Oral argument highlights concerns about undermining the final judgment rule and the importance of the attorney-client privilege, in Mohawk Industries, Inc. v. Carpenter (No. 08-678)
If the trial court errs and compels disclosure of communications that a party believes is covered by the attorney-client privilege, and the proverbial “cat is out of the bag” by compelled disclosure, what immediate remedy should be available? Must the losing party wait until there is a final judgment in the case before being permitted appellate review off the disclosure order? What impact would an interlocutory appeal have on the system which is designed to normally permit an appeal after a final judgment is entered?The case arose in an employment termination action in which the district court concluded the attorney-client privilege covering communications with outside counsel and the decision to terminate the plaintiff were waived and therefore could be disclosed. An interlocutory appeal was filed and the Eleventh Circuit held that it lacked jurisdiction to consider the issue on interlocutory review. See Carpenter v. Mohawk Indus., Inc., 541 F.3d 1048, 1052-53 (11th Cir. 2008) (per curiam).
This blog post reviews the issues raised at the oral argument. The facts of the case were previously noted in an earlier post. See Supreme Court Watch: Supreme Court To Decide On Interlocutory Appeal Of Privilege Disclosure Order; see also Supreme Court Watch: Oral Argument Today On Interlocutory Appeal Of Adverse Privilege Ruling
The case involves application of a narrow exception to the final judgment rule known as the Cohen Collateral Order Doctrine, based on Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546-47 (1949). Under this exception, interlocutory review of a ruling before final judgment has been entered may be available where the party shows shows: 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 are divided on whether an interlocutory appeal is available under the Cohen Collateral Order Doctrine, seven circuits declining an interlocutory appeal (including the First, Second, Fifth, Tenth, Eleventh and Federal Circuits) and three circuits permitting interlocutory review of a discovery order requiring disclosure of a privilege (including the Third, Ninth and D.C. Circuits). See List of Circuit Split Cases.
As summarized below, at the Supreme Court oral argument, some of the questions focused on (1) the scope of any interlocutory appeal; (2) the impact on the final judgment rule; (3) the frequency of new interlocutory appeals; (4) whether other remedies were available and sufficient; and (5) whether an interlocutory appeal should be permitted for some unique governmental privileges (such as the Presidential communications privilege and State secrets privilege) which implicate constitutional matters.
1. Scope Of Interlocutory Appeal
One central issue repeatedly noted during the oral argument concerned the scope of any interlocutory appeal that the Court may recognize under the Cohen Collateral Order Doctrine.
Justice Scalia, asking the first question, queried petitioner’s counsel, who is seeking an interlocutory appeal, on whether the attorney-client “confidentiality right is any more important to the proper functioning of society than, let's say, the protection of trade secrets?” Mohawk Industries, Transcript, at 2-3. In other words, should an interlocutory appeal lie if the court compels disclosure of the trade secret “formula for Coca-Cola,” Justice Scalia pressed. Justice Sotomayor furthered this area of questioning by asking: “Why is the public policy of anti-disclosure any more important in the attorney-client privilege than in the trade secret context?” Transcript, at 5:19-21. Justice Breyer wondered whether any line could or should be drawn concerning the attorney-client privilege and other privileges: “if we grant your collateral appeal, don't we have to, perhaps, equally grant it in every situation, where a judge arguably makes an erroneous ruling on a question of privilege?” Transcript, at 11:11-14; 17:10-13.
In response to these questions, petitioner’s counsel noted the central, historic importance of the attorney-client privilege and found the trade secret example distinguishable because the court could fashion a protective order. Transcript, at 2-3. In particular, he stated: “So when you measure the attorney-client privilege and the role that it plays in the administration of justice in ensuring observance with laws against a rule of efficiency, in this instance in our view, the attorney-client privilege weighs heavier in that consideration.” Transcript, at 14:9-14.
Justice Stevens asked if the prevailing party (obtaining an order compelling disclosure of the privileged material) could also seek an interlocutory appeal. Transcript, at 16-17. Petitioner’s counsel responded that “access to information in the course of discovery does not trigger the same important interest that orders compelling discovery of attorney-client would trigger.” Transcript, at 17:2-6. Justice Sotomayor followed-up by asking whether the petitioner was requesting “that all issues related to attorney-client, whether they are waiver, crime or fraud, scope of the privilege, et cetera, that all issues are immediately appealable because the public interest is the same in all cases related to the attorney-client privilege, or are you wanting us to limit this rule only to the waiver cases?” Transcript, at 19-20. After petitioner’s counsel responded that the request was limited to “waiver cases,” Justice Sotomayor wondered “how do we distinguish or make a difference in your analysis?” Transcript, at 20:8-9. Petitioner’s counsel noted that an interlocutory appeal would mostly likely not lie under the crime fraud exception, circumstances when disclosure is not ordered or inadvertence disclosure. Transcript, at 21-22. Justice Ginsburg asked whether the interlocutory appeal would apply to work product doctrine cases and counsel responded in the negative. Transcript, at 23.
Justice Ginsburg questioned whether interlocutory review of the denial of an assertion of the attorney-client privilege was appropriate. Justice Ginsburg noted that many attorney-client privilege issues are “fact-bound” with unique “factual circumstances” which was distinct from the legal question raised in the Cohen v. Beneficial case concerning the posting of security for costs in a class action. Transcript, at 14:15-23.
2. Impact On Final Judgment Rule
Related to the scope of any interlocutory appeal is the impact it would have on the final judgment rule, codified at 28 U.S.C. § 1291. Justice Sotomayor inquired about the policy ramifications of recognizing an interlocutory appeal on the final judgment rule. Transcript, at 7:14-18. Respondent’s counsel emphasized the “cost and delay” that would result from an interlocutory appeal. Transcript, at 25:12. Justice Breyer echoed a concern that “[a]ny system that allows too many interlocutory appeals wrecks the judicial system through delay.” Transcript, at 53:21-23. Justice Alito queried whether an interlocutory appeal stops all proceedings before the district court. Transcript, at 34:3-4. Petitioner’s counsel added that “[t]he case remains with the district court, the district court is empowered to manage the case.” Transcript, at 51:8-9. Justice Stevens observed that the trial court would be unlikely to proceed to trial while a material issue was pending on appeal. Transcript, at 51:15-24, 52:10-12.
3. Frequency Of New Interlocutory Appeals
Justice Ginsburg asked whether challenges to attorney-client privilege rulings would increase if the Court granted the relief sought by the petitioner. Transcript, at 18:3-14. Petitioner’s counsel responded that experience in the three circuits recognizing an interlocutory appeal did not suggest many new appeals. Transcript, at 18-19. However, respondent’s counsel suggested there were more than 100 cases in which disclosure was compelled during a six month period, which suggested a substantial number in the “pipeline.” Transcript, at 27-28. Justice Alito noted that during his eight years in the Third Circuit, which recognized an interlocutory appeal, he did not conclude “that the sky really will fall if we were to adopt” an interlocutory appeal. Transcript, at 28:15-16.
4. Other Remedies Available
The availability and adequacy of other remedies was noted during the oral argument. Respondent’s counsel, expectedly, contended an interlocutory appeal was unnecessary given other remedies that could be pursued, including a protective order to limit disclosure, avoiding any testimony on the issue, an appeal, certification of a “controlling question of law,” under 28 U.S.C. 12292(b), and a writ of mandamus in extraordinary cases. Transcript, at 32-33. Another option, noted by Chief Justice Roberts, included disobedience of the trial court ruling and a contempt order and possible custody for counsel which may be appealed. Transcript, at 35.
Justice Ginsburg asked whether relief may be available based on certification of a “controlling question of law,” under 28 U.S.C. 1292(b). As Justice Ginsburg framed this issue, if there are other remedies that may be appropriate, “shouldn't we be particularly reluctant to extend Cohen v. Beneficial to include a case of a privilege that maybe was wrongfully denied?” Transcript, at 9:20-23. Petitioner’s counsel indicated later to Justice Stevens that a request for a Section 1292(b) certification was not made in the case. Transcript, at 16:14-17.
Justice Sotomayor noted that relief may be available, as in other cases, if the trial court set aside the judgment and prohibited use of the privileged information, which is what the Eleventh Circuit had essentially ruled in the case. Transcript, at 12-13.
5. Recognizing A Limited Government Privilege
The Solicitor General’s Office urged the Court not to permit an interlocutory appeal from the court-ordered disclosure of material protected by the attorney-client privilege. The government noted that “the denial of attorney-client privilege is tied up with discovery of the sort that happens every day in Federal Court. It's bound up with -- with discovery plans, that --objections on relevance, materiality, various -- various privileges.” Transcript, at 45:2-8. The government framed the issue as “whether the denial of a privilege in a particular case will so undermine that privilege as a general matter to warrant an immediate appeal. And we think the answer is clearly no. And also the loss of the privilege to the individual litigant we think is not a sufficient basis” as the cases present “situations where the injury transcends the particular case.” Transcript, at 47:9-17.
In contrast, the government urged that some governmental privileges should be allowed an interlocutory appeal, including the Presidential communications privilege and State secrets privilege, which implicate constitutional matters. Transcript, at 42. According to the government, disclosure under these uniquely governmental privileges presents an “irreparable injury” as the “harm is immediate and broad on behalf of the nation as a whole.” Transcript, at 50:15-20. Justice Ginsburg suggested a Section 1292(b) certification provided an avenue to consider constitutional issues. Transcript, at 43:7-8.
The issue presented, while technical and jurisdictional, has the potential to have a broad impact on the attorney-client privilege claims and the circumstances in which an interlocutory appeal may be permitted. The opinion is expected later this Term.
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