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Supreme Court Rejects Immediate Appeal of Adverse Privilege Rulings

By Kristine L. Roberts, Litigation News Associate Editor – March 10, 2010

With its decision in Mohawk Industries, Inc. v. Carpenter, the U.S. Supreme Court unanimously held that trial court rulings on the attorney-client privilege do not qualify for immediate appeal under the collateral order doctrine.

In the first decision authored by Justice Sonia Sotomayor, the Court adopted the rule followed in most circuits, finding that post-judgment appeals and other remedies provide sufficient protection of the privilege.

In 2007, Norman Carpenter sued Mohawk Industries, Inc., for wrongful termination. Carpenter alleged that he was fired after reporting that Mohawk had hired undocumented immigrants. At the time, Mohawk was defending a class action alleging a conspiracy to employ illegal aliens.

According to Carpenter, Mohawk asked him to meet with its lawyers, who pressured him to recant his report. He refused and was terminated. In his lawsuit, Carpenter moved to compel discovery regarding the meeting. Mohawk argued that the attorney-client privilege applied.

The district court granted Carpenter’s motion to compel but stayed its ruling to allow Mohawk to appeal. The U.S. Court of Appeals for the Eleventh Circuit dismissed the appeal [PDF], citing lack of jurisdiction because the ruling did not qualify as an immediately appealable collateral order under Cohen v. Beneficial Industrial Loan Corp.

High Court Decision
In affirming the lower courts, the Supreme Court found that “collateral order appeals are not necessary to ensure effective review of orders adverse to the attorney-client privilege.” There are other remedies a party can pursue, explained the Court, including seeking certification for interlocutory review under 28 U.S.C. § 1292(b), petitioning for a writ of mandamus, ignoring the disclosure order and incurring sanctions, or being sanctioned for contempt and immediately appealing the contempt order.

The Court also rejected concerns about chilling communications, stating that “clients and counsel are unlikely to focus on the remote prospect of an erroneous disclosure order, let alone on the timing of a possible appeal.”

Justice Clarence Thomas filed a concurring opinion, criticizing the Court for making “value judgments” and substituting “what the Court thinks is a good idea” for the appellate jurisdiction statute.

Attorney-Client Privilege
“For attorneys in most jurisdictions, Mohawk Industries simply confirms what we already understood—one does not have a right to interlocutory appeal of a discovery order, even an order that would waive the attorney-client privilege,” says Ian H. Fisher, Chicago, cochair of the ABA Section of Litigation’s Pretrial Practice and Discovery Committee.

Yet it remains to be seen whether the Court’s proposed alternative remedies are workable in practice. These alternatives are limited to litigants confronted with particularly consequential or novel attorney-client privilege rulings, says Landis V. Curry, III, Tampa, cochair of the Programming subcommittee of the Section’s Appellate Practice Committee. The Court is not encouraging their use unless the case is severe or aberrational, he says.

Contempt Process
“Taking a contempt citation or discovery sanction is the only sure way to get appellate review of an order to disclose privileged material,” says Fisher.

If there is a strong argument against disclosure, Fisher recommends asking the judge to hold the lawyer in contempt and requesting a minimal fine. “You can do this in the alternative with a request for reconsideration that explains your argument,” he notes.

Yet relying on the contempt process is the “nuclear option” for parties in this situation, says Curry, given the potential sanctions involved. He also questions whether an appellate court would allow a lawyer held in contempt to raise the client’s assertion of the attorney-client privilege.

Curry says the decision serves as a reminder that lawyers must be extremely careful with attorney-client communications.

“Lawyers must be mindful of privilege issues when interviewing witnesses and avoid placing their clients in situations where there may be a potential waiver,” says Curry.

Additional Concerns
Mohawk Industries also reflects the Court’s heightened concern with efficiency in the court system, as in Bell Atlantic Corp. v. Twombly [PDF] and Ashcroft v. Iqbal [PDF], says Fisher.

Curry sees an effort to ease the burden on federal appellate courts. “We should expect the Court to continue to construe exceptions to the final judgment rule narrowly,” says Curry.

Editor’s Note
The Appellate Practice Committee of the Section of Litigation will be presenting a program on the decision at the Section Annual CLE Conference in New York on Thursday, April 22, 2010, at 8:30 a.m. The program is titled Appellate Review of Adverse Discovery Orders in Federal Court—A Mock Oral Argument Based Upon Mohawk Industries, Inc. v. Carpenter.

Keywords: Attorney-client privilege, U.S. Supreme Court, appeals, contempt, Mohawk Industries, Inc. v. Carpenter


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