Commercial Litigation and Arbitration

Party (as Opposed to Non-Party) May Not Immediately Appeal Civil (as Opposed to Criminal) Contempt Order to Obtain Review of Adverse Attorney-Client Privilege Decision

From United States v. Myers, 593 F.3d 338 (4th Cir. 2010) (procedural posture: Myers withheld documents subject to subpoena; on this appeal she challenges the District Court order directing her (1) to produce any missing items she conceded were not protected by the Fifth Amendment and (2) to give all other missing items to the United States privilege team for privilege review):

Maggio [v. Zeitz, 333 U.S. 56, 69-70, 68 S. Ct. 401, 92 L. Ed. 476 (1948)] and [United States v.] Ryan [402 U.S. 530, 91 S. Ct. 1580, 29 L. Ed. 2d 85 (1971)] together indicate that an individual appealing a contempt order cannot challenge matters other than whether contempt was proper and, unless earlier appellate review was available, the order alleged to have been violated [that is, may not challenge the underlying discovery order if earlier appellate review was available]. *** Therefore, only that November 19, 2007, order could be reviewed in this appeal.


Having determined what we could review if we reached this appeal's merits, we now consider our jurisdiction to hear the appeal. With few narrow exceptions, our jurisdiction extends only to "appeals from all final decisions of the district courts of the United States." 28 U.S.C. § 1291. *** Generally, a final decision "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Catlin v. United States, 324 U.S. 229, 233, 65 S. Ct. 631, 89 L. Ed. 911 (1945). This "final-judgment rule" aims to combine all reviewable stages from a proceeding into one appeal and thus to prevent the harassment and cost of interlocutory appeals. See Cobbledick, 309 U.S. at 325.

Applying this rule, the Supreme Court has concluded that a party to litigation may not immediately appeal a civil-contempt order. See Fox v. Capital Co., 299 U.S. 105, 107, 57 S. Ct. 57, 81 L. Ed. 67 (1936) ("The rule is settled in this Court that except in connection with an appeal from a final judgment or decree, a party to a suit may not review upon appeal an order fining or imprisoning him for the commission of a civil contempt."); Doyle v. London Guar. & Accident Co., 204 U.S. 599, 603, 27 S. Ct. 313, 51 L. Ed. 641 (1907)***. Therefore, because Myers has appealed a civil-contempt order issued in litigation brought against her, the final-judgment rule normally would bar this appeal. *** Myers does not dispute this conclusion. Instead, she asserts [*345] jurisdiction under two exceptions to the final judgment rule.

[Footnote 9] By contrast, criminal-contempt orders are immediately appealable, and a civil-contempt order may be immediately appealed by a nonparty. See 15B Charles Alan Wright et al., Federal Practice and Procedure § 3917 (2009).


First, Myers asserts jurisdiction under the Perlman doctrine. In Perlman v. United States, the Supreme Court allowed an interlocutory appeal from an order directing the court clerk to produce documents that Perlman owned and claimed were privileged. 247 U.S. 7, 12-13, 38 S. Ct. 417, 62 L. Ed. 950 (1918). The Court later reasoned that, without immediate review, Perlman would have been "powerless to avert the mischief of the order," *** because "the custodian could hardly have been expected to risk a citation for contempt in order to secure . . . an opportunity for judicial review" ***. Accordingly, the Perlman provides that "a discovery order directed at a disinterested third party is treated as an immediately appealable final order." Church of Scientology of Ca. v. United States, 506 U.S. 9, 18 n.11, 113 S. Ct. 447, 121 L. Ed. 2d 313 (1992). ***


Second, Myers asserts jurisdiction under the "collateral order doctrine" of Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 69 S. Ct. 1221, 93 L. Ed. 1528 (1949). Although "final decisions" in 28 U.S.C. § 1291 typically are judgments terminating an action, Cohen held that § 1291 also encompasses "a small set of prejudgment orders that are 'collateral to' the merits of an action and 'too important' to be denied immediate review." Mohawk, 130 S. Ct. 599, 175 L. Ed. 2d 458, 2009 WL 4573276, at *3 (quoting Cohen, 337 U.S. at 546)). "'That small category includes only decisions [1] that are conclusive, [2] that resolve important questions separate from the merits, and [3] that are effectively unreviewable on appeal from the final judgment in the underlying [**18] action.'" 130 S. Ct. 599, 175 L. Ed. 2d 458, [WL] at *5***. The Supreme Court has stressed that these "conditions are stringent," Will v. Hallock, 546 U.S. 345, 349, 126 S. Ct. 952, 163 L. Ed. 2d 836 (2006), and that the collateral order doctrine "must 'never be allowed to swallow the general rule that a party is entitled to a single appeal, to be deferred until final judgment has been entered,'" Mohawk, 130 S. Ct. 599, 175 L. Ed. 2d 458, 2009 WL 4573276, at *5***.


First, Myers was directed to produce any missing items she conceded were not protected by the Fifth Amendment. Although Myers insisted that all missing items were protected by the attorney-client privilege, Judge Stamp found that the crime-fraud exception vitiated that protection. Myers now argues that the contempt order on appeal would be "effectively unreviewable on appeal from the final judgment in the underlying action" because producing the missing items would irrevocably undermine the attorney-client privilege. Mohawk, 130 S. Ct. 599, 175 L. Ed. 2d 458, 2009 WL 4573276, at *5 (internal quotations omitted).

The Supreme Court's recent Mohawk decision directly addresses this argument. In that case, the petitioner argued that a district court's discovery order implicating the attorney-client privilege should be immediately appealable under the collateral order doctrine. The Court explained that, when determining whether an order would later become effectively unreviewable, "the decisive consideration is whether delaying review until the entry of final judgment 'would imperil a substantial public interest' or 'some particular value of a high order.'" *** Courts doing this analysis should "not engage in an 'individualized jurisdictional inquiry,'" *** but should focus "on 'the entire category to which a claim belong,'"***. Applying this standard to discovery orders affecting the attorney-client privilege, Mohawk acknowledged the importance of that privilege but reasoned that "postjudgment appeals generally suffice to protect the rights of litigants and assure the vitality of the attorney-client privilege" because "[a]ppellate courts can remedy the improper disclosure of privileged material ... by vacating an adverse judgment and remanding for a new trial in which the protected material and its fruits are excluded from evidence." 130 S. Ct. 599, 175 L. Ed. 2d 458, [WL] at 6.

The petitioner argued, however, that the attorney-client privilege not only prohibits using privileged information during trial but also "provides a right not to disclose the privileged information in the first place." 130 S. Ct. 599, 175 L. Ed. 2d 458, [WL] at 7 (internal quotations omitted). Admitting that "an order to disclose privileged information intrudes on the confidentiality of attorney-client communications," Mohawk nonetheless found that "deferring review until final judgment does not meaningfully reduce the ex ante incentives for full and frank consultations between clients and counsel." ... The Court explained that "clients and counsel are unlikely to focus on the remote prospect of an erroneous disclosure order, let alone on the timing of a possible appeal," and added that, "were attorneys and clients to reflect upon their appellate options, they would find that litigants confronted with a particularly injurious or novel privilege ruling have several potential avenues of review apart from collateral order appeal." ... Such avenues include asking the district court to certify interlocutory appeal under 28 U.S.C. 1292(b), requesting a writ of mandamus, incurring sanctions under Federal Rule of Civil Procedure 37(b)(2), and directly appealing a criminal contempt order issued for failure to disclose the privileged information, "at least when the contempt citation can be characterized as a criminal punishment." ***

Even though Myers has appealed a civil contempt order arising from a discovery order rather than the underlying discovery order itself, Mohawk clearly controls our decision. The Court made plain that delaying review for a challenge invoking the attorney-client privilege does not imperil any substantial public interest or other value enough to render the order being appealed "effectively unreviewable on appeal from the final judgment in the underlying action." 130 S. Ct. 599, 175 L. Ed. 2d 458, [WL] at 5. Therefore, we find the collateral order doctrine inapplicable regarding Myers's current challenge to Judge Stamp's order directing her to produce missing items.

[Footnote 14] We note that the collateral order doctrine does not apply for another reason as well. Myers argues that the contempt order appealed "resolve[s] important questions separate from the merits" because Judge Bailey adopted Judge Stamp's finding that the crime-fraud exception applied. Mohawk, 130 S. Ct. 599, 175 L. Ed. 2d 458, 2009 WL 4573276, at *5 (internal quotations omitted). The crime-fraud exception applies where attorney-client "communications are made in furtherance of a crime, fraud, or other misconduct." *** Judge Stamp applied the exception because the government produced evidence that Myers defrauded the West Virginia Public Defender Services by submitting false invoices. The same allegations and evidence underlie her indictment in the criminal matter from which Myers now appeals. Therefore, our deciding whether the crime-fraud exception applies would require delving into factual and legal considerations enmeshed in the merits of the underlying dispute. For that reason, the collateral order doctrine cannot apply. See Van Cauwenberghe v. Biard, 486 U.S. 517, 527-28, 108 S. Ct. 1945, 100 L. Ed. 2d 517 (1988) (noting that the collateral order doctrine does not extend to orders involving considerations that are "enmeshed in the merits of the dispute")***.


Second, Myers was directed to provide any missing items that she believed were protected by the Fifth Amendment to the United States privilege team for privilege review. We have held that when a corporate custodian challenges a subpoena under the Fifth Amendment, the district court must carefully examine the subpoenaed items to determine whether they are personal or corporate and then consider whether producing any personal items would be testimonial. *** Given this precedent, the district court ordered Myers to produce the missing items for privilege review. Because she refused, the court was never able to decide whether they are protected. Accordingly, the November 19, 2007, order does not "conclusively determine the disputed question" that Myers has raised. Hallock, 546 U.S. at 349. Therefore, once again, we believe that the collateral order doctrine does not apply.

We recognize the irony inherent in our decision, namely, that Myers must comply with the November 19, 2007, order to appeal her contempt citation for violating that order. We are constrained, however, by the procedural posture in which Myers raised the issue. She has argued that her closed case files are privileged but has consistently refused to allow the court to evaluate whether the privilege applies. Myers cannot adjudicate her own Fifth Amendment claim. Rather, the district court must evaluate her claim in the first instance. See In re Three Grand Jury Subpoenas, Dated Jan. 5, 1988, 847 F.2d 1024, 1028-29 (2d Cir. 1988) (finding that the Fifth Amendment does not protect refusal to produce documents for in camera inspection). We will not consider her Fifth Amendment claim until the district court has had the opportunity.

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