Another court of appeals read too much into Mohawk Industries and held that parties can no longer take Perlman appeals.
November 28, 2023
In In re Grand Jury 2021 Subpoenas, the Fourth Circuit joined several other circuits in holding that only non-parties can take Perlman appeals. I wrote about this issue a few years ago when the Second Circuit did the same. This cutting back on Perlman appeals is as wrong now as it was then.
Until recently, Perlman was a reliable way for privilege claimants to appeal discovery orders directed to third parties. When a privilege claimant is not the target of a discovery order, the normal contempt route for challenging that order is not available. After all, third parties rarely will risk a contempt citation to permit someone else to take an immediate appeal. Perlman accordingly held that privilege claimants, who are otherwise “powerless to avert the mischief of the[se discovery] order[s],” can take an immediate appeal.
But in the past decade or so, the courts of appeals have cut back on Perlman appeals. They’ve done so by reading too much into a line from the Supreme Court’s decision in Mohawk Industries, Inc. v. Carpenter. The Court held in Mohawk Industries that privilege claimants could not appeal discovery orders via the collateral-order doctrine. In the course of doing so, the Court said that “postjudgment appeals generally suffice to protect the rights of litigants and assure the vitality of the attorney-client privilege.”
Several courts of appeals have taken this just-quoted line to mean that parties can no longer take Perlman appeals. The Fourth Circuit has now joined those ranks. It said that “any distinction between the collateral-order doctrine and the Perlman doctrine is one without a difference—the Supreme Court’s reasoning in Mohawk is equally applicable in both contexts”:
Doe seeks to vindicate a privilege interest that Mohawk expressly recognized should be addressed on post-judgment review. Whether the compelled disclosure to which he objects ultimately comes from him (a collateral-order context) or from a third party (a Perlman context) is entirely inconsequential insofar as his access to post-judgment review is unchanged either way. As such, we conclude that the Supreme Court’s narrowing of the collateral-order exception to the final-judgment rule in Mohawk applies equally to the Perlman doctrine—thereby excluding immediate litigant-sought review.
As I’ve explained before—including in a law review article on this very issue—this is all wrong. I won’t belabor the point too much. But one of the reasons for Mohawk Industries’ holding was the availability of other avenues for review. Among those avenues was the contempt option. And the Perlman doctrine stands in for the contempt option when discovery orders are directed to someone other than the privilege claimant. They both exist to provide some avenue for review before allegedly confidential information is disclosed.
It’s not much of a stretch to say that the availability of other avenues for review—including the Perlman doctrine—are why privilege claimants cannot appeal discovery orders via the collateral-order doctrine. It’s thus perverse to use Mohawk Industries to cut back on Perlman.
In re Grand Jury 2021 Subpoenas, 2023 WL 8103935 (4th Cir. Nov. 22, 2023), available at the Fourth Circuit and Westlaw