It never rains but it pours. The case of the day is In re Naranjo (4th Cir. 2014). The case was an appeal by the Lago Agrio plaintiffs and one of their lawyers, Letters Blogatory contributor Aaron Marr Page, from discovery orders in separate proceedings brought by Chevron under Section 1782 and under FRCP 45. The Section 1782 proceedings were in aid of the BIT arbitration between Chevron and Ecuador and in aid of the appellate proceedings in Ecuador. The FRCP 45 proceedings arose out of subpoenas Chevron issued in the RICO case in the Southern District of New York. In both cases, the issue was whether Page could assert an attorney-client privilege.
The court first turned to a jurisdictional question. As for § 1782, the universal rule among the circuits that have considered the question is that an order granting discovery under the statute is an immediately appealable final order. The Fourth Circuit spelled out the policies behind that rule, which it adopted: the policy against interlocutory appeals is to avoid interfering with the proceeding below; but in a § 1782 case, there is no proceeding on the merits in the US courts.
The more interesting question was whether the court had jurisdiction of the appeal under FRCP 45. The District Court in Maryland issued a decision on the privilege question that was favorable to Chevron; but ordinarily in order to obtain appellate review of an interlocutory discovery order it’s necessary first to disobey the order and to be held in contempt. Appeal then lies from the contempt order. But Page argued that the court had jurisdiction even though things had not progressed that far under the Perlman exception, named for Perlman v. United States, 247 U.S. 7 (1918). Perlman applies when the third party is disinterested in the underlying case and thus lacks a sufficient incentive to risk contempt sanctions. But the Fourth Circuit found that Page was misinterpreting Perlman: it doesn’t allow the subpoena target to appeal; it allows the privilege holder to step in and appeal when it appears that the subpoena target is about to disclose privileged information. Nor can the Ecuadorans themselves appeal, though they are the holders of the ostensible privilege, because Page wasn’t disinterested in the proceedings below. All of this seems right; but I wonder why the FRCP 45 appeal, and the underlying case, aren’t simply moot on account of the final judgment entered in the RICO case. It seems to me you can’t seek to enforce subpoenas forever, even after the underlying litigation has been resolved.
On the merits of the § 1782 appeal—the appeal where the court found that it had jurisdiction—the court, for the most part, found that the Donziger waiver of the attorney-client privilege, which had been decided by the Second Circuit, governed. Comity required the Fourth Circuit to adhere to the Second Circuit’s decision, which after all was rendered in the same overall dispute. But the court agreed with Page that on the record before it, Donziger had not waived the privilege past October 20, 2010, and thus the court refused to grant Chevron’s appeal on that point. Apparently there will be further proceedings in the district court on the issue.
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