In-House Counsel Denied Full Participation in Lawsuit

Federal Circuit says it can’t review order denying access to source code until the lawsuit it over

Modern Font Applications (MFA) wanted its in-house counsel to review source code of Alaska Airlines, a company it sued. The District Court of Utah found counsel to be a “competitive decisionmaker” and maintained the designation of source code as “Attorneys’ Eyes Only” information.

The Federal Circuit held that the order could not be reviewed until the lawsuit had concluded, effectively placing it beyond review. Judge Newman dissented.

The Federal Circuit noted that Congress had limited its jurisdiction to final decisions, such as those that end the litigation on the merits and leave nothing for the court to do but execute the judgment, and that the collateral order doctrine is a practical construction of the final judgment rule that permits review of not only judgments that “terminate an action,” but also the “small class” of collateral rulings that are appropriately deemed “final.”

The order regarding MFA's protective order issues did not fall within the collateral order doctrine, the Federal Circuit held. The order protected confidential information rather than disclose it, and MFA could still participate in the lawsuit with the benefit of outside counsel and experts. Although those consultants would drive up MFA’s litigation costs, the Federal Circuit did not feel the presence of some financial prejudice would qualify for an interlocutory appeal.

While the opinion appears to foreclose many interlocutory appeals of protective order issues (along with other pretrial discovery issues), it appears to leave open an appeal if the order called for disclosure of confidential information and the other requirements of the collateral order doctrine were satisfied.