In Amlong & Amlong, P.A. v. Denny's, Inc., No. 04-14499 (amended Sept. 17, 2007), the district judge had referred a sanctions motion to the magistrate judge to hold an evidentiary hearing. After hearing extensive testimony, the magistrate judge reported and recommended that the sanctions motion be denied, finding that the attorney in question did not act in bad faith. The district judge, conducting its "de novo determination" as required by 28 U.S.C. § 636(b), disagreed after reviewing the transcript of the hearing before the magistrate judge, and concluded that the testimony showed bad faith.
The 11th Circuit held that the district judge erred in rejecting the magistrate judge's implicit determination that the lawyer's testimony concerning the acts in question and the motives for them was credible. The appeals court held that "[r]ejecting credibility findings made by a magistrate judge without holding a new hearing is permissible only when there is an 'articulable basis for rejecting the magistrate's original resolution of credibility.' " Since there wasn't any such "articulable basis" here, the court reversed.