Bieter Co., In re, 94-1037

• Citation: 16 F.3d 929
• Decision Date: 25 April 1994
• Docket Number: No. 94-1037,94-1037
• Parties: , RICO Bus.Disp.Guide 8490 In re BIETER COMPANY, Petitioner.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

Page 929

16 F.3d 929

62 USLW 2534, RICO Bus.Disp.Guide 8490

In re BIETER COMPANY, Petitioner.

No. 94-1037.

United States Court of Appeals Eighth Circuit.

Submitted Jan. 5, 1994.

Decided Feb. 16, 1994.

Rehearing and Suggestion for Rehearing En Banc Denied April

25, 1994.

James P. McCarthy and Michael D. Olafson of Minneapolis, Minnesota, represented the petitioner.

George C. Hoff and Thomas G. Barry, Jr., of Eden Prairie, Minnesota, represented the respondent Beatta Blomquist.

Joseph W. Anthony and Norman J. Baer of Minneapolis, Minnesota, represented the respondents Cliff Road Properties, Advance Developers, Inc., Hoffman Development Group, Inc., HDG Associates Limited Partnership, Eagan Associates Limited Partnership, CRP of Eagan, Inc., Robert L. Hoffman, Patrick C. Hoffman and Jack F. Daly, Jr.

Robert C. Bell of Roseville, Minnesota, represented respondent Federal Land Company.

Gerald L. Svoboda, Richard G. Jensen, and Jocelyn L. Knoll of Minneapolis, Minnesota, represented respondent Dorsey & Whitney.

Before McMILLIAN, Circuit Judge, HEANEY, Senior Circuit Judge, and BEAM, Circuit Judge.

HEANEY, Senior Circuit Judge.

Bieter Company petitioned this court for a writ of mandamus that would direct the district court to vacate an order compelling discovery of material, through both document requests and depositions, that Bieter asserts to be protected by the attorney-client privilege and the work-product doctrine. Bieter also moved this court for a stay of that order pending resolution of this petition. We granted that motion ¹ and requested a response to the petition. In re Bieter Co., 16 F.3d 929 (8th Cir.1994). Having carefully reviewed the record before us and the applicable law, we find that the district court's order constitutes a clear abuse of discretion, and we shall therefore issue the writ.

I

This case has a rather tortured history, very little of which is relevant to the dispute before us. In short, Bieter is a Minnesota partnership formed to develop a parcel of farm land in Eagan, Minnesota. After running into various obstacles, including a lack of cooperation from local government and assorted machinations by competing developers, Bieter resorted to legal action. It sued the city in state court and the instant defendants in federal court, first alleging antitrust violations and then amending the complaint to allege claims under the Racketeer Influenced and Corrupt Organizations Act. 18 U.S.C. Secs. 1961-1968. While discovery was still in progress on the RICO and third-party claims, the district court granted summary judgment to the defendants. We reversed, Bieter Co. v. Blomquist, 987 F.2d 1319 (8th Cir.), cert. denied, --- U.S. ----, 114 S.Ct. 81, 126 L.Ed.2d 50 (1993), ² thereby causing discovery to begin anew. Motions to compel that had been mooted by the grant of summary judgment were renewed, including the motion that led to the order at issue in this petition.

Bieter and third-party defendant Dorsey & Whitney, a Minneapolis law firm that represented Bieter in this action until the third-party complaint against it was filed, assert that certain documents requested and matters into which respondents have inquired at depositions are protected by the attorney-client privilege or, in the alternative, by the work-product doctrine. A motion was brought to compel discovery on these issues, and a hearing was conducted before a magistrate, after which he ruled that the material in question was not protected because it had been disclosed to Dennis S. Klohs, an individual who has worked closely with Bieter both in its attempt to develop the parcel in Eagan and in the subsequent litigation. The magistrate ruled that Klohs was neither an employee of Bieter nor the client of Dorsey, so any disclosure to him destroyed whatever privilege may have otherwise applied. Bieter Co. v. Blomquist, No. 3-89-Civ-759, slip op. at 8 (D.Minn. Sept. 20, 1993). The magistrate noted the existence of "recognized exceptions" to the rule he applied, but found "no evidence to suggest that Klohs' relationship with Bieter Company constitutes such an exception." Id. Bieter and Dorsey appealed to the district court, which summarily affirmed the order, finding that it was neither clearly erroneous nor contrary to law. Bieter then petitioned this court for a writ of mandamus.

II

Although the writ of mandamus is an extraordinary writ and "is not ordinarily available to a litigant to obtain appellate review of interlocutory discovery orders," Diversified Indus., Inc. v. Meredith, 572 F.2d 596, 599 (8th Cir.1977), we have held it to be an appropriate means to review certain types of discovery orders. For example, we have held " 'mandamus to be an appropriate vehicle to review orders compelling the production' of trade secrets in the form of confidential business information." In re Remington Arms Co., 952 F.2d 1029, 1031 (8th Cir.1991) (quoting Iowa Beef Processors, Inc. v. Bagley, 601 F.2d 949, 953 (8th Cir.), cert. denied, 441 U.S. 907, 99 S.Ct. 1997, 60 L.Ed.2d 376 (1979)). We have also "held that mandamus is available as a means of immediate appellate review" when "a claim of attorney-client privilege has been raised in and rejected by a district court." Diversified, 572 F.2d at 599.

The common threads running through those cases that we have held fit for review by mandamus are the presence of "serious policy considerations ... sufficiently compelling to require immediate appellate attention," Iowa Beef, 601 F.2d at 954, and the inadequacy of later review as a remedy. Pfizer, Inc. v. Lord, 456 F.2d 545, 548 (8th Cir.1972) (" '[B]ecause maintenance of the attorney-client privilege up to its proper limits has substantial importance to the administration of justice, and because an appeal after disclosure of the privileged communication is an inadequate remedy, the extraordinary remedy of mandamus is appropriate.' " (quoting Harper & Row Publishing Co. v. Decker, 423 F.2d 487, 492 (7th Cir.1970), aff'd by an equally divided court, 400 U.S. 348, 91 S.Ct. 479, 27 L.Ed.2d 433 (1971))); see also United States v. Victoria-21, 3 F.3d 571, 575 (2d Cir.1993) ("the exercise of mandamus powers relating to discovery disputes constitutes a unique branch of the law" that is only invoked when "effective review on appeal from a final judgment in the case is difficult or effectively unobtainable, as would be the case, for example, where discovery of alleged privileged documents is ordered"); Westinghouse Elec. Corp. v. Republic of the Philippines, 951 F.2d 1414, 1422 (3d Cir.1991) (holding mandamus available to review order compelling production of documents claimed to be privileged but unavailable to review order upholding work-product doctrine).

It goes without saying that not all orders compelling discovery of allegedly privileged materials are appropriate for review by mandamus. This court has never articulated a test for when such review is appropriate, but has simply held that it is available in such cases as a general matter. The Ninth Circuit has formulated a test, since adopted by the Sixth Circuit, which is, at a minimum, instructive. See In re Bendectin Prods. Liab. Litig., 749 F.2d 300, 303-05 (6th Cir.1984) (citing Bauman v. United States Dist. Court, 557 F.2d 650, 654-55 (9th Cir.1977)). The Bauman court outlined five guidelines that it had distilled from the case law to help in deciding whether issuance of the writ is appropriate:

(1) The party seeking the writ has no other adequate means, such as direct appeal, to attain the relief desired. (2) The petitioner will be damaged or prejudiced in a way not correctable on appeal. (This guideline is closely related to the first.) (3) The district court's order is clearly erroneous as a matter of law. (4) The district court's order is an oft-repeated error, or manifests a persistent disregard of the federal rules. (5) The district court's order raises new and important problems, or issues of law of first impression.

Bauman, 557 F.2d at 654-55 (citations omitted).

Although these guidelines were designed to aid in determining when issuance of the writ is proper, the considerations raised also apply to the threshold question of when petitions for the writ merit full-blown review instead of denial without opinion. See Fed.R.App.P. 21(b). This question remains largely one of discretion, as does issuance of the writ itself, see In re Ford Motor Co., 751 F.2d 274, 275 (8th Cir.1984), but these guidelines provide some direction.

In this case, three of the five factors have certainly been satisfied. Each petition that seeks review of an order compelling discovery of allegedly privileged materials will satisfy the first two guidelines, see, e.g., Admiral Ins. Co. v. United States Dist. Court, 881 F.2d 1486, 1491 (9th Cir.1989), and our review of the available case law and scholarship indicates that this is an issue of law of first impression, thus satisfying the fifth guideline. ³ Other courts have noted that "the fourth and fifth guidelines can seldom be consistent with each other." Bendectin, 749 F.2d at 306 n. 16; see Admiral, 881 F.2d at 1491. In a case such as this, review may well be appropriate if either the fourth or the fifth guidelines are satisfied because the first two guidelines will presumably be satisfied as well.

Issuance of the writ does not follow automatically on a decision that review is appropriate. Westinghouse, 951 F.2d at 1422. Under the Bauman court's test, the writ would issue if, in addition to the satisfaction of the three guidelines mentioned above, "[t]he district court's order is clearly erroneous as a matter of law." 557 F.2d at 654-55; accord Bendectin, 749 F.2d at 305-06; see also Sporck v. Peil, 759 F.2d 312, 314 (3d Cir.) ("a writ of mandamus will only be granted for clear error of law"), cert. denied, 474 U.S. 903, 106 S.Ct. 232, 88 L.Ed.2d 230 (1985). Following various Supreme Court decisions, we have indicated that the writ may only issue...