KMK Law Complex Litigation Blog

Justice Sotomayor wrote her first substantive opinion as a Supreme Court Justice, and it is a good read and a good wake up call for class action practitioners.

In Mohawk Industries Inc. v. Carpenter, 2009 WL 4573276 (Sup. Ct. Dec. 8, 2009), the issue before the Court was whether discovery disclosure orders adverse to the attorney-client privilege qualified for immediate appeal under the collateral order doctrine.  In the underlying litigation, Mohawk refused to provide certain documents and information under a claim of attorney-client privilege.  The district court determined that the information was privileged, but also determined that Mohawk implicitly waived the privilege in defending a separately filed class action litigation and therefore ordered its production.  The district court declined to certify its order for interlocutory review, but stayed enforcement and allowed Mohawk to explore avenues for an immediate appeal.  Mohawk filed a notice of appeal and writ of mandamus with the Eleventh Circuit, but the Eleventh Circuit rejected Mohawk's mandamus petition and concluded that it did not have jurisdiction to decide the issue, relying upon Cohen v. Beneficial Ind. Loan Corp., 337 U.S. 541, 546 (1949).

Resolving a circuit split, the Supreme Court concluded that disclosure orders adverse to the attorney-client privilege do not qualify for interlocutory appellate review under the collateral order doctrine.  While recognizing the importance of the privilege, the Supreme Court nevertheless concluded that "post judgment appeals generally suffice to protect the rights of litigants and assure the vitality of the attorney-client privilege" and that there were "several potential avenues of review apart from collateral order appeal[s]."  Writing for the Court, Justice Sotomayor concluded that "sufficiently effective review of adverse attorney-client privilege rulings can be had without resort to the Cohen doctrine."

While the Mohawk Industries decision addresses a specific, narrow procedural issue, the decision is an important, general reminder about privilege issues — in all litigation matters but especially in expansive document productions in complex and class action litigation.  Everyone generally recognizes the need for privilege review but the time and expense committed to conducting such reviews can vary.  Whether through ediscovery or good old fashioned paper productions, the privilege review is not an area to cut corners.  The various safe harbors and claw back provisions provided by the Rules give some protection after an inadvertent disclosure has been made, but it still may require motion practice and result in discovery orders — which are now not subject to interlocutory review under the collateral order doctrine.  Privilege issues and privilege logs are areas of potential dispute, so it is important to have ample authority to support the claims in a log, correspondence, and potential motion practice.  Also, when litigating on multiple fronts, it is important to have consistency in discovery positions and to think and anticipate how current discovery issues (and/or adverse discovery rulings) may impact future litigation.

Minimizing discovery disputes and documenting privilege claims is important because, while Justice Sotomayor outlined "several potential avenues for review apart from collateral order appeals," many of those "avenues" are not particularly appealing alternatives.  The easiest and obvious route to interlocutory review involves an interlocutory certification by the district court under 28 U.S.C. 1292(b) — but the Circuit Courts of Appeal still have discretion whether to accept the certification, and in the underlying litigation, the district court refused to certify its discovery order.  A second route discussed by Justice Sotomayor was a writ of mandamus — which was one of the mechanisms used by Mohawk and rejected by the Eleventh Circuit, but the Supreme Court specifically said it was not reviewing the propriety of this review mechanism in its opinion.  The standard for mandamus review is generally high (when a disclosure order amounts to a judicial usurpation of power or a clear abuse of discretion or otherwise works a manifest injustice) and is arguably still available in limited circumstances, but it may be a difficult standard to meet for discovery issues — especially after the Supreme Court concluded that improper adverse attorney-client privilege rulings can be remedied "by vacating an adverse judgment and remanding for a new trial in which the protect material and its fruits are excluded from evidence."  The third route of review discussed by Justice Sotomayor, the "long recognized option" of defying a court order and facing sanctions or civil or criminal contempt, is the least desirable of all options and is fraught with a whole spectrum of related practical and client problems.  

The factual background of the case is unfortunate and it is not clear how the issue could have been better addressed if at all — so the opinion best stands as a reminder of the need for vigilance and thoroughness in trying to minimize discovery issues and discovery motion practice whenever practical.