Privilege losses now lack immediate appeal

Federal court orders requiring litigants to disclose information that they believe is protected by the attorney-client privilege do not qualify for immediate appeal, the U.S. Supreme Court ruled on Dec.8.

In her first opinion since joining the Court, Justice Sonia Sotomayor wrote that permitting successive, piecemeal appeals of all adverse attorney-client privilege rulings “would unduly delay the resolution of district court litigation and needlessly burden the Courts of Appeals.”

The Court’s unanimous ruling in Mohawk Industries v. Carpenter stemmed from a suit filed in 2007 by Norman Carpenter, a former shift supervisor at Mohawk, who claimed he was fired by the Georgia-based flooring company in violation of state and federal laws because he complained to company officials that several temporary workers were illegal aliens.

At the time of Carpenter’s complaint, Mohawk was the defendant in a class action charging the company with hiring undocumented workers in order to drive down wages of its legal employees. After Carpenter made his complaint, Mohawk directed him to speak with the company’s retained counsel in the class action. That lawyer allegedly pressured Carpenter to recant his statements. When he refused, Carpenter alleges, Mohawk fired him.

In his employment suit, Carpenter sought to compel Mohawk to produce information about his meeting with retained counsel and the firing decision. Mohawk argued that the information was protected by attorney-client privilege.

The district court concluded that Mohawk had waived the privilege because of representations in the class action. Mohawk appealed under the so-called collateral order doctrine, but the U.S. Court of Appeals for the 8th Circuit held that the district court’s order did not qualify.

In the Supreme Court, Sotomayor acknowledged the importance of the attorney-client privilege, but, she said, appeals after final judgment were sufficient to protect the rights of litigants and the privilege. For example, she said, appellate courts could vacate an adverse judgment and remand for a new trial in which the protected information is excluded.

She also rejected Mohawk’s contention that requiring appeals of adverse privilege rulings after final judgment would chill attorney-client communications. “In deciding how freely to speak, 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,” she wrote.

Michael Lackey, co-chairman of Mayer Brown’s electronic-discovery and records-management practice, said the decision would have a significant impact on how litigators conduct their factual investigations.

“Indeed, one could view this opinion as creating a new Miranda warning, but this time for defense attorneys who conduct internal investigations and handle litigation: anything you write, say or learn in an interview could, and might, be revealed to your opposing counsel and be used against your client,” said Lackey.

However, Prof. Stephen Vladeck of American University Washington College of Law, amicus counsel in the case to a group of 28 former federal judges and law professors, said Mohawk and its amici never “made a strong enough case for how the Court could expand the collateral order doctrine to encompass these discovery orders but not others, especially given the Court’s trend toward narrowing the collateral order doctrine in recent years.”

Judith Resnik of Yale Law School argued the case on behalf of Carpenter, who was supported by the Office of Solicitor General as well as by the former federal judges.

“We felt pretty positive going into the arguments and after the arguments,” said J. Craig Smith of Koskoff, Koskoff & Bieder in Bridgeport, Conn., counsel of record to Carpenter. “Justice Sotomayor asked the penultimate question during the argument: how is requiring you to wait until the end of the case to appeal prejudicial to your client? She seemed to make the point then that allowing these appeals just causes more delay.”

Mohawk, represented in the high court by Randall Allen of Atlanta’s Alston & Bird, drew support from the American Bar Association, the U.S. Chamber of Commerce and DRI — the Voice of the Defense Bar.

“We¹re obviously disappointed,” Allen said. “[The discovery order] is an interim order and doesn¹t impact the merits of the case, and we look forward to vigorously defending it.”