USA v. Philip Morris Inc, et al, No. 02-5210 (D.C. Cir. 2003)
Annotate this Case
The court issued a subsequent related opinion or order on November 4, 2003.
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 3, 2002 Decided January 7, 2003
No. 02-5210
United States of America,
United States Department of Justice,
Appellee
v.
Philip Morris Incorporated, et al.,
Appellees
British American Tobacco (Investments) Ltd.,
Directly and as Successor to British-American
Tobacco Company, Ltd.,
Appellant
Appeal from the United States District Court
for the District of Columbia
(99cv2496)
On Motion for Stay Pending Expedited Appeal or,
in the alternative,
a Petition for a Writ of Mandamus
---------
Bruce G. Sheffler argued the cause for appellant. With
him on the motion/petition was Garyowen P. Morrisroe.
Timothy M. Hughes entered an appearance.
Sharon Y. Eubanks, Director, U.S. Department of Justice,
argued the cause for federal appellee. With her on the
opposition were Stephen D. Brody, Deputy Director, and
Daniel K. Crane-Hirsch, Trial Attorney.
Before: Ginsburg, Chief Judge, and Sentelle and
Randolph, Circuit Judges.
Opinion for the Court filed by Circuit Judge Sentelle.
Dissenting opinion filed by Circuit Judge Randolph.
Sentelle, Circuit Judge: British American Tobacco (In-
vestments) Ltd. ("BATCo"), seeks an emergency stay pend-
ing expedited appeal of the district court's discovery orders
requiring BATCo to produce an allegedly privileged docu-
ment. In the alternative, BATCo seeks a writ of mandamus
vacating the orders. BATCo contends that this Court has
jurisdiction over its appeal under the collateral order doc-
trine. See Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541 (1949). On the merits, BATCo argues that the district
court erred by ruling that BATCo waived the attorney-client
privilege, without first considering BATCo's pending objec-
tions to the request for the allegedly privileged document.
Because we agree that BATCo has demonstrated jurisdiction
under the collateral order doctrine and satisfied the require-
ments for a stay, we grant its motion for a stay and dismiss
the petition for mandamus as moot.
I. Background
Appellee, the United States of America, initiated this law-
suit against BATCo and five other tobacco companies in
September 1999 alleging that defendants violated the civil
provisions of RICO, 18 U.S.C. ss 1961-68 (2000), by engaging
in "a pattern of racketeering activity" to "conceal the health
risks of cigarette smoking and the addictiveness of nicotine."
The government further alleges, in relevant part, that defen-
dants have "destroy[ed] and conceal[ed] documents" and tak-
en "other steps to shield documents and materials from
discovery." As to remedy, the government seeks, inter alia,
disgorgement of defendants' profits and recovery of the medi-
cal costs of the tobacco companies' customers.
The parties exchanged Comprehensive Requests for Pro-
duction on August 22, 2000. The government requested that
the defendants produce "[a]ll documents relating to record-
creating, record-keeping, record-retention, record dissemina-
tion or distribution, and/or record-destruction policies, prac-
tices, and procedures ... in any part of your organization
that has or had responsibility for ... research concerning
smoking and health or addiction." On November 6, 2000,
BATCo responded to the government's document requests,
and objected, inter alia, to producing any documents created
prior to August 19, 1994, except those contained in the
Guildford Depository in England (the "Guildford objection").
The Depository was established in response to a parallel
action filed against the same defendants by the State of
Minnesota and contains over one million documents. State of
Minnesota v. Philip Morris, Inc., No. C1-94-8565 (Minn.
Super. Ct. 1994). BATCo also objected to producing any
documents in the possession of third parties if the documents
were not also in BATCo's possession, custody, or control (the
"third-party objection").
In March 2002, the Supreme Court of Victoria, Australia,
publicly released a decision regarding discovery in a case
involving W.D. & H.O. Wills ("Wills"), an Australian subsid-
iary of British American Tobacco Australia Services Limited
("BATAS"), in which BATCo has a minority ownership inter-
est. McCabe v. Brit. Am. Tobacco Austl. Servs., Ltd., (2002)
V.R. 73. The decision quotes extensively from a March 1990
memorandum prepared for Wills by an attorney at the British
law firm Lovell, White & Durrant ("Lovell"), in its capacity as
counsel for Wills and BATCo (the "Foyle Memorandum" or
"the memo"). See id. The Foyle Memorandum advises Wills
on modifying its document retention policy in light of increas-
ing litigation against tobacco companies in the United States
and Australia.
Subsequent to the McCabe decision's release, the govern-
ment requested by letter that BATCo produce the Foyle
Memorandum. BATCo responded that it had been "unable to
locate the document[ ], or any evidence that plaintiff selected
[it] for production."
On May 28, 2002, during the deposition of former BATCo
CEO Ulrich Herter, government counsel requested the "im-
mediate production" of the Foyle Memorandum so it could be
used to refresh Herter's recollection. When BATCo's counsel
declined, government counsel initiated an emergency telecon-
ference with the district court to determine whether BATCo
was required to immediately produce the Foyle Memoran-
dum. During the teleconference, BATCo contended that the
document was covered by the Guildford objection and in-
formed the Court that it did not even know if the document
was in its possession. Moreover, BATCo argued that the
Foyle Memorandum was protected by the attorney-client
privilege. The district court did not address BATCo's Guild-
ford and third-party objections. Instead, the court ruled that
BATCo had waived any claim of attorney-client privilege
because the memo had not been listed in BATCo's privilege
log. The court added that BATCo was free to re-litigate the
underlying facts of the order before the Special Master in the
case. The following day, the district court issued a written
order memorializing the telephone ruling and requiring
BATCo to produce the memo "if the document is in the
control or possession of BATCo," and to make "all reasonable
effort to locate" it. United States v. Philip Morris Inc., No.
99-2496 (D.D.C. May 29, 2002) ("Order 157").
On May 30, 2002, BATCo and the government twice ap-
peared in telephonic conferences before the Special Master in
which BATCo sought to attack Order 157. Although the
argument in the first conference is not part of the record,
BATCo appears to have raised its Guildford and third-party
objections in this conference. See Oral Rep. and Recom. 56
at 35 (BATCo counsel raising objection in context of "reit-
erat[ing] what I said this morning"). It definitely raised
them in the second conference. See id. at 35, 43. Like the
district court, the Special Master did not address these
objections. Instead he concluded that, because the Foyle
Memorandum was in the possession of Lovell, it was "within
the control and possession of BATCO" and thus required to
be logged in the privilege log. Oral Rep. and Recom. 55 at
11. The Special Master therefore recommended that the
district court issue an "order of further compliance" so that
BATCo would immediately produce the memo. Id.
BATCo then submitted to the district court a sealed copy of
the Foyle Memorandum and moved the district court to
reconsider its orders compelling production. BATCo again
urged the court to consider its Guildford and third-party
objections before requiring BATCo to produce or log the
Foyle Memorandum. See BATCo Br. in Supp. of Mot. for
Recons. at 14. On July 2, 2002, the court denied the motion
to reconsider and ordered BATCo to produce the memo
within two days. United States v. Philip Morris Inc., No.
99-2496 (D.D.C. July 2, 2002) (order compelling production).
The court held that because BATCo had "knowledge and
possession" of the Foyle Memorandum "by at least February
of 2002," BATCo was required under Federal Rule of Civil
Procedure 26(e), to "identify and/or designate the document"
as privileged at that time. Philip Morris, No. 99-2496, slip
op. at 4 (D.D.C. July 2, 2002) (memorandum opinion accompa-
nying order). Thus, the court concluded that BATCo's failure
to list the memo on the privilege log waived BATCo's attor-
ney-client privilege claim. Id. at 4-5. The court did not
further address BATCo's objections.
BATCo requested that the district court stay its orders
pending appeal. On July 10, 2002, the district court denied
the motion for stay, reasoning that BATCo had not estab-
lished appellate jurisdiction nor shown that it was likely to
prevail on its challenge to the waiver ruling. Philip Morris,
No. 99-2496, slip op. (D.D.C. July 10, 2002). The court also
noted that BATCo would not suffer irreparable harm absent
a stay, particularly given that many portions of the Foyle
Memorandum have already been made public in McCabe. Id.
at 2. By contrast, the district court found that a stay would
substantially harm the government and undermine the public
interest by jeopardizing the "extremely demanding" discovery
schedule and July 15, 2003 trial date set by the court. Id. at
2-4.
BATCo timely filed this appeal and sought an emergency
stay pending expedited review, claiming that the district court
should have ruled on its pending objections to producing the
Foyle Memorandum, and at that time, given BATCo a chance
to log the memo.
II. Analysis
In seeking a stay pending appeal, BATCo must show (1)
that it has a substantial likelihood of success on the merits;
(2) that it will suffer irreparable injury if the stay is denied;
(3) that issuance of the stay will not cause substantial harm to
other parties; and (4) that the public interest will be served
by issuance of the stay. Washington Metro. Area Transit
Comm'n v. Holiday Tours, Inc., 559 F.2d 841, 843 (D.C. Cir.
1977).
We first consider our jurisdiction over BATCo's appeal and
then address, in turn, the requirements for an emergency
stay.
A. Jurisdiction
BATCo argues that this Court has jurisdiction over its
appeal under the collateral order doctrine, first enunciated by
the Supreme Court in Cohen, 337 U.S. 541. The collateral
order doctrine is a narrow exception to the general rule that
appellate review is only available for final orders. Quacken-
bush v. Allstate Ins. Co., 517 U.S. 706, 712 (1996). For
jurisdiction to lie under Cohen's collateral order doctrine,
BATCo must show that (1) the order from which it appeals
conclusively determines the disputed question; (2) appellate
review will resolve an important issue completely separate
from the merits of the action; and (3) the order will be
effectively unreviewable on appeal from a final judgment.
Puerto Rico Aqueduct & Sewer Auth. v. Metcalf & Eddy,
Inc., 506 U.S. 139, 144 (1993); Nat'l Ass'n of Criminal Def.
Lawyers v. United States Dep't of Justice, 182 F.3d 981, 984
(D.C. Cir. 1999).
The first requirement is satisfied because the district
court's order conclusively and finally determined that the
Foyle Memorandum is not protected by the attorney-client
privilege. In no way does the record suggest that the district
court's conclusion is tentative or subject to revision.
The second requirement has two prongs-separability and
importance. Clearly, the privilege question is separable from
the merits of the underlying case. As to importance, "for the
purposes of the Cohen test, an issue is important if the
interests that would potentially go unprotected without imme-
diate appellate review of that issue are significant relative to
the efficiency interests sought to be advanced by adherence
to the final judgment rule." In re Ford Motor Co., 110 F.3d 954, 959 (3d Cir. 1997); see also Digital Equip. Corp. v.
Desktop Direct, Inc., 511 U.S. 863, 878-79 (1994) ("[T]he third
Cohen question ... simply cannot be answered without a
judgment about the value of the interests that would be lost
through rigorous application of a final judgment require-
ment."). Thus, the considerations underlying the final judg-
ment rule--the costs of piecemeal review--must be weighed
against the costs of delay. Johnson v. Jones, 515 U.S. 304,
315 (1995); Ford, 110 F.3d at 959. The Supreme Court
explained that " 'important' in Cohen's sense [means] being
weightier than the societal interests advanced by the ordinary
operation of final judgment principles." Digital Equip., 511 U.S. at 879. For example, collateral order review is available
to decide, inter alia, issues of federal court abstention,
Quackenbush, 517 U.S. 706, Eleventh Amendment immunity,
Puerto Rico Aqueduct, 506 U.S. 139, and qualified immunity,
Mitchell v. Forsyth, 472 U.S. 511 (1985).
In Ford, the Third Circuit addressed the issue before this
court today and held that collateral order review is also
available to challenge an attorney-client privilege ruling. 110 F.3d at 957-64. The Ford court analogized to Supreme
Court precedent and held that the attorney-client privilege
was the type of "institutionally significant status or relation-
ship" that justifies collateral order review. Id. at 960. We
agree, consistent with our decision In re Grand Jury Investi-
gation of Ocean Transportation, 604 F.2d 672 (D.C. Cir.
1979), in which we allowed interlocutory appeal of a privilege
claim that arose after the appellant inadvertently produced
allegedly privileged documents. Id. at 674.
The attorney-client privilege rests at the center of our
adversary system and promotes "broader public interests in
the observance of law and administration of justice" and
"encourage[s] full and frank communication between attor-
neys and their clients." Upjohn Co. v. United States, 449 U.S. 383, 389 (1981). The privilege promotes sound legal
advocacy by ensuring that the counselor knows all the infor-
mation necessary to represent his client. Id. Only by ensur-
ing that privileged information is never disclosed will these
important interests be advanced. Ford, 110 F.3d at 962.
Even though enforcement of the privilege often results in the
suppression of probative evidence, our jurisprudence has
determined that its value outweighs these costs. Similarly,
we today conclude that the institutional benefits of allowing
interlocutory review of attorney-client privilege claims out-
weigh the costs of delay and piecemeal review that may
result.
The government proposes two reasons why BATCo's privi-
lege claim differs from the immediately appealable privilege
claims in Ford and Ocean Transportation. First, the govern-
ment argues that BATCo is not asserting a privilege claim
because the district court did not reject a timely asserted
claim of privilege, but merely held that BATCo waived the
privilege by failing to log the Foyle Memorandum. On these
facts, this is a distinction without a difference. The only
reason the district court did not reach the merits of BATCo's
privilege claim is because of the court's allegedly erroneous
waiver ruling. A decision defining the contours of a waiver of
privilege is no less "important" for Cohen purposes than a
ruling on the contours of the privilege itself. An erroneous
finding of waiver, like an erroneous ruling denying a claim of
privilege, eviscerates the same important institutional inter-
ests in preserving privileged information, and derivatively,
full and frank communication between client and attorney.
Second, the government argues that the privilege issue is
not important because so much of the Foyle Memorandum
has already been released in the McCabe decision. This
argument misconstrues Cohen's importance requirement.
The importance prong requires weighing the "institutionally
significant status or relationship" at stake, Ford, 110 F.3d at
960, not the individual circumstances of each case. Johnson,
515 U.S. at 315 ("We of course decide appealability for
categories of orders rather than individual orders. Thus, we
do not now in each individual case engage in ad hoc balancing
to decide issues of appealability.") (citation omitted). The
attorney-client privilege protects an important status or rela-
tionship regardless of whether some portion of the privileged
material has already been lost. Total disclosure of the Foyle
Memorandum would unquestionably further impair the attor-
ney-client privilege. See Ocean Transp., 604 F.2d 672 (allow-
ing collateral order review of privilege ruling even though
allegedly privileged documents had inadvertently been pro-
duced to prosecution). Therefore, we conclude that BATCo's
appeal of the district court's ruling satisfies Cohen's impor-
tance requirement.
To satisfy Cohen's final requirement for jurisdiction under
the collateral order doctrine, BATCo must also show that the
district court's discovery order will be effectively unreview-
able on appeal from a final judgment. Puerto Rico Aqueduct,
506 U.S. at 144; Criminal Def. Lawyers, 182 F.3d at 984. An
order is effectively unreviewable if it "involves an asserted
right the legal and practical value of which would be de-
stroyed if it were not vindicated before trial." Lauro Lines
S.R.L. v. Chasser, 490 U.S. 495, 499 (1989) (quotation omit-
ted). While BATCo could appeal the discovery order after
final judgment, the appellate court would merely send the
case back for re-trial without use of the privileged materials.
By that point, the entirety of the Foyle Memorandum will
have been disclosed to third parties, making the issue of
privilege effectively moot. See Ocean Transp., 604 F.2d at
674; see also In Re Papandreou, 139 F.3d 247, 251 (D.C. Cir.
1998) (stating in dictum that "[d]isclosure followed by appeal
after final judgment is obviously not adequate in [privilege]
cases-the cat is out of the bag"). In this case, the right
sought to be protected--BATCo's privilege--would be de-
stroyed if interlocutory appeal is not allowed. Moreover, the
United States' attorneys could gain valuable new leads from
the Foyle Memorandum. See Chase Manhattan Bank, N.A.
v. Turner & Newall, PLC, 964 F.2d 159, 165 (2d Cir. 1992). It
would be impossible for a court to sort out and redress the
harm caused by the incorrect disclosure.
Some of our sister circuits have suggested that a party
might obtain effective review of an adverse privilege order by
refusing to obey the district court's discovery order and
thereby standing in contempt or incurring some other sanc-
tion. By appealing the sanction, they suggest, a party may
have an adverse privilege ruling reviewed upon final judg-
ment without disclosing the privileged document. See FDIC
v. Ogden Corp., 202 F.3d 454, 458 n.2 (1st Cir. 2000); see also
Reise v. Bd. of Regents of Univ. of Wisconsin, 957 F.2d 293,
295-96 (7th Cir. 1992) (discussing this method of obtaining
review of order to submit to medical examination). It is
principally because of the availability of the disobedience
route to review that a majority of the circuits to have
considered the issue have held that adverse privilege rulings
are not appealable. See Ogden, 202 F.3d at 458 n.2; Dell-
wood Farms, Inc. v. Cargill, Inc., 128 F.3d 1122, 1125 (7th
Cir. 1997) (in case involving "law enforcement investigatory
privilege," holding discovery order not within collateral order
doctrine "even if it is an order denying a claim of privilege");
Simmons v. City of Racine, 37 F.3d 325, 327 (7th Cir. 1994)
(in case involving "informer's privilege," noting that discovery
orders are not appealable under Cohen even if "issued over
an objection that the information at issue is privileged");
Boughton v. Cotter Corp., 10 F.3d 746, 750 (10th Cir. 1993);
Texaco, Inc. v. Louisiana Land & Exploration Co., 995 F.2d 43 (5th Cir. 1993) (enforcing general inapplicability of collat-
eral order doctrine to discovery orders in case involving
attorney-client privilege claim); Chase Manhattan Bank,
N.A. v. Turner & Newall, PLC, 964 F.2d 159, 161-63 (2d Cir.
1992) (same but issuing writ of mandamus); Reise, 957 F.2d
at 295 ("even orders to produce information over strong
objections based on privilege are not appealable"); Quantum
Corp. v. Plus Dev. Corp., 940 F.2d 642, 644 (Fed. Cir. 1991);
see also American Express Warehousing, Ltd. v. Trans-
america Ins. Co., 380 F.2d 277, 280-83 (2d Cir. 1967) (work-
product privilege).
Although these authorities are weighty, we cannot follow
them. At least some of the holdings are based in part upon
the assumption that disobedience may lead to a contempt
citation that would itself be an appealable order. See Ogden,
202 F.3d at 458 n.2. In this circuit, however, it is settled that
a civil contempt citation is not appealable as a collateral
order. Byrd v. Reno, 180 F.3d 298 (D.C. Cir. 1999). In the
related context of determining whether a petitioner for man-
damus has adequate alternative means of relief, we have
expressed concern that a party that seeks review does not
know in advance "whether refusal to comply with the discov-
ery order will result in a civil contempt order or a criminal
contempt order." In re Sealed Case No. 98-3077, 151 F.3d 1059, 1065 (D.C. Cir. 1998); see also 15B C. Wright, A.
Miller & E. Cooper, Federal Practice & Procedure
s 3914.23, at 146 (2d ed. 1992). Although there may be other
sanctions that the district court could impose, such as striking
all or a portion of the party's pleadings, see Fed. R. Civ. P.
37(b)(2), these are in the district court's discretion and are
therefore not reliable avenues to appeal. Moreover, they
may be of such severity that a reasonable party would not
risk incurring them, even in order to preserve a clearly
meritorious privilege claim.
The dissent argues that our decision in Byrd requires us to
hold that a privilege ruling is not appealable because a
privilege ruling is merely a "predicate" ruling to an unappeal-
able civil contempt citation. See Dissent at 1-2, 3. Since
BATCo could not appeal the contempt citation under Byrd,
the dissent reasons, it should not be able to appeal the
"predicate" privilege ruling either. We do not think that the
dissent's conclusion follows from our holding in Byrd.
In Byrd, we held that a general class of orders--civil
contempt citations--are not final orders under 28 U.S.C.
s 1291. That is an entirely different question than the one
we face today: whether attorney-client privilege rulings--a
narrow subset of the rulings that might eventually lead to a
contempt citation--fall within Cohen's collateral order excep-
tion to the final order rule. Neither this Court in Byrd nor
the Supreme Court has held that certain types of rulings are
excluded from Cohen's collateral order exception merely be-
cause they may lead to an unappealable civil contempt cita-
tion. Rather, an order is appealable under Cohen if it meets
the three prong test of conclusiveness, separability and im-
portance, and effective unreviewability. This inquiry requires
careful examination of the type of order at issue to determine
whether the benefits of immediate appealability outweigh the
costs that may result from piecemeal adjudication, see John-
son v. Jones, 515 U.S. 304, 315 (1995), not merely a cursory
glance to determine whether the order could lead to an
unappealable civil contempt citation, as the dissent suggests.
Finally, the Byrd Court itself recognized that its central
holding--that civil contempt orders are not final orders under
s 1291--did not eliminate the need for the particularized
Cohen inquiry. Indeed, the Byrd Court separately addressed
the issue of whether the underlying discovery order and civil
contempt order were immediately appealable under the col-
lateral order doctrine. See 180 F.3d at 302. If the dissent's
reading were correct, the Byrd Court would not have needed
to address the collateral order doctrine because that issue
would have been precluded by the Court's holding that civil
contempt orders are not final orders. For all of these
reasons, we are unpersuaded by the dissent's argument that
this Court lacks jurisdiction over BATCo's appeal.
Therefore, we hold that BATCo has demonstrated jurisdic-
tion under the collateral order doctrine. We turn now to
BATCo's likelihood of success on the merits of its claim.
B. Likelihood of Success on the Merits
BATCo contends that it is likely to succeed on the merits
because the district court failed to consider BATCo's pending
objections to producing the Foyle Memorandum and thus
incorrectly found that BATCo waived its privilege claim by
failing to log it. BATCo argues that even if the district court
overruled its objections, BATCo should have been given, at
that time, an opportunity to place the Foyle Memorandum on
its privilege log.
In considering the merits of BATCo's claim, we begin at
Federal Rule of Civil Procedure 26(b)(5). The rule provides
that any party claiming privilege for a document requested
during discovery shall log the document on a privilege log.
Fed. R. Civ. P. 26(b)(5). The 1993 Advisory Committee Notes
explain the application of the rule when a party has pending
objections to the document request. See Fed. R. Civ. P.
26(b)(5) advisory committee's note. The Notes provide that
the court should first rule on the pending objections and then,
if it overrules those objections, give the party claiming privi-
lege an opportunity to log the allegedly privileged documents.
Id. In short, if a party's pending objections apply to alleged-
ly privileged documents, the party need not log the document
until the court rules on its objections.
BATCo claims that its Guildford and third-party objections
apply to the Foyle Memorandum. Although there is some
doubt whether these objections apply to the Foyle Memoran-
dum, the United States did not raise this argument in oppos-
ing the present motion for stay. Moreover, there is no
question that the objections were timely raised and at least
facially seem to apply to the memo. If these objections are
found to apply to the Foyle Memorandum, then the district
court's failure to address the objections, or if it overruled
them, then its failure to give BATCo the opportunity to log
the memo, was error. Therefore, under these circumstances,
we find that BATCo is likely to succeed on its claim that the
district court should have considered these objections before
ruling that BATCo had waived its privilege. If BATCo
succeeds on its appeal, it would be entitled to a remand for
the district court to address BATCo's objections as applied to
the Foyle Memorandum.
C. Irreparable Injury
BATCo would suffer irreparable injury if a stay is denied.
Although BATCo "has not asserted any specific irreparable
injury that would occur" if it produced the Foyle Memoran-
dum, Philip Morris, No. 99-2496, slip op. at 2 (D.D.C. July
10, 2002), the general injury caused by the breach of the
attorney-client privilege and the harm resulting from the
disclosure of privileged documents to an adverse party is
clear enough. The government argues that we should disre-
gard this harm because parts of the Foyle Memorandum have
already been disclosed in the McCabe opinion. We disagree.
The release of the McCabe opinion does not diminish the
harm that would result from releasing additional privileged
information. Moreover, the attorneys for the United States
would be able to use the Foyle Memorandum to pursue new
leads on discovery and witness questioning. Chase Manhat-
tan Bank, 964 F.2d at 165. The implications of this use of
privileged material would be very difficult to remedy on
appeal.
D. Substantial Harm to Other Parties
The government argues that a stay would delay the trial
schedule set by the district court and harm the government's
ability to conduct discovery in this case. A mere assertion of
delay does not constitute substantial harm. Some delay would
be occasioned by almost all interlocutory appeals. Further,
any delay will be minimized by our expedition in hearing
BATCo's appeal. In short, there is no reason to believe a
minor delay will substantially harm the United States.
E. Public Interest
Finally, we consider whether the public interest would be
served by granting a stay. As discussed above, supra at 8, the
attorney-client privilege is an "institutionally significant sta-
tus or relationship" with deep roots in our nation's adversary
system. Ford, 110 F.3d at 960. As such, the privilege
advances "broader public interests in the observance of law
and administration of justice." Upjohn, 449 U.S. at 389. We
conclude that granting a stay to allow BATCo to defend its
claim of privilege will serve these same public interests.
III. Conclusion
Because we are satisfied that we have jurisdiction over this
appeal under the collateral order doctrine and that BATCo
has met all of the requirements for an emergency stay, we
grant its motion for emergency stay, expedite the underlying
appeal, and dismiss its petition for mandamus as moot.
So ordered.
Randolph, Circuit Judge, dissenting: I do not believe we
have appellate jurisdiction over the district court's discovery
orders and I would therefore deny the stay.
The question is whether the orders are "final decisions"
within the meaning of 28 U.S.C. s 1291. The court holds that
an order requiring a party to produce a document allegedly
protected by the attorney-client privilege is immediately ap-
pealable under s 1291, pursuant to the interpretation of that
provision in Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949). See Firestone Tire & Rubber Co. v. Risjord,
449 U.S. 368, 373-75 (1981).
If the underlying action here had been a grand jury
proceeding, we would not have appellate jurisdiction over
BATCo's appeal. The law is settled that if a district court
requires a grand jury witness to produce documents over the
witness's objections, the witness may not immediately appeal
under s 1291, but must first subject himself to contempt and
appeal the contempt citation. United States v. Ryan, 402 U.S. 530, 532-33 (1971), so holds and we have consistently
followed this rule in grand jury cases involving attorney-client
privilege claims. See, e.g., In re Sealed Case, 162 F.3d 670,
672-73 (D.C. Cir. 1998); In re Sealed Case, 107 F.3d 46, 48
n.1 (D.C. Cir. 1997); In re Sealed Case, 737 F.2d 94, 97 (D.C.
Cir. 1984).
This is a civil case, but s 1291 also governs appeals in
criminal cases. Cobbledick v. United States, 309 U.S. 323, 324
(1940); United States v. MacDonald, 435 U.S. 850, 853 (1978).
Why then is it that in a grand jury proceeding the witness
must disobey the order to produce and be held in contempt
before appealing, but--as the court now holds--in a civil
action a party may appeal the order forthwith? Byrd v.
Reno, 180 F.3d 298 (D.C. Cir. 1999), the majority explains,
holds that civil contempt orders are not final under s 1291.
Thus BATCo could not appeal if it refused to produce the
document and were held in civil contempt. But it seems to
me that this is a reason against--not in favor of--taking
jurisdiction of an appeal from an order that would serve as
the predicate for holding the party in contempt. At issue in
both appeals would be whether the district court correctly
rejected a privilege claim and ordered the party to disclose
attorney-client communications. Of the two cases, civil con-
tempt is far more serious; a party may be imprisoned for
violating a court's disclosure order, as Hickman v. Taylor,
329 U.S. 495, 500 (1947), illustrates.
In any event, the majority's distinction cannot account for
the difference between civil cases and grand jury proceed-
ings. In both types of proceedings a person may be held in
civil contempt, rather than criminal contempt, for refusing to
obey a district court order to testify or produce documents.
See 28 U.S.C. s 1826; Shillitani v. United States, 384 U.S. 364, 371 n.9 (1966). In fact, the Supreme Court has instruct-
ed the district courts to prefer civil contempt as a sanction to
force compliance with their orders even in criminal proceed-
ings. See id. The prospect of civil contempt, in other words,
looms as much in grand jury proceedings as in civil cases.
I believe there is another explanation. One of the policies
underlying the final judgment rule of s 1291 is "avoid[ing]
the obstruction to just claims that would come from permit-
ting the harassment and cost of a succession of separate
appeals from the various rulings to which a litigation may
give rise, from its initiation to entry of judgment." Cobble-
dick, 309 U.S. at 325. "The purpose is to combine in one
review all stages of the proceeding that effectively may be
reviewed and corrected if and when final judgment results."
Cohen, 337 U.S. at 546. But in grand jury proceedings a
recalcitrant witness usually can obtain review of his attorney-
client privilege claim only on review of a criminal or civil
contempt order. See 2 Sara Sun Beale et al., Grand Jury
Law and Practice s 11:18, at 11-65 (2d ed. Supp. 2001). The
same is true regarding non-party witnesses in civil cases.
See Byrd, 180 F.3d at 300. There will be no other final
judgment from which an appeal may be brought. Civil
contempt orders against grand jury witnesses are therefore
appealable, see Beale, Grand Jury Law s 11:18, at 11-65, and
so are civil contempt orders against non-party witnesses in
civil cases, see Byrd, 180 F.3d at 300; United States v.
Johnson, 801 F.2d 597, 599 (2d Cir. 1986). That is why the
Court in Ryan, 402 U.S. at 532, after saying that the grand
jury witness there could appeal a contempt citation, did not
distinguish between civil and criminal contempt. (Congress
has required in 28 U.S.C. s 1826(b)--the recalcitrant witness
statute applicable to court proceedings and grand jury pro-
ceedings--that appeals from civil contempt orders must be
"disposed of" no later than 30 days from the filing of the
appeal.) I do not read Byrd as holding otherwise. See 180 F.3d at 302.
What I have written thus far serves to distinguish In re
Grand Jury Investigation of Ocean Transp., 604 F.2d 672
(D.C. Cir. 1979). As the caption indicates, this was a grand
jury proceeding in which a company, in response to a subpoe-
na, inadvertently turned over allegedly privileged documents
to the government. The district court rejected the company's
motion to have the documents returned. We held that the
court's order was "final" under s 1291. The appeal came
within the doctrine of Perlman v. United States, 247 U.S. 7
(1918), because the company could not contest the order by
refusing to comply with it, and thus could not subject itself to
contempt. The appeal also fell within the rationale of Cohen,
not because there was anything particularly special about the
attorney-client privilege, but because this was the company's
only opportunity for appellate review of its privilege claim.
No criminal trial was pending. No final judgment other than
the denial of the motion for return could bring up the issue.
Ocean Transp., 604 F.2d at 673-74. That is not the situation
here. BATCo could raise the issue later on appeal if it lost
on the merits in the district court, or on cross appeal if it
prevailed and the government appealed.
I agree with the majority that it is necessary to analyze
orders that might lead to civil contempt, on the one hand, and
civil contempt citations themselves, on the other, separately
under the three-prong Cohen test. Maj. op. at 12. But our
judgment in Byrd that civil contempt citations are not appeal-
able indicates that the underlying issues--identical to those at
the predicate order stage--fail either the importance or the
effective unreviewability prong of Cohen. Cf. Powers v.
Chicago Transit Auth., 846 F.2d 1139, 1142 (7th Cir. 1988).
Aside from this, there is an entirely separate reason why
we do not have appellate jurisdiction over this appeal. The
circuits are split on the question whether, in civil cases,
discovery orders rejecting a party's attorney-client privilege
claim are immediately appealable. The Second, Fifth, and
Tenth Circuits hold that there is no appellate jurisdiction
because such orders are not final. See Boughton v. Cotter
Corp., 10 F.3d 746, 749-50 (10th Cir. 1993); Texaco Inc. v.
Louisiana Land & Exploration Co., 995 F.2d 43, 44 & n.4
(5th Cir. 1993); Chase Manhattan Bank, N.A. v. Turner &
Newall, PLC, 964 F.2d 159, 162-63 (2d Cir. 1992). A case
from the Seventh Circuit indicates that it too would refuse
jurisdiction in such an appeal. See Reise v. Bd. of Regents,
957 F.2d 293, 295-96 (7th Cir. 1992). In re Ford Motor Co.,
110 F.3d 954 (3d Cir. 1997), on which my colleagues rely, goes
the other way. I will assume arguendo that Ford Motor is
correct, although I have severe doubts. I am willing to make
this assumption because I do not believe this appeal is
anything other than a run-of-the-mill discovery dispute. The
Court's assertion that "[a]n erroneous finding of waiver ...
eviscerates the same important institutional interests" as an
erroneous attorney-client privilege ruling, maj. op. at 8, is
incorrect. The interests protected by the attorney-client
privilege are not threatened by requiring BATCo to await
final judgment before bringing the issue to us.
The order before us has nothing to do with the elements of
the attorney-client privilege and everything to do with BAT-
Co's satisfaction of discovery rules. To decide whether the
district court properly required production of the disputed
memorandum we will not have to consider, as we would in a
true privilege dispute, any of the elements of the privilege--
under what conditions the memorandum was written, or for
what purpose. Instead, this appeal will turn on whether
BATCo's attorneys complied with Fed. R. Civ. P. 26(b)(5),
which requires that a party claiming a privilege "make the
claim expressly and ... describe the nature of the documents
... not produced" with some specificity. Our decision there-
fore will have no impact on confidential communications be-
tween clients and their attorneys. Cf. Swidler & Berlin v.
United States, 524 U.S 399, 407 (1998). If we did not hear
the appeal, clients' incentives to communicate frankly with
their attorneys would remain as strong as ever. The only
possible change would be that clients might be more careful
to hire attorneys who comply rigorously with the discovery
rules.
For good reasons, discovery orders are not usually appeal-
able before the end of the litigation in the district court. See
McKesson Corp. v. Islamic Republic of Iran, 52 F.3d 346, 353
(D.C. Cir. 1995). The "costs of delay via appeal, and 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. ... Discovery
orders ... are readily reviewable after final decision. A
party aggrieved by the order assures eventual review by
refusing to comply." Reise, 957 F.2d at 295. I would there-
fore deny the stay pending appeal. If BATCo wishes to
preserve the discovery issue, it should refuse to produce the
memorandum and bring the question to us after final judg-
ment. It is no answer to say that the company might be
unwilling to risk sanctions for disobeying a court order. Maj.
op. at 11. The risk of sanctions facing parties in civil cases is
the same as that faced by recalcitrant grand jury witnesses,
yet we require grand jury witnesses to face contempt before
appealing, which at least gives some assurance that the claim
of privilege is sincerely interposed.
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 3, 2002 Decided January 7, 2003
No. 02-5210
United States of America,
United States Department of Justice,
Appellee
v.
Philip Morris Incorporated, et al.,
Appellees
British American Tobacco (Investments) Ltd.,
Directly and as Successor to British-American
Tobacco Company, Ltd.,
Appellant
Appeal from the United States District Court
for the District of Columbia
(99cv2496)
On Motion for Stay Pending Expedited Appeal or,
in the alternative,
a Petition for a Writ of Mandamus
---------
Bruce G. Sheffler argued the cause for appellant. With
him on the motion/petition was Garyowen P. Morrisroe.
Timothy M. Hughes entered an appearance.
Sharon Y. Eubanks, Director, U.S. Department of Justice,
argued the cause for federal appellee. With her on the
opposition were Stephen D. Brody, Deputy Director, and
Daniel K. Crane-Hirsch, Trial Attorney.
Before: Ginsburg, Chief Judge, and Sentelle and
Randolph, Circuit Judges.
Opinion for the Court filed by Circuit Judge Sentelle.
Dissenting opinion filed by Circuit Judge Randolph.
Sentelle, Circuit Judge: British American Tobacco (In-
vestments) Ltd. ("BATCo"), seeks an emergency stay pend-
ing expedited appeal of the district court's discovery orders
requiring BATCo to produce an allegedly privileged docu-
ment. In the alternative, BATCo seeks a writ of mandamus
vacating the orders. BATCo contends that this Court has
jurisdiction over its appeal under the collateral order doc-
trine. See Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541 (1949). On the merits, BATCo argues that the district
court erred by ruling that BATCo waived the attorney-client
privilege, without first considering BATCo's pending objec-
tions to the request for the allegedly privileged document.
Because we agree that BATCo has demonstrated jurisdiction
under the collateral order doctrine and satisfied the require-
ments for a stay, we grant its motion for a stay and dismiss
the petition for mandamus as moot.
I. Background
Appellee, the United States of America, initiated this law-
suit against BATCo and five other tobacco companies in
September 1999 alleging that defendants violated the civil
provisions of RICO, 18 U.S.C. ss 1961-68 (2000), by engaging
in "a pattern of racketeering activity" to "conceal the health
risks of cigarette smoking and the addictiveness of nicotine."
The government further alleges, in relevant part, that defen-
dants have "destroy[ed] and conceal[ed] documents" and tak-
en "other steps to shield documents and materials from
discovery." As to remedy, the government seeks, inter alia,
disgorgement of defendants' profits and recovery of the medi-
cal costs of the tobacco companies' customers.
The parties exchanged Comprehensive Requests for Pro-
duction on August 22, 2000. The government requested that
the defendants produce "[a]ll documents relating to record-
creating, record-keeping, record-retention, record dissemina-
tion or distribution, and/or record-destruction policies, prac-
tices, and procedures ... in any part of your organization
that has or had responsibility for ... research concerning
smoking and health or addiction." On November 6, 2000,
BATCo responded to the government's document requests,
and objected, inter alia, to producing any documents created
prior to August 19, 1994, except those contained in the
Guildford Depository in England (the "Guildford objection").
The Depository was established in response to a parallel
action filed against the same defendants by the State of
Minnesota and contains over one million documents. State of
Minnesota v. Philip Morris, Inc., No. C1-94-8565 (Minn.
Super. Ct. 1994). BATCo also objected to producing any
documents in the possession of third parties if the documents
were not also in BATCo's possession, custody, or control (the
"third-party objection").
In March 2002, the Supreme Court of Victoria, Australia,
publicly released a decision regarding discovery in a case
involving W.D. & H.O. Wills ("Wills"), an Australian subsid-
iary of British American Tobacco Australia Services Limited
("BATAS"), in which BATCo has a minority ownership inter-
est. McCabe v. Brit. Am. Tobacco Austl. Servs., Ltd., (2002)
V.R. 73. The decision quotes extensively from a March 1990
memorandum prepared for Wills by an attorney at the British
law firm Lovell, White & Durrant ("Lovell"), in its capacity as
counsel for Wills and BATCo (the "Foyle Memorandum" or
"the memo"). See id. The Foyle Memorandum advises Wills
on modifying its document retention policy in light of increas-
ing litigation against tobacco companies in the United States
and Australia.
Subsequent to the McCabe decision's release, the govern-
ment requested by letter that BATCo produce the Foyle
Memorandum. BATCo responded that it had been "unable to
locate the document[ ], or any evidence that plaintiff selected
[it] for production."
On May 28, 2002, during the deposition of former BATCo
CEO Ulrich Herter, government counsel requested the "im-
mediate production" of the Foyle Memorandum so it could be
used to refresh Herter's recollection. When BATCo's counsel
declined, government counsel initiated an emergency telecon-
ference with the district court to determine whether BATCo
was required to immediately produce the Foyle Memoran-
dum. During the teleconference, BATCo contended that the
document was covered by the Guildford objection and in-
formed the Court that it did not even know if the document
was in its possession. Moreover, BATCo argued that the
Foyle Memorandum was protected by the attorney-client
privilege. The district court did not address BATCo's Guild-
ford and third-party objections. Instead, the court ruled that
BATCo had waived any claim of attorney-client privilege
because the memo had not been listed in BATCo's privilege
log. The court added that BATCo was free to re-litigate the
underlying facts of the order before the Special Master in the
case. The following day, the district court issued a written
order memorializing the telephone ruling and requiring
BATCo to produce the memo "if the document is in the
control or possession of BATCo," and to make "all reasonable
effort to locate" it. United States v. Philip Morris Inc., No.
99-2496 (D.D.C. May 29, 2002) ("Order 157").
On May 30, 2002, BATCo and the government twice ap-
peared in telephonic conferences before the Special Master in
which BATCo sought to attack Order 157. Although the
argument in the first conference is not part of the record,
BATCo appears to have raised its Guildford and third-party
objections in this conference. See Oral Rep. and Recom. 56
at 35 (BATCo counsel raising objection in context of "reit-
erat[ing] what I said this morning"). It definitely raised
them in the second conference. See id. at 35, 43. Like the
district court, the Special Master did not address these
objections. Instead he concluded that, because the Foyle
Memorandum was in the possession of Lovell, it was "within
the control and possession of BATCO" and thus required to
be logged in the privilege log. Oral Rep. and Recom. 55 at
11. The Special Master therefore recommended that the
district court issue an "order of further compliance" so that
BATCo would immediately produce the memo. Id.
BATCo then submitted to the district court a sealed copy of
the Foyle Memorandum and moved the district court to
reconsider its orders compelling production. BATCo again
urged the court to consider its Guildford and third-party
objections before requiring BATCo to produce or log the
Foyle Memorandum. See BATCo Br. in Supp. of Mot. for
Recons. at 14. On July 2, 2002, the court denied the motion
to reconsider and ordered BATCo to produce the memo
within two days. United States v. Philip Morris Inc., No.
99-2496 (D.D.C. July 2, 2002) (order compelling production).
The court held that because BATCo had "knowledge and
possession" of the Foyle Memorandum "by at least February
of 2002," BATCo was required under Federal Rule of Civil
Procedure 26(e), to "identify and/or designate the document"
as privileged at that time. Philip Morris, No. 99-2496, slip
op. at 4 (D.D.C. July 2, 2002) (memorandum opinion accompa-
nying order). Thus, the court concluded that BATCo's failure
to list the memo on the privilege log waived BATCo's attor-
ney-client privilege claim. Id. at 4-5. The court did not
further address BATCo's objections.
BATCo requested that the district court stay its orders
pending appeal. On July 10, 2002, the district court denied
the motion for stay, reasoning that BATCo had not estab-
lished appellate jurisdiction nor shown that it was likely to
prevail on its challenge to the waiver ruling. Philip Morris,
No. 99-2496, slip op. (D.D.C. July 10, 2002). The court also
noted that BATCo would not suffer irreparable harm absent
a stay, particularly given that many portions of the Foyle
Memorandum have already been made public in McCabe. Id.
at 2. By contrast, the district court found that a stay would
substantially harm the government and undermine the public
interest by jeopardizing the "extremely demanding" discovery
schedule and July 15, 2003 trial date set by the court. Id. at
2-4.
BATCo timely filed this appeal and sought an emergency
stay pending expedited review, claiming that the district court
should have ruled on its pending objections to producing the
Foyle Memorandum, and at that time, given BATCo a chance
to log the memo.
II. Analysis
In seeking a stay pending appeal, BATCo must show (1)
that it has a substantial likelihood of success on the merits;
(2) that it will suffer irreparable injury if the stay is denied;
(3) that issuance of the stay will not cause substantial harm to
other parties; and (4) that the public interest will be served
by issuance of the stay. Washington Metro. Area Transit
Comm'n v. Holiday Tours, Inc., 559 F.2d 841, 843 (D.C. Cir.
1977).
We first consider our jurisdiction over BATCo's appeal and
then address, in turn, the requirements for an emergency
stay.
A. Jurisdiction
BATCo argues that this Court has jurisdiction over its
appeal under the collateral order doctrine, first enunciated by
the Supreme Court in Cohen, 337 U.S. 541. The collateral
order doctrine is a narrow exception to the general rule that
appellate review is only available for final orders. Quacken-
bush v. Allstate Ins. Co., 517 U.S. 706, 712 (1996). For
jurisdiction to lie under Cohen's collateral order doctrine,
BATCo must show that (1) the order from which it appeals
conclusively determines the disputed question; (2) appellate
review will resolve an important issue completely separate
from the merits of the action; and (3) the order will be
effectively unreviewable on appeal from a final judgment.
Puerto Rico Aqueduct & Sewer Auth. v. Metcalf & Eddy,
Inc., 506 U.S. 139, 144 (1993); Nat'l Ass'n of Criminal Def.
Lawyers v. United States Dep't of Justice, 182 F.3d 981, 984
(D.C. Cir. 1999).
The first requirement is satisfied because the district
court's order conclusively and finally determined that the
Foyle Memorandum is not protected by the attorney-client
privilege. In no way does the record suggest that the district
court's conclusion is tentative or subject to revision.
The second requirement has two prongs-separability and
importance. Clearly, the privilege question is separable from
the merits of the underlying case. As to importance, "for the
purposes of the Cohen test, an issue is important if the
interests that would potentially go unprotected without imme-
diate appellate review of that issue are significant relative to
the efficiency interests sought to be advanced by adherence
to the final judgment rule." In re Ford Motor Co., 110 F.3d 954, 959 (3d Cir. 1997); see also Digital Equip. Corp. v.
Desktop Direct, Inc., 511 U.S. 863, 878-79 (1994) ("[T]he third
Cohen question ... simply cannot be answered without a
judgment about the value of the interests that would be lost
through rigorous application of a final judgment require-
ment."). Thus, the considerations underlying the final judg-
ment rule--the costs of piecemeal review--must be weighed
against the costs of delay. Johnson v. Jones, 515 U.S. 304,
315 (1995); Ford, 110 F.3d at 959. The Supreme Court
explained that " 'important' in Cohen's sense [means] being
weightier than the societal interests advanced by the ordinary
operation of final judgment principles." Digital Equip., 511 U.S. at 879. For example, collateral order review is available
to decide, inter alia, issues of federal court abstention,
Quackenbush, 517 U.S. 706, Eleventh Amendment immunity,
Puerto Rico Aqueduct, 506 U.S. 139, and qualified immunity,
Mitchell v. Forsyth, 472 U.S. 511 (1985).
In Ford, the Third Circuit addressed the issue before this
court today and held that collateral order review is also
available to challenge an attorney-client privilege ruling. 110 F.3d at 957-64. The Ford court analogized to Supreme
Court precedent and held that the attorney-client privilege
was the type of "institutionally significant status or relation-
ship" that justifies collateral order review. Id. at 960. We
agree, consistent with our decision In re Grand Jury Investi-
gation of Ocean Transportation, 604 F.2d 672 (D.C. Cir.
1979), in which we allowed interlocutory appeal of a privilege
claim that arose after the appellant inadvertently produced
allegedly privileged documents. Id. at 674.
The attorney-client privilege rests at the center of our
adversary system and promotes "broader public interests in
the observance of law and administration of justice" and
"encourage[s] full and frank communication between attor-
neys and their clients." Upjohn Co. v. United States, 449 U.S. 383, 389 (1981). The privilege promotes sound legal
advocacy by ensuring that the counselor knows all the infor-
mation necessary to represent his client. Id. Only by ensur-
ing that privileged information is never disclosed will these
important interests be advanced. Ford, 110 F.3d at 962.
Even though enforcement of the privilege often results in the
suppression of probative evidence, our jurisprudence has
determined that its value outweighs these costs. Similarly,
we today conclude that the institutional benefits of allowing
interlocutory review of attorney-client privilege claims out-
weigh the costs of delay and piecemeal review that may
result.
The government proposes two reasons why BATCo's privi-
lege claim differs from the immediately appealable privilege
claims in Ford and Ocean Transportation. First, the govern-
ment argues that BATCo is not asserting a privilege claim
because the district court did not reject a timely asserted
claim of privilege, but merely held that BATCo waived the
privilege by failing to log the Foyle Memorandum. On these
facts, this is a distinction without a difference. The only
reason the district court did not reach the merits of BATCo's
privilege claim is because of the court's allegedly erroneous
waiver ruling. A decision defining the contours of a waiver of
privilege is no less "important" for Cohen purposes than a
ruling on the contours of the privilege itself. An erroneous
finding of waiver, like an erroneous ruling denying a claim of
privilege, eviscerates the same important institutional inter-
ests in preserving privileged information, and derivatively,
full and frank communication between client and attorney.
Second, the government argues that the privilege issue is
not important because so much of the Foyle Memorandum
has already been released in the McCabe decision. This
argument misconstrues Cohen's importance requirement.
The importance prong requires weighing the "institutionally
significant status or relationship" at stake, Ford, 110 F.3d at
960, not the individual circumstances of each case. Johnson,
515 U.S. at 315 ("We of course decide appealability for
categories of orders rather than individual orders. Thus, we
do not now in each individual case engage in ad hoc balancing
to decide issues of appealability.") (citation omitted). The
attorney-client privilege protects an important status or rela-
tionship regardless of whether some portion of the privileged
material has already been lost. Total disclosure of the Foyle
Memorandum would unquestionably further impair the attor-
ney-client privilege. See Ocean Transp., 604 F.2d 672 (allow-
ing collateral order review of privilege ruling even though
allegedly privileged documents had inadvertently been pro-
duced to prosecution). Therefore, we conclude that BATCo's
appeal of the district court's ruling satisfies Cohen's impor-
tance requirement.
To satisfy Cohen's final requirement for jurisdiction under
the collateral order doctrine, BATCo must also show that the
district court's discovery order will be effectively unreview-
able on appeal from a final judgment. Puerto Rico Aqueduct,
506 U.S. at 144; Criminal Def. Lawyers, 182 F.3d at 984. An
order is effectively unreviewable if it "involves an asserted
right the legal and practical value of which would be de-
stroyed if it were not vindicated before trial." Lauro Lines
S.R.L. v. Chasser, 490 U.S. 495, 499 (1989) (quotation omit-
ted). While BATCo could appeal the discovery order after
final judgment, the appellate court would merely send the
case back for re-trial without use of the privileged materials.
By that point, the entirety of the Foyle Memorandum will
have been disclosed to third parties, making the issue of
privilege effectively moot. See Ocean Transp., 604 F.2d at
674; see also In Re Papandreou, 139 F.3d 247, 251 (D.C. Cir.
1998) (stating in dictum that "[d]isclosure followed by appeal
after final judgment is obviously not adequate in [privilege]
cases-the cat is out of the bag"). In this case, the right
sought to be protected--BATCo's privilege--would be de-
stroyed if interlocutory appeal is not allowed. Moreover, the
United States' attorneys could gain valuable new leads from
the Foyle Memorandum. See Chase Manhattan Bank, N.A.
v. Turner & Newall, PLC, 964 F.2d 159, 165 (2d Cir. 1992). It
would be impossible for a court to sort out and redress the
harm caused by the incorrect disclosure.
Some of our sister circuits have suggested that a party
might obtain effective review of an adverse privilege order by
refusing to obey the district court's discovery order and
thereby standing in contempt or incurring some other sanc-
tion. By appealing the sanction, they suggest, a party may
have an adverse privilege ruling reviewed upon final judg-
ment without disclosing the privileged document. See FDIC
v. Ogden Corp., 202 F.3d 454, 458 n.2 (1st Cir. 2000); see also
Reise v. Bd. of Regents of Univ. of Wisconsin, 957 F.2d 293,
295-96 (7th Cir. 1992) (discussing this method of obtaining
review of order to submit to medical examination). It is
principally because of the availability of the disobedience
route to review that a majority of the circuits to have
considered the issue have held that adverse privilege rulings
are not appealable. See Ogden, 202 F.3d at 458 n.2; Dell-
wood Farms, Inc. v. Cargill, Inc., 128 F.3d 1122, 1125 (7th
Cir. 1997) (in case involving "law enforcement investigatory
privilege," holding discovery order not within collateral order
doctrine "even if it is an order denying a claim of privilege");
Simmons v. City of Racine, 37 F.3d 325, 327 (7th Cir. 1994)
(in case involving "informer's privilege," noting that discovery
orders are not appealable under Cohen even if "issued over
an objection that the information at issue is privileged");
Boughton v. Cotter Corp., 10 F.3d 746, 750 (10th Cir. 1993);
Texaco, Inc. v. Louisiana Land & Exploration Co., 995 F.2d 43 (5th Cir. 1993) (enforcing general inapplicability of collat-
eral order doctrine to discovery orders in case involving
attorney-client privilege claim); Chase Manhattan Bank,
N.A. v. Turner & Newall, PLC, 964 F.2d 159, 161-63 (2d Cir.
1992) (same but issuing writ of mandamus); Reise, 957 F.2d
at 295 ("even orders to produce information over strong
objections based on privilege are not appealable"); Quantum
Corp. v. Plus Dev. Corp., 940 F.2d 642, 644 (Fed. Cir. 1991);
see also American Express Warehousing, Ltd. v. Trans-
america Ins. Co., 380 F.2d 277, 280-83 (2d Cir. 1967) (work-
product privilege).
Although these authorities are weighty, we cannot follow
them. At least some of the holdings are based in part upon
the assumption that disobedience may lead to a contempt
citation that would itself be an appealable order. See Ogden,
202 F.3d at 458 n.2. In this circuit, however, it is settled that
a civil contempt citation is not appealable as a collateral
order. Byrd v. Reno, 180 F.3d 298 (D.C. Cir. 1999). In the
related context of determining whether a petitioner for man-
damus has adequate alternative means of relief, we have
expressed concern that a party that seeks review does not
know in advance "whether refusal to comply with the discov-
ery order will result in a civil contempt order or a criminal
contempt order." In re Sealed Case No. 98-3077, 151 F.3d 1059, 1065 (D.C. Cir. 1998); see also 15B C. Wright, A.
Miller & E. Cooper, Federal Practice & Procedure
s 3914.23, at 146 (2d ed. 1992). Although there may be other
sanctions that the district court could impose, such as striking
all or a portion of the party's pleadings, see Fed. R. Civ. P.
37(b)(2), these are in the district court's discretion and are
therefore not reliable avenues to appeal. Moreover, they
may be of such severity that a reasonable party would not
risk incurring them, even in order to preserve a clearly
meritorious privilege claim.
The dissent argues that our decision in Byrd requires us to
hold that a privilege ruling is not appealable because a
privilege ruling is merely a "predicate" ruling to an unappeal-
able civil contempt citation. See Dissent at 1-2, 3. Since
BATCo could not appeal the contempt citation under Byrd,
the dissent reasons, it should not be able to appeal the
"predicate" privilege ruling either. We do not think that the
dissent's conclusion follows from our holding in Byrd.
In Byrd, we held that a general class of orders--civil
contempt citations--are not final orders under 28 U.S.C.
s 1291. That is an entirely different question than the one
we face today: whether attorney-client privilege rulings--a
narrow subset of the rulings that might eventually lead to a
contempt citation--fall within Cohen's collateral order excep-
tion to the final order rule. Neither this Court in Byrd nor
the Supreme Court has held that certain types of rulings are
excluded from Cohen's collateral order exception merely be-
cause they may lead to an unappealable civil contempt cita-
tion. Rather, an order is appealable under Cohen if it meets
the three prong test of conclusiveness, separability and im-
portance, and effective unreviewability. This inquiry requires
careful examination of the type of order at issue to determine
whether the benefits of immediate appealability outweigh the
costs that may result from piecemeal adjudication, see John-
son v. Jones, 515 U.S. 304, 315 (1995), not merely a cursory
glance to determine whether the order could lead to an
unappealable civil contempt citation, as the dissent suggests.
Finally, the Byrd Court itself recognized that its central
holding--that civil contempt orders are not final orders under
s 1291--did not eliminate the need for the particularized
Cohen inquiry. Indeed, the Byrd Court separately addressed
the issue of whether the underlying discovery order and civil
contempt order were immediately appealable under the col-
lateral order doctrine. See 180 F.3d at 302. If the dissent's
reading were correct, the Byrd Court would not have needed
to address the collateral order doctrine because that issue
would have been precluded by the Court's holding that civil
contempt orders are not final orders. For all of these
reasons, we are unpersuaded by the dissent's argument that
this Court lacks jurisdiction over BATCo's appeal.
Therefore, we hold that BATCo has demonstrated jurisdic-
tion under the collateral order doctrine. We turn now to
BATCo's likelihood of success on the merits of its claim.
B. Likelihood of Success on the Merits
BATCo contends that it is likely to succeed on the merits
because the district court failed to consider BATCo's pending
objections to producing the Foyle Memorandum and thus
incorrectly found that BATCo waived its privilege claim by
failing to log it. BATCo argues that even if the district court
overruled its objections, BATCo should have been given, at
that time, an opportunity to place the Foyle Memorandum on
its privilege log.
In considering the merits of BATCo's claim, we begin at
Federal Rule of Civil Procedure 26(b)(5). The rule provides
that any party claiming privilege for a document requested
during discovery shall log the document on a privilege log.
Fed. R. Civ. P. 26(b)(5). The 1993 Advisory Committee Notes
explain the application of the rule when a party has pending
objections to the document request. See Fed. R. Civ. P.
26(b)(5) advisory committee's note. The Notes provide that
the court should first rule on the pending objections and then,
if it overrules those objections, give the party claiming privi-
lege an opportunity to log the allegedly privileged documents.
Id. In short, if a party's pending objections apply to alleged-
ly privileged documents, the party need not log the document
until the court rules on its objections.
BATCo claims that its Guildford and third-party objections
apply to the Foyle Memorandum. Although there is some
doubt whether these objections apply to the Foyle Memoran-
dum, the United States did not raise this argument in oppos-
ing the present motion for stay. Moreover, there is no
question that the objections were timely raised and at least
facially seem to apply to the memo. If these objections are
found to apply to the Foyle Memorandum, then the district
court's failure to address the objections, or if it overruled
them, then its failure to give BATCo the opportunity to log
the memo, was error. Therefore, under these circumstances,
we find that BATCo is likely to succeed on its claim that the
district court should have considered these objections before
ruling that BATCo had waived its privilege. If BATCo
succeeds on its appeal, it would be entitled to a remand for
the district court to address BATCo's objections as applied to
the Foyle Memorandum.
C. Irreparable Injury
BATCo would suffer irreparable injury if a stay is denied.
Although BATCo "has not asserted any specific irreparable
injury that would occur" if it produced the Foyle Memoran-
dum, Philip Morris, No. 99-2496, slip op. at 2 (D.D.C. July
10, 2002), the general injury caused by the breach of the
attorney-client privilege and the harm resulting from the
disclosure of privileged documents to an adverse party is
clear enough. The government argues that we should disre-
gard this harm because parts of the Foyle Memorandum have
already been disclosed in the McCabe opinion. We disagree.
The release of the McCabe opinion does not diminish the
harm that would result from releasing additional privileged
information. Moreover, the attorneys for the United States
would be able to use the Foyle Memorandum to pursue new
leads on discovery and witness questioning. Chase Manhat-
tan Bank, 964 F.2d at 165. The implications of this use of
privileged material would be very difficult to remedy on
appeal.
D. Substantial Harm to Other Parties
The government argues that a stay would delay the trial
schedule set by the district court and harm the government's
ability to conduct discovery in this case. A mere assertion of
delay does not constitute substantial harm. Some delay would
be occasioned by almost all interlocutory appeals. Further,
any delay will be minimized by our expedition in hearing
BATCo's appeal. In short, there is no reason to believe a
minor delay will substantially harm the United States.
E. Public Interest
Finally, we consider whether the public interest would be
served by granting a stay. As discussed above, supra at 8, the
attorney-client privilege is an "institutionally significant sta-
tus or relationship" with deep roots in our nation's adversary
system. Ford, 110 F.3d at 960. As such, the privilege
advances "broader public interests in the observance of law
and administration of justice." Upjohn, 449 U.S. at 389. We
conclude that granting a stay to allow BATCo to defend its
claim of privilege will serve these same public interests.
III. Conclusion
Because we are satisfied that we have jurisdiction over this
appeal under the collateral order doctrine and that BATCo
has met all of the requirements for an emergency stay, we
grant its motion for emergency stay, expedite the underlying
appeal, and dismiss its petition for mandamus as moot.
So ordered.
Randolph, Circuit Judge, dissenting: I do not believe we
have appellate jurisdiction over the district court's discovery
orders and I would therefore deny the stay.
The question is whether the orders are "final decisions"
within the meaning of 28 U.S.C. s 1291. The court holds that
an order requiring a party to produce a document allegedly
protected by the attorney-client privilege is immediately ap-
pealable under s 1291, pursuant to the interpretation of that
provision in Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949). See Firestone Tire & Rubber Co. v. Risjord,
449 U.S. 368, 373-75 (1981).
If the underlying action here had been a grand jury
proceeding, we would not have appellate jurisdiction over
BATCo's appeal. The law is settled that if a district court
requires a grand jury witness to produce documents over the
witness's objections, the witness may not immediately appeal
under s 1291, but must first subject himself to contempt and
appeal the contempt citation. United States v. Ryan, 402 U.S. 530, 532-33 (1971), so holds and we have consistently
followed this rule in grand jury cases involving attorney-client
privilege claims. See, e.g., In re Sealed Case, 162 F.3d 670,
672-73 (D.C. Cir. 1998); In re Sealed Case, 107 F.3d 46, 48
n.1 (D.C. Cir. 1997); In re Sealed Case, 737 F.2d 94, 97 (D.C.
Cir. 1984).
This is a civil case, but s 1291 also governs appeals in
criminal cases. Cobbledick v. United States, 309 U.S. 323, 324
(1940); United States v. MacDonald, 435 U.S. 850, 853 (1978).
Why then is it that in a grand jury proceeding the witness
must disobey the order to produce and be held in contempt
before appealing, but--as the court now holds--in a civil
action a party may appeal the order forthwith? Byrd v.
Reno, 180 F.3d 298 (D.C. Cir. 1999), the majority explains,
holds that civil contempt orders are not final under s 1291.
Thus BATCo could not appeal if it refused to produce the
document and were held in civil contempt. But it seems to
me that this is a reason against--not in favor of--taking
jurisdiction of an appeal from an order that would serve as
the predicate for holding the party in contempt. At issue in
both appeals would be whether the district court correctly
rejected a privilege claim and ordered the party to disclose
attorney-client communications. Of the two cases, civil con-
tempt is far more serious; a party may be imprisoned for
violating a court's disclosure order, as Hickman v. Taylor,
329 U.S. 495, 500 (1947), illustrates.
In any event, the majority's distinction cannot account for
the difference between civil cases and grand jury proceed-
ings. In both types of proceedings a person may be held in
civil contempt, rather than criminal contempt, for refusing to
obey a district court order to testify or produce documents.
See 28 U.S.C. s 1826; Shillitani v. United States, 384 U.S. 364, 371 n.9 (1966). In fact, the Supreme Court has instruct-
ed the district courts to prefer civil contempt as a sanction to
force compliance with their orders even in criminal proceed-
ings. See id. The prospect of civil contempt, in other words,
looms as much in grand jury proceedings as in civil cases.
I believe there is another explanation. One of the policies
underlying the final judgment rule of s 1291 is "avoid[ing]
the obstruction to just claims that would come from permit-
ting the harassment and cost of a succession of separate
appeals from the various rulings to which a litigation may
give rise, from its initiation to entry of judgment." Cobble-
dick, 309 U.S. at 325. "The purpose is to combine in one
review all stages of the proceeding that effectively may be
reviewed and corrected if and when final judgment results."
Cohen, 337 U.S. at 546. But in grand jury proceedings a
recalcitrant witness usually can obtain review of his attorney-
client privilege claim only on review of a criminal or civil
contempt order. See 2 Sara Sun Beale et al., Grand Jury
Law and Practice s 11:18, at 11-65 (2d ed. Supp. 2001). The
same is true regarding non-party witnesses in civil cases.
See Byrd, 180 F.3d at 300. There will be no other final
judgment from which an appeal may be brought. Civil
contempt orders against grand jury witnesses are therefore
appealable, see Beale, Grand Jury Law s 11:18, at 11-65, and
so are civil contempt orders against non-party witnesses in
civil cases, see Byrd, 180 F.3d at 300; United States v.
Johnson, 801 F.2d 597, 599 (2d Cir. 1986). That is why the
Court in Ryan, 402 U.S. at 532, after saying that the grand
jury witness there could appeal a contempt citation, did not
distinguish between civil and criminal contempt. (Congress
has required in 28 U.S.C. s 1826(b)--the recalcitrant witness
statute applicable to court proceedings and grand jury pro-
ceedings--that appeals from civil contempt orders must be
"disposed of" no later than 30 days from the filing of the
appeal.) I do not read Byrd as holding otherwise. See 180 F.3d at 302.
What I have written thus far serves to distinguish In re
Grand Jury Investigation of Ocean Transp., 604 F.2d 672
(D.C. Cir. 1979). As the caption indicates, this was a grand
jury proceeding in which a company, in response to a subpoe-
na, inadvertently turned over allegedly privileged documents
to the government. The district court rejected the company's
motion to have the documents returned. We held that the
court's order was "final" under s 1291. The appeal came
within the doctrine of Perlman v. United States, 247 U.S. 7
(1918), because the company could not contest the order by
refusing to comply with it, and thus could not subject itself to
contempt. The appeal also fell within the rationale of Cohen,
not because there was anything particularly special about the
attorney-client privilege, but because this was the company's
only opportunity for appellate review of its privilege claim.
No criminal trial was pending. No final judgment other than
the denial of the motion for return could bring up the issue.
Ocean Transp., 604 F.2d at 673-74. That is not the situation
here. BATCo could raise the issue later on appeal if it lost
on the merits in the district court, or on cross appeal if it
prevailed and the government appealed.
I agree with the majority that it is necessary to analyze
orders that might lead to civil contempt, on the one hand, and
civil contempt citations themselves, on the other, separately
under the three-prong Cohen test. Maj. op. at 12. But our
judgment in Byrd that civil contempt citations are not appeal-
able indicates that the underlying issues--identical to those at
the predicate order stage--fail either the importance or the
effective unreviewability prong of Cohen. Cf. Powers v.
Chicago Transit Auth., 846 F.2d 1139, 1142 (7th Cir. 1988).
Aside from this, there is an entirely separate reason why
we do not have appellate jurisdiction over this appeal. The
circuits are split on the question whether, in civil cases,
discovery orders rejecting a party's attorney-client privilege
claim are immediately appealable. The Second, Fifth, and
Tenth Circuits hold that there is no appellate jurisdiction
because such orders are not final. See Boughton v. Cotter
Corp., 10 F.3d 746, 749-50 (10th Cir. 1993); Texaco Inc. v.
Louisiana Land & Exploration Co., 995 F.2d 43, 44 & n.4
(5th Cir. 1993); Chase Manhattan Bank, N.A. v. Turner &
Newall, PLC, 964 F.2d 159, 162-63 (2d Cir. 1992). A case
from the Seventh Circuit indicates that it too would refuse
jurisdiction in such an appeal. See Reise v. Bd. of Regents,
957 F.2d 293, 295-96 (7th Cir. 1992). In re Ford Motor Co.,
110 F.3d 954 (3d Cir. 1997), on which my colleagues rely, goes
the other way. I will assume arguendo that Ford Motor is
correct, although I have severe doubts. I am willing to make
this assumption because I do not believe this appeal is
anything other than a run-of-the-mill discovery dispute. The
Court's assertion that "[a]n erroneous finding of waiver ...
eviscerates the same important institutional interests" as an
erroneous attorney-client privilege ruling, maj. op. at 8, is
incorrect. The interests protected by the attorney-client
privilege are not threatened by requiring BATCo to await
final judgment before bringing the issue to us.
The order before us has nothing to do with the elements of
the attorney-client privilege and everything to do with BAT-
Co's satisfaction of discovery rules. To decide whether the
district court properly required production of the disputed
memorandum we will not have to consider, as we would in a
true privilege dispute, any of the elements of the privilege--
under what conditions the memorandum was written, or for
what purpose. Instead, this appeal will turn on whether
BATCo's attorneys complied with Fed. R. Civ. P. 26(b)(5),
which requires that a party claiming a privilege "make the
claim expressly and ... describe the nature of the documents
... not produced" with some specificity. Our decision there-
fore will have no impact on confidential communications be-
tween clients and their attorneys. Cf. Swidler & Berlin v.
United States, 524 U.S 399, 407 (1998). If we did not hear
the appeal, clients' incentives to communicate frankly with
their attorneys would remain as strong as ever. The only
possible change would be that clients might be more careful
to hire attorneys who comply rigorously with the discovery
rules.
For good reasons, discovery orders are not usually appeal-
able before the end of the litigation in the district court. See
McKesson Corp. v. Islamic Republic of Iran, 52 F.3d 346, 353
(D.C. Cir. 1995). The "costs of delay via appeal, and 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. ... Discovery
orders ... are readily reviewable after final decision. A
party aggrieved by the order assures eventual review by
refusing to comply." Reise, 957 F.2d at 295. I would there-
fore deny the stay pending appeal. If BATCo wishes to
preserve the discovery issue, it should refuse to produce the
memorandum and bring the question to us after final judg-
ment. It is no answer to say that the company might be
unwilling to risk sanctions for disobeying a court order. Maj.
op. at 11. The risk of sanctions facing parties in civil cases is
the same as that faced by recalcitrant grand jury witnesses,
yet we require grand jury witnesses to face contempt before
appealing, which at least gives some assurance that the claim
of privilege is sincerely interposed.
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