for appeal would be to deny them any effective relief from the trial court’s order.’” Orsak, slip op. at 7 (quoting Simpson, 806 S.W.2d at 812).

V. Miscellaneous considerations.

Finally, there are a few other issues in the First Court’s opinion that are worth noting.

First, the rationale given in the appointment order signed by the trial court is important. In evaluating whether the appointment was proper, the First Court focused its analysis primarily, although not exclusively, on the reasons given in the trial court’s order. See Orsak, slip op.at 10 (beginning with the rationale given “[i]n the appointment order” and also considering that “[i]n addition to the guidance provided by the appointment order,” “the trial court commented” on its rationale). A practitioner drafting a proposed order should work to ensure that the best rationale for the contested appointment is included in the order.

Second, the First Court held that the Covid emergency orders do not warrant relaxing the standards for appointment of a special master. It held that “[a]lthough the Texas Supreme Court’s emergency orders have been interpreted as to afford trial courts broad discretion to extend deadlines, the appointment order is not analogous to a mere deadline extension. The emergency order does not vest trial courts with any discretion to ease or disregard Rule 171’s strict criteria for appointing a special master.” Id. at 20.

Finally, a practitioner should consider whether evidence is helpful to demonstrate that the case warrants the appointment of a special master. While the First Court did not hold that evidence was necessary, it twice noted that the Relator faulted the lack of “evidence presented to the trial court that this was an exceptional case warranting the appointment of a master in chancery.” Id. at 10 (emphasis added); see id. at 12. Should evidence be helpful the issues regarding the appointment of a special master, a practitioner should consider putting that evidence before the trial court.