December 9, 2009  

Written by Attorneys: Claudia Drennen McCarron and Elizabeth R. Dill

This article is an interpretation of current law and is offered for informational purposes only. This material is not legal advice and should not be construed or used as a substitute for the advice of an attorney.

In Mohawk Industries, Inc. v. Carpenter, the United States Supreme Court has held that federal court orders requiring parties to disclose information that they believe is protected by the attorney-client privilege are not immediately appealable under the collateral order doctrine. Mohawk Industries, Inc. v. Carpenter, No. 08-678, 2009 WL 45773276 (S. Ct. Dec. 8, 2009). The Court has effectively denied review of erroneous disclosure orders until after the disclosures have been made, forcing an aggrieved party to "un-ring the bell" at a later time.

The underlying litigation arose from allegations of unlawful firing for false pretenses. In support of his claim, Carpenter demanded all information in the possession of Mohawk's counsel relating to Carpenter's communications and his termination. Mohawk refused, citing attorney-client privilege.

The District Court ordered disclosure. Mohawk immediately appealed the ruling pursuant to the collateral order doctrine. The United States Court of Appeals for the Eleventh Circuit dismissed the appeal for lack of jurisdiction.

The collateral order doctrine permits appeal of some non-final orders. Under 28 U.S.C. § 1291, the Courts of Appeals have jurisdiction over all "final decisions" of the District Courts. Typically, final decisions end the litigation. However, under section 1291, there are some decisions that are immediately appealable even though they do not end the litigation. To qualify for an appeal under section 1291, the decision must be conclusive, collateral to the merits and effectively unreviewable on appeal from the final judgment in the underlying litigation. These decisions are appealable under the "collateral order doctrine."

A right is said to be effectively unreviewable if delaying its review until entry of final judgment would imperil a substantial public interest or some particular value of a higher order. The Supreme Court granted certiorari in Mohawk Industries to resolve a split among the circuits as to whether the attorney-client privilege qualifies as an interest meriting this treatment. The Court, in a unanimous decision written by Justice Sotomayor, held that it does not.

The foundation of the Court's holding was its conclusion that post-judgment appeals and other review mechanisms available to litigants in federal court are sufficient to protect the parties' rights and "preserve the vitality" of the attorney-client privilege.

The Court began by noting that allowing piecemeal appeals under section 1291 undermines judicial efficiency and therefore, if the subject of the appeal can be vindicated by other means, it should not qualify for review under section 1291. The Court stated that it generally denies review of pre-trial discovery orders. Although it acknowledged that the attorney-client privilege is one of the oldest privileges recognized by law, it stated that denying review of a disclosure order until the entry of a final judgment does not sufficiently imperil the interests behind the privilege to justify the institutional costs of the immediate appeal.

Refusing to elevate the attorney-client privilege above ordinary disputed discovery, the Court stated that appellate courts can remedy the improper disclosure of privileged material in the same way that they remedy other erroneous evidentiary rulings, by vacating the judgment and remanding for new proceedings in which the protected material is excluded from evidence. It also left open other possible avenues of review, such as interlocutory appeals under 28 U.S.C. § 1292 and petitions for writs of mandamus. Further, the Court stated that a party also has the option of defying the disclosure order and incurring court-imposed sanctions.

Unfortunately, appeals under section 1292 and petitions for writs of mandamus have limited availability and are infrequently invoked. Therefore, section 1292 and the mandamus process are unlikely to provide adequate avenues of review for attorney-client privilege issues.

The Court rejected Mohawk's argument that its ruling will chill communications between lawyers and their clients. It reasoned that clients and counsel are not likely to focus on the "remote prospect" of an erroneous disclosure order, let alone the timing of an appeal of such an order. In addition, the Court observed that counsel are already cognizant of the possibility that they may be required to disclose client communications, as they could inadvertently waive the privilege or misjudge its scope.

The Court's assessment of the role that the privilege plays in daily communications between attorneys and clients does not comport with the experience of most practicing attorneys. Clients feel free to openly communicate with their attorneys because they recognize that the privilege does more than prevent their communications from being admissible, it protects them from disclosure altogether. The attorney-client privilege protects information from disclosure in the first place because its purpose is to ensure that an attorney knows all the pertinent facts such that she can fully protect her client's rights. As many courts have noted, there is no effective remedy when disclosure takes place erroneously; once privileged material is disclosed, the "cat is out of the bag, and it may not be possible to get it back in." In re Napster, Inc. Copyright Litigation, 479 F.3d 1078, 1088 (9th Cir. 2007). More importantly, the knowledge that no effective remedy exists for an erroneous decision by the District Court has the potential to chill future communications between attorneys and clients.

The Court's holding also fails to account for the important position that the privilege occupies in our legal system. In refusing to afford the attorney-client relationship the special status it deserves, the Court's ruling eviscerates the role of the attorney in a system of justice constructed on the principle that each person who comes before the Court has the right to a champion. This ruling will force attorneys into the role of witnesses against our clients in the middle of the proceedings in which it is our duty is act as their advocates and protectors.