Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-08-08003/USCOURTS-ca8-08-08003-0/pdf.json

Parties Involved:
Piper Jaffray & Co., Inc.
Respondent
Union County, Iowa
Petitioner

Document Text:

1

Section 1292(b) provides:

When a district judge, in making in a civil action an order not otherwise

appealable under this section [that disallows interlocutory appeals with

certain exceptions], shall be of the opinion that such order involves a

controlling question of law as to which there is substantial ground for

difference of opinion and that an immediate appeal from the order may

materially advance the ultimate termination of the litigation, he shall so

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 08-8003

___________

Union County, Iowa, *

*

Petitioner, *

* Appeal from the United States

v. * District Court for the

* Southern District of Iowa.

Piper Jaffray & Co., Inc., *

* [PUBLISHED]

Respondent. *

___________

Submitted: April 24, 2008

Filed: May 13, 2008

___________

Before BYE, ARNOLD, and SHEPHERD, Circuit Judges.

___________

PER CURIAM.

This matter comes before this court upon a petition for leave to file an

interlocutory appeal under 28 U.S.C. § 1292(b)1

 from a discovery order of the district

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state in writing in such order. The Court of Appeals which would have

jurisdiction of an appeal of such action may thereupon, in its discretion,

permit an appeal to be taken from such order . . . .

28 U.S.C. § 1292(b). 

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court. Because we find that the district court abused its discretion in certifying this

interlocutory appeal, we dismiss this appeal for lack of jurisdiction.

I.

The underlying diversity action arises out of the construction of a soybean

crushing plant in Union County, Iowa. The construction of the mill was to be

undertaken by CF Processing, a wholly owned subsidiary of Crestland Cooperative.

The petitioner, Union County, Iowa (the “County”), alleges that the respondent, Piper

Jaffray & Co., Inc., provided the County with advice regarding the County’s issuance

of two General Obligation Capital Loan Notes (the “bond offerings”) in connection

with the project. In total, the bond offerings amounted to $5.865 million. The mill

was to be assessed for property tax purposes at a certain amount, and if the tax

revenue generated on that assessment failed to cover debt service on the notes, CF

Processing agreed to pay any shortfall in order for the County to make the required

debt service payments. In turn, Crestland guaranteed CF Processing’s performance.

CF Processing and Crestland filed bankruptcy in 2001, defaulting on all

obligations to the County, when the tax shortfall occurred. The County filed suit

against Piper Jaffray, asserting claims of breach of fiduciary duty, breach of contract,

negligent misrepresentation, negligence, and fraud. The crux of the County’s case is

that Piper Jaffray failed to properly advise the County of (1) material information and

risks involved in the issuance of the bond offerings in the event of defaults by

Crestland and CF, and (2) alternative financing options. 

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After requesting documents and/or information concerning the professional

advice the County received in connection with the bond offerings, Piper Jaffray filed

a Motion to Compel, asserting that the County had refused to provide the

documentation sought. The County asserted, through a privilege log, that the

documents were not discoverable under the work product doctrine and attorney-client

privilege. The magistrate judge granted the motion in part and denied it in part,

specifying the documents that were to be produced because the County had waived

the attorney-client privilege with regard to the information contained in those

documents as a result of the litigation it had undertaken against Piper Jaffray. The

district court affirmed; in its order, however, the court certified the case for

interlocutory appeal pursuant to 28 U.S.C. § 1292(b). The County then petitioned this

court for permission to file the appeal. 

II.

Because “[t]he requirements of § 1292(b) are jurisdictional,” White v. Nix, 43

F.3d 374, 376 (8th Cir. 1994), if the case does not present circumstances satisfying the

statutory prerequisites for granting certification, this court cannot allow the appeal.

Id. at 377. Furthermore, even if the statutory criteria are satisfied, “we possess

discretion whether to hear the appeal,” id. at 376 n.2, and “may deny the appeal for

any reason.” Id. (citing Coopers & Lybrand v. Livesay, 437 U.S. 463 (1978)). In

determining whether to grant the County’s petition, we keep in mind that “[i]t has .

. . long been the policy of the courts to discourage piece-meal appeals because most

often such appeals result in additional burdens on both the court and the litigants.

Permission to allow interlocutory appeals should thus be granted sparingly and with

discrimination.” Id. at 376 (quoting Control Data Corp. v. Internat’l Bus. Machines

Corp., 421 F.2d 323, 325 (8th Cir. 1970)); see U.S. ex rel. Hollander v. Clay, 420 F.

Supp. 853, 859 (D.C.D.C. 1976) (“Certification under section 1292(b) is far from the

normal course of procedure.”); see also United States Rubber Co. v. Wright, 359 F.2d

784, 785 (9th Cir. 1966) (per curiam) (“The legislative history of subsection (b) of

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section 1292 . . . indicates that it was to be used only in extraordinary cases where

decision of an interlocutory appeal might avoid protracted and expensive litigation.

It was not intended merely to provide review of difficult rulings in hard cases.”).

In requesting that this court follow the extraordinary course of interlocutory

review of this matter, “the [County] bears the heavy burden of demonstrating that the

case is an exceptional one in which immediate appeal is warranted.” White, 43 F.3d

at 376. “Section 1292(b) establishes three criteria for certification: the district court

must be of the opinion that (1) the order involves a controlling question of law; (2)

there is substantial ground for difference of opinion; and (3) certification will

materially advance the ultimate termination of the litigation.” Id. at 377 (internal

quotations omitted). The district court found that all three statutory criteria were met

because of “the lack of Eighth Circuit precedent on this issue.” We address each

requirement to determine whether the district court abused its discretion in certifying

this appeal. See id. at 377-79 (finding that the district court abused its discretion in

certifying appeal because: (1) it failed to adequately consider all the relevant criteria

before granting the motion for certification and (2) none of the statutory criteria were

satisfied). 

First, the motion to compel was granted by the district court based upon waiver

of attorney-client privilege. We assume without deciding that the district court’s

order, premised upon its resolution of the attorney-client privilege issue, involves a

controlling question of law. See id. at 377 n.3 (stating that appellants’ argument that

files were protected against discovery by “some privilege” presents a controlling legal

issue as to the existence of the privilege). However under § 1292(b) there must also

exist “substantial basis for difference of opinion” with respect to such question. Id.

Because this is a diversity case, the determination of whether attorney-client privilege

applies is governed by state law. Fed. R. Evid. 501 (providing that state law supplies

the rule of decision on privilege in diversity cases); see Pamida, Inc. v. E.S. Originals,

Inc., 281 F.3d 726, 731 (8th Cir. 2002). 

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Under Iowa law, a client may waive attorney-client privilege. Iowa Code

§ 622.10(2); see Miller v. Continental Ins. Co., 392 N.W.2d 500, 504 (Iowa 1986).

Though there was no express waiver here, “implied waiver occurs where the [client]

has placed in issue a communication which goes to the heart of the claim in

controversy.” Squealer Feeds v. Pickering, 530 N.W.2d 678, 684 (Iowa 1995),

abrogated on other grounds by Wells Dairy, Inc. v. Am. Indus. Refrigeration, Inc., 690

N.W.2d 38 (Iowa 2004) (quoting 81 Am. Jur. 2d Witnesses § 348 (1992)); see

Brandon v. W. Bend Mut. Ins. Co., 681 N.W.2d 633, 642 (Iowa 2004) (providing that

waiver may be implied by “conduct making it unfair for a client to invoke the

privilege”); Miller, 392 N.W.2d at 505 (same). “While identification of ‘a sufficient

number of conflicting and contradictory opinions’ would provide substantial ground

for disagreement,” White, 43 F.3d at 378 (quotation omitted), the County offered no

such Iowa opinions, statutes or rules, and “a dearth of cases” does not constitute

“substantial ground for difference of opinion.” Id. Accordingly, section 1292(b)’s

second criterion for certification has not been satisfied. 

With regard to the third statutory requirement, that the certification will

materially advance the ultimate termination of the litigation, the district court quoted

this portion of the statute, however, we do not see how the court’s only stated reason

for certifying the appeal–the lack of Eighth Circuit precedent–demonstrates that this

requirement has been met. Though this criterion may be satisfied here, the district

court should make the necessary findings to demonstrate that this statutory criterion

was satisfied. See id. (“Although the district court quoted this portion of the statute,

it made no mention of it when making the necessary findings. Thus, we conclude that

the district court failed to consider this statutory criterion.”); see also Isra Fruit Ltd.

v. Agrexco Agri. Export Co., 804 F.2d 24, 25 (2d Cir. 1986) (“strongly suggest[ing]

to district judges the advisability of stating more than a bare finding that the statutory

requirements of 1292(b) have been met”).

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Finally, while this court has previously considered an interlocutory appeal

relating to attorney-client privilege, see Simon v. G.D. Searle & Co., 816 F.2d 397,

399 (8th Cir. 1987) (involving two issues: (1) whether the work product doctrine or

attorney-client privilege applied to corporate risk management documents prepared

by nonlawyer corporate officials and (2) whether Rule 26(b)(2) of the Federal Rules

of Civil Procedure limits discovery of corporate risk management documents that

relate to insurance considerations), we have also denied it. See White, 43 F.3d at

375-76 (involving prison officials’ assertion of attorney-client privilege with regard

to documents the district court ordered them to produce concerning an assault for

which the inmate was under investigation in inmate’s section 1983 action). In

dismissing the interlocutory appeal, the White Court distinguished Simon, stating that

“Simon involved novel controlling issues of law concerning the work product

doctrine, attorney/client privilege and construction of Federal Rule of Civil Procedure

26(b)(2). Moreover, the Simon case was a consolidation of approximately 40 cases,

and was therefore extraordinary.” Id. at 377 n.4. Thus, White suggests that, absent

the sort of extraordinary circumstances present in Simon, this court will not allow a

certified appeal of an attorney-client privilege case. Because this case is more like

White than Simon, in that it lacks novel controlling issues of law and does not consist

of a substantial number of consolidated cases, it constitutes a typical attorney-client

case inappropriate for interlocutory review pursuant to section 1292(b). 

III.

We conclude that the district court abused its discretion in certifying this

interlocutory appeal where the statutory criteria were not satisfied. Accordingly, we

dismiss this appeal for lack of jurisdiction. 

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