Court Opinion

ID: 3053919
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:51:02.904337+00
Date Added: 2024-06-11T11:49:29.168613
License: Public Domain

FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

TRUCKSTOP.NET, LLC,                        
                 Plaintiff-Appellee,               No. 07-35123
                v.                                  D.C. Nos.
SPRINT CORPORATION,                               CV-04-00561-S-
             Defendant-Appellant,                     BLW
                                                  CV-05-00138-S-
SPRINT COMMUNICATIONS COMPANY,                         BLW
L.P.,
       Defendant-counter-claimant-                  OPINION
                          Appellant.
                                           
         Appeal from the United States District Court
                   for the District of Idaho
          B. Lynn Winmill, District Judge, Presiding

                     Argued and Submitted
               June 3, 2008—Seattle, Washington

                      Filed October 28, 2008

          Before: Melvin Brunetti, Jay S. Bybee, and
           Consuelo M. Callahan, Circuit Judges.1

                   Opinion by Judge Callahan

  1
    This case was argued before Ferguson, Brunetti and Callahan, Circuit
Judges. Following Judge Ferguson’s death, Judge Bybee was drawn by lot
to replace Judge Ferguson. Judge Bybee has read the briefs, reviewed the
record, and listened to oral argument.

                                14987
           TRUCKSTOP.NET v. SPRINT COMMUNICATIONS     14989

                        COUNSEL

Stephen R. Thomas, Esq. (Argued), C. Clayton Gill, Esq.,
Moffatt, Thomas, Barrett, Rock & Fields, Chartered, for
defendant-appellant Sprint Corporation and defendant-
counter-claimant-appellant Sprint Communications Company
L.P.

Timothy P. Getzoff, Esq. (Argued), Steven B. Andersen, Esq.,
Amanda K. Brailsford, Esq., Holland & Hart LLP, for
plaintiff-appellee Truckstop.net L.L.C.
14990       TRUCKSTOP.NET v. SPRINT COMMUNICATIONS
                           OPINION

CALLAHAN, Circuit Judge:

   The threshold issue in this appeal is a rather straightforward
question: Do we have appellate jurisdiction under the collat-
eral order doctrine to review a district court’s interlocutory
order addressing whether an inadvertently disclosed e-mail is
protected by the attorney-client privilege? We hold that
because the allegedly privileged information has already been
disclosed we do not have jurisdiction and thus dismiss this
appeal.

                                I.

   In 2003, Truckstop.net (“Truckstop”) entered into an agree-
ment with Sprint Communications Company L.P. (“Sprint
Communications”), a subsidiary of Sprint Corporation. Under
this agreement, Sprint Communications was to design, install,
and test standardized wireless local area networks
(“WLANs”) at certain truck stops and provide data circuits
that would allow Truckstop’s customers to access the Internet
through those WLANs. Truckstop filed the instant lawsuit
over a dispute regarding Sprint Communications’ design and
installation of the WLANs.

   During the course of pretrial discovery, Sprint Communica-
tions produced more than 470,000 electronic images to Truck-
stop. In its sixteenth supplemental production of documents,
Sprint Communications inadvertently disclosed a September
2004 e-mail from Sprint employee Deborah Neal to three of
her co-workers (“Neal e-mail”). The e-mail discusses Neal’s
impressions and recollections of a meeting with Sprint Com-
munications’ legal department, along with statements of facts
derived from other sources. Once Sprint Communications
realized that it had inadvertently disclosed this e-mail, it filed
a Motion to Determine Privilege.
            TRUCKSTOP.NET v. SPRINT COMMUNICATIONS         14991
   The district court ordered redacted as protected by the
attorney-client privilege those portions of the Neal e-mail that
either directly related to, or gave impressions based on, attor-
ney advice, and those that recollected attorney advice for the
purpose of informing others in need-to-know positions so that
they could implement the attorney advice. The court found
that the remaining portions of the e-mail were not protected
by the attorney-client privilege because they consisted of
statements that were either factual in nature or did not directly
relay impressions based on or recollections of attorney advice.
Sprint Communications then filed this interlocutory appeal.

                               II.

   [1] Under 28 U.S.C. § 1291, our jurisdiction is typically
limited to “final decisions” of the district courts. Accordingly,
the general rule is that discovery orders are interlocutory in
nature and nonappealable under section 1291. KL Group v.
Case, Kay & Lynch, 829 F.2d 909, 918 n.5 (9th Cir. 1987)
(citations omitted). The Supreme Court, however, has held
that under the collateral order doctrine a party may appeal
from a “narrow class of decisions that do not terminate the lit-
igation, but must, in the interest of achieving a healthy legal
system, nonetheless be treated as final.” Digital Equip. Corp.
v. Desktop Direct, Inc., 511 U.S. 863, 867 (1994) (internal
citation and quotation marks omitted). An order is immedi-
ately appealable under the collateral order doctrine when it
“(1) conclusively determines the disputed question, (2)
resolves an important issue completely separate from the mer-
its of the action, and (3) is effectively unreviewable on appeal
from a final judgment.” Sell v. United States, 539 U.S. 166,
176 (2003) (quoting Coopers & Lybrand v. Livesay, 437 U.S.
463, 468 (1978)). We have held that “[t]his determination
should not be made lightly because the principle that appellate
review should be deferred pending the final judgment of the
district court is central to our system of jurisprudence.”
United States v. Amlani, 169 F.3d 1189, 1192 (9th Cir. 1999).
“Strict application of the requirements is particularly impor-
14992       TRUCKSTOP.NET v. SPRINT COMMUNICATIONS
tant because, when a court identifies an order as an appeal-
able, collateral one, it determines the appealability of all such
orders.” SEC v. Capital Consultants LLC, 453 F.3d 1166,
1171 (9th Cir. 2006) (per curiam). “Because collateral juris-
diction requires all three elements,” the court “lack[s] collat-
eral order jurisdiction if even one [element] is not met.”
McElmurry v. U.S. Bank Nat’l Ass’n, 495 F.3d 1136, 1140
(9th Cir. 2007).

                              III.

   [2] We have recognized that a district court’s order requir-
ing the disclosure of privileged material is often “irreparable
by any subsequent appeal.” UMG Recording, Inc. v. Bertels-
mann AG (In re Napster, Inc. Copyright Litig.), 479 F.3d
1078, 1088 (9th Cir. 2007) (quoting United States v. Griffin,
440 F.3d 1138, 1142 (9th Cir. 2006) (internal quotation marks
omitted)); see also Bittaker v. Woodford, 331 F.3d 715, 717-
18 (9th Cir. 2003) (finding that a protective order was appeal-
able under the collateral order doctrine because “[i]f petitioner
relies on the protective order by releasing privileged materials
and it turns out to be invalid, he will suffer serious prejudice
during any retrial”). We have treated such orders as “effec-
tively unreviewable on appeal from a final judgment” under
the third prong of the collateral order doctrine because
“[o]nce ‘[t]he cat is already out of the bag,’ it may not be pos-
sible to get back in.” In re Napster, 479 F.3d at 1088 (quoting
Agster v. Maricopa County, 422 F.3d 836, 838 (9th Cir. 2005)
(citation omitted)). If a party is required to comply with a dis-
trict court’s order requiring the disclosure of privileged mate-
rial and the party is “correct in his assertion of privilege, by
the time of trial he will have suffered the very harm that he
seeks to avoid, namely erroneous disclosure of privileged
material.” Griffin, 440 F.3d at 1142 (internal quotation marks
and citation omitted).

   [3] However, irreparable harm from the disclosure of the
allegedly privileged material has already taken place when the
            TRUCKSTOP.NET v. SPRINT COMMUNICATIONS         14993
material has been inadvertently disclosed. In Bank of America
v. Feldman (In re Nat’l Mortgage Equity Corp. Mortgage
Pool Certificates Litig.), 821 F.2d 1422 (9th Cir. 1987),
National Mortgage appealed the denial of a request for a pro-
tective order concerning documents that it deemed privileged.
Id. at 1423. Bank of America filed a motion to dismiss for
lack of appellate jurisdiction. Id. In the meantime, all of the
disputed documents were turned over to Bank of America
pursuant to a stipulation that they would be returned if
National Mortgage succeeded in its appeal. Id. We declined
to exercise jurisdiction under the collateral order doctrine
because National Mortgage “already produced the requested
documents, and [stated that] we cannot [now] restore the priv-
ilege.” Id. at 1425.

   [4] Our position that a district court’s order concerning
inadvertently disclosed documents is generally not appealable
under the collateral order doctrine is also reflected in our deci-
sion in KL Group v. Case, Kay & Lynch, 829 F.2d 909. In that
case, KL Group filed an appeal following a grant of summary
judgment to Case, Kay & Lynch. On appeal, KL Group also
sought review of a pretrial protective order that required it to
return an inadvertently disclosed letter containing attorney-
client correspondence. Case, Kay & Lynch argued that the
appeal of the protective order was untimely because the pro-
tective order was a final disposition under the collateral order
doctrine and thus KL Group lost its right to challenge the dis-
trict court’s order by failing to file an appeal within thirty
days of the order. Id. at 918 n.5. We rejected this “unwar-
ranted expansion of the collateral order doctrine” and stated
that the court lacked appellate jurisdiction until there was a
final judgment on the merits. Id.

   The Third Circuit has taken a similar position. In ADAPT
of Philadelphia v. Philadelphia Housing Authority, 417 F.3d
390 (3d Cir. 2005), ADAPT sought a list of public housing
units accessible to individuals with disabilities from the Phila-
delphia Housing Authority (“PHA”) to verify that PHA com-
14994       TRUCKSTOP.NET v. SPRINT COMMUNICATIONS
plied with a settlement agreement. Id. at 392-93. The district
court granted several motions to compel filed by ADAPT. Id.
at 393. PHA complied with the court’s order and then
appealed. Id. The Third Circuit dismissed the appeal, holding
that PHA failed to satisfy the “effectively unrevieweable on
appeal from a final judgment” prong of the collateral order
doctrine. Id. at 395. The court stated that “[t]he failure to con-
sider these appeals now would not cause any significant harm
beyond that which occurred when PHA disclosed the disputed
information. Nor would reviewing the orders now ‘unscram-
ble the egg scrambled by [PHA’s] disclosure.’ ” Id. (quoting
In re Ford Motor Co., 110 F.3d 954, 963 (3d Cir. 1997)).

   Moreover, our decision does not conflict with the District
of Columbia Circuit’s decision in In re Grand Jury Investiga-
tion of Ocean Transportation, 604 F.2d 672 (D.C. Cir. 1979).
In that case, Sea-Land Services, Inc. responded to a grand
jury subpoena and inadvertently disclosed purportedly privi-
leged documents to the Antitrust Division of the Department
of Justice. It then filed an appeal from the district court’s
denial of a motion for the return of the alleged privileged doc-
uments. The D.C. Circuit concluded that it had appellate juris-
diction to consider Sea-Land’s motion to have the documents
returned under the collateral order doctrine, noting that

    Sea-Land must [be able to] pursue its claim of
    attorney-client privilege at [that] time in order to
    ensure that its claim not later become moot by rea-
    son of the documents’ disclosure to third parties.
    Absent the present appeal, these documents could be
    read or shown in the course of the grand jury pro-
    ceedings to witnesses who would then be free under
    Fed. R. Crim. P. 6(e) to disclose them.

Id. at 674. The appeal fell within the collateral order doctrine
because the alleged irreparable harm was not the initial dis-
closure of the privileged materials to the government, but
their possible disclosure to third parties. The appeal was Sea-
              TRUCKSTOP.NET v. SPRINT COMMUNICATIONS                 14995
Land’s only opportunity for appellate review of its privilege
claim. The underlying case was a grand jury proceeding to
which Sea-Land was not a party and there was no final judg-
ment from which Sea-Land could appeal. The fact that Sea-
Land’s disclosure to the government took place during a
grand jury proceeding and that the harm Sea-Land sought to
avoid was further disclosure to third parties presents a much
different scenario than the instant case.2

   [5] Following our prior precedent, we hold that this court
lacks appellate jurisdiction under the collateral order doctrine
to consider Sprint Communications’ appeal. Although Sprint
Communications’ inadvertent disclosure during the course of
discovery of the Neal e-mail may be unfortunate, the chicken
has already flown the coop — the alleged harm from disclo-
sure has already occurred. Sprint Communications has already
produced the allegedly privileged document and has not
alleged any additional harm that is not effectively reviewable
on appeal from a final judgment. The Supreme Court has cau-
tioned that

     the ‘narrow’ exception [provided by the collateral
     order doctrine] should stay that way and never be
   2
     The District of Columbia Circuit more recently decided that it had
appellate jurisdiction under the collateral order doctrine to consider an
emergency stay pending an expedited appeal of the district court’s discov-
ery order requiring that a party produce an allegedly privileged document
that had been partially disclosed by an opinion issued by the Supreme
Court of Victoria, Australia. United States v. Philip Morris Inc., 314 F.3d
612, 614-15 (D.C. Cir. 2003). The court concluded that this issue was
effectively unreviewable on appeal from a final judgment because the dis-
covery order required the party to produce the entire privileged document,
including those portions that had not been previously disclosed. Id. at 619.
Thus, compliance with the discovery order mandating release of the entire
document would “mak[e] the issue of privilege effectively moot.” Id.
(citations omitted). The Philip Morris case is similar to our decision in In
re Napster where we found that we have appellate jurisdiction under the
collateral order doctrine to consider appeals of discovery orders mandating
the release of privileged documents.
14996      TRUCKSTOP.NET v. SPRINT COMMUNICATIONS
    allowed to swallow the general rule, that a party is
    entitled to a single appeal, to be deferred until final
    judgment has been entered, in which claims of dis-
    trict court error at any stage of the litigation may be
    ventilated.

Digital Equip. Corp., 511 U.S. at 868. Accordingly, because
we hold that we lack appellate jurisdiction under 28 U.S.C.
§ 1291, the appeal is DISMISSED.