Federal Deposit Insurance Corporation, as Successor in Interest to New England Merchants Leasing Corporation, Etc. v. Ogden Corporation

202 F.3d 454, 46 Fed. R. Serv. 3d 772, 2000 U.S. App. LEXIS 1657
CourtCourt of Appeals for the First Circuit
DecidedFebruary 7, 2000
Docket99-1788
StatusPublished
Cited by97 cases

This text of 202 F.3d 454 (Federal Deposit Insurance Corporation, as Successor in Interest to New England Merchants Leasing Corporation, Etc. v. Ogden Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Federal Deposit Insurance Corporation, as Successor in Interest to New England Merchants Leasing Corporation, Etc. v. Ogden Corporation, 202 F.3d 454, 46 Fed. R. Serv. 3d 772, 2000 U.S. App. LEXIS 1657 (1st Cir. 2000).

Opinion

SELYA, Circuit Judge.

The district court ordered a law firm, Dickstein, Shapiro, Morin & Oshinsky, LLP (“Dickstein”), not itself a party to the underlying action, to produce documents that the appellants, Ogden Corporation and Ogden Martin Systems of Haverhill, Inc. (collectively, “Ogden”), claim are within the attorney-client privilege. The ap-pellee, Federal Deposit Insurance Corporation (“FDIC”), asserts that the so-called “joint client exception” trumps the privilege and, thus, legitimates the order. After providing necessary context, surmounting a jurisdictional obstacle, and charting the parameters of both the privilege and the exception, we affirm the turnover order.

I. BACKGROUND

In 1978, Citicorp North America, Inc. (“Citicorp”) and New England Merchants Leasing Corp. (“NEMLC”) formed a general partnership (“SBR Associates”) to develop a refuse-to-energy facility in Haver-hill, Massachusetts. Each nominated a wholly-owned subsidiary to serve as a general partner: CIC Omega Lease, Inc., for Citicorp, and NEMLC Alpha, Inc., for NEMLC. In the early 1980s, the partners (hereinafter, with their parents and successors, sometimes collectively called “the banks”) designed and built the facility and leased it to an independent operator, Refuse Fuels, Inc. (“RFI”), on condition that RFI purchase insurance policies (“the efficacy insurance”) to protect against operational glitches leading to shortfalls in revenue.

The hedge proved prudent; from the moment that the facility went on line, it was plagued with problems. In an effort to protect their investment, the banks terminated the arrangement with RFI and brought Ogden into the venture. The details of the transaction are unimportant at this juncture, save to say that by virtue of a series of complicated agreements, Ogden acquired the banks’ interests in SBR Associates and assumed sole control of the business on December 23,1986.

The operational difficulties that the facility encountered had given rise to claims under the efficacy insurance, and the parties sought to tie up this loose end. They entered into a specific agreement (“the restated assignment agreement”) with regard to those claims. Under that agreement, Ogden was to direct the recovery effort against the efficacy insurers and pay portions of the realized proceeds (net of fees and expenses) to the banks. Betimes, Ogden would keep the banks apprised of progress. Finally, the agreement contained a mechanism whereby the banks could redeem Ogden’s interest and take direct control of the recovery effort should Ogden wish to consummate a settlement with the efficacy insurers that the banks deemed unacceptable.

Ogden retained Dickstein to handle the claims against the efficacy insurers. Meanwhile, it continued to operate the Haverhill facility, incurring additional losses (which furnished a basis for further insurance claims). The facility shut down *458 sometime in 1990. On January 6, 1991, NEMLC’s parent company, Bank of New England, N.A., was adjudged insolvent, and the FDIC was appointed as receiver (thus becoming, in effect, successor in interest to NEMLC and NEMLC Alpha).

By mid-1996, Dickstein had recovered $18,700,000 from the efficacy insurers. On August 2, 1996, a Dickstein partner, Leslie Cohen, wrote to the banks, notifying them of their allocable shares of the funds collected. Both Citicorp and the FDIC protested the proposed, allocation, arguing that they were being shortchanged and that the terms of the restated assignment agreement were not being followed. Each demanded substantially more money. 1 Ogden balked. Dickstein continued to prosecute the underlying litigation — at the time the parties submitted their appellate briefs, the total amounts recovered on the insurance claims exceeded $60,000,006— but it refused to become entangled in the internecine squabble over the allocation of the proceeds.

Citicorp and the FDIC sued Ogden in the district court for breach of contract and unfair business practices. In due course, the FDIC served Dickstein with a subpoena duces tecum that, inter alia, commanded production of communications between it and Ogden. Dickstein objected, citing the attorney-client privilege. The FDIC moved to compel, contending that no privilege attached because Dickstein had represented Ogden and the banks jointly in connection with the litigation against the efficacy insurers. The district court granted this motion by endorsement. Ogden appealed the order,, and the district court stayed production pending resolution of the appeal.

II. APPELLATE JURISDICTION

There is a threshold issue here. Ogden premises appellate jurisdiction on 28 U.S.C. § 1291, which provides for jurisdiction over appeals taken from “final” decisions and orders of the district courts. Since the order from which Ogden purports to appeal does not conclude the litigation on the merits, it is not final in the stereotypical sense. See United States v. Metropolitan Dist. Comm’n, 847 F.2d 12, 14 (1st Cir.1988). Nevertheless, some orders that do not themselves end litigation are deemed final (and thus immediately appealable) under the collateral order doctrine. See Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546-47, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949).

To qualify for this sanctuary, an order must conclusively resolve an important question distinct from the merits and yet be unreviewable, as a practical matter, in a conventional end-of-case appeal. See Cunningham v. Hamilton County, 527 U.S. 198, 119 S.Ct. 1915, 1920, 144 L.Ed.2d 184 (1999); Swint v. Chambers County Comm’n, 514 U.S. 35, 42, 115 S.Ct. 1203, 131 L.Ed.2d 60 (1995). The compass of this exception is “narrow,” Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 712, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996), and discovery orders generally are not thought to come within it. 2 See Insurers Syndicate for the Joint Underwriting of Medico- *459 Hosp. Prof'l Liab. Ins. v. Garcia, 864 F.2d 208, 210 (1st Cir.1988).

One reason that most discovery orders do not fall within the collateral order exception is because they do not meet the “otherwise effectively unreviewable” requirement; the party resisting the discovery order “can gain the right of appeal ... by defying it, being held in contempt, and then appealing from the contempt order, which would be a final judgment as to [him].” Corporacion Insular de Seguros v. Garcia, 876 F.2d 254, 257 (1st Cir.1989).

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202 F.3d 454, 46 Fed. R. Serv. 3d 772, 2000 U.S. App. LEXIS 1657, Counsel Stack Legal Research, https://law.counselstack.com/opinion/federal-deposit-insurance-corporation-as-successor-in-interest-to-new-ca1-2000.