Oral argument: Oct. 5, 2009
Appealed from: United States Court of Appeals for the Eleventh Circuit (Aug. 26, 2008)
EVIDENCE, DISCLOSURE, CONFIDENTIALITY, ATTORNEY-CLIENT PRIVILEGE, COLLATERAL ORDER DOCTRINE
Norman Carpenter, a shift supervisor for Mohawk Industries, Inc., reported to Mohawk that several of its temporary employees were illegal aliens. Mohawk investigated the report and required Carpenter to speak with its outside counsel who was defending Mohawk in a RICO class action filed by current and former Mohawk employees over the hiring of illegal aliens. Thereafter, Mohawk terminated Carpenter, and Carpenter filed suit, alleging that he had been terminated as a result of refusing to recant his report. Carpenter sought discovery of information regarding his interview with Mohawk’s counsel. Mohawk claimed the interview and investigation were protected by the attorney-client privilege. The District Court for the Northern District of Georgia held that Mohawk had impliedly waived the privilege by putting the protected communications in issue during the class action lawsuit. Mohawk appealed this order to the United States Court of Appeals for the Eleventh Circuit, arguing that the discovery order was immediately appealable under the collateral order doctrine. The Eleventh Circuit dismissed the appeal, holding that the collateral order doctrine did not apply, because the discovery order would not be effectively “unreviewable” on appeal from the district court’s final judgment. The Supreme Court’s decision will resolve a circuit split on whether the collateral order doctrine permits the immediate appeal of a discovery order finding waiver of the attorney-client privilege.
Whether, under the collateral order doctrine established in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541 (1949), a party can immediately appeal a district court’s order finding waiver of the attorney-client privilege and compelling the production of privileged information.
May a party immediately appeal a district court judge’s order compelling disclosure of communications subject to the attorney-client privilege under the collateral order doctrine?
In 2006, Norman Carpenter was hired as a shift supervisor by Mohawk Industries, a manufacturer of flooring materials, at its Union Grove facility in Georgia. See Carpenter v. Mohawk Industries, Inc., 541 F.3d 1048, 1051 (11th Cir. 2008). Carpenter filed a report to Mohawk’s human resources department, indicating that several temporary employees hired through an employment agency were illegal aliens. See id. at 1050. Soon afterward, Mohawk required Carpenter to meet with its counsel, Juan Morillo, who was representing Mohawk in a class action lawsuit, Williams v. Mohawk Industries, Inc., No. 4:04-cv-0003-HLM (N.D. Ga. field Jan. 6, 2004). See id. The Williams case involved a group of current and former Mohawk employees who filed a RICO action against Mohawk, alleging that Mohawk conspired to employ illegal aliens. See id. at 1050 n.1.
The day after Carpenter’s meeting with Morillo, Mohawk terminated Carpenter for allegedly violating immigration law and Mohawk’s code of ethics. See Carpenter, 541 F.3d at 1050. Carpenter brought suit in the Northern District of Georgia against Mohawk, alleging that he was terminated in violation of 42 U.S.C. § 1985(2), which makes it unlawful to conspire to deter someone from testifying in court through threats or intimidation. See id. at 1050. Carpenter alleged that the meeting with Morillo was an attempt by Mohawk to coerce him into recanting his report concerning illegal alien workers, which would have been damaging to Mohawk’s defense in the Williams case. See id. Carpenter alleged that Mohawk terminated him because he refused to recant the report. See id.
After learning of Carpenter’s complaint, the Williams plaintiffs filed a motion for an evidentiary hearing at which Carpenter could testify. See Carpenter, 541 F.3d at 1050-51. Mohawk’s counsel in the Williams action filed a response to this motion, asserting that after an investigation of Carpenter, which included the interview with Morillo, Carpenter was fired for attempting to violate immigration law and that Carpenter’s allegations of conspiracy were “pure fantasy.” See id. at 1051.
Carpenter filed a motion to compel responses to interrogatories and document requests relating to his communications with Morillo and Mohawk’s decision to terminate him. See Carpenter, 541 F.3d at 1051. Mohawk contended that the requested information was protected by the attorney-client privilege. See id. The district court ordered disclosure, holding that the communications were protected but that Mohawk had implicitly waived the attorney-client privilege because Mohawk had put the privileged communications “in issue” by referencing the investigation and interview in its response in the Williams case. See id.
Mohawk immediately appealed the district court’s order in the United States Court of Appeals for the Eleventh Circuit, arguing that it had not waived the attorney-client privilege. See Carpenter, 541 F.3d at 1052. Mohawk argued that the discovery order was immediately appealable under the collateral order doctrine, which provides that an interlocutory order is appealable if it “(1) conclusively determines the disputed question; (2) resolves an important issue completely separate from the merits of the action; and (3) is effectively unreviewable on appeal from a final judgment.” See id. (quoting Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541 (1949)). The Eleventh Circuit dismissed Mohawk’s appeal, holding that the challenged discovery order was not appealable under the collateral order doctrine because it was not effectively unreviewable on appeal from a final judgment. See id.
Mohawk petitioned the Supreme Court for review, and in January of 2009, the Court granted certiorari to consider whether a district court’s order finding waiver of the attorney client privilege is immediately appealable under the collateral order doctrine. See Question Presented.
The final judgment rule in 28 U.S.C. § 1291 states that courts of appeals may take appeals from “final decisions.” While, courts of appeals may usually only hear appeals of final orders, the Supreme Court established the collateral order doctrine exception to the final judgment rule in Cohen v. Beneficial Industrial Loan Corp. Mohawk presents the Supreme Court with the opportunity to resolve a circuit split over whether the collateral order doctrine can be used to allow an appeal of a non-final order compelling the disclosure of privileged information. See Supreme Court to Decide On Interlocutory Appeal of Privilege Disclosure Order, Federal Evidence Review, Mar. 23, 2009. The Eleventh Circuit joined six other circuits in holding that a discovery order is not immediately appealable under the collateral order doctrine. See id. See also Carpenter, 541 F.3d 1048, 1053. Three circuits have held that the collateral order doctrine does apply to interlocutory appeals of a discovery order for disclosure of privileged information. See Carpenter, 541 F.3d at 1053; Supreme Court to Decide on Interlocutory Appeal of Privilege Disclosure Order.
Effects of Compelling Disclosure
Mohawk contends that discovery orders compelling disclosure of information protected by the attorney-client privilege should be immediately appealable because of the importance of the privilege to our legal system. See Brief for Petitioner, Mohawk Industries, Inc. at 27-29. Amicus curiae, the American Bar Association (“ABA”), also emphasizes the importance of the attorney-client privilege, arguing that the privilege encourages clients to discuss their legal issues fully and openly with their lawyers, thus permitting lawyers to better serve their clients’ interests. See Brief of Amicus Curiae American Bar Association (“ABA”) in Support of Petitioner at 4–5. Mohawk further argues that denying a party an immediate appeal of an order compelling discovery of privileged communications improperly encourages parties to disobey court orders because parties will actually seek out reviewable contempt citations in order to indirectly appeal the discovery order. See Brief for Petitioner at 35-36. The United States Chamber of Commerce contends that the immediate appeal of an erroneous disclosure order is necessary because any disclosure would undermine the very purpose privilege serves—assuring clients that communications with counsel will remain secret. See Brief of Amicus Curiae Chamber of Commerce of the United States in Support of Petitioner at 14. The Chamber of Commerce and others have also argued that in a time where litigants are often involved in multiple cases in which the privileged material is relevant, disclosure in one case will have an irreparable ripple effect, because once disclosed, the information might be used by adverse parties in other cases. See, e.g., id. at 17; Michael P. Shea, Allow Prompt Appeals, National Law Journal, Apr. 13, 2009.
Carpenter argues that allowing immediate appeal of disclosure orders would undermine one hundred years of jurisprudence holding that discovery orders are not final and are therefore not immediately appealable. See Brief for Respondent, Norman Carpenter at 10. Both Carpenter and the United States, as amicus curiae, claim that even orders involving important constitutional rights such as the right to choose one’s counsel and the right against self-incrimination are not immediately appealable under the collateral order doctrine. See id. at 10-11; Brief of Amicus Curiae the United States in Support of Respondent at 14. Carpenter contends that allowing immediate appeals of discovery orders would “undermine the deference owed to trial judges charged with managing the discovery process.” See Brief for Respondent at 11 (quoting Cunningham v. Hamilton County, 527 U.S. 198, 209 (1999)). In addition, a group of former federal judges and law professors assert that departing from the final judgment rule would “tilt civil litigation toward the party with greater financial resources” because such a party could routinely appeal any number of prejudgment orders, creating cost, delay, and harassment for the opposing party. See Brief of Amici Curiae Former Article III Judges and Law Professors in Support of Respondent at 15.
Carpenter argues that a ruling for Mohawk would open the door to constant appeals that test the limits of the collateral-order doctrine and seek review of orders concerning any form of privilege or “antidiscovery interests.” See Brief for Respondent at 44-45. The group of law professors and former federal judges agree that appellate courts are already over-burdened, and a ruling for Mohawk would only increase dockets congestion. See Brief of Former Article III Judges and Law Professors at 9-14.
Mohawk argues that a ruling in its favor will not greatly increase the workload of the appellate courts because the holding in this case would apply narrowly to orders finding a waiver of the attorney-client privilege. See Brief for Petitioner at 39. Instead, Mohawk contends that the holding and would not apply to orders involving other forms of privilege that are of lesser importance than the attorney-client privilege. See id.
This case turns on the application of the collateral order doctrine set forth in Cohen v. Beneficial Industrial Loan Corporation. The collateral order doctrine has its origins in 28 U.S.C. § 1291, a statute that grants federal appellate courts the ability to review any final decision made by a federal district court on appeal. See 28 U.S.C. § 1291. The Supreme Court expanded that authority in 1949, and ruled that § 1291 also gave federal appellate courts the discretion to hear immediate appeals concerning a small number of constitutionally important pre-judgment orders that are “separate from, and collateral to,” the main action. See Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949). For a pre-judgment order to qualify for immediate appeal under the Cohen standard, the order must “(i) conclusively determine the disputed question; (ii) resolve an important issue completely separate from the merits of the action; and (iii) be effectively unreviewable on appeal from final judgment.” Brief for Petitioner, Mohawk Industries, Inc. at 15–16 (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 468 (1978)).
Mohawk argues that the district court’s order compelling discovery meets all three prongs of the Cohen standard, and thus, it should be allowed to appeal the order immediately. See Brief for Petitioner at 10-11. Carpenter responds that over a hundred years of Supreme Court cases have never found a discovery order to be a final order that is immediately appealable. See Brief for Respondent, Norman Carpenter at 10. Carpenter also argues that orders regarding the attorney-client privilege do not requirements of the collateral order doctrine. See id. at 17–18.
Did the Order Conclusively Determine the Issue?
Mohawk asserts that the Eleventh Circuit conclusively decided the disputed matter of privilege when it ordered Mohawk to disclose privileged information. See Brief for Petitioner at 18. According to Mohawk, the ruling was final, and left “no room for the district court to further consider” the issue. See id..
Carpenter counters that the order was inconclusive, arguing that conclusiveness as the point where “‘there are no further steps that can be taken in the District Court’ to avoid’ violating a party’s claimed right.” See Brief for Respondent at 19 (quoting Mitchell v Forsyth, 472 U.S. 511, 527 (1985)). Carpenter contends that the discovery order is not truly final because a party may ignore the order and the court may thereafter cite the directed party for contempt. See Brief for Respondent at 20. Then, Carpenter claims, the party may appeal the contempt order, and seek review of the discovery order. See Brief for Respondent at 20. Carpenter’s argument is that the contempt sanction will be the order that conclusively determines the issue, not the initial order denying privilege claims. See id.
Carpenter also argues conclusiveness requires that there is “nothing in the subsequent . . . proceedings . . . [to] alter the court’s conclusion.” See Brief for Respondent at 20 (quoting Mitchell, 472 U.S. at 527). Carpenter points out that the path leading to the contempt citation forces both parties to evaluate the desirability of their actions—whether the party invoking privilege wishes to face the possibility of contempt in order to avoid disclosure, and whether the moving party favors disclosure over the delay a contempt citation and appeal would bring. See Brief for Respondent at 21. Further, Carpenter argues that privilege rulings may not even lead to disclosure, since parties might settle a claim before the case goes to trial, or the party receiving the documents could decide they will not use the evidence for fear of an appeal. See id. at 24. Carpenter also points out that the judge may revise a discovery order at any time, pursuant to the Federal Rules of Civil Procedure. See id. at 23. The Federal Rules also provide a two-step procedure for privilege issues—a judge will first rule on a description of the information sought, and then review the material in camera, if necessary. See id.
Mohawk finds fault with Carpenter’s conclusiveness rationale, arguing that if one followed Carpenter’s suggestion and actually sought out criminal contempt sanctions for violating an order, the collateral order doctrine would be pointless because the contempt order itself would constitute a final appealable judgment. See Reply Brief for Petitioner at 13. According to Mohawk, this would defeat the entire purpose of the collateral order doctrine, which is to provide a way to immediately appeal a disputed issue. See id.
Did the Order Resolve an Important Issue that is Separate from the Merits?
Mohawk argues that the attorney-client privilege is extremely important because it encourages clients to fully disclosure information to their counsel and promotes effective representation. See Brief for Petitioner at 19. Mohawk also argues that the attorney-client privilege issue brought up on appeal is sufficiently distinct from Carpenter’s employment claim. See id. at 20. Mohawk contends that the Court has extended collateral review to certain issues, holding them “conceptually distinct” from the action itself. See Reply Brief for Petitioner at 15. Although a district court may have look to the pleadings when deciding a privilege issue, Mohawk argues this is necessary for the court to understand the context of the issue, and that the court would not have to actually determine whether the plaintiff’s allegations were correct or not. See id. Mohawk’s claim is that an issue may be separate from the merits even if its resolution requires some reference to the pleadings. See id.
Carpenter argues that the Court should adopt a broad rule that treats attorney-client privilege rulings as a category, rather than considering the application of the collateral order doctrine on a case-by-case basis. See Brief for Respondent at 25. Carpenter states that when an issue requires review of trial court proceedings or is “intertwined” with the underlying claims, one cannot claim that the issue is entirely separate from the merits. See id. Carpenter argued in the district court that Morillo’s interview did not fall under the attorney-client privilege in the first place since it was used “to intimidate Carpenter, rather than provide the company legal advice.” Id. at 25, n.2. Therefore, Carpenter claims that the privilege issue is directly relevant to the merits of the action. See id. Alternatively, Carpenter contends that the issue of whether privilege was waived required the district court to consider the merits of the wrongful termination action. See id. Carpenter also points out that the attorney-client privilege is an evidentiary rule, not a constitutional right, and argues that it is not important enough to be subject to collateral review. See id. at 32–34.
Was the Order Effectively Unreviewable After Final Judgment?
Mohawk asserts that unless the issue is brought to appeal immediately, the attorney-client privilege will be destroyed whether it was waived or not because Carpenter will have been able to review the information, and “once Mohawk discloses the information at issue, it will irretrievably lose the protections afforded by the attorney-client privilege.” See Brief for Petitioner at 23. Mohawk asserts that remedies such as an appeal after the final judgment and a new trial would be useless because even on appeal of the judgment, “the cat is already out of the bag,” and Carpenter, as well as others, could make use of the information in planning legal strategies against Mohawk. See Brief for Petitioner at 24-26.
Carpenter dismisses Mohawk’s fears, arguing that judges can issue protective orders and use sanctions to limit public disclosure of the privileged information. See Brief for Respondent at 38–39. In addition, Carpenter contends that an appellate court could order a new trial without use of the confidential information. See id. at 40. Alternatively, Carpenter points out that a district court can apply a variety of sanctions in lieu of contempt that “would not require the party asserting the privilege to disclose the evidence to anyone,” such as ordering that particular facts must be treated as established, striking part of the disobedient party’s pleadings, or preventing that party from introducing certain evidence. See id. at 39. Carpenter also argues that the order is not “effectively unreviewable” as Mohawk contends, but only “imperfectly reparable.” See id. at 37. For while it is impossible to put everyone back into the state they were in before the litigation process began, Carpenter urges that a party can seek reversal on appeal of a final judgment, and might gain review through disobedience and appeal of a subsequent contempt citation. See id. at 37-38.
Are there Alternative Avenues for Review that Provide a Basis to Reject Collateral Order Jurisdiction?
Carpenter argues that apart from seeking contempt followed by review, a party wishing to appeal a privilege ruling can seek a writ of mandamus—a court order directing a lower court judge or officer to remedy an abuse of discretion or to properly execute an office. See Brief for Respondent at 41. Carpenter argues that mandamus, though rare, is a viable option when the privileged information at issue is of extreme importance and an appellate court may wish to give guidance to a trial court concerning proper procedure for “managing complex privilege disputes.” See Brief for Respondent, at 41. Carpenter also brings up another alternative – appellate certification, which allows an appellate court to determine whether the issue is appropriate for appellate review before a final judgment. See id. at 42. Carpenter states that Mohawk need not attempt to invoke collateral order review, since the court system has already supplied Mohawk with tools to pursue review. See id. at 44.
Mohawk acknowledges that some courts, including the Eleventh Circuit, have recognized that orders to disclose privileged information are not subject to the collateral order doctrine, because a party can defy the court order and “seek review of the resulting contempt sanction.” See Brief for Petitioner at 32. However, Mohawk argues that contempt is not a guaranteed path to review, since immediate appeal is only available in instances of criminal contempt, and it would be unlikely that a party would face criminal contempt charges for refusing to disclose information. See id. at 34. Mohawk argues that a writ of mandamus is also an inadequate alternative, since it is extremely limited, both in application and standard of review. See id. at 38. In fact, mandamus is only justified in “exceptional circumstances amounting to a ‘judicial usurpation of power’”. Id. at 38 (quoting Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 289 (1988)). Mohawk characterizes mandamus as a last resort, when no other remedy is available and argues that “the very existence of collateral order jurisdiction precludes mandamus as an appropriate remedy.” See id.
This case turns on the applicability of the Cohen standard, as well as the policy concerns behind the attorney-client privilege and compelled disclosure of privileged information. Mohawk argues that a denial of attorney-client privileges meets the three prongs of the Cohen standard, while Carpenter argues that such a privilege denial meets none of the three requirements. The Supreme Court’s decision will affect attorneys as they prepare for trial and discovery, as well as clients and their willingness to disclose information that could be turned over to an opposing party.
Edited by: Joseph Rancour
- Brief of Amicus Curiae DRI- The Voice of the Defense Bar in Support of Petitioner.
- PrawfsBlawg: The Attorney-Client Privilege and the Collateral Order Doctrine (July 13, 2009)
- R. Robin McDonald, Law.com: Panel Upholds ‘Privileged Material’ Ruling Against Mohawk (Aug. 28, 2008)