The Sixth Circuit released its first opinion interpreting the impact of Mohawk Industries, Inc. v. Carpenter, — U.S. — , 130 S. Ct. 599, 175 L. Ed. 2d 458 (2009).pdf, on an interlocutory appeal from an order compelling production of attorney-client communications between a party and its former attorney. Holt-Orsted v. City of Dickson, 641 F.3d 230 (2011).pdf, eliminates certain pre-Mohawk exceptions to the final judgment rule and holds that the attorney-client privilege is generally protected so long as an appeal is available after final judgment.
The plaintiffs in Holt-Orsted claimed that the city and county of Dickinson issued racially selective warnings to its citizenry about allegedly contaminated wells. During discovery, the City of Dickson moved to compel the deposition of plaintiffs’ former counsel, claiming that her activities prior to suit should establish a statute of limitations bar to the action. The motion was referred to a magistrate, who ultimately granted the motion in part, holding that most of the information sought in defendants’ written questions to Jacobs was neither privileged attorney-client communications nor attorney work-product.
The plaintiffs appealed, but the Sixth Circuit dismissed the appeal for lack of a final appealable order. The final judgment rule is subject to certain exceptions, such as the long-standing exception in Perlman v. United States, 247 U.S. 7, 1 (1913).pdf, which plaintiffs argued applied here. The Perlman rule (pre-Holt-Orsted) allowed the privilege-holder to appeal from an order compelling disclosure of privileged material from a disinterested third party because the third party lacks a sufficient stake in the proceedings to risk contempt (which would allow an appeal). Agreeing with the Seventh Circuit’s position in Wilson v. O’Brien, 621 F.3d 641 (7th Cir. 2010).pdf, the Sixth Circuit concluded that Mohawk significantly narrows the application of the Perlman rule.
In the new post-Mohawk landscape, the Court held that the Perlman exception is limited to situations in which the privilege-holder is a non-litigant. Although the contempt citation route is effectively eliminated where, as here, the third party is merely a custodian of privileged material, plaintiffs possessed an adequate remedy. Indeed, because plaintiffs were both the privilege holders and actual parties to the suit, they could “avail themselves of a post-judgment appeal,” which would fully protect the “vitality of the attorney-client privilege.” The Court, agreeing with a recent Ninth Circuit decision, concluded that the “application of the Perlman doctrine will likely be limited” to situations where the privilege-holder is not a party and thus would lose all ability to appeal without an interlocutory appeal.”
This case illustrates, in a post-Mohawk world, the difficulty of securing immediate appellate review over privilege rulings. The main door left open by the court’s ruling is mandamus, which does remain a viable option (although the Sixth Circuit has even narrowed that option in recent years).