FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 10-30247
MATTHEW GALE KRANE; JEFFREY D.C. No.
GREENSTEIN; CHARLES H. WILK, 2:08-cr-00296-
Defendants, RSM-1
and OPINION
QUELLOS GROUP LLC,
Intervenor-Appellant.
Appeal from the United States District Court
for the Western District of Washington
Ricardo S. Martinez, District Judge, Presiding
Argued and Submitted
October 4, 2010—Seattle, Washington
Filed October 29, 2010
Before: Sidney R. Thomas and Milan D. Smith, Jr.,
Circuit Judges, and David A. Ezra, District Judge.*
Opinion by Judge Thomas
*The Honorable David A. Ezra, United States District Judge for the
District of Hawaii, sitting by designation.
17951
17954 UNITED STATES v. KRANE
COUNSEL
J. Ronald Sim and Molly Margaret Daily, Seattle, Washing-
ton, Bennett Evan Cooper, Phoenix, Arizona, for intervenor-
appellant Quellos Group, LLC.
Jenny A. Durkan, Michael S. Morgan, Seattle, Washington,
for plaintiff-appellee United States of America.
OPINION
THOMAS, Circuit Judge:
This interlocutory appeal presents, inter alia, the question
of whether the Perlman rule survives Mohawk Industries, Inc.
v. Carpenter, 130 S.Ct. 599 (2009). Under these circum-
stances, we conclude that it does, and that we have jurisdic-
tion over this appeal. However, we also conclude that there is
no longer a justiciable controversy at issue, and we dismiss
the appeal as moot. See In re Grand Jury Proceedings Klay-
man, 760 F.2d 1490, 1491 (9th Cir. 1985) (“We have jurisdic-
tion under 28 U.S.C. § 1291. We agree that the controversy
is moot and do not reach the merits.”).
I
Intervenor-appellant Quellos Group, LLC (“Quellos”),
appeals the district court’s order compelling Skadden, Arps,
Slate, Meagher & Flom LLP (“Skadden”), Quellos’s former
UNITED STATES v. KRANE 17955
counsel, to comply with a pretrial subpoena duces tecum
issued in anticipation of the criminal trial of two former Quel-
los executives (the “defendants”). Quellos was not charged in
the criminal case. Quellos claims the materials the govern-
ment seeks are subject to its attorney-client privilege.
The criminal case underlying the present interlocutory
appeal alleges that the defendants violated federal law in cre-
ating a fraudulent tax shelter called “POINT.” A federal grand
jury indicted the defendants on eighteen counts, including
conspiring to defraud the Internal Revenue Service, tax eva-
sion, counseling false tax filings, wire fraud, and conspiring
to launder monetary instruments. The government alleges that
the defendants “developed and marketed” POINT on behalf of
Quellos.
Quellos intervened to assert attorney-client privilege
against a pretrial subpoena duces tecum served on Skadden in
April 2010. The government claims that key to the success of
the POINT transaction were opinion letters Quellos obtained
from “respected law firms” that assured POINT clients that
POINT was “more likely than not” to survive an IRS chal-
lenge. Before the district court, the government alleged that
the defendants consulted Skadden regarding the development
of POINT, with an eye toward having the firm produce an
opinion letter on the shelter’s legality. The district court per-
mitted the government to serve Skadden with a pretrial sub-
poena duces tecum. See Fed. R. Crim. P. 17(c). The
government sought all materials from January 1999 through
December 2000 relating to POINT, as well as materials pre-
pared during that period at the behest of certain Quellos
employees that related to tax opinions, financial instruments,
and partnerships.
Quellos informed Skadden that it was asserting attorney-
client privilege as to the materials the government sought.
Accordingly, Skadden produced a privilege log identifying
three categories of documents—one set of attorney billing
17956 UNITED STATES v. KRANE
records and two sets of handwritten attorney notes (the “Skad-
den Documents”)—as responsive to the subpoena and indicat-
ing that attorney-client privilege was being asserted as to all
of them. The government moved to compel and Quellos
moved to intervene. The district court granted Quellos’s
motion to intervene and Quellos filed an opposition to the
government’s motion to compel. The district court granted the
government’s motion to compel, and this interlocutory appeal
ensued. Upon Quellos’s motion, this court stayed the district
court’s order pending appeal.
Subsequently, the defendants entered into plea agreements
and the criminal trial was cancelled. Thereafter, the govern-
ment informed Quellos that it would continue to seek the
Skadden Documents. The government served a second sub-
poena duces tecum on Skadden, identical to the first in all rel-
evant respects, with a return date set for the defendants’
sentencing hearing.1 Thereafter, Quellos filed a “Notice of
Further Proceedings and Suggestion of Mootness” before this
court, which the government opposed.
II
[1] We have jurisdiction to entertain this interlocutory
appeal. “This court generally has jurisdiction to review only
‘appeals from all final decisions of the district courts.’ ”
United States v. Griffin, 440 F.3d 1138, 1141 (9th Cir. 2006)
(quoting 28 U.S.C. § 1291). Here, the “district court’s pretrial
order is not a final decision under § 1291 because it does not
‘end[ ] the litigation on the merits and leave[ ] nothing for the
court to do but execute the judgment.’ ” Id. (alterations in the
original) (quoting Van Cauwenberghe v. Biard, 486 U.S. 517,
521 (1988)). In general, interlocutory appellate review of an
order compelling compliance with a subpoena is available
1
Despite having served the second subpoena on Skadden, the govern-
ment has yet to file a motion with the district court seeking issuance of a
pre-sentencing subpoena duces tecum.
UNITED STATES v. KRANE 17957
only when the subpoenaed party has refused to comply and
appeals from the resulting contempt citation. See United
States v. Ryan, 402 U.S. 530, 532-33 (1971).
[2] Skadden has not been cited in contempt. However, we
maintain jurisdiction over this interlocutory appeal under the
so-called Perlman rule. See Perlman v. United States, 247
U.S. 7 (1918). Under Perlman, “a discovery order directed at
a ‘disinterested third-party custodian of privileged documents’
is immediately appealable because ‘the third party, presum-
ably lacking a sufficient stake in the proceeding, would most
likely produce the documents rather than submit to a con-
tempt citation.’ ” Griffin, 440 F.3d at 1143 (quoting United
States v. Austin, 416 F.3d 1016, 1024 (9th Cir. 2005)). Here,
Skadden is such a disinterested third party.2 Therefore, as both
parties agree, we have appellate jurisdiction under the Perl-
man rule.
[3] The Perlman rule survives the Supreme Court’s recent
decision in Mohawk Industries, Inc. v. Carpenter, 130 S.Ct.
599 (2009). In Mohawk, the Supreme Court held that “disclo-
sure orders adverse to the attorney-client privilege” are not
subject to interlocutory review under the Cohen “collateral
order” exception to the final-judgment rule of 28 U.S.C.
§ 1291. 130 S.Ct. at 609. See Cohen v. Beneficial Indus. Loan
Corp., 337 U.S. 541 (1949).
2
Were Skadden still representing Quellos, Skadden would be deemed an
interested party and the Perlman rule would not apply, but because Skad-
den is Quellos’s former counsel, Skadden is disinterested and we have
jurisdiction under Perlman. See In re Grand Jury Subpoena Issued to
Bailin, 51 F.3d 203, 205 (9th Cir. 1995) (“We have previously held that
the Perlman exception does not apply where the subpoena is directed at
an attorney who is currently representing the party moving to quash the
subpoena in connection with the grand jury proceedings. . . . On the other
hand, the denial of a motion to quash a subpoena directed at the movant’s
former attorney is appealable.” (citations omitted)); In re Grand Jury Sub-
poena Dated June 5, 1985, 825 F.2d 231, 237 (9th Cir. 1987).
17958 UNITED STATES v. KRANE
[4] Perlman and Mohawk are not in tension. When assess-
ing the jurisdictional basis for an interlocutory appeal, we
have considered the Perlman rule and the Cohen collateral
order exception separately, as distinct doctrines. See, e.g.,
Griffin, 440 F.3d at 1141-43; Austin, 416 F.3d at 1024 (after
assessing the collateral order doctrine’s potential applicabil-
ity, describing the Perlman rule as “an alternative jurisdic-
tional basis to review the District Court’s order”); United
States v. Amlani, 169 F.3d 1189, 1191-92 & 1192 n.2 (9th
Cir. 1999); see also United States v. Myers, 593 F.3d 338,
345-48 (4th Cir. 2010) (assessing the Perlman rule and
Mohawk’s effect on Cohen’s collateral order doctrine sepa-
rately).
[5] Mohawk forecloses interlocutory appeal of some dis-
trict court orders in reliance on the fact that “postjudgment
appeals generally suffice to protect the rights of litigants and
assure the vitality of the attorney-client privilege.” 130 S.Ct.
at 606; see also id. at 607-08 (surveying “several potential
avenues” by which “litigants confronted with a particularly
injurious or novel privilege ruling” might seek its immediate
review “apart from collateral order appeal,” including by not
complying with a disclosure order and then receiving, and
appealing, a contempt citation (citing, inter alia, Church of
Scientology of Cal. v. United States, 506 U.S. 9, 18 n.11
(1992) (citing Perlman, 247 U.S. 7))). In contrast, the Perl-
man rule applies only when the privilege holder is “ ‘power-
less to avert the mischief of’ ” a district court’s discovery
order because the materials in question are held by a disinter-
ested third party. Griffin, 440 F.3d at 1143 (quoting Perlman,
247 U.S. at 13). Such third parties, like Skadden here, may be
likely to forgo suffering a contempt citation and appealing in
favor of disclosure. See Austin, 416 F.3d at 1024. If Skadden
had produced the documents, Quellos would have been
deprived of the opportunity to challenge the subpoena. See
Federal Ins. Co. v. Maine Yankee Atomic Power Co., 311
F.3d 79, 81 (1st Cir. 2002) (production of documents by third
party renders objection moot). Further, in this case, neither the
UNITED STATES v. KRANE 17959
privilege holder nor the custodian of the relevant documents
are parties to the underlying criminal proceedings. Thus, for
all practical purposes, this appeal is Quellos’s only opportu-
nity to seek review of the district court’s order adverse to its
claims of attorney-client privilege.
[6] For all these reasons, we conclude that, under the Perl-
man rule and 28 U.S.C. § 1291, we have jurisdiction to hear
Quellos’s claims.3
III
Turning to the issues before us, we agree with Quellos’s
suggestion that the guilty plea of the defendants, and subse-
quent vacation of the trial, have rendered the trial subpoenas
moot. See Harter v. Iowa Grain Co., No. 98-7108, 1998 WL
796131, at *1 (D.C. Cir. Oct. 28, 1998) (per curiam) (dismiss-
ing as moot an appeal from an order compelling compliance
with a subpoena upon termination of the underlying proceed-
ing (citing El Paso v. Reynolds, 887 F.2d 1103, 1105-06 (D.C.
Cir. 1989) (per curiam) (appeal regarding trial subpoena is
moot when there is no pending trial))); Central Wyoming Law
Assoc. v. Denhardt, 60 F.3d. 684, 686 (10th Cir. 1995) (not-
ing that the subpoenas became moot when the criminal case
was settled); In re Steinberg, 837 F.2d 527, 527 n.1 (1st Cir.
1988) (noting that the conclusion of trial proceedings ren-
dered the appeal from a contempt citation issued for failure to
comply with a subpoena moot); United States v. Miller, 685
F.2d 123, 124 (5th Cir. 1982) (per curiam) (holding that the
conclusion of criminal trial proceedings rendered an appeal
concerning a pre-trial subpoena moot); United States v.
Christo, 614 F.2d 486, 495 n.10 (5th Cir. 1980) (retrial ren-
dered issues regarding quashal of subpoena moot).4
3
But cf. Wilson v. O’Brien, No. 10-2417, ___ F.3d ___, 2010 WL
3447650, at *2 (7th Cir. Sept. 3, 2010) (Easterbrook, C.J.) (questioning
Perlman’s vitality after Mohawk under different factual circumstances).
4
The government’s citations to United States v. Zolin, 491 U.S. 554
(1989), are unavailing. In a footnote, Zolin dismissed allegations of moot-
17960 UNITED STATES v. KRANE
[7] In this case, the district court authorized the govern-
ment “to issue a pretrial subpoena duces tecum” to Skadden
pursuant to Fed. R. Crim P. 17(c)(1). In order to grant a pre-
trial subpoena in a criminal case, the court must be persuaded
by the moving party:
(1) that the documents are evidentiary and relevant;
(2) that they are not otherwise procurable reasonably
in advance of trial by exercise of due diligence; (3)
that the party cannot properly prepare for trial with-
out such production and inspection in advance of
trial and that the failure to obtain such inspection
may tend unreasonably to delay the trial; and (4) that
the application is made in good faith and is not
intended as a general “fishing expedition.”
United States v. Nixon, 418 U.S. 683, 699-700 (1974) (foot-
note omitted).
[8] In granting the pre-trial subpoena duces tecum, the dis-
trict court necessarily engaged in a “discretionary, case-by-
case inquiry” in which the court considered these factors and
the purposes for which the government sought the Skadden
Documents. United States v. Bergeson, 425 F.3d 1221, 1225
(9th Cir. 2005); see Fed. R. Crim P. 17(c)(2). Primary among
the government’s reasons was obtaining evidence that the
defendants had engaged in fraud. Now that the defendants
have entered guilty pleas, developing evidence of their guilt
is no longer necessary. The defendants’ guilty pleas are “an
intervening event” by virtue of which this court “cannot grant
ness and noted that a “live controversy remain[ed]” as to a discovery dis-
pute notwithstanding the death of the alleged privilege holder. Id. at 557
n.3. But the controversy in Zolin was embodied in two separate proceed-
ings, one criminal and one civil, and only the former terminated with the
privilege-holder’s death. Id. Here, in contrast, there is only one proceed-
ing, and the only trial for which the subpoena was sought has now been
cancelled.
UNITED STATES v. KRANE 17961
any effectual relief.” Calderon v. Moore, 518 U.S. 149, 150
(1996) (internal quotes and citation omitted). To fashion “ef-
fectual relief” in this case, this court would have to assess the
effectiveness of a Rule 17 pretrial subpoena as against allega-
tions of privilege when there will be no trial.
[9] Therefore, we must dismiss this appeal as moot and
instruct the district court to vacate its order directing compli-
ance with the subpoena. See United States v. Munsingwear,
Inc., 340 U.S. 36, 39-40 (1950) (a district court decision that
becomes moot prior to the appellate court’s disposition must
be vacated); Harter, 1998 WL 796131, at *1 (applying Muns-
ingwear in the subpoena context); Miller, 685 F.2d at 124
(same); see also Idaho v. Horiuchi, 266 F.3d 979 (9th Cir.
2001) (en banc).
The government argues that it needs the Skadden Docu-
ments for sentencing. Indeed, a “pretrial” criminal subpoena
can be issued for a sentencing proceeding. See United States
v. Winner, 641 F.2d 825, 833 (10th Cir. 1981). However, such
a right is not unfettered, as the Tenth Circuit explained:
In such situations, the party seeking production must
show: (1) that the information is evidentiary and rel-
evant; (2) that it is not otherwise procurable in
advance through the exercise of due diligence; (3)
that the party seeking production cannot properly
prepare for post-trial motions or sentencing without
advance inspection; and (4) that the application is
made in good faith and is not simply intended as a
general “fishing expedition.”
Id (citing Nixon, 418 U.S. at 699-700). In short, if a pre-
sentencing subpoena is sought, the trial court must apply the
Nixon factors in the specific context of sentencing.
We do not opine on the propriety of the government’s sec-
ond subpoena duces tecum, but we note that the district court
17962 UNITED STATES v. KRANE
has not had the opportunity to apply the Nixon factors in the
sentencing context. The government concedes that the entry
of the defendant’s guilty pleas has caused its purposes for
seeking the Skadden Documents to shift. It no longer needs
the materials to establish guilt; rather, it would like to use the
materials to develop arguments at sentencing relevant to
application of the United States Sentencing Guidelines. Quel-
los argues that its objections to the production of the Skadden
Documents have also altered. The basis for the district court’s
order compelling compliance with the original subpoena
duces tecum no longer exists. Reliance on the original trial
subpoena would be improper.
IV
Therefore, we dismiss this appeal as moot, vacate the dis-
trict court’s order compelling compliance with the April 2010
subpoena duces tecum, and remand for further proceedings
consistent with this opinion. We need not, and do not, reach
any other question presented by the parties.
DISMISSED, VACATED, AND REMANDED WITH
INSTRUCTIONS.