Perlman and Collateral-Order Limits: No Interlocutory Privilege Appeal When the Custodian-Law Firm Is a Defendant Asserting Its Own Work Product

1. Introduction

In Pace O Matic Inc v. Eckert Seamans Cherin & Mellott LLC (3d Cir. Feb. 12, 2026) (nonprecedential), the Third Circuit dismissed an interlocutory appeal for lack of appellate jurisdiction in a discovery dispute implicating attorney-client privilege and work-product protection.

The underlying suit was brought by Pace-O-Matic, Inc. (“POM”), an electronic games manufacturer, against the law firm Eckert Seamans Cherin & Mellott LLC (“Eckert”) and two attorneys. POM alleged that Eckert, while serving as POM’s counsel, simultaneously represented POM’s competitor, Greenwood Gaming and Entertainment, Inc. d/b/a Parx Casino (“Parx”), without POM’s knowledge, and asserted claims including breach of fiduciary duty, fraud, and abuse of process, along with a request for declaratory relief preventing adverse representation. Parx was not a party to the merits litigation.

During discovery, POM moved to compel 120 documents withheld by Eckert on attorney-client privilege (claimed to belong to Parx and other clients) and work-product grounds. After in camera review, the Magistrate Judge ordered production of all but four documents; the District Court largely affirmed. Parx sought reconsideration or certification under 28 U.S.C. § 1292(b) and filed this appeal. The District Court stayed enforcement pending appeal. POM moved to dismiss for lack of appellate jurisdiction, presenting the core issue: whether Parx could immediately appeal a privilege/work-product disclosure order directed to Eckert.

2. Summary of the Opinion

The Third Circuit held it lacked jurisdiction under 28 U.S.C. § 1291 because the challenged discovery order was not a final decision. It rejected Parx’s attempt to invoke (1) the Perlman v. United States doctrine and (2) the collateral order doctrine. The appeal was dismissed, and the court declined to reach the merits of the privilege determinations.

3. Analysis

A. Precedents Cited

  • Bobrick Washroom Equip., Inc. v. Scranton Prods., Inc., 152 F.4th 507 (3d Cir. 2025)
    Used for the foundational proposition that an appellate court “always” may determine its own jurisdiction. This frames the opinion’s threshold posture: jurisdiction is addressed first, even if merits briefing exists.
  • Crystallex Int'l Corp. v. Bolivarian Republic of Venezuela, 24 F.4th 242 (3d Cir. 2022) (quoting Hall v. Hall, 584 U.S. 59 (2018))
    These authorities supply the standard definition of finality under § 1291: a decision that ends litigation on the merits and leaves nothing but execution of judgment. The court applies that standard to characterize the discovery order as non-final.
  • In re Grand Jury Subpoena, 745 F.3d 681 (3d Cir. 2014)
    Cited for two points: (i) discovery orders are generally not immediately appealable; and (ii) the usual path to immediate review is defiance of the order, a contempt finding, and then appeal of the contempt order. The Third Circuit highlights that Parx did not pursue this route.
  • Glenmede Tr. Co. v. Thompson, 56 F.3d 476 (3d Cir. 1995)
    Cited for mandamus as an alternative mechanism for interlocutory review of discovery rulings. The court notes Parx did not seek mandamus.
  • Perlman v. United States, 247 U.S. 7 (1918), and In re Grand Jury, 705 F.3d 133 (3d Cir. 2012)
    These cases define the Perlman exception: a privilege holder may immediately appeal an order directed at a “disinterested third party” likely to comply rather than risk contempt, thereby mooting later review by destroying the privilege.
  • In re Flat Glass Antitrust Litig., 288 F.3d 83 (3d Cir. 2002) (quoting In re Sealed Case, 141 F.3d 337 (D.C. Cir. 1998))
    This line supplies a crucial limitation: Perlman is confined to circumstances where custodian and privilege holder are different and the custodian is sufficiently “disinterested.” If the custodian has its own stake—especially in work product—it may be expected to resist disclosure (even to contempt), defeating Perlman’s premise.
  • In re Naranjo, 768 F.3d 332 (4th Cir. 2014), and In re Grand Jury Subpoena, 190 F.3d 375 (5th Cir. 1999)
    These out-of-circuit authorities reinforce that attorneys holding documents are not “disinterested” where they are targets/defendants or where assertions of work-product protection put the attorneys’ own interests at stake.
  • Saint-Jean v. Palisades Interstate Park Comm'n, 49 F.4th 830 (3d Cir. 2022)
    Provides the Third Circuit’s articulation of the collateral order doctrine’s three elements (conclusive determination, separateness from merits, and effective unreviewability after final judgment).
  • Mohawk Industries v. Carpenter, 558 U.S. 100 (2009)
    The Supreme Court’s rule: disclosure orders adverse to the attorney-client privilege do not qualify for collateral-order appeals. This is the principal barrier to Parx’s alternative jurisdictional theory.
  • United States v. Nocito, 64 F.4th 76 (3d Cir. 2023)
    Used to rebut Parx’s attempt to distinguish Mohawk on the ground that Parx is a non-party. The Third Circuit cites Nocito as applying Mohawk to interlocutory appeals by intervenors/third parties in privilege-related contexts.

B. Legal Reasoning

1) Finality baseline: discovery orders are not “final decisions” under § 1291

The court treats the appealed order as a standard discovery ruling—non-final and ordinarily reviewable only after final judgment. It emphasizes established alternatives (contempt appeal or mandamus) and notes Parx pursued neither.

2) Perlman doctrine: the “disinterested custodian” requirement fails when the law firm has its own stakes

Parx’s core Perlman theory was that it held the privilege, while Eckert—custodian of documents—was a third party likely to comply with the order, making immediate appeal necessary to prevent irreversible privilege loss.

The Third Circuit rejected that characterization because Eckert was not “disinterested”:

  • Eckert was a defendant accused of wrongdoing tied to the subject matter of the discovery request (“impermissible actions against POM”), so disclosure could increase Eckert’s litigation exposure.
  • Eckert faced potential professional consequences, including disciplinary risk, given the opinion’s reference to Pa. R. P. C. 1.7 (concurrent conflicts of interest).
  • Eckert asserted its own work-product protection. Under In re Flat Glass Antitrust Litig. and allied cases, once the custodian claims its own work-product privilege, it has “requisite incentives” to resist disclosure, undermining Perlman’s premise that the custodian will likely comply rather than incur contempt.

In effect, the court reframes Perlman as a narrow tool designed for “orphaned” privilege holders who cannot practically obtain review because the custodian will cave. Where the custodian is a motivated litigant with independent interests, the privilege holder’s appeal must follow ordinary interlocutory-review constraints.

3) Collateral order doctrine: Mohawk bars privilege-based interlocutory appeals, including by non-parties

Parx argued the collateral order doctrine should apply because it was a non-party privilege holder. The Third Circuit treated Mohawk Industries v. Carpenter as controlling and found no support for a party/non-party carve-out.

The court’s reliance on United States v. Nocito is significant: it indicates that, in the Third Circuit, Mohawk is read broadly to foreclose collateral-order review of adverse attorney-client privilege rulings even when the would-be appellant is not a merits party (e.g., intervenors).

C. Impact

Although labeled “NONPRECEDENTIAL,” the decision clarifies—at least as a practical signal to litigants—two jurisdictional pressure points common in modern privilege disputes involving third parties, law firms, and in camera review:

  • Perlman is especially hard to invoke when the custodian is the privilege holder’s counsel and is also a litigation target. If the law firm is a defendant (or otherwise has reputational, disciplinary, or liability exposure) and asserts work product, courts may deem it sufficiently interested to defeat Perlman.
  • Non-party status does not, by itself, revive collateral-order jurisdiction after Mohawk. Privilege holders should expect to rely on alternative mechanisms (e.g., mandamus in exceptional cases, protective orders, sealing, clawback arrangements, contempt paths where appropriate) rather than immediate appeals.
  • Discovery disputes in attorney conflict-of-interest litigation are likely to remain in the trial court until final judgment. This increases the leverage and importance of magistrate practice, in camera review, and narrowly tailored privilege logs—because appellate correction may come late, if at all.

4. Complex Concepts Simplified

  • “Final decision” (28 U.S.C. § 1291): generally, you can appeal only after the case is over in the district court. Routine discovery orders usually don’t qualify.
  • Attorney-client privilege: protects confidential communications between lawyer and client made for legal advice. If disclosed, the protection can be lost.
  • Work-product doctrine: protects an attorney’s litigation preparation materials (mental impressions, strategies, certain investigations). It is often partly the lawyer’s own protection, not only the client’s—so the lawyer may have an independent interest in resisting disclosure.
  • In camera review: the judge privately reviews documents to decide if privilege/work product applies.
  • Perlman doctrine: allows immediate appeal when a privilege holder’s documents are held by a truly disinterested third party who will likely comply with a disclosure order rather than risk contempt—making later review impossible.
  • Collateral order doctrine: a narrow exception allowing immediate appeal of certain non-final orders. After Mohawk, adverse attorney-client privilege orders generally do not qualify.
  • Pa. R. P. C. 1.7 (concurrent conflict of interest): a professional conduct rule limiting representation when the lawyer’s duties to one client are directly adverse to another client or materially limited by other responsibilities or interests.

5. Conclusion

The Third Circuit’s dismissal rests on a strict application of interlocutory jurisdiction limits in privilege disputes. The court held that Perlman v. United States does not permit a non-party privilege holder’s immediate appeal when the document custodian—here, the law firm—has its own strong incentives to resist disclosure (including being a defendant and asserting work-product protection). It further held that Mohawk Industries v. Carpenter forecloses collateral-order appeals from adverse privilege rulings without a special non-party exception. The practical takeaway is that privilege holders embroiled in discovery involving an interested attorney-custodian should plan for trial-court-focused protection strategies rather than expecting immediate appellate review.