High court to consider attorney-client privilege

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Faced with an order in federal court to turn over a document that an attorney believes is protected by the attorney-client privilege, an attorney has only two choices.

He can turn it over; or he can refuse (and accept whatever sanctions the court may impose). Reise v. Board of Regents of University of Wisconsin System, 957 F.2d 293, 295 (7th Cir. 1992).

But seeking interlocutory review of the discovery order may become a viable option in the near future. On Jan. 26, the U.S. Supreme Court accepted certiorari in Mohawk Industries, Inc. v. Carpenter, No. 08-678, to review whether the Court of Appeals can accept jurisdiction in such cases.

In the Seventh Circuit, the court won’t exercise jurisdiction for two reasons.

First, on policy grounds, the court believes that since so few appeals from discovery orders would result in reversal, “the costs to the judicial system of entertaining these appeals, exceed in the aggregate the costs of the few erroneous discovery orders that might be corrected were appeals available.” Id., 957 F.2d at 295.

Second, on legal grounds, discovery orders cannot be considered “final” orders. Id. This is the majority rule in the United States, but three circuits take the opposite position. In re Napster, Inc. Copyright Litig., 479 F.3d 1078 (1087-89 (9th Cir., 2007); U.S. v. Phillip Morris, Inc., 314 F.3d 612, 617-21 (D.C.Cir. 2003); and In re Ford Motor Co., 110 F.3d 954, 964 (3d Cir. 1997).

In Mohawk Industries, the Eleventh Circuit adopted the majority rule, concluding that a discovery order fails to meet the three requisites under Cohen v. Beneficial Industrial Loan Corp. 337 U.S. 541 (1949): (1) the order conclusively determines the disputed question; (2) the order resolves an important issue completely separate from the merits of the action; and (3) the order is effectively unreviewable on appeal from a final judgment.

The first two elements were indisputably met. However, the court held that, if a discovery order is erroneous, it can order a new trial after a final judgment, and thus, the erroneous order is reviewable.

But in their petition for review, attorneys Randall L. Allen and Daniel F. Diffley, of Alston & Bird LLP, in Atlanta, argue an erroneous denial of the attorney-client privilege cannot be effectively reviewed on appeal from the final judgment.

Because an attorney cannot know whether refusing to turn over documents will result in civil or criminal contempt, they maintain, “Awaiting a contempt citation is therefore an unrealistic, impractical, and unnecessarily risky method of obtaining appellate review, particularly to protect attorney-client privileged communications.” Petition for Review, at 21.

The petition also contends that the attorney-client privilege should be treated differently than other privileges. Because communications contain not merely facts, but an attorney’s conclusions and litigation strategies, they contend a new trial is not an effective remedy.

They argue, “Once the privileged documents and communications are produced … the benefit of the attorney-client privilege is irretrievably lost.” Id., at 27.

Nathaniel Cade, Jr., an attorney with Michael Best & Friedrich LLP, in Milwaukee, represents attorneys before the OLR, and is a frequent speaker on legal ethics. He said in an e-mail that he thinks that interlocutory review should be available when orders implicate the attorney-client privilege.

Cade noted that, under Wisconsin’s Rules of Professional Responsibility, an attorney is required to maintain inviolate their communications with clients, no matter what. In addition, following an order to reveal privileged information makes the attorney a witness in the case, reveals legal strategy, and discourages clients from conducting internal investigations.

Cade said, “[The Eleventh Circuit] seems to suggest that whenever a lawyer conducts an internal investigation, the client faces the risk that the results of the investigation (and attorney notes, conversations, documents, etc.) are discoverable. If so, why would any client ever let their lawyer conduct an internal investigation?”

Finally, Cade noted that the majority view is inconsistent with the rule that only the client can waive the attorney-client privilege, and agreed with the petitioners that neither mandamus nor risking a finding of contempt is a viable option for attorneys.

Case: Mohawk Industries, Inc. v. Carpenter, No. 08-678.