Opinion ID: 532639
Heading Depth: 2
Heading Rank: 1

Heading: PaineWebber: The Sanction Waiving Privileges.

Text: 28 PaineWebber submits that under any of the doctrines espoused by the Supreme Court in Cohen, Forgay and Gillespie, the sanction waiving its right to claim privilege as an objection to discovery of documents related to the California litigation is immediately reviewable by this court. We disagree. 29 First, we find it inconsistent for PaineWebber to assert that the collateral order doctrine, which requires the issue resolved to be completely separate from the merits, and the Gillespie exception, which addresses the review of intermediate issues fundamental to the further conduct of the case, 379 U.S. at 153, 85 S.Ct. at 311 (quoting United States v. General Motors Corp., 323 U.S. 373, 377, 65 S.Ct. 357, 359, 89 L.Ed. 311 (1945)) (emphasis added), can both serve as bases for review by this court. Either the matter of privilege is entirely unrelated to or it is integral to the merits of the case; it is unlikely to be both. More importantly, however, we find that under any of the doctrines of constructive finality, PaineWebber's appeal is premature as the trial court has not conclusively determined the issue of waiver of PaineWebber's attorney-client and work product privileges. 30 The collateral order doctrine applies only if the order being appealed conclusively settles a disputed question. Coopers & Lybrand, 437 U.S. at 468, 98 S.Ct. at 2457-58; see also Cohen, 337 U.S. at 546, 69 S.Ct. at 1225-26 (order must finally dispose of a claimed right). The doctrine of practical finality mandates review only when the order calls for  'immediate delivery of physical property and subjects the losing party to irreparable harm.'  In re Martin Bros., 796 F.2d at 1437 (citing Forgay ). Even under the very broad interpretation of section 1291 found in Gillespie, the Court required the issue presented to have at least marginal finality. 31 PaineWebber argues that the memorandum order issued by the trial court on July 10 finally resolves the issue of the viability of PaineWebber Inc.'s attorney-client privilege with respect to this litigation and the California litigation. Brief of Appellant PaineWebber Inc. at 13. PaineWebber further maintains that the irrevocable loss of the attorney-client privilege ... would irreparably harm PaineWebber Inc. and that such destruction presents questions which are 'fundamental to further conduct of the case.'  Id. at 14. These arguments are unavailing. 32 The district court expressly retained the right to consider an assertion of privilege in an extreme case. BankAtlantic, 127 F.R.D. at 236. When PaineWebber made an emergency motion for a stay of the privilege sanction pending appeal, the court treated the motion as invoking that savings clause. Record Excerpts (RE) at 106 (Order of July 25, 1989). The district court gave instructions to PaineWebber and BankAtlantic on how the court intended to resolve PaineWebber's claim of an exceptional need for its privileges to be recognized, and later appointed a special master when the task proved to be too time- and resource-consuming for the court to undertake unassisted. As far as this court is aware, this process is still underway, and thus far, PaineWebber has not lost one iota of the privilege which it declares was totally destroyed by the district court's July 10 order. There has been no marginal finality, much less irreparable harm or final disposition of a claimed right. 8 This is a case in which the inconvenience and costs of piecemeal review far outweigh the as yet non-existent danger of denying justice by delay. Dickinson v. Petroleum Conversion Corp., 338 U.S. 507, 511, 70 S.Ct. 322, 324, 94 L.Ed. 299 (1950).B. Ruden Barnett: The Cash Bond and Publication Sanctions 33 Ruden Barnett relies primarily on the collateral order doctrine to give this court jurisdiction over its appeal. It argues that the trial court's July 10 order conclusively determined factual findings against Ruden Barnett supporting sanctions, that Ruden Barnett would post immediately a $125,000 cash bond, and that the order itself would be published. Ruden Barnett asserts that the portions of the order sanctioning it are issues completely separate from the merits as it is a non-party law firm that no longer represents PaineWebber. Finally, Ruden Barnett states that, as a non-party, it has no guarantee that it will be able to pursue an appeal upon final determination of the merits of the case and thus the sanctions against it are effectively unreviewable on appeal from final judgment. Ruden Barnett also refers to the practical finality doctrine of Forgay as another source of jurisdiction for this court, declaring that the July 10 order has immediate, otherwise irreparable effects. As with PaineWebber, we find that Ruden Barnett has appealed too hastily.
34 Ruden Barnett correctly asserts that we have applied the collateral order doctrine to cases in which a non-party was sanctioned by the trial court in a non-final order. See, e.g., Ortho, 847 F.2d at 1515; Robinson v. Tanner, 798 F.2d 1378, 1380-81 (11th Cir.1986), cert. denied, 481 U.S. 1039, 107 S.Ct. 1979, 95 L.Ed.2d 819 (1987). This case differs from those in important respects. In our previous cases where we determined that we had jurisdiction to review sanctions against a non-party, we dealt with situations in which monetary sanctions were conclusively determined and immediately payable or where a non-party might not be able to obtain review at a later date. Neither circumstance obtains here. 35 The sanction requiring Ruden Barnett to put up half of the $250,000 cash bond, while possibly final in and of itself, is hardly a definitive disposition of a disputed question. It is inextricably linked with the sanction of attorney's fees and costs to be determined post-trial. The bond merely guarantees that Ruden Barnett will meet its liability should fees and costs be assessed at the end of the trial. It is not the type of immediately payable sanction that allowed us to find jurisdiction in the Ortho case. In fact, in Ortho we held that [i]f a money sanction against a non-party is not immediately payable, neither will it normally be immediately reviewable. 847 F.2d at 1518. Here nothing has been paid. The amount of the sanction has not been fixed. The bond is being held, accruing interest, until such time as the amount of the sanction is decided and payment becomes due. 9 When Ruden Barnett's liability, if any, is finally determined, it can then appeal that order. 36 The issue of publication of the July 10 order more closely accords with the requirements of Cohen and the collateral order doctrine. It is a separable claim, conclusively determined and collateral to the merits. Where the demand for our taking jurisdiction fails is on the question of importance. Cohen and Coopers & Lybrand both require that to assume jurisdiction over a collateral order, that order must decide an important issue. Publication of the memorandum order does not constitute an issue of sufficient import to warrant disruptive interlocutory review. Publication simply has made more accessible to interested persons an order that was already a matter of public record. Further, by accepting jurisdiction over this sanction we could not avert any harm feared by Ruden Barnett. The order has been published and disseminated among the legal community. Taking jurisdiction now, even if we were to find the trial court in error and vacate the published order, would be of no more effect than if we were to do so pursuant to a subsequent, more appropriate appeal. When and if Ruden Barnett appeals final determinations of the other sanctions against it, it may properly raise this issue on appeal as well. 37 Ruden Barnett contests that the case may end in a way that would leave it no means for appeal if we do not take jurisdiction now. We do not see this as a likely eventuality. The trial court's July 10 order left several sanction issues outstanding which affect Ruden Barnett. Should the case go to trial and BankAtlantic prevail, the court will adjudge the amount of costs, fees and interest to be awarded to BankAtlantic, or at least approve a resolution of that issue arrived at independently by the parties, from which order PaineWebber may appeal. Even if PaineWebber prevails on the merits, the court may decide that the sanctions are still warranted and the sequence of events stated above would take place. The court may conclude at any point that the sanctions were unjustified and remove them entirely, returning the bond and vacating its published order, in which case there would be no need for appeal. Finally, PaineWebber and BankAtlantic may settle their differences; but the sanctions would remain until the court either removed them or executed them against the appropriate parties. In any case, the court's action would result in an order which could be appealed by Ruden Barnett to this court. In sum, Ruden Barnett will have an opportunity to appeal, one which is not premature.
38 The type of issue triggering review of interim orders under Forgay are immediately executable judicial decrees deciding property rights. Thus, as delimited by that case, the practical finality doctrine does not apply to the publication sanction. The payment of the cash bond might seem to fit into the Forgay exception were it not for the further explication of the doctrine by the Court: 39 This rule, of course, does not extend to cases where money is directed to be paid into court.... Orders of that kind are frequently and necessarily made in the progress of a cause. But they are interlocutory only, and intended to preserve the subject-matter in dispute from waste or dilapidation, and to keep it within the control of the court until the rights of the parties concerned can be adjudicated by a final decree. 40 Forgay, 47 U.S. (6 How.) at 204-05. 41 We believe that not only will Ruden Barnett not suffer irreparable injury by not securing review of the bond sanction until the final resolution of the monetary sanctions, but that the practical finality doctrine explicitly excluded cases such as this. Ruden Barnett was ordered to pay a bond to the court, not to pay a certain sum of money to BankAtlantic. See Id. at 204. The bond did not decide[ ] the right to ... property; it ensured that there would be funds with which to pay the fees and costs assessed at the end of trial by keeping the $250,000 within the control of the court until the rights of the parties concerned [could] be adjudicated by a final decree. Id. at 204-05. We do not have jurisdiction over this case under the practical finality doctrine. C. Conclusion 42 Both PaineWebber and Ruden Barnett may file new appeals with this court once the district court has entered truly dispositive orders on the sanctions from which they appeal. We DISMISS this appeal for lack of jurisdiction.