Drummond Co. v. Terrance P. Collingsworth, Conrad & Scherer, LLP

• Decision Date: 15 March 2016
• Docket Number: 14–15749.,Nos. 14–15722,s. 14–15722
• Citation: 816 F.3d 1319
• Parties: DRUMMOND COMPANY, INC., Plaintiff–Appellee, v. TERRANCE P. COLLINGSWORTH, CONRAD & SCHERER, LLP, Defendants–Appellants, Jack Scarola, Searcy Denney Scarola Barnhart & Shipley, P.A., Interested Parties–Appellants. In re John Scarola, Petitioner.
• Court: U.S. Court of Appeals — Eleventh Circuit

816 F.3d 1319

DRUMMOND COMPANY, INC., Plaintiff–Appellee,

v. TERRANCE P. COLLINGSWORTH, CONRAD & SCHERER, LLP, Defendants–Appellants,Jack Scarola, Searcy Denney Scarola Barnhart & Shipley, P.A., Interested Parties–Appellants.In re John Scarola, Petitioner.

Nos. 14–15722

14–15749.

United States Court of Appeals, Eleventh Circuit.

March 15, 2016.

Huey Thomas Wells, III, Starnes Davis Florie, LLP, Birmingham, AL, Brett Alan Barfield, Holland & Knight, LLP, Miami, FL, for Plaintiff–Appellee.

Bruce Stephen Rogow, Bruce S. Rogow, PA, Fort Lauderdale, FL, William T. Paulk, II, Michael Sansbury, Robert K. Spotswood, Spotswood Sansom & Sansbury, LLC, Birmingham, AL, for Defendant–Appellant.

Before ED CARNES, Chief Judge, MARTIN, Circuit Judge, and WALTER,^* District Judge.

ED CARNES

, Chief Judge:

Subpoenas seeking documents were issued to an attorney and his law firm who are not parties to this lawsuit. They filed a third-party motion to quash on work product grounds. After the district court denied their motion, instead of producing the subpoenaed documents, they appealed and also filed a petition for a writ of mandamus. The defendants in the underlying lawsuit filed their own appeal from the denial of the motion to quash even though the subpoenas were not addressed to them and they did not object in the district court. As you might imagine, this appeal presents a number of issues of appellate jurisdiction.

I.

Over a number of years, attorney Terrance P. Collingsworth and his law firm, Conrad & Sherer, LLP (collectively, Collingsworth) have filed a series of lawsuits on behalf of Colombian plaintiffs against Alabama-based oil company Drummond Company, Inc. under the Alien Tort Statute, 28 U.S.C. § 1350

. Those lawsuits claim that Drummond has attempted to maintain control of its coal mining operations in Colombia by conspiring with paramilitary groups there, making Drummond complicit in scores of human rights violations including a number of murders. So far none of those lawsuits has been successful.

In 2011 Drummond filed a defamation lawsuit against Collingsworth in federal district court in the Northern District of Alabama based on a series of letters that Collingsworth sent to Drummond's customers and business partners describing Drummond's alleged role in those human rights violations. Collingsworth contended that the statements in those letters were based on the testimony of former Colombian paramilitary fighters. According to Drummond, however, Collingsworth had paid those witnesses a total of well over $100,000. Drummond argues that those payments call into question the veracity of the witnesses' testimony and, in turn, the legitimacy of Collingsworth's defense to the defamation suit.

To prove that Collingsworth paid the witnesses, Drummond served Florida attorney Jack Scarola and his law firm, Searcy, Denney, Scarola, Barnhart, & Shipley, P.A. (collectively, Scarola), with two subpoenas to produce documents. The connection to Scarola arises from the fact that he serves along with Collingsworth as counsel for plaintiffs in another lawsuit, which is a multi-district litigation against Chitquita Brands International, Inc., premised on Chiquita's alleged involvement in similar human rights violations. As co-counsel in that other case, Collingsworth and Scarola have shared information related to it under confidentiality and common interest agreements. The subpoenas sought from Scarola documents and communications related to Collingsworth's "provision of security in Colombia" and to "payments made to witnesses or any Colombian paramilitary."

Scarola filed a motion to quash Drummond's subpoenas in the Southern District of Florida. See Fed.R.Civ.P. 45(d)(3)(A)

(providing that a motion to quash should be directed to the district court "where compliance is required"). His motion contended that the subpoenas sought materials protected by the work product privilege and that they imposed an undue burden on him as a nonparty to the defamation case. He did not submit a privilege log.

The district court denied Scarola's motion to quash, concluding that the work product privilege did not apply because the documents Drummond sought "were prepared for different parties in a different case in which Drummond was not involved." The court declined to rule on the undue burden issue because the parties had said that they would "continue efforts to limit the burden that the present production request would impose." The court directed the clerk of court to close the motion to quash case (the only matter pending before it).

Scarola appealed the district court's decision. Collingsworth also appealed, asserting his own work product privilege in the subpoenaed documents for the first time.¹ Scarola also filed a petition for a writ of mandamus, which we consolidated with both appeals. We provided the district court judge with the opportunity to respond to the mandamus petition, which he did. The underlying defamation case in the Northern District of Alabama, from which this related litigation sprang, is ongoing; there is no final judgment in it.

II.

The threshold issue is whether we have jurisdiction to decide the appeals from the denial of Scarola's motion to quash the subpoenas. See Adams v. Monumental Gen. Cas. Co., 541 F.3d 1276, 1277 (11th Cir.2008)

(noting that a court has an obligation to raise any questions about its jurisdiction). The courts of appeals "have jurisdiction of appeals from all final decisions of the district courts of the United States...." 28 U.S.C. § 1291. "A final decision is one by which a district court disassociates itself from the case." Doe No. 1 v. United States, 749 F.3d 999, 1004 (11th Cir.2014) (quotation marks omitted). It "ends the litigation on the merits and leaves nothing more for the court to do but execute the judgment." Id. (quotation marks omitted). "Discovery orders are ordinarily not final orders that are immediately appealable." Id.

There are, of course, exceptions to the final judgment rule. A district court can certify for appeal, and the court of appeals can accept, an order that "involves a controlling question of law as to which there is a substantial ground for difference of opinion" where "immediate appeal ... may materially advance the ultimate termination of the litigation." 28 U.S.C. § 1292(b)

. But the district court in this case did not do that. Or an aggrieved person can defy a district court's order and then appeal directly from court-imposed contempt sanctions. See Rouse Constr. Int'l, Inc. v. Rouse Constr. Corp., 680 F.2d 743, 745 (11th Cir.1982)

. But no one did that in this case.

And a privilege holder can appeal from an order that directs a disinterested third party to produce materials over which the privilege holder claims a privilege of nondisclosure, if he would have no other means of appellate review. See Int'l Horizons, Inc. v. Comm. of Unsecured Creditors (In re Int'l Horizons), 689 F.2d 996, 1001 (11th Cir.1982)

. Collingsworth contends that exception applies to his appeal. And under the collateral order doctrine a litigant can appeal immediately from an order that conclusively decides an important question separate from the merits of a case when the order would otherwise be unreviewable. See Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100, 105, 130 S.Ct. 599, 604, 175 L.Ed.2d 458 (2009). Scarola contends that exception applies to his appeal. We don't think either exception applies to either appeal.

A.

We turn first to Collingsworth, who contends that we have jurisdiction over his appeal because the district court's disclosure order demands that Scarola turn over Collingsworth's own privileged work product. "Ordinarily, a litigant seeking to overturn a discovery order has two choices. Either he can comply with the order and challenge it at the conclusion of the case or he can refuse to comply with the order and contest its validity if subsequently cited for contempt for his refusal to obey." Rouse, 680 F.2d at 745

. But when a disclosure order is "directed to a person who has custody of materials as to which another person may claim privilege of non-disclosure ... [,] the person who holds the privilege may seek immediate review of the disclosure order." In re Int'l Horizons, 689 F.2d at 1001 (quotation marks omitted). "The justification for permitting immediate appeal under such circumstances is that the privilege-holder has no power to compel the custodian of the material to risk a contempt citation for his refusal to comply with the Court's order." Id. (quotation marks omitted). Without the ability to bring an interlocutory appeal, the privilege holder would be left "powerless to avert the mischief of the order." Perlman v. United States, 247 U.S. 7, 12–13, 38 S.Ct. 417, 419, 62 L.Ed. 950 (1918).

But that concern arises only when the privilege holder is not a party to the underlying litigation from which the subpoena came. The Supreme Court made that clear in Mohawk Indus., Inc. v. Carpenter, 558 U.S. at 103, 130 S.Ct. at 603

, where it held that a disclosure order adverse to the attorney-client privilege did not warrant interlocutory appeal when the privilege holder was a party to the litigation who could appeal after final judgment. The Court reasoned that "postjudgment appeals generally suffice to protect the rights of litigants and ensure the vitality of the attorney-client privilege[,]" because "[a]ppellate courts can remedy the improper disclosure of privileged material in the same way they remedy a host of other erroneous evidentiary rulings: by vacating an adverse judgment and remanding for a new trial in which the protected material and its fruits are excluded from evidence." Id. at 109, 130 S.Ct. at 606. When the rights asserted can be vindicated after final judgment, permitting interlocutory appeal of "privilege-related disclosure orders simply cannot justify the likely institutional costs," including "unduly delay[ing] the resolution of district court litigation and needlessly...