Class Action Defense Cases–Mohawk Industries v. Carpenter: Supreme Court Holds Collateral Order Doctrine For Appellate Jurisdiction Does Not Extend To Disclosure Orders Adverse To Attorney-Client Privilege

Dec 14, 2009 | By: Michael J. Hassen

District Court Order Compelling Production of Discovery Protected by Attorney-Client Privilege on Grounds Privilege had been Waived not Appealable because Collateral Order Doctrine does not Extend to such Orders Supreme Court Holds

Plaintiff Carpenter filed a lawsuit against his employer, Mohawk Industries, in a Georgia federal court alleging violations of various labor laws; specifically, plaintiff alleged that he was wrongfully terminated for informing the company’s human resources department that Mohawk was employing illegal aliens. Mohawk Industries, Inc. v. Carpenter, ___ U.S. ___, 130 S.Ct. 599, 2009 WL 4573276, *3 (December 8, 2009). At the time, plaintiff did not know that a putative class action lawsuit (“_Williams_”) had been filed against Mohawk that accused it of “conspiring to drive down the wages of its legal employees by knowingly hiring undocumented workers in violation of federal and state racketeering laws.” Id. According to the allegations underlying plaintiff’s individual lawsuit, Mohawk fired him after he refused to be pressured into retracting his accusation. Id. Plaintiffs in the Williams class action learned of the Carpenter lawsuit, and “sought an evidentiary hearing to explore Carpenter’s allegations.” Id. The company opposed the motion, characterizing Carpenter’s accusations as “pure fantasy” and by attacking Carpenter in its explanation of his termination. Id. At the same time, Carpenter was seeking discovery of company documents concerning the meeting with company employees and counsel that preceded his termination; Mohawk opposed the discovery request in Carpenter on the grounds that it sought information protected by the attorney-client privilege. Id., at *4. The district court in Carpenter concluded that the attorney-client privileged had been waived based on the disclosures made in the Williams action concerning the grounds for Carpenter’s termination. Id. Defense attorneys appealed the court’s order or, in the alternative, sought mandamus relief; the Eleventh Circuit dismissed the appeal for lack of jurisdiction as the order was not appealable, and denied the petition for writ of mandate. Id. The Supreme Court granted certiorari “to resolve a conflict among the Circuits concerning the availability of collateral appeals in the attorney-client privilege context.” Id.

We do not discuss the Supreme Court’s analysis in detail, as we are concerned here only with its holding. (Interested readers may find the entire text of the Supreme Court opinion below.) In brief, the High Court summarized the “final decision” jurisdiction of Courts of Appeal, and the “‘small class’ of collateral rulings that, although they do not end the litigation, are appropriately deemed ‘final.’” Mohawk Industries, at *5 (citation omitted). The Supreme Court explained, “That small category includes only decisions that are conclusive, that resolve important questions separate from the merits, and that are effectively unreviewable on appeal from the final judgment in the underlying action.” Id. (citation omitted). But the Court expressed concern that the “small class” of cases fitting within this exception be interpreted so as to swallow the general rule. Id. And the High Court concluded that “collateral order appeals are not necessary to ensure effective review of orders adverse to the attorney-client privilege,” id., at *6. The Court explained that its holding turned not on the importance of the interest sought to be protected “in the abstract,” but rather “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.” Id. In this regard, the Court noted that it “routinely require[s] litigants to wait until after final judgment to vindicate valuable rights, including rights central to our adversarial system.” Id. (citations omitted). Here, too, the Supreme Court held that “post-judgment appeals generally suffice to protect the rights of litigants and assure the vitality of the attorney-client privilege.” Id.

The Supreme Court stressed that “the class of collaterally appealable orders must remain ‘narrow and selective in its membership.’” Mohawk Industries, at *9 (citation omitted). And in the end, the High Court held that “the collateral order doctrine does not extend to disclosure orders adverse to the attorney-client privilege” and that “[e]ffective appellate review can be had by other means.” Id. Accordingly, the Court affirmed the judgment of the Eleventh Circuit.

Download PDF file of Mohawk Industries v. Carpenter

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