Monday, August 07, 2006

D.C. Circuit Discusses “Important Issue” Factor in Determining Propriety of Interlocutory Review

Per Diamond Ventures, LLC v. Barreto, 452 F.3d 892 (D.C. Cir. July 7, 2006):

In Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541 (1949), the United States Supreme Court set forth the "collateral order" doctrine authorizing the interlocutory appeal of an order so long as the order "[1] conclusively determine[s] the disputed question, [2] resolve[s] an important issue completely separate from the merits of the action, and [3][is] effectively unreviewable on appeal from a final judgment." Will v. Hallock, --- U.S. ----, ----, 126 S.Ct. 952, 957 (2006) (quotations omitted). The doctrine is "stringent[ly]" applied so as not to "overpower the substantial finality interests" of 28 U.S.C. § 1291. Id.

The first and third Cohen factors are plainly met in this case. The Protective Order conclusively determines the sole issue in this dispute: Diamond Ventures' principals' and employees' access to the MAQs [Management Assessment Questionnaires]. In addition, the order granting such access would be unreviewable at the litigation's end because the harm the SBA alleges--competitive harm to the SBIC applicants caused by Diamond Ventures' principals' review of the formers' MAQs--could not be undone on appeal. See Providence Journal v. FBI, 595 F.2d 889, 890 (1st Cir.1979) (confidentiality lost once documents were surrendered pursuant to court order; "[t]he status quo could never be restored"). The closer issue is the second Cohen requirement, which itself consists of two prongs: separability and importance. As to separability, Diamond Ventures' management's access to the MAQs has nothing to do with the merits of its discrimination claim. Diamond Ventures argues that the "importance" factor is lacking because confidential information, unlike privileged material, is discoverable under the federal rules. …

An "important issue" under Cohen is determined not by the nature of the information being sought but by the interest that would be harmed if immediate review were not allowed weighed against the interest in finality. See United States v. Philip Morris, 314 F.3d 612, 617 (D.C.Cir.2003) (under Cohen, issue is important "if the interests that would potentially go unprotected without immediate appellate review of that issue are significant relative to the efficiency interests sought to be advanced by adherence to the final judgment rule") (citing Digital Equip. v. Desktop Direct, 511 U.S. 863, 879, 114 S.Ct. 1992, 128 L.Ed.2d 842 (1994)); id. at 618-19 ("The importance prong requires weighing the institutionally significant status or relationship at stake.") (quotations omitted). In Philip Morris we held that a discovery order implicating the attorney-client privilege was significant compared to the counterbalancing interest in finality because the privilege "rests at the center of our adversary system." Philip Morris, 314 F.3d at 618. In Medical Records, the significant interest under Cohen 's second factor was that the documents sought to be discovered were covered by the psychotherapist's privilege under Federal Rule of Evidence 501 and by the medical records privilege under the District of Columbia Municipal Code. Medical Records, 381 F.3d at 1209-10.

Using the Philip Morris test, we believe the privacy and competitive interests of the SBIC applicants that "would potentially go unprotected without immediate appellate review" overcome the interest in finality.


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