One of the remarkable things about the Stevens criminal indictment was the volume of attorney-client privileged material that comprised the evidence presented at trial.  While Judge Titus qualified his criticism of a District of Massachusetts Magistrate Judge’s order requiring these documents to be produced by noting that his opinion was “with the 20/20 vision of hindsight,” he found himself resolving that Crime-Fraud Exception was erroneously applied.   This left us wondering, why did the Magistrate Judge have the last word on the production of documents that eventually led to the indictment of Lauren Stevens?  Could this entire trial have been avoided had the discovery order been overturned?

In 2009, such appellate review got more difficult to obtain.  On December 8, 2009, the Supreme Court resolved a circuit split in Mohawk Industries, Inc. v. Carpenter, __ S. Ct. __ 2009 WL 4573276 (Dec. 8, 2009), holding that attorney-client privilege rulings could not be the subject of “collateral order appeals.”  Therefore, the challenge to orders to disclose potentially privileged documents must rely other mechanisms for appellate jurisdiction or wait until the underlying action is final.  Until Mohawk was decided, three circuits (the 9^th, 3^rd and DC) permitted collateral order appeals of attorney-client privilege rulings under 28 USC § 1291.  The First Circuit, where the privileged matter in the Stevens case was ordered disclosed, had never considered the issue. 

However, as noted in Mohawk, the pharmaceutical company facing disclosure had other options before disclosing such sensitive material, even if not relying on collateral order appeal under § 1291.  Indeed, had the company subjected itself to criminal contempt for refusing to disclose, it would be allowed to appeal directly from that contempt ruling and have the discovery decision reviewed as well.  See XYZ Corp. v. U.S., 348 F.3d 16 (1st Cir. 2003) (appellate review of contempt and discovery orders, requiring disclosure of privileged material in response to investigatory subpoena).  Other options pointed out by Mohawk were to 1) ask the district court to certify, and the court of appeals to accept, an interlocutory appeal under 28 U.S.C. § 1292(b); or 2) petition the court of appeals for a writ of mandamus.  “While these discretionary review mechanisms do not provide relief in every case, they serve as useful safety valves for promptly correcting serious errors.”  Mohawk, 2009 WL (2009). 

Balancing the interests of the client (the company in this case), it may well have been in the company’s best interest to comply with the order of disclosure in order to avoid sanctions or an order of contempt in the face of rising costs of government investigation.  However, the disclosure certainly had dire consequences for Ms. Stevens, who faced the brunt of the government’s prosecutorial power.  On the heels of Mohawk, then, targets of investigatory subpoenas will have to become comfortable challenging contempt orders or applying for discretionary review in order to protect the fruits of the “sine qua non of a meaningful attorney-client relationship.”