Georgia Lawyers Take Sides in High Court Client Privilege Case
Groups siding with Mohawk say not allowing immediate review of privilege waiver means no review at all.
Georgia lawyers are front and center in a U.S. Supreme Court case that could change the way appellate courts deal with questions of attorney-client privilege.
The appeal, expected to be heard by the high court this fall, represents the latest chapter in litigation over hiring practices at the carpet maker Mohawk Industries in Calhoun in northwest Georgia.
A coalition that includes business interests and the American Bar Association is asking the justices to allow parties in federal cases to immediately appeal lower court findings that the parties have waived their rights to keep key information secret under attorney-client privilege.
Mohawk’s case is out of the Northern District of Georgia, and lawyers on both sides of the case are based in Atlanta. Alston & Bird partner Randall L. Allen said he will argue for Mohawk at the Supreme Court, while Atlanta lawyer Thomas J. Munger is on the team of lawyers representing a former Mohawk employee who is suing the company.
The Atlanta connections don’t stop there. The filing of the ABA’s brief in support of Mohawk needed the support of an established ABA policy on the issue in the case, said Laurie Webb Daniel, a partner in Holland & Knight’s Atlanta office and one of five members of the ABA’s committee on amicus curiae briefs. To make that happen, the ABA’s Section of Litigation, headed by Arnall Golden Gregory partner Robert L. Rothman, and the ABA’s Task Force on Attorney-Client Privilege, chaired by McKenna Long & Aldridge partner R. William Ide III, successfully urged the ABA’s House of Delegates to approve a clear policy position on the issue at the group’s mid-year meeting in February.
“We have kind of a confluence of … different people in Atlanta coming together and having an interest in this brief and in this case,” said Daniel.
But the importance of the case goes far beyond Georgia, as signaled by the Supreme Court’s grant of certiorari in the case in January and the amicus briefs from not only the ABA but also the U.S. Chamber of Commerce and an organization of civil defense lawyers.
Those groups join Mohawk in arguing that not allowing immediate appellate review of orders finding a waiver of attorney-client privilege in effect means no review at all. Pick your metaphor, but the one used most frequently is that once privileged material is produced in discovery, the cat is out of the bag and the consequences of disclosure cannot be undone by an appellate reversal.
When a party is forced to show privileged materials to the other side, it’s disclosing its legal thinking on the case, said Allen, who’s representing Mohawk along with his partner Daniel F. Diffley. “You can’t erase the data and information from the minds of the lawyers on the other side,” said Allen.
Connecticut lawyer J. Craig Smith, who is counsel of record for the former Mohawk employee, countered in an e-mail that a rule permitting pretrial appeals in every case where attorney-client privilege is asserted could overwhelm appellate courts and create years of delay in litigation. “Because justice delayed is justice denied and the potential for abuse of the appellate system exists, Courts should be, and for the most part are, reluctant to grant interlocutory appeals,” said Smith.
Illegal alien claims
The dispute over Mohawk’s hiring practices dates back to 2004, when a team including Summerville attorney Bobby Lee Cook and lawyers at Atlanta’s Bondurant, Mixson & Elmore filed a potential class action on behalf of current and former employees of the company who claimed the company was hiring illegal aliens, thereby depressing the wages of Mohawk’s legal employees.
That case already has been to the U.S. Supreme Court. In that appeal, the company had challenged a conclusion by the 11th U.S. Circuit Court of Appeals that Mohawk’s alleged relationship with outside labor recruiters could constitute a racketeering enterprise as defined by the federal RICO law, short for Racketeer Influenced and Corrupt Organizations. The high court granted certiorari and heard oral argument but ultimately sent the case back to the 11th Circuit for reconsideration in light of a new Supreme Court ruling in another case.
On remand, the 11th Circuit kept the suit alive, rejecting Mohawk’s argument that alleged hiring of illegal workers couldn’t have been a sufficiently significant cause of any depression of wages. The plaintiffs suffered a setback in the case last year, when U.S. District Judge Harold L. Murphy denied class certification. On Thursday, an 11th Circuit panel vacated that class certification ruling and sent the case back to Murphy, handing the employee plaintiffs another interim victory.
The attorney-client privilege case at the Supreme Court is an offshoot of the RICO suit. In that case, former Mohawk shift supervisor Norman Carpenter claims he was fired from his job shortly after he complained to the company’s human resource department that several temporary workers were living in the U.S. illegally. Carpenter alleged in his complaint that Washington lawyer Juan P. Morillo, who is outside counsel for Mohawk in the RICO case, unsuccessfully pressured him to recant his report to human resources because it would damage the company’s litigation position.
After Carpenter filed his suit in March 2007, the plaintiffs in the RICO suit filed a motion asking for an emergency evidentiary hearing to address Carpenter’s allegations and compel Morillo’s testimony. That hearing never took place, but Mohawk’s response to the motion is at the heart of the waiver issue before the high court.
Mohawk’s response said that Carpenter’s “wild allegations that he was fired because of some conspiracy to influence his testimony are pure fantasy.” Instead, said Mohawk, Carpenter engaged in “blatant and illegal misconduct” and himself tried to “cause Mohawk to circumvent federal immigration law.” Mohawk made reference to Morillo’s interview of Carpenter, saying it was part of the company’s investigation of both Carpenter’s alleged behavior and his allegations about the company.
Carpenter has tried to get Mohawk to disclose documentation of his conversation with Morillo, but the company has claimed that the information is protected by attorney-client privilege. Murphy determined that the information was protected by the attorney-client privilege but found that Mohawk had waived the privilege by putting Morillo’s actions at issue in the case.
Murphy stayed his order that compelled Mohawk to produce the privileged material, allowing the company to try its luck at the 11th Circuit. Mohawk petitioned the 11th Circuit for a writ of mandamus to make Murphy vacate his order.
But 11th Circuit Judges Edward E. Carnes and Stanley Marcus and U.S. District Judge Susan C. Bucklew, a Florida jurist who sat by designation, did not address the merits of Mohawk’s argument that it did not waive its privilege.
Instead, the panel relied on its general rule against appeals in the middle of a case and concluded that a disputed discovery order was not a proper exception to the rule. A writ of mandamus petition is the more desirable avenue for challenging a privilege-related discovery dispute, said the judges, but Mohawk couldn’t make the requisite showing of a clear usurpation of power or abuse of discretion.
“[W]e are not persuaded by [Mohawk]’s argument that once the privileged material is turned over, the ‘cat is out of the bag’ and the damage is done,” the appellate judges wrote.
In asking the Supreme Court to look at the case, Mohawk was able to show that circuit courts disagree on the issue, which can be a key factor in the high court’s decision to grant cert. According to Mohawk’s cert petition, the 3rd, 9th and D.C. Circuits have found jurisdiction to hear interlocutory appeals over attorney-client privilege questions. In addition to the 11th Circuit, Mohawk said the 1st, 2nd, 5th, 7th, 10th and Federal Circuits all have gone the other way, holding that a discovery order implicating the attorney-client privilege is not immediately appealable under the exception to the general rule.
The ABA’s brief in the case, which was filed under the names of ABA President H. Thomas Wells Jr. and Washington lawyers Paul Mogin and C. Bryan Wilson, urges the high court to follow the 3rd, 9th and D.C. Circuits and allow privilege questions to be appealed, at least where the trial court finds a waiver. Trial courts too frequently get those questions wrong, the ABA brief says.
Other groups supporting Mohawk are the U.S. Chamber of Commerce and DRI, a civil defense attorneys’ group. Briefs for Carpenter’s side aren’t due for several weeks. Smith, who represents Carpenter, said he expects to have amicus briefs supportive of his client but wasn’t in a position to say who will be filing them.
But it’s not clear that the issue before the Supreme Court is one that divides plaintiff’s and defense lawyers. Kyle Murphy, a spokesman for the American Association for Justice, said it’s unlikely the organization of plaintiff’s lawyers will take a position in the case.
According to J. Marcus “Marc” Howard, who chairs the Georgia Trial Lawyers Association’s amicus committee, GTLA doesn’t have a stance on the issue. “I haven’t heard of this as being some big plaintiffs versus defense issue,” said Howard.
Howard said he can see both sides of the debate, calling it a “dicey issue” given the importance of the attorney-client privilege. But he expressed concern that a ruling in Mohawk’s favor could be extended to allow immediate appeals of a host of types of discovery orders. Defendants sometimes use discovery battles to delay a case, he said.
Mohawk’s cert petition limited the issue for the Supreme Court to situations in which a trial judge has found a waiver of the attorney-client privilege. But Allen, Mohawk’s lawyer, said even if the court allows immediate appeals in a broader universe of circumstances, other considerations—such as the possibility of sanctions—would prevent lawyers from raising improper claims of privilege in court. “The Rule 11 ramifications for that kind of thing are likely sufficient protection,” he said.
The case at the Supreme Court is Mohawk Industries v. Carpenter, No. 08-678.
By Alyson M. Palmer , Fulton County Daily Report