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Panel Upholds 'Privileged Material' Ruling Against Mohawk11th Circuit leaves door open for carpet maker to appeal order forcing it to reveal information about its lawyer, ex-worker
Lawyers for Mohawk Industries must give a former employee information they had argued was protected by attorney-client privilege, the 11th Circuit has ruled. A panel this week upheld a ruling ordering the company to turn over information related to conversations between former supervisor Norman Carpenter and Mohawk counsel Juan P. Morillo. Carpenter's case is an offshoot of a class action racketeering suit claiming that the company's hiring of illegal aliens depressed the wages of Mohawk's legal employees.
Daily Report2008-08-28 12:00:00 AM
Lawyers for Mohawk Industries Inc. must give a former employee information they had argued was protected by attorney-client privilege, the 11th Circuit Court of Appeals has ruled.
A three-judge panel this week upheld a ruling by U.S. District Judge Harold L. Murphy ordering the Calhoun, Ga., carpet maker to turn over information related to conversations between former Mohawk shift supervisor Norman Carpenter and Mohawk counsel Juan P. Morillo.
The panel noted that, once a final judgment is entered, Mohawk may ask the appeals court to reconsider whether Murphy's order unfairly allowed Carpenter's lawyers access to privileged material.
But this time, the appellate panel was "not persuaded by [Mohawk's] argument that once the privileged material is turned over, the 'cat is out of the bag' and the damage is done."
Carpenter is suing Mohawk, claiming that he was fired from his Union Grove Road post shortly after he complained to the company's human resources department that several temporary workers were living in the U.S. illegally.
Carpenter's case is an offshoot of a 2004 class action racketeering suit against Mohawk brought by current and former employees who claimed that the company's hiring of illegal aliens depressed the wages of Mohawk's legal employees.
In the racketeering case, Murphy denied class certification in a 136-page order last March. The plaintiffs have appealed that ruling to the 11th Circuit.
An attorney for the plaintiffs in the racketeering case said Wednesday that he was extremely interested in the information that could be disclosed by the appellate ruling.
John E. Floyd, a partner at Atlanta's Bondurant, Mixson & Elmore and co-counsel with Summerville attorney Bobby Lee Cook for the plaintiffs, said the conversations between Morillo and Carpenter "are of great interest and concern to us."
"The reason he [Carpenter] was terminated, we believe, relates to our case because ultimately it had to do with whether Mohawk was employing people who could not lawfully work there," Floyd said. "We, of course, are eager to learn what really happened. ... What's important to us is the reason why he was terminated, what he complained about and what the company's response to his complaint was."
In Carpenter's case, the shift supervisor's complaint about illegal workers led him to speak with Morillo, then a Sidley Austin partner defending Mohawk in the racketeering suit. According to Carpenter, during that conversation, Morillo attempted to coerce him into recanting his statements because they would have damaged Mohawk's defense in the RICO case.
But Carpenter refused to recant and was fired the following day, according to a summary of the case contained in Tuesday's appellate opinion. Carpenter then sued, claiming he was fired because he had discovered that Mohawk "was committing immigration crimes by harboring illegal aliens," the opinion stated.
Citing his role in the Carpenter case, Morillo, now a partner with the Washington office of Clifford Chance, declined to comment for this story.
Carpenter's conversation with Morillo is at the heart of per curiam decision by Judges Edward E. Carnes, Stanley Marcus and U.S. District Judge Susan C. Bucklew, sitting by designation from the Middle District of Florida.
After Carpenter sued, lawyers for a proposed class of Mohawk employees in the racketeering case sought an emergency evidentiary hearing to bolster their case against Mohawk. Mohawk lawyers responded in a pleading that branded Carpenter's claims as "wild allegations" and "pure fantasy."
Mohawk lawyers claimed that Carpenter was dismissed after he "engaged in blatant and illegal misconduct" by attempting to channel the employment of a Mohawk worker whom he believed was an illegal alien to a temporary employment agency as "an attempt to circumvent federal immigration law."
"As a result of Mr. Carpenter's misconduct, Mohawk fired Mr. Carpenter and did not give him any severance package," the Mohawk pleading stated. "His attempt to knowingly cause Mohawk to obtain and utilize an unauthorized worker blatantly violated Mohawk policy."
Carpenter's lawyers immediately sought discovery that would document and support his version of his conversation with Morillo, only to have Mohawk assert that such information was protected by attorney-client privilege.
Murphy determined that although the communications in question were privileged, Mohawk had implicitly waived that privilege in labeling Carpenter's claims as fiction.
"By making those representations, Murphy concluded, "defendant Mohawk placed the actions of attorney Morillo in issue.
"In fairness, evaluation of those representations will require an examination of otherwise-protected communications between attorney Morillo and [Carpenter] and between attorney Morillo and defendant Mohawk's personnel."
Mohawk immediately appealed Murphy's ruling to the 11th Circuit.
The appellate panel determined that in the 11th Circuit discovery orders are normally not immediately appealable, and Murphy's order in this case was no exception. While affirming that attorney-client privilege "is important," the panel also found that Mohawk's lawyers could appeal Murphy's order once the case has reached a final judgment.
"If this court were to determine on appeal from a final judgment that privileged information was wrongly turned over and was used to the detriment of the party asserting the privilege, we could reverse any adverse judgment and require a new trial, forbidding any use of the improperly disclosed information, as well as any documents, witnesses or other evidence obtained as a consequence of the improperly disclosed information."
The appellate panel also determined that while a writ of mandamus may be an appropriate way to seek review of lower court discovery orders involving privilege claims, it is "an extraordinary remedy" that is appropriate only when "no other adequate means are available to remedy a clear usurpation of power or abuse of discretion by the district court. ... Mohawk has not shown that either occurred here."
Randall L. Allen, a partner with Alston & Bird who is defending Mohawk in the Carpenter case, said, "While we're disappointed in the decision reached by the 11th Circuit, it obviously has nothing to do with the merits of the case. We are confident that Mohawk will ultimately prevail in this litigation, and this discovery battle will not impact that result."
Carpenter's attorney, Thomas Munger of Atlanta's Munger & Stone, on Wednesday said they were pleased with the appellate ruling and eager to resume discovery in the case, which has been delayed by the interlocutory appeal. "Under this ruling, they [the defendants] will be required to produce documents and information that we feel will be very helpful to our case," Munger said. That information includes four memos that relate to Carpenter's complaint about illegal aliens, Munger said. Those memos, he added, are expected to confirm Carpenter's account of his dismissal.
The cases are Carpenter v. Mohawk Industries, Inc., No. 4:07-cv-0049 (N.D. Ga.); Williams v. Mohawk Industries, No. 4:04-cv-00003 (11th Cir.); and In Re Mohawk Industries, Inc., No. 07-15691-GG (11th Cir.)