No Perlman Appeals When the Same Issues Could Be Raised via Contempt


The Eleventh Circuit held that a privilege claimant cannot take a Perlman appeal when the claimant could have raised the same issues via its own contempt appeal.


In In Re Grand Jury Investigation, the Eleventh Circuit held that a privilege claimant could not appeal orders compelling it and third parties to produce documents.

The analysis of the order directed at the privilege claimant was straightforward. Privilege claimants normally must take contempt appeals to challenge a discovery order. The privilege claimant in Grand Jury Investigation had not been held in contempt. So it couldn’t appeal.

The order directed at third parties was more interesting. Under the Perlman doctrine, privilege claimants can normally immediately appeal discovery orders directed to a third party. But the Eleventh Circuit held that the claimant here could not take a Perlman appeal. That’s because the claimant could have raised all of its challenges to the third-party discovery order by taking its own appeal. Appellate review of those issues was therefore possible, meaning Perlman didn’t apply.

The Discovery Orders

Simplifying a fair bit, Grand Jury Investigation stemmed from (as the name implies) a grand jury investigation into illegal tax shelters. The grand jury wanted records from an investment company involved in those tax shelters. So it issued a subpoena to both the investment company and a handful of third parties affiliated with the company. These subpoenas sought the same kinds of records, but the targets of the subpoenas were different.

The investment company objected to both subpoenas on attorney-client privilege grounds. The district court eventually rejected the claim of privilege on several grounds and ordered discovery. The investment company then tried to appeal.

The Order to the Investment Company

The Eleventh Circuit swiftly dismissed the appeal insofar as it challenged the discovery order directed to the investment company. With rare and narrow exceptions, targets of discovery orders must be held in contempt before they can immediately appeal that order. The investment company had not yet refused to produce the documents, much less been held in contempt. So it could not appeal.

The Order to the Third Parties

The Eleventh Circuit went on to hold that the investment company also could not appeal the order directed to the third parties.

Under the Perlman doctrine, privilege claimants normally can appeal a discovery order directed at a disinterested third party. The rationale is that the privilege claimant cannot use the contempt option and is therefore powerless to prevent disclosure by the third parties. And immediate Perlman appeal is necessary to protect the confidentiality interests at stake.

But the Eleventh Circuit said that Perlman appeals are available only when appellate review would otherwise be impossible. And review was possible in Grand Jury Investigation without a Perlman appeal. The investment company’s objections to the third-party discovery orders were the same objections it raised in opposing its own discovery order. So the investment company could have raised all of its privilege arguments by taking a contempt appeal. Since there could have been a contempt appeal, the company could not take a Perlman appeal.

In Re Grand Jury Investigation, 2024 WL 4500966 (11th Cir. Oct. 16, 2024), available at the Eleventh Circuit and Westlaw