Supreme Court will resolve circuit split on whether a party may use the Cohen collateral order doctrine to appeal a non-final order requiring production of attorney-client privilege information, in Mohawk Industries, Inc. v. Carpenter (No. 08-678)
The Supreme Court has agreed to address an important issue involving the attorney-client privilege. The decision will likely impact the appellate review of other privileges as the same procedural posture often arises when disclosure is compelled for other privileged information. The question presented in the case is:
“Whether a party has an immediate appeal under the collateral order doctrine, as set forth in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541 (1949), of a district court's order finding waiver of the attorney-client privilege and compelling production of privileged materials.”Mohawk Industries, Inc. v. Carpenter.
When a party is compelled to produce privileged materials, under what circumstances should interlocutory appellate review be permitted? If a trial court determines attorney-client privileged material has been waived, what appellate avenues are available, if any, to the holder of the privilege? The consequences can be significant. If the holder of the privilege waits until there is a final judgment in the case, then the privilege is disclosed to the opposing party and may be used during the litigation. If, instead, the party refuses to comply with the court’s discovery ruling, sanctions or contempt may be ordered.
There are a few limited exceptions to the final judgment rule, which normally requires that an appeal may be taken only upon the conclusion of the case. See 28 U.S.C. § 1291. One exception, the Collateral Order (Cohen) Doctrine, under Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546-47 (1949), allows an immediate appeal if the claimant can show: a non-final order that (1) conclusively determines the disputed question of privilege; (2) resolves an important issue, completely separate from the merits of the case, if appellate review allowed; and (3) is effectively unreviewable on appeal from a final judgment.
The circuits have divided on whether the Collateral Order (Cohen) Doctrine may be used to permit an interlocutory appeal on a non-final order compelling disclosure of privileged information. The Supreme Court will consider this split in precedent next Term.
Summary Facts: Carpenter v. Mohawk Indus., Inc.
In the Mohawk Industries, Inc. v. Carpenter case, shift supervisor Carpenter filed an action claiming that Mohawk Industries, Inc. and other employees terminated him after he reported that several temporary employees were illegal aliens. After making his report, he was told to meet with Mohawk attorney [Murillo], who represented the company in a separate Williams v. Mohawk Indus. class-action racketeering lawsuit. According to Carpenter, the meeting “was designed to coerce him into recanting his report, which” he “knew would be damaging to its defense in the Williams action.” After refusing to “recant his report,” he was terminated. The company stated that he was terminated after the company learned Carpenter “was committing immigration crimes by harboring illegal aliens.” Carpenter v. Mohawk Indus., Inc., 541 F.3d 1048, 1050 (11th Cir. 2008) (per curiam).
The plaintiffs in the Williams class-action then moved for discovery concerning Carpenter’s meeting with counsel. The company claimed the information was covered by the attorney-client privilege. In responding to the motion, Mohawk counsel Murillo explained the company’s view and position on the Carpenter case:
As his own statements demonstrate, Mr. Carpenter’s wild allegations that he was fired because of some conspiracy to influence his testimony are pure fantasy. The true facts are these. On June 1, 2006, Mohawk hired Mr. Carpenter as a Shift Supervisor at Mohawk’s Union Grove manufacturing facility. Mr. Carpenter was hired as a salaried employee, and his responsibilities included the supervision of hourly Mohawk employees. Shortly after he arrived at Mohawk, Mr. Carpenter engaged in blatant and illegal misconduct . . . . Mr. Carpenter’s attempt to have Mohawk send a worker that Mr. Carpenter believed to be unauthorized to a temporary agency was a clear violation of Mohawk’s Code of Ethics and an attempt to circumvent federal immigration law. . . .Carpenter, Inc., 541 F.3d at 1051.
After receiving Ms. Hale’s complaint, Mohawk responded in an entirely appropriate manner. It commenced an immediate investigation of Mr. Carpenter’s efforts to cause Mohawk to circumvent federal immigration law and his claim that other temporary workers at the Union Grove Road facility were not authorized to work in the United States. As part of that investigation, Mohawk’s outside counsel Juan P. Morillo interviewed Mr. Carpenter.
As a result of Mr. Carpenter’s misconduct, Mohawk fired Mr. Carpenter and did not give him any severance package. His attempt to knowingly cause Mohawk to obtain and utilize an unauthorized worker blatantly violated Mohawk policy.
The plaintiffs then sought discovery concerning counsel’s communications regarding the termination decision. The court district concluded the communications were protected by the attorney-client privilege, but the privilege had been waived by counsel’s foregoing response. The court explained:
By making those representations, Defendant Mohawk placed the actions of Attorney Morillo in issue. In fairness, evaluation of those representations will require an examination of otherwise-protected communications between Attorney Morillo and Plaintiff and between Attorney Morillo and Defendant Mohawk’s personnel. Consequently, the Court must conclude that Defendant Mohawk has waived the attorney-client privilege with respect to the communications relating to the interview of Plaintiff and the decision to terminate Plaintiff’s employment.Carpenter, Inc., 541 F.3d at 1051. The company was ordered to respond to the discovery requests. However, the court stayed imposition of its order pending an appeal.
On appeal, the Eleventh Circuit found jurisdiction was lacking. The collateral order doctrine did not permit interlocutory review. While the first two elements under the doctrine were established (first, the challenged order conclusively determined the disputed question, and second, resolved an important issue completely separate from the merits of the action), the third element was not (the order was not effectively unreviewable on appeal from a final judgment). As the circuit explained:
As for the third prong, however, we do not find that a discovery order that implicates the attorney-client privilege is effectively unreviewable on appeal from a final judgment. If this Court were to determine on appeal from a final judgment that privileged information was wrongly turned over and was used to the detriment of the party asserting the privilege, we could reverse any adverse judgment and require a new trial, forbidding any use of the improperly disclosed information, as well as any documents, witnesses, or other evidence obtained as a consequence of the improperly disclosed information…. Further, we are not persuaded by Appellant’s argument that once the privileged material is turned over, the ‘cat is out of the bag’” and the damage is done. This Court has never exercised jurisdiction under the collateral order doctrine to review any discovery order involving any privilege.Carpenter, Inc., 541 F.3d at 1052-53.
The circuit noted the two choices confronting a party opposing a court order compelling discovery:
“Ordinarily, a litigant seeking to overturn a discovery order has (only) two choices. Either he can comply with the order and challenge it at the conclusion of the case or he can refuse to comply with the order and contest its validity if subsequently cited for contempt for his refusal to obey.”Carpenter, Inc., 541 F.3d at 1053 (quoting Rouse Constr. Int’l, Inc. v. Rouse Constr. Corp., 680 F.2d 743, 745 (11th Cir. 1982)).
A party therefore has two avenues to challenge an adverse privilege ruling. First, the party may seek a writ of mandamus, “which places a higher burden on the challenging party than a direct appeal” and “strikes an appropriate balance between the concerns of furthering the important policies of full and frank communication sought to be furthered by the privilege and the concerns of judicial efficiency.” Carpenter, Inc., 541 F.3d at 1054. Mandamus was not available in the case, however, because the company had not met its burden to show that the district court clearly usurped its power or abused its discretion. Second, the party could appeal a contempt order imposing a fine or penalty for the refusal to comply with the court’s order. Carpenter, Inc., 541 F.3d at 1054-55 (citing Combs v. Ryan’s Coal Co., Inc., 785 F.2d 970, 977 (11th Cir. 1986) (noting an appeal may lie where there is “both a finding of contempt and a noncontingent order of sanction”).
The Eleventh Circuit joined with six other circuits which have held that an interlocutory appeal under the collateral order doctrine is not available to contest a discovery order involving disclosure of a privilege.
- First Circuit: FDIC v. Ogden Corp., 202 F.3d 454, 458 (1st Cir. 2000) (noting “discovery orders generally are not thought to come within” the collateral order doctrine) [**link: http://federalevidence.com/pdf/2009/Mohawk/FDIC_v%2C_Ogden.pdf ]
- Second Circuit: Chase Manhattan Bank, N.A. v. Turner & Newall, PLC, 964 F.2d 159, 162-63 (2d Cir. 1992) (“We thus reaffirm our long-stated view that Cohen does not provide jurisdiction to review interlocutory discovery orders. Because Judge Broderick refused to certify an appeal from the challenged order pursuant to 28 U.S.C. § 1292(b), we have no jurisdiction over this appeal and grant Chase's motion to dismiss.”)
- Fifth Circuit: Texaco Inc. v. Louisiana Land & Exploration Co., 995 F.2d 43, 44 (5th Cir. 1993) (concluding “a discovery order” is not “immediately appealable under the collateral order doctrine of Cohen”)
- Seventh Circuit: Reise v. University of Wisconsin, 957 F.2d 293, 295 (7th Cir. 1992) (noting “orders to produce information over strong objections based on privilege are not appealable”)
- Tenth Circuit: Boughton v. Cotter Corp., 10 F.3d 746, 752 (10th Cir. 1993) (noting that “in virtually every case in other circuits involving similar attorney-client privilege claims, the courts have refused to take jurisdiction”)
- Federal Circuit: Quantum Corp. v. Tandon Corp., 940 F.2d 642, 644 (Fed. Cir. 1991) (noting a discovery order is “not now appealable” since “they are effectively reviewable on appeal from a final judgment”)
Three circuits have concluded that the collateral order doctrine permits interlocutory review of a discovery order requiring disclosure of a privilege:
- Third Circuit: In re Ford Motor Co., 110 F.3d 954, 964 (3d Cir. 1997) (collateral order doctrine provided “jurisdiction over the appeal”)
- Ninth Circuit: In re Napster, Inc. Copyright Litigation., 479 F.3d 1078 (1087-89 (9th Cir. 2007) (collateral order doctrine permitted review of order compelling production of attorney-client communication)
- D.C. Circuit: United States v. Phillip Morris, Inc., 314 F.3d 612, 617-21 (D.C. Cir. 2003) (“we today conclude that the institutional benefits of allowing interlocutory review of attorney-client privilege claims outweigh the costs of delay and piecemeal review that may result”)
According to the Supreme Court Docket Sheet, the petitioner’s brief on the merits is due April 13, 2009. Now that the Supreme Court has granted certiorari review, the Federal Evidence Blog will review the briefs on the merits and the policy considerations raised by the case in a future post. In the meantime, for the briefs filed on the petition for writ of certiorari brief, consider: