Opinion ID: 2732
Heading Depth: 2
Heading Rank: 1

Heading: The Perlman Exception

Text: Golan argues that his appeal falls under the so-called Perlman exception to the rule requiring the subject of a subpoena to submit to contempt before a district court’s order compelling compliance with the subpoena is appealable. In Perlman v. United States, 247 U.S. 7 (1918), the Supreme Court permitted Perlman, the target of a grand jury investigation, to immediately appeal the district court’s denial of his motion for an order restraining the United States Attorney from using property belonging to him that had been impounded and deposited with the clerk of the court, after the clerk had been ordered by the district court to produce the property. See id. at 12-13; Nat’l Super Spuds, Inc., 591 F.2d at 178 (discussing Perlman’s facts and procedural history). Thus, in Perlman, “the contempt avenue for ultimately securing review” of the district court’s production order “was not available since Perlman was not being required to do anything,” Nat’l Super Spuds, Inc., 591 F.2d at 179 (citing Cobbledick, 309 U.S. at 328-29). Moreover, it was “unimaginable” that the disinterested clerk would defy the district 8 court’s order so that Perlman—who had no connection to the clerk—could appeal. Id. Perlman has since come to stand for the principle that the holder of an asserted privilege may immediately appeal the enforcement of a subpoena when the subpoena is directed at another person who does not object to providing the testimony or documents at issue. See Stolt-Nielsen SA, 430 F.3d at 575 (“[W]here a subpoenaed third-party witness does not object to testifying, but someone else does—often on the grounds of privilege—a district court’s refusal to quash the subpoena is immediately appealable by the objecting party.”); In re Katz, 623 F.2d 122, 124 (2d Cir. 1980) (“[W]here the subpoena is directed against a third party, the movant who claims that production of the subpoened material would violate his fifth amendment privilege against self-incrimination is permitted an immediate appeal.”); see also In re Grand Jury Proceedings, 219 F.3d 175, 182 n.3 (2d Cir. 2000) (interpreting In re Katz as concluding that the “holder of [an] asserted privilege may appeal when [a] subpoena is directed at a third party because of the risk that the third party will surrender the privilege rather than risk a contempt citation”). The Perlman exception applies to appeals both from orders denying motions to quash, see, e.g., In re Katz, 623 F.2d at 124, and orders granting motions to compel, see, e.g., In re Grand Jury Proceedings, 219 F.3d at 181-82 & n.3. It also applies to appeals from orders issued in both grand jury proceedings, see, e.g., In re Katz, 623 F.2d at 123-24, and criminal and civil actions, see Nat’l Super Spuds, Inc., 591 F.2d at 176-81. Golan contends that, like the clerk in Perlman, it is unimaginable that he would defy the District Court’s order to assert privileges belonging to his reporter client. Golan claims that because he is a licensed attorney who often appears on a pro hac vice basis in the Southern District of New York, it would be “virtually impossible” for him to risk a citation for contempt. Although Golan does not explain the basis for this impossibility in his submissions to this Court, at oral argument he implied that a mere citation for contempt would have adverse professional consequences, primarily affecting his appointment to plaintiffs’ executive committees in other complex litigation. 9 Golan’s argument fails, and the Perlman exception is inapplicable to his appeal, for two reasons. First, the Perlman exception is relevant only to appeals brought by the holder of a privilege where the disputed subpoena is directed at someone else. It is impossible for such an appellant to pursue the normal avenue of review—submission to contempt—because, like Perlman, that appellant has not been required to do anything by the district court. In the instant case, however, Golan is both the appellant and the subject of the subpoena. The power to abide by or defy the district court’s order is in his hands alone. See In re Am. Tobacco Co., 866 F.2d 552, 556 (2d Cir. 1989) (“Perlman may not be extended to permit the party in possession of the subpoenaed documents to appeal prior to contempt simply because other persons might have been able to do so.”); cf. In re Grand Jury Subpoena for N.Y. State Income Tax Records, 607 F.2d 566, 571 (2d Cir. 1979) (“Since the State is both the holder of the privilege and the custodian of the records the Perlman doctrine does not permit this appeal.”). Second, unlike the court clerk in Perlman, a lawyer in Golan’s position—even one concerned about the effects of a contempt citation on his practice—does not lack countervailing motivations to submit to contempt, as well as ethical obligations to assert his client’s privileges. As the United States Court of Appeals for the District of Columbia Circuit has noted in a similar situation, a lawyer who “assert[s] [his] own interests in work product and in not being subject to what [he] claims is burdensome and abusive discovery, plus the privilege of [his] client (which [he] is normally duty-bound to assert) . . . has the requisite incentives (as well as the clear ability) to risk contempt and thereby force review into the usual channel.” In re Sealed Case, 141 F.3d 337, 340 (D.C. Cir. 1998) (citations omitted). Moreover, if a mere citation for civil contempt might hinder an attorney’s attempts at obtaining representation in future cases, the refusal to submit to such contempt under any circumstances might drive away clients in the future.7 7 At oral argum ent, G olan suggested tha t we shou ld allow his appeal to proceed be cau se his reporter clien t is not a party to the underlying litigation and therefore cannot bring the appeal on the client’s own behalf. However, in In re Katz, we permitted the client of a non-party attorney to appeal under the Perlman exception after moving to intervene 10 Because Golan cannot take advantage of the Perlman exception to obtain review of the District Court’s order, the ordinary contempt requirement would prevent immediate appeal unless we were to create a new exception for lawyers that is similar to the exception established for the President of the United States by the Supreme Court in Nixon v. United States. In that case, the Supreme Court held that the President, who had been issued a subpoena to produce certain tapes and documents in connection with a criminal proceeding where he was named as an unindicted co-conspirator, could immediately appeal the district court’s denial of his motion to quash the subpoena, even though he had not first submitted to contempt. Nixon, 418 U.S. at 686, 691-92. The Court emphasized that the ordinary rule was “peculiarly inappropriate due to the unique setting” in which the issue arose. Id. at 691. Requiring the President to submit to contempt would have “present[ed] an unnecessary occasion for constitutional confrontation between two branches of the Government,” placed the federal judge in an unusually difficult position, and threatened to “itself engender protracted litigation” over whether the district court had the power to hold the President in contempt, thereby delaying review “on the merits as of right before the district court pursuant to F ederal Rule of C ivil Procedure 24(a). See In re Katz, 623 F.2d at 123-25. Moreover, an order com pelling discovery does not become final under 28 U.S.C. § 1291 merely because the privilege holder cannot appeal and the target of the order has not submitted to contempt. For instance, such an order may not be final if th e target is an em ployee of the p rivilege holder and appears willing to su bm it to contem pt rather than com ply with the order. See Nat’l Super Spuds, Inc., 591 F.2d at 179-81 (dismissing an appeal from a district court order directing the employee of a government agency to answer certain questions at a deposition, where the employee had not submitted to contempt and the Perlman exception did not perm it the agency itself to appeal). We need not consider whether the Perlman exception would allow Golan’s client to appeal in a situation where, as here, the attorney has resisted the subpoena and the client has authorized the attorney to obey an order compelling com pliance in the event of an unsucc essfu l appeal by the attorney himself. See id. at 179 n.7 (“Whatever the validity of this exception m ay be in cases w here the [privilege holder] is disintere sted or independent, it becomes more difficu lt to sustain where the target of the disclosure order is both subject to the control of the person or entity asserting the privilege and is a participant in the re lationship out of which the privilege em erge s.” (citations o mitted)); cf. Stolt-Nielsen, SA, 430 F.3d at 475 (applying the Perlman exception where the subject of the subpoena “dem onstrated that he is more than willing to comply w ith the subpoena w ithou t any add itional prom pting”); In re Sealed Case, 141 F.3d at 34 0 n.1 (“In som e cases the attorney will indicate an intention to com ply with the subpoena, and on those facts the [D.C . Circuit] regards Perlman as controlling.”); In re Katz, 623 F.2d at 124-25 (applying the Perlman exception where the attorney’s client asserted his “fifth amendment privilege against self-incrimination” and the attorney had already appeared before the grand jury and given the allegedly privileged docum ents to the district cou rt under seal). Go lan also ask ed at oral argu ment that, if we conclu de he is unable to appeal, we grant leave to have his reporter client substituted on the notice of appeal. We decline to depart from the ordinary rules for intervention and perfection of an appeal from an order compelling compliance with a subpoena. 11 of his claim of privilege and the ultimate termination of the underlying criminal action for which his evidence [was] sought.” Id. at 692. Such concerns have no bearing on the instant case. We have declined to dispense with the ordinary contempt requirement “where the government, whether state or federal, asserts governmental or ‘executive’ privilege in cases where it is not a party,” Nat’l Super Spuds, Inc., 591 F.2d at 177, and we decline to dispense with it in cases where a non-party lawyer asserts either his own or his client’s privileges. As other lawyers have had to do, Golan must submit to contempt before the district court’s order to appear for a deposition and produce documents will be appealable. See In re Grand Jury Proceedings, 604 F.2d 798, 799-800 (3d Cir. 1979) (dismissing the appeal of a non-party attorney who had not submitted to contempt by defying an order to produce documents in a grand jury proceeding); In re Murphy, 560 F.2d 326, 332-33 & n.10 (8th Cir. 1977) (permitting appeals by non-party law firms and lawyers because they were cited for civil contempt after refusing to turn over documents to the district court)