

                UNITED STATES COURT OF APPEALS
                    FOR THE FIRST CIRCUIT
                                         

No. 95-8026

                  UNITED STATES OF AMERICA,

                     Plaintiff, Appellee,

                              v.

                  JOHN W. BILLMYER, ET AL.,

                    Defendants, Appellees.
                                    

             AMERICAN HONDA MOTOR COMPANY, INC.,

                          Appellant.
                                        

No. 95-1393

                  UNITED STATES OF AMERICA,

                     Plaintiff, Appellee,

                              v.

                     JOHN W. BILLMYER and
                       DENNIS JOSLEYN,

                    Defendants, Appellees.
                                   

                         LYON &amp; LYON,

                          Appellant.
                                         

        APPEALS FROM THE UNITED STATES DISTRICT COURT

              FOR THE DISTRICT OF NEW HAMPSHIRE

     [Hon. Joseph A. DiClerico, Jr., U.S. District Judge]                                                                    

                                         

                            Before

                    Boudin, Circuit Judge,                                                     

                Bownes, Senior Circuit Judge,                                                        

                and Stearns,* District Judge.                                                        

                                         

Steven M. Gordon  with whom  Shaheen, Cappiello,  Stein &amp;  Gordon,                                                                             
Richard A. Gargiulo, Gargiulo, Rudnick &amp; Gargiulo, Peter G. Callaghan,                                                                             
Richard  J. Inglis  and Marielise  Kelly were  on brief  for appellant                                                
American Honda Motor Company, Inc.
Jeremiah T.  O'Sullivan with whom  Christopher H.M. Carter,  Nancy                                                                              
W. Geary and Choate, Hall &amp; Stewart were on brief for appellant Lyon &amp;                                           
Lyon.
Paul Twomey with  whom Mark L.  Sisti was on brief  for defendant,                                                 
appellee Dennis Josleyn.

                                         

                        June 14, 1995
                                         

               

*Of the District of Massachusetts, sitting by designation.

     BOUDIN, Circuit Judge.  Two former employees of American                                      

Honda Motor  Company,  defendants John  Billmyer  and  Dennis

Josleyn, have  been on  trial in  the district  court charged

with RICO, conspiracy and  mail fraud violations arising from

an alleged commercial bribery scheme involving Honda dealers.

The defendants were indicted by a federal grand jury on March

11,  1994, and  trial began  in February  1995.   About three

weeks into the trial, Josleyn  served a subpoena duces  tecum

on American Honda, pursuant to Fed. R. Crim. P. 17(c).  It is

this  demand that gave rise to the present proceeding in this

court.

     The  Josleyn  subpoena   demanded  that  American  Honda

produce inter alia  a file maintained  by Sherry Cameron,  an                              

American  Honda  vice  president, that  consists  largely  of

information  received  from  the company's  outside  counsel,

notes  taken by  her  during conversations  with counsel  and

memoranda reflecting such information.  American Honda  moved

to quash the subpoena  on attorney-client privilege and work-

product  grounds.  Its former  law firm, Lyon  &amp; Lyon, joined

the  motion, asserting that certain of the documents were its

work product and protected under the work-product doctrine.

     The  district  court found  that  Josleyn  had made  the

threshold  showing required under  United States  v. LaRouche                                                                         

Campaign, 841 F.2d 1176 (1st Cir. 1988), to warrant in camera                                                                         

review  of the  documents in  the Cameron  file.   After some

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wrangling, American Honda submitted  the file to the district

court,  but appealed the court's LaRouche ruling.  This Court                                                     

dismissed  that appeal on April  4, 1995, on  the ground that

the district court's order  was not final.  United  States v.                                                                      

Billmyer, No. 95-1324, 95-1325, slip op. at 1 (1st Cir., Apr.                    

19,  1995).   We  recognized that  American Honda  might have

difficulty  appealing any  subsequent  orders  rejecting  its

privilege claims  because it would no  longer have possession

of the files and  could not automatically provoke a  contempt

proceeding.  Id.                            

     The district judge then conducted an in camera review of                                                               

the Cameron  file and issued  a 40-page order  appraising the

documents page by page.   Although he found much of  the file

to  be protected  either by  attorney-client privilege  or as

work product, the judge found that some of the documents were

unprotected,  either  because  neither  doctrine  applied  or

because the privilege had been  waived.  American Honda  then

moved  for the  return of  the sealed  documents, so  that it

could  test  the rulings  in a  contempt proceeding,  but the

district court denied the motion and made ready to reveal the

disputed materials to the defendants.

     American  Honda and  Lyon  &amp; Lyon  then filed  immediate

appeals,  challenging   the   proposed  disclosure   of   the

documents; in the alternative,  writs of mandamus were sought

if the appeal were dismissed.  American Honda objected to all

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of  the disclosures while Lyon &amp; Lyon restricted its claim to

one  document.  At  appellants' request, this  court on April

19, 1995, stayed the district court's order pending expedited

review.    The district  court  then  suspended the  criminal

trial,  awaiting a ruling by  this court.   Briefs were filed

here on April 28, 1995, and oral argument was heard on May 1,

1995.

     On May 4, 1995, this court decided the case and released

a  brief  order  in advance  of  this  opinion,  so that  the

recessed criminal  trial could  be resumed immediately.   Our

order  stated  that  the  district  court's  order  directing

disclosure  of the  disputed  materials did  not qualify  for

review either under the  collateral order doctrine or through

mandamus.   We directed  entry of  judgment, issuance  of the

mandate  forthwith, and  dissolution  of the  April 19  stay.

This opinion is to  explain the reasons for our  dismissal of

the appeals and denial of mandamus.

     The first  question is whether American Honda and Lyon &amp;

Lyon may appeal from the discovery  order.  Surprisingly, the

law in this area is more tangled than one would expect, given

the  recurring nature of the problem.  From the standpoint of

the proceeding itself--a  criminal trial--there is no  "final

decision"  until  the trial  ends.    Corporacion Insular  de                                                                         

Seguros  v.  Garcia,  876  F.2d  254,  256  (1st  Cir.  1989)                               

("Garcia").  But the  collateral order doctrine recognized in                    

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Cohen v. Beneficial Indus.  Loan Corp., 337 U.S.  541, 545-47                                                  

(1949), provides one means for examining issues that arise in

the course of a continuing proceeding; failing that, mandamus

remains a  possibility.   Appellants invoke both  concepts in

this court.

     At the threshold Josleyn  urges dismissal because a non-

party normally  cannot appeal  an order enforcing  a subpoena

but must provoke a contempt order as the basis for an appeal.

United States v. Ryan, 402 U.S.  530 (1971).  That path is no                                 

longer  open  to  American  Honda  and may  never  have  been

available to Lyon  &amp; Lyon.   Given the  judicial interest  in

allowing  a  trial court  to  inspect  disputed documents  in                                                                         

camera,  we  decline  to  hold  that  a  holder  of documents                  

forfeits appeal  rights otherwise available by  allowing such

an inspection.

     Conversely, we  do not  think that the  district court's

discovery order becomes a "final decision" under  28 U.S.C.  

1291 simply  because contempt is  not available as  a vehicle

for review.  Perlman v. United States, 247 U.S. 7, 13 (1918),                                                 

and Cobbledick v.  United States, 309 U.S. 323  (1940), might                                            

once  have lent some support to such a theory; but Cobbledick                                                                         

was  cited by  the Supreme Court  in adopting  the collateral

order  doctrine, Cohen,  337 U.S.  at 546,  and the  Perlman-                                                                         

Cobbledick line  of authority  appears to have  been absorbed                      

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into  the collateral order doctrine.  Garcia, 876 F.2d at 258                                                        

n.3.1   See also In re  Oberkoetter, 612 F.2d  15, 17-18 (1st                                               

Cir. 1980).  

     We turn  now to  the  collateral order  doctrine as  the

primary basis  for possible  jurisdiction in  this case.   In

this circuit, to qualify for immediate appeal as a collateral

order, an order must involve

     (1) an issue essentially unrelated to the merits of
     the  main  dispute,   capable  of  review   without
     disrupting   the  main   trial;   (2)  a   complete
     resolution   of  the   issue,  not   one  that   is
     `unfinished'   or   `inconclusive';  (3)   a  right
     incapable  of  vindication  on  appeal  from  final
     judgment;  and  (4)  an  important   and  unsettled
     question of controlling law, not  merely a question
     of  the   proper  exercise  of  the  trial  court's
     discretion.

United States v. Sorren, 605 F.2d 1211, 1213 (1st Cir. 1979).                                   

In addition, the Supreme  Court has warned that interlocutory

appeals "are  especially inimical  to the effective  and fair

administration of the criminal law."  Abney v. United States,                                                                        

431 U.S. 651, 657 (1977).

     The  instant  appeal   meets  the  first  three   listed

requirements.  The privilege and work product issues posed by

                                                    

     1The  Fifth Circuit  has so  held in  circumstances very
similar to our  own case,  In re grand  Jury Proceedings,  43                                                                    
F.3d  966, 969-70  (1981),  although the  Third Circuit  some
years  before   treated  Perlman-Cobbledick  as   a  separate                                                       
doctrine.   United States v.  Cuthbertson, 651 F.2d  189, 194                                                     
(3d  Cir.),  cert. denied,  454  U.S. 1056  (1981).   Further                                     
uncertainty is  added by a  brief and ambiguous  reference in
Church of Scientology v.  United States, 113 S. Ct.  447, 452                                                   
n.11 (1992), not cited to us by anyone.

                             -7-                                         -7-

the  discovery  order have  little to  do  with the  guilt or

innocence of  Billmyer and Josleyn; and  the district court's

order is  a complete resolution of  those issues.  As  to the

third prong, any disclosure that occurs now will be virtually

unreviewable  after  a final  judgment.   In  the case  of an

acquittal,  no appeal  can  ensue,  and  in  the  case  of  a

conviction,  any  appeal would  be  taken  by defendants  who

either sought or acquiesced in the disclosure.

     The  remaining, and most  daunting, question  is whether

this  case presents  a  distinct and  important legal  issue.

Although not  all  circuits employ  such  a test,  it  enjoys

considerable  support.  See, e.g., 15A C. Wright, A. Miller &amp;                                             

G. Cooper, Federal Practice and Procedure    3911, 3911.5 (2d                                                     

ed. 1992) (citing  case law); see also  National Super Spuds,                                                                         

Inc. v. New York  Mercantile Exchange, 591 F.2d 174,  180 (2d                                                 

Cir.  1979) (Friendly,  J.).   Ordinarily, a  discovery order

will  meet the legal-importance  test only  if it  presents a

claim  of clear-cut legal error and not merely a challenge to

the   district  judge's   factual   determinations   or   the

application of a settled legal rule to the particular facts.

     The  requirement of  an important  legal issue  rests in                                                         

part on the increased  likelihood that such an appeal  may be

fruitful;  legal rulings  are  reviewed de  novo, while  more                                                            

deferential standards of review  apply to factual findings or

application of known legal  rules to specific facts.   See In                                                                         

                             -8-                                         -8-

re Extradition of  Howard, 996 F.2d  1320, 1327-28 (1st  Cir.                                     

1992).   It is  not easy  to justify the  interruption of  an

ongoing  proceeding,  especially   a  criminal  trial,  where

affirmance is  very likely because the issues  are ones where

the  district court is reviewed only for clear error or abuse

of discretion.

     In addition,  where the appeal occurs  during a criminal

trial,  a  mistrial  may  result  if  the appeal  process  is

prolonged, raising  both  speedy trial  and  double  jeopardy

concerns.   United States v. Horn, 29 F.3d 754, 768 (1st Cir.                                             

1994).  Were  every factual dispute or law  application issue

posed by  a privilege claim  open to interlocutory  review in

mid-trial,  it  could  take  weeks to  secure  the  necessary

transcripts, learn background facts  that the trial judge has

absorbed  over many  months,  and then  replicate and  review

district court rulings.

     Admittedly,  this collateral  order  test does  create a

possibility that disclosure of documents may be ordered based

on a mistake of  fact or a misapplication of settled law, and

the error may escape review.  But litigation  is full of such

instances:     a  temporary   restraining  order   may  cause

irreparable  harm;  burdensome  discovery  may  be  compelled

before  review  can be  secured;  a  witness whose  claim  of

privilege is overruled may  answer rather than risk contempt.

The finality  rule  reflects  a  compromise  among  competing

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interests.   Given the protection afforded  by the collateral

order  doctrine and mandamus,  we think that  there is little

chance of any grave miscarriage of justice.

     No  one  can make  a  seamless web  out  of  all of  the

decisions  on  collateral  orders.    The  circuits  are  not

unanimous in every nuance, see 15A Wright, supra,   3911, and                                                            

even  within  circuits,  a  wider  scope  of  review  may  be

available  for some   interlocutory orders, such  as an order

denying a claim of immunity or an order imposing sanctions on

a non-party for  contempt.  E.g.,  Lowinger v. Broderick,  50                                                                    

F.3d 61,  64 (1st  Cir. 1995)  (immunity).   But we  have set

forth the  collateral order  doctrine in  this circuit  as it

applies  to  discovery  orders,  and  must  respect  our  own

precedents. 

     Turning to the merits, we conclude that the  claims made

in these attempted appeals  do not reveal any clear  error of

law.   The district judge  at the outset  accurately laid out

the rules  applicable to  the  attorney-client privilege  and

work-product protection, including  the pertinent  exceptions

and  waiver.   He reviewed  the  documents virtually  line by

line, finding  some pages  or portions  to be  protected from

disclosure  and  some unprotected.    Most  of the  arguments

raised on appeal are patently  attacks on factual findings or

on the application  of legal  standards to those  facts.   To

review each ruling would  require a time-consuming effort and

                             -10-                                         -10-

entail  a delay all out of  proportion to any likelihood of a

reversal. 

     But American Honda does raise one issue that involves an

arguable claim  of legal  error.   In  examining the  Cameron

"legal  file,"  the  district  judge concluded  that,  as  to

certain  portions of  the  materials  protected by  attorney-

client privilege,  American Honda  had waived  the privilege.

American Honda says that the district judge misunderstood the

legal  standard  for  an  implied waiver  of  the  privilege.

Specifically, the district court found that 

     American Honda has  disclosed to the  United States
     government considerable portions of the information
     acquired  through  internal investigation  into the
     conduct   comprising   the   charges  against   the
     defendants  in  this  case. .  .  .    In light  of
     American Honda's disclosure of information acquired
     through  internal  investigation,  the court  finds
     that  American Honda has waived the attorney-client
     privilege  with  respect  to  documents  containing
     information      acquired     through      internal
     investigation.

     The court then listed the  portions of the materials  as

to which American Honda  had waived the privilege.   American

Honda now contends that  waiver results only when  the client

reveals privileged communications to  a third party, not when

the client reveals "the  information" contained in privileged

communications.    American Honda  argues  that  the district

court clearly  erred by finding  a waiver from  the company's

disclosure  to the  government  of facts,  not of  privileged                                                    

                             -11-                                         -11-

communications.  E.g., Upjohn Co. v.  United States, 449 U.S.                                                               

383, 395 (1980).

     The  district  judge  may  have  meant  that  privileged

communications were disclosed to the government and therefore                          

privilege as to  those topics was waived.  On the other hand,

the judge  twice referred  to American Honda's  disclosure of

"information,"  and  did  not   indicate  that  any  specific

privileged  documents had been  disclosed.  So  the judge may

have found waiver because the substance of the communications

had  already  been revealed  to  the  government by  American

Honda.  If the court's ruling embraced this latter theory, we

agree that  a legal issue  is raised, but  do not  agree that

such a theory constitutes legal error.2

     To put the matter in context, we note that the documents

as to  which waiver was found appear  to be pages or portions

of pages setting forth information gathered by Lyon &amp; Lyon at

the behest of American Honda  from sources whose identity  is

not  revealed.    The  information  consists  importantly  of

allegations or evidence as to payments  made by Honda dealers

to  Honda employees.  The documents, prepared by Lyon &amp; Lyon,

Cameron  or  others,  reflect   the  communication  of  these

                                                    

     2In noting the ambiguity,  we intend no criticism.   The
district  judge's   careful  analysis,  detailed   order  and
document-by-document  review--undertaken in  the middle  of a
complex trial--were altogether admirable.

                             -12-                                         -12-

allegations  or evidence  to Cameron  or other  executives of

American Honda.

     It  is  fair to  read the  district  court's order  as a

finding that the same allegations or evidence were thereafter

disclosed by American Honda to government investigators.  The

district  court  does  not   describe  means  of  disclosure;

appellants' briefs shed no light upon the matter, but also do

not  contest the finding that such a disclosure occurred.  We

thus  take the case as  one in which  American Honda received

factual information  from its counsel,  disclosed those facts

to  the government, and  now seeks to  withhold the documents

that reflect the original  communication of that  information

to American Honda.

     One might  ask why  there is  any basis  for a  claim of

privilege  in  the first  instance,  since  the privilege  is

primarily designed to protect communications by the client to                                                                      

the lawyer in  order to procure  legal advise.   See VIII  J.                                                                

Wigmore,  Evidence    2320,  at  628-29  (J. McNaughton,  ed.                              

1961).   Possibly some of the information was provided to the

law  firm by American Honda employees.  Or the district court

may have  deemed the material privileged  (aside from waiver)

because  the  lawyer's  communications  to   the  client  are

secondarily protected as needed to prevent inferring what the

client said to the lawyer.  Id.                                           

                             -13-                                         -13-

     In  all  events,  the question  here  is  the effect  of

American  Honda's  disclosure  of  this  information  to  the

government.  Wigmore tells us that "[j]udicial decision gives

no  clear answer  to th[e] question"  of what  constitutes "a

waiver by implication," and that only a few general instances

are  well  settled.   Wigmore,  supra    2327, at  635.   For                                                 

example, a client's offer of his own testimony as to specific                                                          

facts does not waive the  privilege as to his  communications

with  his attorney on  the same subject, id.    2327, at 638;                                                        

but  this  rule protects  testimony  given by  the  client in                                                                         

court, in order that the right  to testify should not come at                 

the price of one's ability to consult privately with counsel.

Id.    2327, at 637.   Admitting that  "authority is scanty,"               

McCormick cites a number of cases in which disclosures by the

client, other than  those involving in-court testimony,  have

been  held to be a waiver.   I McCormick on Evidence   93, at                                                                

377-48 (J. Strong ed., 4th ed. 1992).

     Appellants   respond   that   the   privilege   protects

"communications, not facts," Upjohn, 449 U.S. at 395, so that                                               

American Honda  cannot have  waived the privilege  as to  the

notes or memoranda merely by  revealing to the government the

allegations or  evidence recorded in the  notes or memoranda.

The distinction is useful in some circumstances--say, where a

party tries to refuse to testify about an automobile accident

on  the ground that he gave his counsel a private description

                             -14-                                         -14-

of  the  same accident.    But, once  again,  the distinction

appears to have little to do with the present problem.

     Here, the  gist of the  matter is that  counsel informed

the  client of  detailed evidence and  allegations concerning

possible bribes  of its  employees, and  the client  chose to

make this same information available to the government.  What

is sought by the defense in the criminal trial is merely  the

recordations by or for the  client of this same  information.

The information  now having been  disclosed by the  client to

the government, it  is unclear what  damage to the  attorney-

client  privilege  can occur  from  making the  corresponding

portions of the file available.  the district court carefully

limited the disclosures to the factual allegations, excluding

any commentary on their legal implications.

     Indeed, American Honda's disclosure to the government of

the  factual information received from  its law firm not only

reveals that  information, and American  Honda's knowledge of

it, but makes an  inquiry into the  source and basis for  the

information hard to avoid.   A risk of unfairness  is evident

where  information is provided to  one side in  a case (here,

the United States)  and then  an inquiry into  its origin  is

shielded by a claim of privilege.   In a variety of contexts,

the affirmative  use of privileged information  has been held

to  be a waiver of  privilege.  See  P. Rice, Attorney-Client                                                                         

                             -15-                                         -15-

Privilege in the United States   9.34, at 711,    938, 9.40                                            

950, at 752-53 (1993) (collecting cases).

     Given the disclosure to the government, the waiver label

is presumptively apt.   Waiver doctrine has only a  few hard-

edged rules; as to many permutations,  it is a fluid body  of

precedent  reflecting a  variety  of  concerns, including  an

insistence on  real confidentiality and limitations  based on

fairness.     See   "Developments  in   the   Law--Privileged                             

Communications," 98 Harv. L.  Rev. 1450, 1629-32 (1985).   In                                              

this instance, confidentiality has largely been dissolved  by

American Honda's own actions.

     One argument not made by appellants is that, as a matter                                 

of policy, private revelations  to the government of possible

criminal conduct  ought not waive  the privilege as  to third

parties.   The  concern,  of  course, is  to  encourage  such

revelations.  The  general tendency  of the law  is to  treat

waivers  as an  all-or-nothing  proposition, e.g.,  ALI Model                                                                         

Code  of Evidence, Rule 231, comment (a) (1942); but there is                             

a  trace  of  support  for  limited  waivers  in  some  cases

involving   confidential   disclosures  to   the  government.

Diversified Industries,  Inc. v. Meredith, 572  F.2d 606 (8th                                                     

Cir. 1977).  See generally Rice, supra, 9.86-9.87 (collecting                                                  

and analyzing the cases).

     On  the other hand, it  is a serious  matter to withhold

from a defendant in a criminal case details that have already

                             -16-                                         -16-

been made available  to the government  by a person  claiming

the  privilege.  If there  were ever an  argument for limited

waiver, it  might well  depend importantly  on just  what had

been disclosed to the  government and on what understandings.

Without intending  to preclude such  an argument in  a future

case, we think that it  is enough in this one to  say that no

such claim of limited waiver has been argued to us.

     This discussion also disposes of the alternative request

for mandamus.   Mandamus is a discretionary writ available in

extraordinary  circumstances  to   redress  grievous   error.

Garcia,  876 F.2d  at 260.   While  it is  not restricted  to                  

errors of law, it does require that the error be manifest and

the burden of  showing manifest error  is upon the  applicant

for the writ.  No such legal error has been  shown and, as to

the  district  court's   fact-findings  and  applications  of

settled rules to particular  facts, it is enough to  say that

we have found no manifest error.

     Judgment has  been previously  entered.  We  direct that

this opinion be filed  and transmitted to the  district court

and the  parties to the appeal.  Each side shall bear its own

costs.

     It is so ordered.                                 

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