Third Parties & “Party” Status for Discovery Appeals

In Broidy Capital Management LLC v. Muzin, the D.C. Circuit dismissed a non-party’s appeal that challenged a discovery order directed to a party. The court explained that only those with some sort of party status—whether an original party, an intervenor, or some other type of “party” for purposes of appeal—may appeal. Because the would-be appellant in Broidy Capital had never obtained party status, it could not appeal to challenge any of the district court’s orders. The D.C. Circuit remanded the case to give the non-party the opportunity to obtain the necessary status.

The Broidy Capital Litigation

The plaintiffs in Broidy Capital sued several defendants who, the plaintiff alleged, were “U.S.-based political consultants, lobbyists, and public relations professionals that Qatar hired to support its foreign policy objectives in the United States.” (Cleaned up.) Qatar filed a “Notice of Interest” in the district court, intending to monitor the proceedings with an eye towards protecting its sovereignty and immunities when it came to discovery.

The plaintiffs later sought to compel discovery from the defendants. In response, Qatar filed a “statement of interest,” arguing that the discovery was barred by its rights under the Vienna Convention on Diplomatic Relations, its rights under the Vienna Convention on Consular Relations, and international comity interests. The district court granted the plaintiffs’ motion to compel. Qatar then appealed from that discovery order.

Party & Non-Party Appeals

The D.C. Circuit ultimately dismissed Qatar’s appeals. The court invoked the familiar rule that only parties to an action may appeal. Because Qatar was not a “party” to the action, it could not appeal.

The D.C. Circuit explained that there are various ways to become a party. Parties include the original parties to an action, those who intervene, and those made parties via substitution or third-party practice. When it comes to who can appeal, the definition is even broader. It can include those who unsuccessfully try to intervene, those bound by a district court order (such as witnesses held in contempt), and even those whose interests have been adversely affected by a district court order. But in that last category, the D.C. Circuit has required that non-parties invoke some sort of procedural device—such as intervention or a separate proceeding—before deeming them parties.

Qatar had not availed itself of any of those procedures. And the D.C. Circuit saw no reason to expand its conception of parties to include “sovereigns who, acting as nonparty amicus curiae, have submitted statements of interest asserting the inviolability of disputed discovery under the Vienna Conventions and principles of international comity.” For one thing, no order of the district court actually bound Qatar. The discovery order was directed only to the defendants, not Qatar itself. Granted, Qatar had an interest in the discovery. But Qatar was not bound by the district court’s determination that the materials were discoverable. For another, Qatar had options, such as intervention. (The court explained that limited intervention would not have waived Qatar’s sovereign immunity.) Finally, requiring non-parties to invoke some sort of procedural device made it clear who was (and was not) eligible to appeal.

The court ultimately remanded the case for the district court to give Qatar the chance to intervene or otherwise assert its rights before the defendants had to comply with the order compelling discovery.

A Subsequent Question of Appellate Jurisdiction

The D.C. Circuit declined to address whether, had Qatar intervened, it could have immediately appealed from the discovery order. Appellate jurisdiction would presumably come via the Perlman doctrine. When a district court orders discovery from someone other than a privilege holder, the Perlman doctrine allows the privilege claimant to immediately appeal. That’s because the privilege claimant cannot disobey the discovery order and then take a contempt appeal.

Broidy Capital’s emphasis on party status raises a potential—and, in my opinion, specious—argument for any future appeal. Since the Supreme Court’s 2009 decision in Mohawk Industries, Inc. v. Carpenter, several courts of appeals have held that parties can no longer take Perlman appeals. This has been a mistaken development, as I wrote about in my article Perlman Appeals After Mohawk.

But even if it’s a sound development, it still shouldn’t apply in the context of Broidy Management. Cases that have prevented parties from taking Perlman appeals have involved appeals from the original parties—not third-parties who seek to prevent discovery. And any bar on Perlman appeals should not apply to non-parties who must obtain some sort of party status before appealing. To hold otherwise would create a catch-22 for privilege claimants and effectively prohibit all Perlman appeals. Under Broidy Management, a non-party must obtain some party status before appealing from a discovery order directed to someone else. But if that party status barred a Perlman appeal, then there would be no appellate jurisdiction to take that appeal.

Broidy Capital Management LLC v. Muzin, 2023 WL 2439809 (D.C. Cir. Mar. 10, 2023), available at the D.C. Circuit and Westlaw