A ruling on attorney-client privilege appeals

By Anna Christensen
on Dec 11, 2009 at 1:52 pm

Below, Akin Gump associate Jonathan Eisenman analyzes the Court’s decision, handed down Tuesday, in Mohawk Industries v. Carpenter (08-678). Check the Mohawk v. Carpenter SCOTUSwiki page for commentary on the briefing and argument stages of the case.

On Tuesday, the Court issued its opinion—the first authored by Justice Sotomayor—in Mohawk Industries, Inc. v. Carpenter.  Resolving a split among the courts of appeals, the Court held that an order requiring the disclosure of information protected (arguably) by the attorney–client privilege is not immediately appealable under the collateral order doctrine.  The collateral order doctrine, progeny of the Court’s ruling in Cohen v. Beneficial Industrial Loan Corp., allows for the immediate appellate review of an order that fulfills three criteria:  first, the order must conclusively determine the disputed question; second, it must resolve an important issue completely separate from the merits of the case; and third, the order must be effectively unreviewable, were a party to wait for the final judgment in a case.  Concluding, as did the Eleventh Circuit, that an order requiring the disclosure of allegedly privileged information can manageably be reviewed on appeal from a final judgment, the Court held that the collateral order doctrine does not allow the immediate appeal of such an order.

The facts of the case are straightforward.  Mohawk was born of two separate lawsuits.  In one, a group of employees sued Mohawk Industries over an alleged conspiracy to drive down their wages by knowingly hiring lower-paid undocumented workers.  Without knowledge of that lawsuit, Carpenter allegedly complained to Mohawk’s human resources department about the company’s employment of undocumented aliens.  Mohawk sent Carpenter to talk to the counsel defending the employees’ suit, and Carpenter alleged that the attorney pressed him to recant his accusations.  Carpenter claimed that he refused to recant, and Mohawk terminated him as a result.  So began the second case, in which Carpenter sued Mohawk.  The plaintiffs in the wage suit, having learned of the alleged reason for Carpenter’s termination, sought an evidentiary hearing on the matter in their litigation.  Opposing such a hearing, Mohawk raised issues grounded in Carpenter’s communication with Mohawk’s counsel.  This, in turn, led Carpenter to demand the production of information related to his meeting with Mohawk’s counsel.  When Mohawk asserted the privilege against Carpenter, the district court deemed it waived as a result of Mohawk’s representations in the wage suit.  Seeking appellate review via the collateral order doctrine, Mohawk sought to prevent the disclosure of the arguably privileged communications.  The Eleventh Circuit found the first two Cohen criteria satisfied, but not the third:  Mohawk’s position could be vindicated on appeal from a final judgment through, e.g., an order remanding the case for re-trial, sans the improperly disclosed information.

Writing for seven of her colleagues (Justice Thomas concurred in the judgment and in one part of opinion), Justice Sotomayor recognized the historical importance of the attorney-client privilege.  But notwithstanding the importance of the interest protected by the privilege, the question remains whether “deferring review until final judgment so imperils the interest as to justify the cost of allowing immediate appeal of the entire class of relevant orders.”  The majority observed that other “rights central to our adversarial system” cannot be vindicated on appeal until after a final judgment, such as the appeal of an order disqualifying one’s counsel in either a civil or a criminal case.  The disclosure of privileged information, the majority concluded, can be remedied on appeal in the same way that other erroneous evidentiary rulings can be corrected.  Moreover, the majority was skeptical of the proposition that allowing disclosures to go unaddressed until after a final judgment would chill clients’ willingness to speak freely with their attorneys; it reasoned that “clients and counsel are unlikely to focus on the remote prospect of an erroneous disclosure order, let alone the timing of a possible appeal,” when deciding what information to share with one another.  And whether an appeal is interlocutory or post-judgment, orders requiring the disclosure of information—whether because a party waived the privilege or the privilege never actually applied—are reviewed with a great deal of deference to the trial court.  It is that fact, and not the timing of a possible appeal, for which parties must account in their dealings with counsel.
In any event, the majority observed, parties have other ways to avoid the disclosure of arguably privileged information:  they can, for example, seek certification for interlocutory review under 28 U.S.C. 1291; in extraordinary circumstances, seek a writ of mandamus; ignore an order, incur sanctions, and seeking review later; or ignore an order, suffer a punitive contempt sanction, and immediately appeal that.  With these factors all weighed in the balance, the majority concluded, the limited benefits of allowing interlocutory appeals like Mohawk’s are outweighed by the burden that hearing such appeals would place on the courts.
Finally, in the portion of the opinion joined by all nine Justices, the Court added that the expansion of the class of orders subject to interlocutory appeal would best be done, if at all, by promulgation of a rule.  The 1990 amendments to the Rules Enabling Act allow the Court to promulgate just such a rule; in light of that alternative, acting through a judicial opinion would be, in the Court’s eyes, an inferior method of proceeding.  For precisely that reason, Justice Thomas, while concurring with the result, deemed the rest of the majority’s opinion harmful surplusage.  If the policy of determining which orders should be subject to interlocutory appeal is best served by rulemaking, he contended, there is no reason for the Court to opine on the merits of one particular type of interlocutory appeal—and given the weight that could be placed on the majority’s opinion in any subsequent rulemaking, the Court should have begun and concluded by pointing to its rulemaking authority and refusing to go further.