Unanimous Supreme Court Opinion a Setback for In-house Attorney Client Privilege

In Justice Sotomayor’s first written opinion filed December 8, 2009, a unanimous U.S. Supreme Court decision in Mohawk Industries v. Carpenter, No. 08-678 , limits a corporation’s right to immediately appeal a pretrial order that would compel disclosure of confidential attorney-client information.

A Mohawk Industries employee, Norman Carpenter, claims he was fired after telling a manager the company was employing illegal aliens. Mohawk counters the worker was fired because an investigation concluded that he had violated immigration laws. Mohawk appealed a trial judge’s order to provide Carpenter with documents and other information about the attorney-led investigation. A federal appeals court said it lacked jurisdiction to review the trial judge’s ruling that the company had waived its right to attorney-client privilege. The Supreme Court upheld that decision, stating, “we routinely require litigants to wait until after final judgment to vindicate valuable rights, including rights central to our adversarial system.”

ACC is diligent in its efforts to protect your client’s rights to exercise its privilege rights. While this case represents a loss, we will continue to develop information on issues involving privilege and work product protections for in-house counsel/their clients and are currently working on another case on appeal to the Supremes in the matter of US v. Textron, which concerns the protection of legal assessments re company liabilities provided to accountants to aid in the preparation of financial (tax) filings. Privilege in the financial disclosure process (including concerns over proposed changes to FAS 5) are a focus of increasing concern to ACC and its members.

To read the full opinion: