Showing 217 of 217 results

Chapter: 22.3

Case Name: Olson v. Shawnee Cnty. Bd. of Comm'rs, Case No. 12-2084-JTM-KGG, 2013 U.S. Dist. LEXIS 38442, at *6, *6-7 (D. Kan. Mar. 20, 2013)
(finding an employment-related investigation was not protected by the privilege; "[A]fter counsel passes along responsibility for the investigation, the investigation occurs and a report is compiled by the investigator. Counsel then shares the contents of that report with the Sheriff."; "While the Court anticipates that 'legal guidance' occurs during this conversation, that does not make the contents of the underlying report -- which counsel did not draft and for which counsel did not conduct the underlying investigation -- privileged.")

Case Date Jurisidction State Cite Checked
2013-05-20 Federal KS B 3/14

Chapter: 22.4

Case Name: McSparran v. Commonwealth of Pennsylvania, Civ. No. 1:13-CV-1932, 2016 U.S. Dist. LEXIS 19993 (M.D. Pa. Feb. 18, 2016)
(allowing the plaintiff to ask the government agency's investigator about the logistics of her investigation into sexual discrimination allegations, and also ask her about the facts she uncovered; dealing first with attorney-client privilege issues; "[T]he information at issue is not a communication. Plaintiff wants disclosure of the steps Moseley took during her investigation -- what she did, who she talked to, where she looked -- not disclosure of what agency counsel told her. Thus, Plaintiff seeks disclosure of underlying facts, and those facts do not become shielded under attorney-client privilege simply because they may have been included in a communication between Moseley and counsel. Id."; "Accordingly, we will deny Defendants' motion for protective order. Plaintiff may inquire into the steps Moseley took during the course of her investigation. She may also inquire into the facts Moseley learned during that investigation. Plaintiff may not, however, discover the contents of conversations Moseley had with agency counsel or the contents of conversations Moseley had with other DEP employees while acting at the direction of agency counsel. Such conversations, whether written or oral, are privileged attorney-client communications."; also finding the work product doctrine inapplicable)

Case Date Jurisidction State Cite Checked
2016-02-18 Federal PA

Chapter: 22.6

Case Name: In re Fairway Methanol LLC and Celanese Ltd., No. 14-16-00884-CV, 2017 Tex. App. LEXIS 830 (Tex. App. 14d Jan. 31, 2017)
(protecting as privileged documents created by a company's in-house lawyer investigation; noting that Texas did not following the "primary purpose" test; but finding the work product doctrine applicable after noting that a company affidavit indicated that the departments role in the investigation was not ordinary; "According to Rowen [Celanese's corporation's in-house lawyer], the primary purpose for the investigation and creation of documents and communications therefrom was to aid Celanese in preparing to defend itself in anticipated litigation. As a secondary concern, the information communicated from the investigative team to the legal department was necessary for the legal department to provide Celanese with business and legal advice with respect to the potential termination of employees involved in the accident. The team members were immediately informed that the investigation was for the purpose of assisting counsel and that all communications and documents generated during their investigation must be kept confidential and marked as 'Privileged and Confidential' or 'Attorney-Client Privilege -- Attorney Work Product.' The investigative team conducted interviews and site inspections and communicated their findings to the Celanese Law Department. They prepared a root cause analysis which was necessary for the Celanese Law Department to evaluate liability and begin developing a strategy for defending itself in likely civil and regulatory litigation. Rowen states, 'All of the communications withheld by Celanese were communications between Celanese in-house and outside counsel and their representatives made for the purposes of providing and communicating legal advice or otherwise facilitating or providing professional legal services.'"; "Plaintiffs cite no Texas authority for their position that the communication must have been made for the primary purpose of soliciting legal, rather than business advice. And the federal decisions supporting Plaintiffs' position are not binding on our court. More important, the language of Rule 503(b) does not require that the primary purpose of the communication be to facilitate the rendition of legal services; it only requires that the communication be made to facilitate the rendition of legal services.")

Case Date Jurisidction State Cite Checked
2017-01-31 Federal TX
Comment:

key case


Chapter: 22.6

Case Name: Thomas v. Kellogg Company, Case No. C13-5136-RBL, 2016 U.S. Dist. LEXIS 66881 (W.D. Wash. May 20, 2016)
(finding that work prepared by a consulting firm or Kellogg did not deserve privilege or work product protection; noting that plaintiff's Rule 30(b)(6) witness did not know who commissioned the report; also noting that the court realized the engagement letter between Kellogg and the consultant and the consultant's report itself; "A review of the report confirms that it was not prepared for Kellogg's attorneys so they could provide legal advice; it was patently prepared to assist Kellogg's in making its workforce more efficient and 'effective in growing sales' -- quintessential business advice."; "The engagement letter (sent by Willard Bishop to a Mr. Martin at 'DSD cost control'), the agreement, and the Report itself all confirm what the 30(b)(6) witness explained: the Report was a study of the efficiencies or 'effectiveness' of the RSRs."; "[N]one of the documents references any legal issue or litigation. And while virtually all business decisions can or do have 'legal implications' that does not mean that every business decision run through an in-house attorney is attorney-client privileged."; also finding the work product doctrine inapplicable)

Case Date Jurisidction State Cite Checked
2016-05-20 Federal WA
Comment:

key case


Chapter: 22.6

Case Name: U.S. Bank National Association v. PHL Variable Insurance Company, Civ. No. 12-877 (JRT/TNL), 2016 U.S. Dist. LEXIS 42670 (D. Minn. March 30, 2016)
(finding that neither the attorney-client privilege nor the work product doctrine protected a risk analysis prepared by Bracewell & Guiliani; including after an in camera review the risk assessment involved business rather than legal concern; "PHL has not convinced the Court that they retained Bracewell & Guiliani primarily for the purpose of obtaining legal advice. Rather, the majority of the Report suggests improvements to PHL's business practices aimed at resolving what the first page of the Report refers to as the 'clear economic risk' presented by STOLI policies. Thus, to the extent that there is a presumption that communications between an attorney and client are in pursuit to legal advice, U.S. Bank has shown evidence rebutting that presumption. Accordingly, the Court will not find the Report as a whole protected by attorney-client privilege."; "For example, a November 7, 2007, email states that PHL retained 'an outside firm 'Bracewell and Giuliani' to review our current procedures and provide recommendations to us on how to improve the detection and prevention of life insurance sales intended to be investor owned. They have provided this type of service to others serious about ensuring the quality of business and bring to [PHL] expertise in this field.'. . . Another email referred to the firm's activities with PHL as 'consulting.' (Id., Ex. P) A presentation given at a risk management meeting stated, 'Bracewell and Guiliani recommendations -- majority implemented from business plan.' Finally, another presentation stated that PHL '[e]ngaged Bracewell & Guiliani law firm to assess and recommend STOLI prevention tactics.'. . .")

Case Date Jurisidction State Cite Checked
2016-03-30 Federal MN
Comment:

key case


Chapter: 22.6

Case Name: U.S. Bank National Ass'n v. PHL Variable Insurance Co., Civ. No. 12-877 (JRT/TNL), 2016 U.S. Dist. LEXIS 42670, at *3 (D. Minn. Mar. 30, 2016)
May 25, 2016 (PRIVILEGE POINT)

"Court Finds Bracewell & Guiliani Report Unprotected by the Privilege or the Work Product Doctrine"

Many clients assume that the attorney-client privilege will almost always automatically protect any law firm's report to them, and that the work product doctrine will also apply whenever they anticipate litigation. Like other common client assumptions, this overly optimistic view is frequently wrong.

In U.S. Bank National Ass'n v. PHL Variable Insurance Co., defendant PHL withheld from production a 39-page report written by three lawyers from the law firm then known as Bracewell & Guiliani — supporting its privilege and work product claim with a declaration that it retained Bracewell & Guiliani "for the purpose of seeking legal consultation, advice and counsel." Civ. No. 12-877 (JRT/TNL), 2016 U.S. Dist. LEXIS 42670, at *3 (D. Minn. Mar. 30, 2016). But the court rejected both claims. Among other things, the court pointed to non-protected emails, undoubtedly written by the defendant's business folks -- announcing that the company had hired Bracewell & Guiliani "'to review our current procedures,'" because that law firm had provided services to others "'serious about ensuring the quality of business.'" Id. At *6 (internal citations omitted). Other unprotected client documents described the law firm's activities as "'consulting,'" and mentioned the firm's recommendations about the company's "'business plan.'" Id. At *7 (internal citations omitted). The court also reviewed in camera the Bracewell & Guiliani report itself — noting that "the majority of the Report suggests improvements to PHL's business practices." Id. The court again pointed to its in camera review of the report in also rejecting PHL's work product claim — noting that the firm's report "was not 'mapping litigation strategy.'" Id. At *16 (citation omitted).

Corporations hiring law firms should remember that a court might review business executives' description of the law firm's role, and also read the law firm's communications.

Case Date Jurisidction State Cite Checked
2016-03-30 Federal MN
Comment:

key case


Chapter: 22.6

Case Name: Motion Industries, Inc. v. Superior Derrick Services, LLC, Civ. A. No. 15-1958 Section: "H"(5), 2016 U.S. Dist. LEXIS 23826 (E.D. La. Feb. 26, 2016)
(analyzing an internal corporate investigation into possibly improper transactions; holding that in the Fifth Circuit litigation need not be imminent to trigger the work product doctrine protection; finding plaintiff's brief provided inadequate supporting protection internal corporate investigation documents; "In the present case, there is literally nothing in the record, including the documents themselves, that would allow this Court to undertake the inquiry necessary to find these documents to be privileged. As for what the 'primary motivating purpose behind the creation of the document' might have been, the Court can only guess. This is the sum total information provided by the Plaintiff in brief to explain the documents' genesis: 'An employee contacted Movant's human resources department in July 2013 and as a result of that contact, an investigation was initiated. Movant retained Asset Protection as a contractor to assist in the process of the investigation.'"; "As a statement in support of a privilege claim, this one leaves much to be desired, as it creates far more questions than it provides answers. Who was the employee that contacted human resources and why? An 'investigation was initiated' by whom and why? What is 'Asset Protection?' Where are the privilege logs referenced in the brief? Who are the six employees identified? Are any of them attorneys? Were any attorneys involved in this investigation? Why, if at all, did anyone anticipate litigation resulting from this human resources 'contact?'"; "It should be noted that the documents themselves do not in any way help the Court answer any of these questions. The mere statement by counsel in brief that '[t]he motivation for the investigation and the preparation of the documents in relation to the investigation was an anticipation of litigation' is woefully insufficient to carry Plaintiff's burden in the absence of any supporting evidence in the record.")

Case Date Jurisidction State Cite Checked
2016-02-26 Federal LA

Chapter: 22.6

Case Name: Gillespie v. Charter Communications, Case No. 4:14CV00207 AGF, 2015 U.S. Dist. LEXIS 128185 (E.D. Mo. Sept. 24, 2015)
(finding that an investigation into alleged racial discrimination did not deserve privilege or work product protection; "Charter argues that the incident report is privileged because it was created by Charter's Director of Human Resources at the direction of, and following a process instituted by, Charter's compliance team, which includes three in-house attorneys. Charter provides no facts as to the overall size of the compliance team, nor to the composition of its remaining members."; "In this case, unlike Geller [2011 U.S. Dist. LEXIS 129751, 2011 WL 5507572], the incident report was not prepared in response to any pending litigation, and the Director of Human Resources who prepared the report did so as an agent of Charter's entire corporate compliance team, rather than a single defense attorney as was the case in Geller. Therefore, the Court finds that the attorney-client privilege does not apply to either the EthicsPoint complaint or the incident report."; also finding the work product doctrine inapplicable).

Case Date Jurisidction State Cite Checked
2015-09-24 Federal MO

Chapter: 22.6

Case Name: Frickey v. Kobelco Stewart Bolling, Inc., Civ. A. No. 14-2 Sec. "I" (2), 2015 U.S. Dist. 27264 (E.D. La. March 5, 2015)
(finding that Dow's post-accident root cause analysis did not deserve privilege protection; noting Dow had already produced all witness statements and factual documents collected during the investigation, despite an in-house lawyer's involvement in the investigation; "Eddlemon [In-house lawyer] states that she and Dow Legal were involved in all phases of the investigation and that she 'supervised meetings, oversaw the investigative process, approved written documents, and in sum, oversaw preparation of the conclusions set forth in the' Root Cause Investigation report at issue. . . . She avers that the investigation was 'closed to third parties' and that "complete confidentiality was maintained throughout' it. . . . She states that the Root Cause Investigation 'Report and legal conclusions regarding the cause of the September 13, 2012 accident were prepared and ultimately relied upon by Dow and Union Carbide management and Dow Legal to respond to the incident, make recommendations, prepare the matter for trial, and in general, perform the regular functions of legal counsel.'")

Case Date Jurisidction State Cite Checked
2015-03-05 Federal LA

Chapter: 22.6

Case Name: Frickey v. Kobelco Stewart Bolling, Inc., Civ. A. No. 14-2 Sec. "I" (2), 2015 U.S. Dist. 27264 (E.D. La. March 5, 2015)
(finding that Dow's post-accident root cause analysis did not deserve privilege protection; noting Dow had already produced all witness statements and factual documents collected during the investigation, despite an in-house lawyer's involvement in the investigation; "Every page of the Root Cause Investigation report is marked 'attorney-client privileged.' The second page states that the report is an attorney-client communication that was prepared for the purpose of obtaining legal advice and notifies recipients that they may not disseminate it without permission from Dow Legal or Eddlemon. . . . The report contains no other references to law, legal advice or litigation. It includes factual analyses of the root causes that led to the accident and action items to address the identified causes. None of the action items are assigned to Eddlemon. The final page summarizes what has been learned and makes a few recommendations for what appear to be longer term actions."; "I find that Eddlemon's affidavit and the Root Cause Investigation report contain only conclusory and self-serving allegations about attorney-client privilege. Viewed in light of the overall content of the report, these allegations fail to carry Dow's burden to prove that the report was not prepared in the ordinary course of business of investigating an accident.")

Case Date Jurisidction State Cite Checked
2015-03-05 Federal LA
Comment:

key case


Chapter: 22.6

Case Name: United States v. NeuroScience, Inc., No. 14-mc-003-slc, 2015 U.S. Dist. LEXIS 20572, at *5 (W.D. Wis. Feb. 10, 2015)
April 8, 2015 (PRIVILEGE POINT)

“Court Condemns Law Firm's Privilege Claim as "Subterfuge": Part I”

Some companies begin internal investigations or audits for business reasons, but later try to cloak related communications and documents with work product privilege protection. Although some companies successfully argue that a business-related investigation "morphed" into a privilege-protected investigation, most attempts fail.

In United States v. NeuroScience, Inc., No. 14-mc-003-slc, 2015 U.S. Dist. LEXIS 20572, at *5 (W.D. Wis. Feb. 10, 2015), NeuroScience retained a regulatory compliance company (CodeMap) to conduct a "full, flat-fee compliance audit" of its billing practices after its billing manager suddenly resigned. About a month later, CodeMap reported that NeuroScience had overbilled Medicare and some insurance companies. In the meantime, NeuroScience's outside Minneapolis law firm learned that the ex-billing manager had accused the company of fraudulent billing practices. About ten days later, NeuroScience and its law firm agreed that the law firm "should supervise the remainder of CodeMap's audit activities." Id. at *7. CodeMap sent a Services Proposal indicating that the law firm would now direct CodeMap's "baseline" compliance audit, and stating that related communications would deserve privilege and work product protection. Id. However, CodeMap later admitted that (1) "counsel really did not provide much internal 'direction' to CodeMap at all" (id. at *8); (2) lawyers were not present when CodeMap auditors met with NeuroScience employees; and (3) lawyers generally did not receive copies of email message traffic between CodeMap and company employees during the audit. CodeMap's chief auditor later acknowledged that "'[b]y the time Counsel was involved, CodeMap already knew the work to be done and how to do it, so the legal oversight, as [he] understood it, was to maintain privilege.'" Id. at *9-10 (internal citation omitted).

Next week's Privilege Point will describe the court's work product and attorney-client privilege analysis.

Case Date Jurisidction State Cite Checked
2015-02-10 Federal WI
Comment:

key case


Chapter: 22.6

Case Name: United States v. NeuroScience, Inc., No. 14-mc-003-slc, 2015 U.S. Dist. LEXIS 20572, at *7 (W.D. Wis. Feb. 10, 2015)
April 15, 2015 (PRIVILEGE POINT)

“Court Condemns Law Firm's Privilege Claim as "Subterfuge": Part II”

Last week's Privilege Point described an outside regulatory compliance consultant's work for a company which worried about its non-compliant billing practices and about possible litigation, that consultant's later agreement to work under outside lawyers' "direction," and the admitted lack of any such day-to-day direction. United States v. NeuroScience, Inc., No. 14-mc-003-slc, 2015 U.S. Dist. LEXIS 20572, at *7 (W.D. Wis. Feb. 10, 2015).

The court first rejected NeuroScience's work product claim. The court held that the company hired the compliance auditor CodeMap for business purposes, and that lawyers' later involvement "was a tactic designed solely to cloak the audit documents" with some protection. Id. at *17. The court concluded that the outside lawyers "in fact provided no direction at all," and found no evidence that "CodeMap changed the focus of its audit or conducted it any differently after it was agreed that the Services Proposal should be routed through counsel." Id. at *18. Although outside lawyers used the audit's result, the court explained that "the focus is on the circumstances of the communication at the time it was made." Id. The court also rejected NeuroScience's privilege claim. The court noted that the company hired CodeMap "without any direction from counsel," and that CodeMap "conducted and completed [its] coding review and transmitted the results" to NeuroScience before any lawyer's involvement. Id. at *24. And after the lawyers' "post-hoc retention of CodeMap," there was no evidence that "the focus of CodeMap's audits changed." Id. at *25. The court therefore concluded that "there is no question that [the outside law firm's] retention of CodeMap was a subterfuge specifically designed to cloak the audits with privilege." Id. at *26.

This and other similar cases highlight the wisdom of involving lawyers at the first hint of a problem, and assuring their intense hands-on involvement in any consultants' work the company intends to withhold as privileged or as work product.

Case Date Jurisidction State Cite Checked
2015-02-10 Federal WI
Comment:

key case


Chapter: 22.6

Case Name: In re General Motors LLC Ignition Switch Litigation, No. 14-MD-2543 (JMF), 2015 U.S. Dist. LEXIS 5199, at *220 (S.D.N.Y. Jan. 15, 2015)
February 4, 2015 (PRIVILEGE POINT)

“Game Changer? The S.D.N.Y. Endorses a Company-Friendly Privilege Standard”

In In re General Motors LLC Ignition Switch Litigation, No. 14-MD-2543 (JMF), 2015 U.S. Dist. LEXIS 5199, at *220 (S.D.N.Y. Jan. 15, 2015), Judge Furman upheld General Motors' claim of privilege and work product protection for "notes and memoranda relating to the witness interviews" Jenner & Block conducted while investigating GM's ignition switch issue. The opinion naturally has received extensive media coverage, given the high profile. But many reports do not focus on the court's ground-breaking adoption of a company-friendly privilege standard.

Most courts provide privilege protection only to communications whose "primary purpose" relates to legal rather than business advice. Last year, the D.C. Circuit rejected that rule, and extended privilege protection to investigation-related documents if "legal advice was one of the significant purposes." In re Kellogg Brown & Root, Inc., 756 F.3d 754, 758-59 (D.C. Cir. 2014) (emphasis added) (also known as the Barko decision). Although acknowledging that the D.C. Circuit's decision did not bind it, the General Motors court adopted that standard. This appears to represent the first time another court has adopted the D.C. Circuit's favorable privilege standard. Most significantly, the court held that "the D.C. Circuit's holding is consistent with - if not compelled by - the Supreme Court's logic" in the seminal Upjohn decision. Gen. Motors, 2015 U.S. Dist. LEXIS 5199, at *240 (citing Upjohn v. United States, 449 U.S. 383, 394 (1981)).

The General Motors court's rejection of the "primary purpose" test and powerful endorsement of a "one of the significant purposes" standard could extend privilege protection in other contexts, such as with compliance-related communications.

Case Date Jurisidction State Cite Checked
2015-01-15 Federal NY
Comment:

key case


Chapter: 22.6

Case Name: In re General Motors LLC Ignition Switch Litig., 14-MD-2543 (JMF), 2015 U.S. Dist. LEXIS 5199 (S.D.N.Y. Jan. 15, 2015)
(finding that the attorney-client privilege and the work product doctrine protected notes and memoranda relating to the witness interviews conducted by the Jenner lawyers during the firm's investigation into General Motors ignition switch incidents; rejecting plaintiff's argument that GM's "primary purpose" in conducting the investigation was not to obtain legal advice; adopting the "one of the significant purposes" standard; "The primary purpose test, however, does not require a showing that obtaining or providing legal advice was the sole purpose of an internal investigation or that the communications at issue 'would not have been made 'but for' the fact that legal advice was sought.' In re Kellogg Brown & Root, Inc., 756 F.3d 754, 759 (D.C. Cir. 2014). Instead, as the D.C. Circuit has expressly held, 'the primary purpose test, sensibly and properly applied, cannot and does not draw a rigid distinction between a legal purpose on the one hand and a business purpose on the other.' Id. At 759. 'So long as obtaining or providing legal advice was one of the significant purposes of the internal investigation, the attorney-client privilege applies, even if there were also other purposes for the investigation . . . .' Id. At 758-59."; "[T]he D.C. Circuit's holding is consistent with -- if not compelled by -- the Supreme Court's logic in Upjohn. Rare is the case that a troubled corporation will initiate an internal investigation solely for legal, rather than business, purposes; indeed, the very prospect of legal action against a company necessarily implicates larger concerns about the company's internal procedures and controls, not to mention its bottom line. Accordingly, an attorney-client privilege that fails to account for the multiple and often-overlapping purposes of internal investigations would 'threaten[] to limit the valuable efforts of corporate counsel to ensure their client's compliance with the law.' Upjohn, 449 U.S. at 393."; "[R]egardless of whether New GM had other purposes in retaining Jenner, and regardless of whether the Valukas Report itself contained legal as opposed to business advice -- a question this Court need not, and does not, reach -- the underlying investigation, and the interviews conducted as part of it, had a 'primary purpose' of enabling Valukas and Jenner to provide New GM with legal advice.")

Case Date Jurisidction State Cite Checked
2015-01-15 Federal NY
Comment:

key case


Chapter: 22.6

Case Name: Chevron Midstream Pipelines LLC v. Settoon Towing LLC, Civ. A. No. 13-2809c/w13-3197, 2014 U.S. Dist. LEXIS 179284 (E.D. La. Jan. 5, 2015)
(holding that neither the attorney-client privilege nor the work product doctrine protected Chevron's "legally chartered" "root cause analysis" of a fatal pipeline accident, although in-house lawyer's affidavit explained that Chevron anticipated litigation, and as such "legally chartered root cause investigations are not routine"; "On the basis of the Legal Charter and Youngblood's Declaration describing its genesis and his handling of the RCA Team's work product upon the completion of its work, Chevron seeks to protect the RCA and all documentation related to its creation under both the attorney-client and work product privileges. Importantly, Chevron, through Youngblood, claims the following: 'Within Chevron, legally chartered root cause investigations are not routine. While root cause procedures are utilized by Chevron's Health, Environmental, and Safety (HES) group to analyze incidents and near miss events, often in conjunction with outside contractors, in order to identify improvements to procedures or equipment, HES incident reviews are separate and distinct from root cause analyses conducted at the request of the Law Department pursuant to a Legal Charter.'")

Case Date Jurisidction State Cite Checked
2015-01-05 Federal LA

Chapter: 22.6

Case Name: In re Kellogg Brown & Root, Inc., No. 14-5055, 2014 U.S. App. LEXIS 12115, at *10 (D.C. Cir. June 27, 2014)
(granting a petition for writ of mandamus and vacating a lower court's holding that the privilege did not protect documents created during an internal corporate investigation of possible foreign wrongdoing; holding among other things that a privilege applied to an investigation if one "significant purpose" was the collection of facts lawyers required to give legal advice; "So long as obtaining or providing legal advice was one of the significant purposes of the internal investigation, the attorney-client privilege applies, even if there were also other purposes for the investigation and even if the investigation was mandated by regulation rather than simply an exercise of company discretion.")

Case Date Jurisidction State Cite Checked
2014-06-27 Federal

Chapter: 22.6

Case Name: In re Kellogg Brown & Root, Inc., No. 14-5055, 2014 U.S. App. LEXIS 12115, at *14-15 (D.C. Cir. June 27, 2014)
(granting a petition for writ of mandamus and vacating a lower court's holding that the privilege did not protect documents created during an internal corporate investigation of possible foreign wrongdoing; holding among other things that a privilege applied to an investigation if one "significant purpose" was the collection of facts lawyers required to give legal advice; "In this case, there can be no serious dispute that one of the significant purposes of the KBR internal investigation was to obtain or provide legal advice. In denying KBR's privilege claim on the ground that the internal investigation was conducted in order to comply with regulatory requirements and corporate policy and not just to obtain or provide legal advice, the District Court applied the wrong legal test and clearly erred.")

Case Date Jurisidction State Cite Checked
2014-06-27 Federal

Chapter: 22.6

Case Name: In re Kellogg Brown & Root, Inc., No. 14-5055, 2014 U.S. App. LEXIS 12115, *13-14 (D.C. Cir. June 27, 2014)
(granting a petition for writ of mandamus and vacating a lower court's holding that the privilege did not protect documents created during an internal corporate investigation of possible foreign wrongdoing; holding among other things that a privilege applied to an investigation if one "significant purpose" was the collection of facts lawyers required to give legal advice; "[I]t is clearer, more precise, and more predictable to articulate the test as follows: Was obtaining or providing legal advice a primary purpose of the communication, meaning one of the significant purposes of the communication? . . . Sensibly and properly applied, the test boils down to whether obtaining or providing legal advice was one of the significant purposes of the attorney-client communication. In the context of an organization's internal investigation, if one of the significant purposes of the internal investigation was to obtain or provide legal advice, the privilege will apply. That is true regardless of whether an internal investigation was conducted pursuant to a company compliance program required by statute or regulation, or was otherwise conducted pursuant to company policy.")

Case Date Jurisidction State Cite Checked
2014-06-27 Federal

Chapter: 22.6

Case Name: In re Kellogg Brown & Root, Inc., No. 14-5055, 2014 U.S. App. LEXIS 12115, at *6-7 (D.C. Cir. June 27, 2014)
(granting a petition for writ of mandamus and vacating a lower court's holding that the privilege did not protect documents created during an internal corporate investigation of possible foreign wrongdoing; holding among other things that a privilege applied to an investigation if one "significant purpose" was the collection of facts lawyers required to give legal advice; "KBR's assertion of the privilege in this case is materially indistinguishable from Upjohn's assertion of the privilege in that case. As in Upjohn, KBR initiated an internal investigation to gather facts and ensure compliance with the law after being informed of potential misconduct. And as in Upjohn, KBR's investigation was conducted under the auspices of KBR's in-house legal department, acting in its legal capacity. The same considerations that led the Court in Upjohn to uphold the corporation's privilege claims apply here.")

Case Date Jurisidction State Cite Checked
2014-06-27 Federal

Chapter: 22.6

Case Name: In re Kellogg Brown & Root, Inc., No. 14-5055, 2014 U.S. App. LEXIS 12115 (D.C. Cir. June 27, 2014)
July 16, 2014 (PRIVILEGE POINT)

"District of Columbia Circuit Court Dramatically Expands Privilege Protection for Internal Corporate Investigations: Part II"

Last week's Privilege Point described the legal standard and some of the factual bases for the District of Columbia District Court's denial of privilege protection for Kellogg Brown & Root's (KBR) internal corporate investigation. This week’s privilege point tells the good news -- when about three months later, the D.C. Circuit Court of Appeals issued a writ of mandamus reversing the District Court's holding. In re Kellogg Brown & Root, Inc., No. 14-5055, 2014 U.S. App. LEXIS 12115 (D.C. Cir. June 27, 2014).

The District of Columbia federal appellate court first rejected the district court's legal standard, holding that the privilege could protect a company's investigation if its need for legal advice was one of the "primary" or "significant" motivating purposes – even if not the only purpose, or the primary purpose. Id. at *13-14. The appeals court also explicitly addressed several factual indicia the district court relied on, holding that (1) KBR's requirement under government regulations to investigate alleged fraud did not preclude KBR's argument that another "significant purpose[]" was seeking legal advice; (2) nonlawyers could conduct privileged employee interviews while "serving as agents of attorneys"; (3) the absence of Upjohn warnings did not prevent privilege protection, because "nothing in Upjohn requires a company to use magic words"; and (4) although the employees' confidentiality agreements did not "expressly" mention KBR's need for legal advice, employees knew the law department was conducting a "sensitive" investigation and were warned not to discuss their interviews without KBR's General Counsel's authorization. Id. at *8-10.

The appeals court's legal standard represents a much more privilege-friendly approach than most courts apply. The standard permits companies to claim privilege protection even for investigations they must undertake pursuant to external requirements -- rather than having to initiate parallel or successive investigations to gain the protection. And the court's analysis of the factual issues provides a much more lenient standard for claiming privilege than most courts would apply. Next week's Privilege Point will discuss what the D.C. Circuit Court of Appeals' decision did not address.

Case Date Jurisidction State Cite Checked
2014-06-27 Federal
Comment:

key case


Chapter: 22.6

Case Name: McCullough v. Fraternal Order of Police, Chicago Lodge 7, No. 12 C 9359, 2014 U.S. Dist. LEXIS 79281, at *7-8 (N.D. Ill. June 11, 2014)
(analyzing defendant's investigation of possible sexual harassment; holding that the investigation-related documents deserved privilege protection and work product protection; holding that the defendant could refer to remedial steps and the investigation, but would waive any protection by using investigation-related documents at the trial; "[T]he Court finds that the D'Alba Report (and associated notes and memoranda) is protected by the attorney client and work product privileges. FOP asserts that the report contains 'legal analysis and advice' from D'Alba, which was hired 'in response to a complaint of sexual harassment by an employee' and 'due to the prospect of litigation.' . . . . The firm conducted 'confidential interviews,' prepared the report, marked the report 'privileged and confidential,' and shared the report with only certain FOP management employees and no third parties. . . . "The conduct of the D'Alba attorneys during their investigation is persuasive; the attorneys conducted confidential interviews, marked their report 'privileged and confidential,' and restricted access by third parties to the report.")

Case Date Jurisidction State Cite Checked
2014-06-11 Federal IL

Chapter: 22.6

Case Name: United States ex rel. Barko v. Halliburton Co, Case No. 1:05-CV-1276, 2014 U.S. Dist. LEXIS 30866 (D.D.C. Mar. 11, 2014)
July 9, 2014 (PRIVILEGE POINT)

"District of Columbia Circuit Court Dramatically Expands Privilege Protection for Internal Corporate Investigations: Part I"

After a decade or more of generally bad news for corporations seeking privilege protection for their internal corporate investigations, the District of Columbia Circuit has issued an opinion containing good news on all fronts.

In March 2014, the District of Columbia District Court denied attorney-client privilege and work product doctrine protection for documents Kellogg Brown & Root (KBR) (and affiliates) created during an internal corporate investigation. United States ex rel. Barko v. Halliburton Co., Case No. 1:05-CV-1276, 2014 U.S. Dist. LEXIS 36490 (D.D.C. Mar. 6, 2014). Five days later, the court denied a stay. United States ex rel. Barko v. Halliburton Co, Case No. 1:05-CV-1276, 2014 U.S. Dist. LEXIS 30866 (D.D.C. Mar. 11, 2014). The District Court used a narrow version of the "primary purpose" test for privilege protection -- holding that "[t]he party invoking the privilege must show the 'communication would not have been made "but for" the fact that the legal advice was sought.'" Halliburton, 2014 U.S. Dist. LEXIS 36490, at *7-8 (citation omitted). In applying this standard, the District Court pointed to a number of facts, including (1) the investigation "resulted from the Defendants [sic] need to comply with government regulations"; (2) nonlawyers conducted the interviews; (3) those nonlawyers did not give Upjohn warnings informing the interviewed employees "that the purpose of the interview was to assist KBR in obtaining legal advice"; and (4) the interviewed employees signed confidentiality agreements that did not mention the investigation's legal purpose. Id. at *9-10. In most courts, these factors would probably have doomed KBR's privilege claim even under a more favorable "primary purpose" test.

The next two Privilege Points will describe the District of Columbia Circuit Court's reversal of this ruling.

Case Date Jurisidction State Cite Checked
2014-03-11 Federal DC
Comment:

key case


Chapter: 22.6

Case Name: United States ex rel. Barko v. Halliburton Co., Case No. 1:05-CV-1276, 2014 U.S. Dist. LEXIS 36490 (D.D.C. Mar. 6, 2014)
July 9, 2014 (PRIVILEGE POINT)

"District of Columbia Circuit Court Dramatically Expands Privilege Protection for Internal Corporate Investigations: Part I"

After a decade or more of generally bad news for corporations seeking privilege protection for their internal corporate investigations, the District of Columbia Circuit has issued an opinion containing good news on all fronts.

In March 2014, the District of Columbia District Court denied attorney-client privilege and work product doctrine protection for documents Kellogg Brown & Root (KBR) (and affiliates) created during an internal corporate investigation. United States ex rel. Barko v. Halliburton Co., Case No. 1:05-CV-1276, 2014 U.S. Dist. LEXIS 36490 (D.D.C. Mar. 6, 2014). Five days later, the court denied a stay. United States ex rel. Barko v. Halliburton Co, Case No. 1:05-CV-1276, 2014 U.S. Dist. LEXIS 30866 (D.D.C. Mar. 11, 2014). The District Court used a narrow version of the "primary purpose" test for privilege protection -- holding that "[t]he party invoking the privilege must show the 'communication would not have been made "but for" the fact that the legal advice was sought.'" Halliburton, 2014 U.S. Dist. LEXIS 36490, at *7-8 (citation omitted). In applying this standard, the District Court pointed to a number of facts, including (1) the investigation "resulted from the Defendants [sic] need to comply with government regulations"; (2) nonlawyers conducted the interviews; (3) those nonlawyers did not give Upjohn warnings informing the interviewed employees "that the purpose of the interview was to assist KBR in obtaining legal advice"; and (4) the interviewed employees signed confidentiality agreements that did not mention the investigation's legal purpose. Id. at *9-10. In most courts, these factors would probably have doomed KBR's privilege claim even under a more favorable "primary purpose" test.

The next two Privilege Points will describe the District of Columbia Circuit Court's reversal of this ruling.

Case Date Jurisidction State Cite Checked
2014-03-06 Federal DC
Comment:

key case


Chapter: 22.6

Case Name: Telamon Corp. v. Charter Oak Fire Ins. Co., Case No. 1:13-cv-00382-RLY-DML, 2014 U.S. Dist. LEXIS 6583, at *12, *13-14, *14 n.1 (S.D. Ind. Jan. 17, 2014)
(finding that an internal corporate investigation conducted by Barnes & Thornburg into possible theft of inventory did not deserve privilege or work product protection; addressing these issues in a first party insurance case, in which the defendant insurance company sought documents from the investigation company Chamberlain; finding attorney-client privilege protection inapplicable; "The court's in camera examination reveals that nearly all of Chamberlain's file materials could not be classified as privileged attorney-client communications because they are public records or Telamon's business records. The gathering of public and business records by an investigator, or the funneling of business documents through one's attorney's office (or through one's fraud investigator), does not make those documents privileged."; "[S]ome of the communications obviously were not made to obtain legal advice, were not maintained in confidence, or were not even intended as a confidential communication in the first place. For example, the communications include (a) an email chain sent by the lawyers to Chamberlain lauding its reputation as a fraud investigator; (b) emails to set up meetings; and (c) emails that do not involve counsel at all or any bona fide connection to legal advice. . . . [D]documents within Chamberlain's file reveal that Chamberlain's investigatory work was not inextricable from Barnes & Thornburg's provision of legal advice and that its work was conducted because Telamon had a pressing business reason to uncover what it believed was large-scale inventory fraud by one of its workers. Documents indicate that the use of Barnes & Thornburg as the nominee client to Chamberlain was for the purpose of attempting to shield Chamberlain's work as privileged. It is apparent, however, that Barnes & Thornburg did not in fact direct this investigation, but that Chamberlain designed the investigation and determined the records to gather and review, the persons to interview, the questions to be asked, and the manner of interrogation."; "Moreover, waiver principles would prevent the assertion of the privilege as to the majority of the Chamberlain investigative file. Telamon provided to the insurers a preliminary investigative report prepared by Chamberlain that it otherwise asserts was a privileged communication. That report summarizes 'key' interviews and documents. When the privilege is waived as to an attorney-client communication, the waiver extends to all communications on the same subject matter. . . . The subject matter of the preliminary report is the investigative work conducted by Chamberlain. By producing the preliminary report (apparently for the purpose of proving its insurance claim and the losses suffered), Telamon waived the privilege with respect to the documents in the investigative file that are the 'nuts and bolts' source documents of Chamberlain's work, including the interview summaries, document analyses, and investigative background summaries.")

Case Date Jurisidction State Cite Checked
2014-01-17 Federal IN B 6/14

Chapter: 22.6

Case Name: In re Kellogg Brown & Root, Inc., 756 F.3d 754, 758-59 (D.C. Cir. 2014)
February 4, 2015 (PRIVILEGE POINT)

“Game Changer? The S.D.N.Y. Endorses a Company-Friendly Privilege Standard”

In In re General Motors LLC Ignition Switch Litigation, No. 14-MD-2543 (JMF), 2015 U.S. Dist. LEXIS 5199, at *220 (S.D.N.Y. Jan. 15, 2015), Judge Furman upheld General Motors' claim of privilege and work product protection for "notes and memoranda relating to the witness interviews" Jenner & Block conducted while investigating GM's ignition switch issue. The opinion naturally has received extensive media coverage, given the high profile. But many reports do not focus on the court's ground-breaking adoption of a company-friendly privilege standard.

Most courts provide privilege protection only to communications whose "primary purpose" relates to legal rather than business advice. Last year, the D.C. Circuit rejected that rule, and extended privilege protection to investigation-related documents if "legal advice was one of the significant purposes." In re Kellogg Brown & Root, Inc., 756 F.3d 754, 758-59 (D.C. Cir. 2014) (emphasis added) (also known as the Barko decision). Although acknowledging that the D.C. Circuit's decision did not bind it, the General Motors court adopted that standard. This appears to represent the first time another court has adopted the D.C. Circuit's favorable privilege standard. Most significantly, the court held that "the D.C. Circuit's holding is consistent with - if not compelled by - the Supreme Court's logic" in the seminal Upjohn decision. Gen. Motors, 2015 U.S. Dist. LEXIS 5199, at *240 (citing Upjohn v. United States, 449 U.S. 383, 394 (1981)).

The General Motors court's rejection of the "primary purpose" test and powerful endorsement of a "one of the significant purposes" standard could extend privilege protection in other contexts, such as with compliance-related communications.

Case Date Jurisidction State Cite Checked
2014-01-01 Federal
Comment:

key case


Chapter: 22.6

Case Name: Wultz v. Bank of China Ltd., No. 11 Civ. 1266 (SAS), 2013 U.S. Dist. LEXIS 154343 (S.D.N.Y. Oct. 24, 2013)
December 18, 2013 (PRIVILEGE POINT)

"Courts Deny Privilege Protection for Compliance-Related Documents"

Many corporate clients erroneously assume that the attorney-client privilege or the work product doctrine will protect their compliance-related communications. However, such communications face the same impediments to either protection as other internal corporate communications.

For instance, the attorney-client privilege only protects communication primarily motivated by clients' request for legal advice. In United States ex rel. Gale v. Omnicare, Inc., the court found that the privilege did not protect "Compliance Committee meetings and the documents drafted by [the company's CCO]," – because the company's previous agreement with the government required such meetings. Case No. 1:10-CV-00127, 2013 U.S. Dist. LEXIS 143831, at *4 (N.D. Ohio Oct. 4, 2013). The court concluded that "[t]he meetings and documents sought to comply with its contract with the United States, not to obtain legal advice." Id. The privilege also normally depends on lawyers' involvement. In Wultz v. Bank of China Ltd., No. 11 Civ. 1266 (SAS), 2013 U.S. Dist. LEXIS 154343 (S.D.N.Y. Oct. 24, 2013), Judge Scheindlin held that the privilege did not protect documents created during the Bank of China Chief Compliance Officer's investigation into the bank's possible dealings with terrorists. Judge Scheindlin noted that after the Bank's CCO received Plaintiff's demand letter, "'he called outside counsel, then set about performing the investigation within the Compliance Department – without the involvement of any counsel.'" Id. At *35 (citation omitted). Judge Scheindlin cited an earlier case's blunt conclusion that "[p]rivilege does not apply to 'an internal corporate investigation . . . Made by management itself.'" Id. At *36 (citation omitted).

Companies and their lawyers should not assume that the compliance function automatically, or even usually, deserves privilege protection.

Case Date Jurisidction State Cite Checked
2013-10-24 Federal NY
Comment:

key case


Chapter: 22.6

Case Name: United States ex rel. Gale v. Omnicare, Inc., Case No. 1:10-CV-00127, 2013 U.S. Dist. LEXIS 143831, at *4 (N.D. Ohio Oct. 4, 2013)
December 18, 2013 (PRIVILEGE POINT)

"Courts Deny Privilege Protection for Compliance-Related Documents"

Many corporate clients erroneously assume that the attorney-client privilege or the work product doctrine will protect their compliance-related communications. However, such communications face the same impediments to either protection as other internal corporate communications.

For instance, the attorney-client privilege only protects communication primarily motivated by clients' request for legal advice. In United States ex rel. Gale v. Omnicare, Inc., the court found that the privilege did not protect "Compliance Committee meetings and the documents drafted by [the company's CCO]," – because the company's previous agreement with the government required such meetings. Case No. 1:10-CV-00127, 2013 U.S. Dist. LEXIS 143831, at *4 (N.D. Ohio Oct. 4, 2013). The court concluded that "[t]he meetings and documents sought to comply with its contract with the United States, not to obtain legal advice." Id. The privilege also normally depends on lawyers' involvement. In Wultz v. Bank of China Ltd., No. 11 Civ. 1266 (SAS), 2013 U.S. Dist. LEXIS 154343 (S.D.N.Y. Oct. 24, 2013), Judge Scheindlin held that the privilege did not protect documents created during the Bank of China Chief Compliance Officer's investigation into the bank's possible dealings with terrorists. Judge Scheindlin noted that after the Bank's CCO received Plaintiff's demand letter, "'he called outside counsel, then set about performing the investigation within the Compliance Department – without the involvement of any counsel.'" Id. At *35 (citation omitted). Judge Scheindlin cited an earlier case's blunt conclusion that "[p]rivilege does not apply to 'an internal corporate investigation . . . Made by management itself.'" Id. At *36 (citation omitted).

Companies and their lawyers should not assume that the compliance function automatically, or even usually, deserves privilege protection.

Case Date Jurisidction State Cite Checked
2013-10-04 Federal OH
Comment:

key case


Chapter: 22.6

Case Name: United States v. ISS Marine Services, Inc., Misc. A. No. 12-481 (BAH), 905 F. Supp. 2d 121, 2012 U.S. Dist. LEXIS 166088 (D.D.C. Nov. 21, 2012)
("If a communication would have been made even if legal advice were not explicitly being sought, then it is difficult to say that that communication's primary purpose was to seek legal advice."; "In applying these principles, the Government argues that the Audit Report was not created for the purpose of seeking legal advice. The Government posits that 'nothing about the March 2008 Audit Report indicates that it was part of a request for legal advice,' the Report was 'not directed to any attorney or a person employed by an attorney,' it 'does not contain any legends indicating that it is privileged,' and 'Inchcape's CEO waited nearly two months after it was completed to forward the Audit Report to its outside counsel.'. . . In support of this argument, the Government offers the sworn declaration of Larry Cosgriff, who served as the Senior Vice President of Inchcape Government Services during the relevant time period. As discussed above, Cosgriff states that it was his understanding that Hyldager and Tory 'undertook this internal audit to obtain information to enable Messrs. Hyldager and Tory, the Inchcape audit committee and the Inchcape Board of Directors to make a business decision as to what further action, if any, Inchcape would take to address' the allegations raised by the two Inchcape employees."; "At bottom, the respondent's claim to privilege appears to be premised on a gimmick: exclude counsel from conducting the internal investigation but retain them in a watered-down capacity to 'consult' on the investigation in order to cloak the investigation with privilege. Unfortunately for the respondent, this sort of 'consultation lite' does not qualify the Audit Report for the protections of the attorney-client privilege. First and foremost, the fact that Inchcape purposefully eschewed the involvement of outside counsel – or any attorneys whatsoever – in the internal investigation and audit militates strongly against applying the attorney-client privilege. When a company fails to involve lawyers directly in an internal investigation, the company faces a higher burden to demonstrate that the attorney-client privilege applies to the results of that investigation. The Tory Declaration indicates that, at most, A&P generically 'recommended initiating an internal investigation' and drafted a memorandum that 'framed' the issues relating to 'potential criminal and civil liability implicated by the activities as reported.'. . . The Tory Declaration also states that A&P 'prepared a list of documents necessary to more fully assess the issues identified,'. . . though Tory notably does not specify that A&P would be the ones 'more fully assess[ing] the issues identified.' Although Tory states that he pursued the internal investigation 'in consultation with outside counsel,'. . . the record is devoid of any evidence to suggest that A&P provided any consultation to ISS Marine while the investigation was actually being conducted. A&P's framing of the issues related to potential liability and its guidance about the types of documents that would be helpful all took place before the investigation began. As Cosgriff explains: "A&P did not participate in the interview process or the review of documentary evidence.'. . . Even when Inchcape took steps to verify the information in the Audit Report, Tory indicates that Hyldager performed this 'follow up,' rather than an attorney."; "This sort of arms-length coaching by counsel, as opposed to the direct involvement of an attorney, undercuts the purposes of the attorney-client privilege in the context of an internal investigation."; "Thus, the Audit Report memoralizing the contents of the documents and information gathered from this investigation and audit does not justify the protection of the attorney-client privilege. For the results of an internal investigation to enjoy the attorney-client privilege, the company must clearly structure the investigation as one seeking legal advice and must ensure that attorneys themselves conduct or supervise the inquiries and, at the very least, the company must make clear to the communicating employees that the information they provide will be transmitted to attorneys for the purpose of obtaining legal advice.")

Case Date Jurisidction State Cite Checked
2012-11-21 Federal DC
Comment:

key case


Chapter: 22.6

Case Name: Graff v. Haverhill N. Coke Co., Case No. 1:09 cv 670, 2012 U.S. Dist. LEXIS 162013, at *38 (S.D. Ohio Nov. 13, 2012)
(holding that documents created during a 2006 compliance audit deserved privilege protection; "The withheld documents reflect that the information gathered by . . . corporate employee[s] and transferred to General Counsel was done so at counsel's request and in furtherance of counsel's provision of legal advice.")

Case Date Jurisidction State Cite Checked
2012-11-13 Federal OH B 7/13

Chapter: 22.6

Case Name: Graff v. Haverhill N. Coke Co., Case No. 1:09 cv 670, 2012 U.S. Dist. LEXIS 162013, at *27 28 (S.D. Ohio Nov. 13, 2012)
(holding that some documents prepared during a third party consultant's audit deserved privilege protection; "Mr. Sullivan's communication to URS demonstrates that the audit information was to be communicated only to necessary SunCoke corporate employee and was otherwise to be considered privileged and confidential. . . . Ms. Pack's affidavit confirms that the audit was prepared to assist counsel with providing legal advice to SunCoke.")

Case Date Jurisidction State Cite Checked
2012-11-13 Federal OH B 7/13

Chapter: 22.6

Case Name: Graff v. Haverhill N. Coke Co., Case No. 1:09 cv 670, 2012 U.S. Dist. LEXIS 162013, at *27 (S.D. Ohio Nov. 13, 2012)
(holding that some documents prepared during a third party consultant's audit deserved privilege protection; "[I]n July 2008, SunCoke's president directed in-house counsel to conduct an HES audit of HNCC to assess its compliance with regulatory requirements and company policies and to provide SunCoke with legal advice based on such findings. In addition, correspondence from SunCoke's outside counsel, Andrew Sullivan, to URS establishes that the audit was requested by counsel for SunCoke so that URS's investigation, analyses, and opinions could be used by counsel to provide legal advice to SunCoke. . . . Further, a review of the documents reveals that the audit reports contain more than raw information and/or data and include the advice and opinions of URS personnel directed to SunCoke on legal compliance issues.")

Case Date Jurisidction State Cite Checked
2012-11-13 Federal OH B 7/13

Chapter: 22.6

Case Name: Collins v. Braden, 384 S.W.3d 154, 160 (Ky. 2012)
(holding that the attorney-client privilege might protect documents created during an internal corporate investigation about a plaintiff's suicide; remanding for further evidence; "But the fact that the communications were collected pursuant to hospital policy does not make them business advice or otherwise remove them from the privilege. The policies in question were promulgated by the hospital's in-house lawyer and relate to the collection of information after a potentially tortious event in the hospital. No doubt, any death in a hospital creates the risk of litigation. The attorney-client privilege is not contingent on actual or threatened litigation. Statements made by a hospital's employees in such circumstances are made as part of a comprehensive program by which the hospital seeks to determine, with the assistance of counsel, the best legal strategy to pursue in regard to the tort that may have happened on the hospital's premises. The policies here were not general business policies, such as those aimed at reducing waste or hiring qualified employees; rather, they were promulgated by the hospital's in-house lawyer for the purpose of assessing the risk of and preparing for possible litigation." (footnote omitted))

Case Date Jurisidction State Cite Checked
2012-01-01 State KY B 9/13

Chapter: 22.6

Case Name: United States v. ISS Marine Servs., 905 F. Supp. 2d 121, 132 (D.D.C. 2012)
(analyzing privilege and work product protection for an audit; noting that the company had specifically indicated that it did not need the assistance of Arnold & Porter in connection with the audit; "The fact that Inchcape [affiliate of defendant] had an obvious and compelling business purpose to conduct an internal audit to ascertain any overpayments further militates in favor of concluding that the privilege does not apply because it suggests that the Audit Report would have been created even if Inchcape was not seeking legal advice.")

Case Date Jurisidction State Cite Checked
2012-01-01 Federal DC B 7/13

Chapter: 22.6

Case Name: United States v. ISS Marine Servs., 905 F. Supp. 2d 121, 131 (D.D.C. 2012)
(analyzing privilege and work product protection for an audit; noting that the company had specifically indicated that it did not need the assistance of Arnold & Porter in connection with the audit; "For the results of an internal investigation to enjoy the attorney-client privilege, the company must clearly structure the investigation as one seeking legal advice and must ensure that attorneys themselves conduct or supervise the inquiries and, at the very least, the company must make clear to the communicating employees that the information they provide will be transmitted to attorneys for the purpose of obtaining legal advice.")

Case Date Jurisidction State Cite Checked
2012-01-01 Federal DC B 7/13

Chapter: 22.6

Case Name: Collins v. Braden, 384 S.W.3d 154, 160 (Ky. 2012)
("But the fact that the communications were collected pursuant to hospital policy does not make them business advice or otherwise remove them from the privilege. The policies in question were promulgated by the hospital's in-house lawyer and relate to the collection of information after a potentially tortious event in the hospital.")

Case Date Jurisidction State Cite Checked
2012-01-01 State KY B 1/14

Chapter: 22.6

Case Name: Planicka v. Am. Anesthesiology of Va., P.C., CL 2011 1344, 2011 Va. Cir. LEXIS 135, at *2 (Va. Cir. Ct. Nov. 22, 2011)
("Upon review of Carey's investigation notes, the Court finds the investigation proceeded with guidance and direction from counsel, and in anticipation of litigation. Such information is privileged under Rule 4:1(b)(3) work product doctrine and under attorney-client privilege, and is not discoverable by Plaintiff Planicka in this matter.")

Case Date Jurisidction State Cite Checked
2011-11-22 State VA

Chapter: 22.6

Case Name: Akzo Nobel Chems. Ltd. v. Comm'n of European Comtys., Nos. T-125/03 & T-253/03 (Ct. First Instance Sept. 17, 2007) (available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri= CELEX:62003A0125:EN:HTML)
(assessing privilege claims for documents created in connection with an investigation conducted by Akzo Nobel and its affiliate; holding that internal documents would deserve privilege protection only if they were "exclusively" created for purposes of receiving legal advice, and their "sole aim" was to seek legal advice; also holding that Akzo's in-house lawyers based in Holland did not engage in privileged communications with Akzo employees, because the in-house lawyers were not independent; holding that the privilege did not protect documents sent by the general manager of an Akzo subsidiary to his supervisor; noting that the documents did not mention legal advice and were not sent to or from an outside lawyer; likewise finding that the privilege did not protect a business person's notes and communications with an in-house lawyer based in Holland)

Case Date Jurisidction State Cite Checked
2007-09-17 Other

Chapter: 22.6

Case Name: Upjohn v. United States, 449 U.S. 383, 394 (1981)
February 4, 2015 (PRIVILEGE POINT)

“Game Changer? The S.D.N.Y. Endorses a Company-Friendly Privilege Standard”

In In re General Motors LLC Ignition Switch Litigation, No. 14-MD-2543 (JMF), 2015 U.S. Dist. LEXIS 5199, at *220 (S.D.N.Y. Jan. 15, 2015), Judge Furman upheld General Motors' claim of privilege and work product protection for "notes and memoranda relating to the witness interviews" Jenner & Block conducted while investigating GM's ignition switch issue. The opinion naturally has received extensive media coverage, given the high profile. But many reports do not focus on the court's ground-breaking adoption of a company-friendly privilege standard.

Most courts provide privilege protection only to communications whose "primary purpose" relates to legal rather than business advice. Last year, the D.C. Circuit rejected that rule, and extended privilege protection to investigation-related documents if "legal advice was one of the significant purposes." In re Kellogg Brown & Root, Inc., 756 F.3d 754, 758-59 (D.C. Cir. 2014) (emphasis added) (also known as the Barko decision). Although acknowledging that the D.C. Circuit's decision did not bind it, the General Motors court adopted that standard. This appears to represent the first time another court has adopted the D.C. Circuit's favorable privilege standard. Most significantly, the court held that "the D.C. Circuit's holding is consistent with - if not compelled by - the Supreme Court's logic" in the seminal Upjohn decision. Gen. Motors, 2015 U.S. Dist. LEXIS 5199, at *240 (citing Upjohn v. United States, 449 U.S. 383, 394 (1981)).

The General Motors court's rejection of the "primary purpose" test and powerful endorsement of a "one of the significant purposes" standard could extend privilege protection in other contexts, such as with compliance-related communications.

Case Date Jurisidction State Cite Checked
1981-01-01 Federal
Comment:

key case


Chapter: 22.7

Case Name: City of Potomac Gen. Emps.' Ret. Sys. v. Wal-Mart, Inc., Case No. 5:12-cv-5162, 2017 U.S. Dist. LEXIS 69378, at *4, *11, *8-9, *9-10 (W.D. Ark. May 5, 2017)
(finding that Wal-Mart's investigation into alleged corruption in Mexico did not deserve privilege or work product protection; explaining that "former Wal-Mart in-house investigator [Halter] reviewed business records and interviewed fact witnesses to determine what occurred in Mexico."; holding that securities law plaintiffs alleging that Wal-Mart made misleading filings: (1) could discover factual details underlying documents provided to the New York Times and Congress, even if the disclosure was unauthorized; (2) could depose in-house investigator Halter about his findings, because the privilege did not apply; and (3) could discover documents Halter created during his investigation, because the work product doctrine did not apply; ordering Wal-Mart to "produce Ronald Halter's investigative reports, action plan, interview reports, and other factual compilations that Halter drafted in 2005 and 2006. Further, the Court will allow [plaintiff] to depose Ronald Halter a second time."; in supporting conclusion (3), explaining as follows: "According to Defendants, the documents prepared in conjunction with the 2005-2006 internal investigation, including Halter's work plans, interview reports, and December 2005 report, were created in anticipation of litigation or government investigations that could result if FCPA [Foreign Corrupt Practices Act] violations had occurred. Defendants argue in general terms that the internal investigation was initiated in direct response to allegations of illegal conduct, which created the prospect of litigation. However, the fact that the subject matter of these documents could conceivably be litigated at some point is not determinative. . . . Defendants have not offered the Court any evidence in the form of an affidavit or declaration setting forth the basis for the claim that the documents are protected by the work product doctrine. Defendants have the burden of proving the applicability of the work product doctrine to the documents prepared in conjunction with the internal investigation, and all that Defendants have offered as evidence are general, conclusory assertions by counsel that litigation was anticipated. If this was sufficient, it would render the burden to establish the protection meaningless."; "The facts before the Court seem to suggest that the investigation was not commenced and the report was not prepared because of any prospect of litigation but instead to gather factual information regarding an alleged bribery scheme orchestrated by Wal-Mart de Mexico. Halter testified that his reports simply recounted facts; and he was not given any special direction as to how to conduct the interviews; that he reported the facts he gathered; that he conducted no legal analysis; and that he did not send his reports to counsel. Thus, the Court finds that the factual materials regarding the 2005-2006 internal investigation that Halter drafted and provided to his superior, Joseph Lewis, including investigative reports, action plan, interview reports, and other factual compilations, are not protected by the work product doctrine. Thus, Wal-Mart shall produce these documents to PGERS [plaintiff]." (emphases added))

Case Date Jurisidction State Cite Checked
2017-05-05 Federal AR
Comment:

key case


Chapter: 22.7

Case Name: City of Potomac Gen. Emps.' Ret. Sys. v. Wal-Mart, Inc., Case No. 5:12-cv-5162, 2017 U.S. Dist. LEXIS 69378, at *4, *11, *7-8 (W.D. Ark. May 5, 2017)
(finding that Wal-Mart's investigation into alleged corruption in Mexico did not deserve privilege or work product protection; explaining that "former Wal-Mart in-house investigator [Halter] reviewed business records and interviewed fact witnesses to determine what occurred in Mexico."; holding that securities law plaintiffs alleging that Wal-Mart made misleading filings: (1) could discover factual details underlying documents provided to the New York Times and Congress, even if the disclosure was unauthorized; (2) could depose in-house investigator Halter about his findings, because the privilege did not apply; and (3) could discover documents Halter created during his investigation, because the work product doctrine did not apply; ordering Wal-Mart to "produce Ronald Halter's investigative reports, action plan, interview reports, and other factual compilations that Halter drafted in 2005 and 2006. Further, the Court will allow [plaintiff] to depose Ronald Halter a second time."; in supporting conclusion (2), explaining as follows: "Halter collected facts and conducted interviews pursuant to his duties as an investigator and communicated his findings to his direct superior, Joseph Lewis. Neither Halter nor Lewis is an attorney, and there is no indication that either Halter or Lewis communicated Halter's findings to an attorney. Halter testified that he conducted the investigation without any specific direction. There are no facts in the record to suggest that the purpose of Halter's investigation was to gather facts so that Defendants could obtain legal advice or that Defendants represented to Halter or Lewis that the investigation was commenced for the purpose of obtaining legal advice. The Court is not convinced that a communication from one non-attorney gathering facts, without any specific direction, to another non-attorney, without any indication of a purpose of obtaining legal advice, is a privileged communication. Accordingly, Halter's communications regarding the 2005 and 2006 internal investigation are not protected by the attorney-client privilege, and PGERS [plaintiff] is entitled to fully examine Halter regarding the facts he learned and reported to Lewis." (emphasis added))

Case Date Jurisidction State Cite Checked
2017-05-05 Federal AR
Comment:

key case


Chapter: 22.7

Case Name: In re Fairway Methanol LLC and Celanese Ltd., No. 14-16-00884-CV, 2017 Tex. App. LEXIS 830 (Tex. App. 14d Jan. 31, 2017)
(protecting as privileged documents created by a company's in-house lawyer investigation; noting that Texas did not follow the "primary purpose" test; but finding the work product doctrine applicable after noting that a company affidavit indicated that the departments role in the investigation was not ordinary; "Rowen's affidavit states that he was serving as counsel for Celanese Corporation, not relator Celanese Ltd., and that he requested that an investigative team provide the Celanese Law Department with the information needed to assess liability in potential litigation. Because the investigation was requested by counsel employed by Celanese Corporation, the investigation was for the benefit of not just relator Celanese Ltd., but also for Celanese Corporation which could anticipate litigation and who Plaintiffs have, in fact, sued in this court proceeding.")

Case Date Jurisidction State Cite Checked
2017-01-31 Federal TX
Comment:

key case


Chapter: 22.7

Case Name: Simon v. Northwestern University, Case No. 1:15-CV-1433, 2017 U.S. Dist. LEXIS 2461 (N.D. Ill. Jan. 6, 2017)
("In Illinois, confidential communications made by a client to his attorney are privileged, as are communications made to investigators employed by the attorney.")

Case Date Jurisidction State Cite Checked
2017-01-06 Federal IL

Chapter: 22.7

Case Name: Doe v. Phillips Exeter Acad., Civ. No. 16-cv-396-JL, 2016 U.S. Dist. LEXIS 141877, at *5, *8-9 (D.N.H. Oct. 13, 2016)
(finding that defendant Phillips Exeter Academy could not successfully claim privilege protection for a lawyer's investigation into possible sexual misconduct by a student; noting that defendant called the lawyer an "independent investigator," which meant that the lawyer was not assisting the defendant's lawyer in providing legal advice; also finding an implied waiver because the defendant relied on the investigation report in disciplining a student; also finding that defendant waived any possible privilege protection by disclosing portions of the investigation report to parents; inexplicably failing to deal with the work product doctrine; "[D]efendants explain that PEA's outside counsel commissioned Attorney McGintee's reports 'for the purpose of providing legal advice related to the school's handling of this student sexual misconduct matter.' . . . PEA's own statements concerning the purpose of Attorney McGintee's investigation, however, as well as its description of her as an 'independent investigator,' suggest otherwise."; "Finally, PEA's Dean Mischke has consistently described Attorney McGintee as an 'independent investigator' or an 'external investigator' in her communications with the Does and her statements in this court. . . . It seems difficult to reconcile such a description with the argument that Attorney McGintee -- the reports of that 'independent' or 'external' investigator -- acted as an agent of PEA's counsel made for the purposes of obtaining or providing legal advice to PEA. To the contrary, by describing Attorney McGintee as 'independent,' PEA appears to signal that Attorney McGintee was not acting as its outside counsel's agent.").

Case Date Jurisidction State Cite Checked
2016-10-13 Federal NH
Comment:

key case


Chapter: 22.7

Case Name: Patel v. Kensol-Franklin, Inc., Civ. A. No. 3:14-1439, 2016 U.S. Dist. LEXIS 36684 (M.D. Pa. March 22, 2016)
(in a bad faith insurance case, analyzing privilege and work product protection for a post-accident investigation; finding that both protections applied; "The court finds that only the photographs contained in the investigation report should be produced by Letica to the parties. All of the other documents were part of the post-accident investigation which was not in the ordinary course of business, and they were prepared under direction of attorney Michael for possible subsequent litigation closely related to this case, including the OSHA investigation. Attorney Michael had direct involvement with and controlled the fatal accident investigation from its inception. Also, Letica reasonably anticipated litigation immediately after the accident and communications in the investigation report following the accident fell within the work-product doctrine. The court's in camera review further shows that the Exhibits discussed above to which Letica asserts the attorney-client privilege do in fact contain 'information exchanged in order to facilitate the professional relationship between an attorney and his client with regard to ongoing or potential legal proceedings.'. . . As such, these documents are protected from disclosure by the attorney-client privilege and the work-product doctrine.")

Case Date Jurisidction State Cite Checked
2016-03-22 Federal PA

Chapter: 22.7

Case Name: Patel v. Kensol-Franklin, Inc., Civ. A. No. 3:14-1439, 2016 U.S. Dist. LEXIS 36684 (M.D. Pa. March 22, 2016)
(in a bad faith insurance case, analyzing privilege and work product protection for a post-accident investigation; finding that both protections applied; "These cases certainly support Letica's contention that the attorney-client privilege and the work-product doctrine protect communications made between its in-house attorney Michael and Hunter as well as the communications between Michael and the other employees of Letica. After the accident, attorney Michael conducted interviews of eyewitness employees of Letica and others who had knowledge of or facts relating to the event. Interviews were also performed by supervisory employees of Letica at attorney Michael's direction. Hunter then prepared the investigation report at the direction of attorney Michael.")

Case Date Jurisidction State Cite Checked
2016-03-22 Federal PA
Comment:

key case


Chapter: 22.7

Case Name: Patel v. Kensol-Franklin, Inc., Civ. A. No. 3:14-1439, 2016 U.S. Dist. LEXIS 36684 (M.D. Pa. March 22, 2016)
(in a bad faith insurance case, analyzing privilege and work product protection for a post-accident investigation; finding that both protections applied; "The court finds that this report was not complied in the ordinary course of business since it was intended to assist attorney Michael with an OSHA investigation as well as to implement post-accident modifications. It makes no difference that Hunter [Employee] prepared the report since the work-product doctrine also protects 'materials prepared by an attorney's agent.'. . . The report and the referenced communications involving the accident investigation performed at the direction of attorney Michael also are protected by the attorney-client privilege.")

Case Date Jurisidction State Cite Checked
2016-03-22 Federal PA

Chapter: 22.7

Case Name: Frickey v. Kobelco Stewart Bolling, Inc., Civ. A. No. 14-2 Sec. "I" (2), 2015 U.S. Dist. 27264 (E.D. La. March 5, 2015)
(finding that Dow's post-accident root cause analysis did not deserve privilege protection; noting Dow had already produced all witness statements and factual documents collected during the investigation, despite an in-house lawyer's involvement in the investigation; "Every page of the Root Cause Investigation report is marked 'attorney-client privileged.' The second page states that the report is an attorney-client communication that was prepared for the purpose of obtaining legal advice and notifies recipients that they may not disseminate it without permission from Dow Legal or Eddlemon. . . . The report contains no other references to law, legal advice or litigation. It includes factual analyses of the root causes that led to the accident and action items to address the identified causes. None of the action items are assigned to Eddlemon. The final page summarizes what has been learned and makes a few recommendations for what appear to be longer term actions."; "I find that Eddlemon's affidavit and the Root Cause Investigation report contain only conclusory and self-serving allegations about attorney-client privilege. Viewed in light of the overall content of the report, these allegations fail to carry Dow's burden to prove that the report was not prepared in the ordinary course of business of investigating an accident.")

Case Date Jurisidction State Cite Checked
2015-03-05 Federal LA
Comment:

key case


Chapter: 22.7

Case Name: Frickey v. Kobelco Stewart Bolling, Inc., Civ. A. No. 14-2 Sec. "I" (2), 2015 U.S. Dist. 27264 (E.D. La. March 5, 2015)
(finding that Dow's post-accident root cause analysis did not deserve privilege protection; noting Dow had already produced all witness statements and factual documents collected during the investigation, despite an in-house lawyer's involvement in the investigation; "Eddlemon [In-house lawyer] states that she and Dow Legal were involved in all phases of the investigation and that she 'supervised meetings, oversaw the investigative process, approved written documents, and in sum, oversaw preparation of the conclusions set forth in the' Root Cause Investigation report at issue. . . . She avers that the investigation was 'closed to third parties' and that "complete confidentiality was maintained throughout' it. . . . She states that the Root Cause Investigation 'Report and legal conclusions regarding the cause of the September 13, 2012 accident were prepared and ultimately relied upon by Dow and Union Carbide management and Dow Legal to respond to the incident, make recommendations, prepare the matter for trial, and in general, perform the regular functions of legal counsel.'")

Case Date Jurisidction State Cite Checked
2015-03-05 Federal LA

Chapter: 22.7

Case Name: United States v. NeuroScience, Inc., No. 14-mc-003-slc, 2015 U.S. Dist. LEXIS 20572, at *5 (W.D. Wis. Feb. 10, 2015)
April 8, 2015 (PRIVILEGE POINT)

“Court Condemns Law Firm's Privilege Claim as "Subterfuge": Part I”

Some companies begin internal investigations or audits for business reasons, but later try to cloak related communications and documents with work product privilege protection. Although some companies successfully argue that a business-related investigation "morphed" into a privilege-protected investigation, most attempts fail.

In United States v. NeuroScience, Inc., No. 14-mc-003-slc, 2015 U.S. Dist. LEXIS 20572, at *5 (W.D. Wis. Feb. 10, 2015), NeuroScience retained a regulatory compliance company (CodeMap) to conduct a "full, flat-fee compliance audit" of its billing practices after its billing manager suddenly resigned. About a month later, CodeMap reported that NeuroScience had overbilled Medicare and some insurance companies. In the meantime, NeuroScience's outside Minneapolis law firm learned that the ex-billing manager had accused the company of fraudulent billing practices. About ten days later, NeuroScience and its law firm agreed that the law firm "should supervise the remainder of CodeMap's audit activities." Id. at *7. CodeMap sent a Services Proposal indicating that the law firm would now direct CodeMap's "baseline" compliance audit, and stating that related communications would deserve privilege and work product protection. Id. However, CodeMap later admitted that (1) "counsel really did not provide much internal 'direction' to CodeMap at all" (id. at *8); (2) lawyers were not present when CodeMap auditors met with NeuroScience employees; and (3) lawyers generally did not receive copies of email message traffic between CodeMap and company employees during the audit. CodeMap's chief auditor later acknowledged that "'[b]y the time Counsel was involved, CodeMap already knew the work to be done and how to do it, so the legal oversight, as [he] understood it, was to maintain privilege.'" Id. at *9-10 (internal citation omitted).

Next week's Privilege Point will describe the court's work product and attorney-client privilege analysis.

Case Date Jurisidction State Cite Checked
2015-02-10 Federal WI
Comment:

key case


Chapter: 22.7

Case Name: United States v. NeuroScience, Inc., No. 14-mc-003-slc, 2015 U.S. Dist. LEXIS 20572, at *7 (W.D. Wis. Feb. 10, 2015)
April 15, 2015 (PRIVILEGE POINT)

“Court Condemns Law Firm's Privilege Claim as "Subterfuge": Part II”

Last week's Privilege Point described an outside regulatory compliance consultant's work for a company which worried about its non-compliant billing practices and about possible litigation, that consultant's later agreement to work under outside lawyers' "direction," and the admitted lack of any such day-to-day direction. United States v. NeuroScience, Inc., No. 14-mc-003-slc, 2015 U.S. Dist. LEXIS 20572, at *7 (W.D. Wis. Feb. 10, 2015).

The court first rejected NeuroScience's work product claim. The court held that the company hired the compliance auditor CodeMap for business purposes, and that lawyers' later involvement "was a tactic designed solely to cloak the audit documents" with some protection. Id. at *17. The court concluded that the outside lawyers "in fact provided no direction at all," and found no evidence that "CodeMap changed the focus of its audit or conducted it any differently after it was agreed that the Services Proposal should be routed through counsel." Id. at *18. Although outside lawyers used the audit's result, the court explained that "the focus is on the circumstances of the communication at the time it was made." Id. The court also rejected NeuroScience's privilege claim. The court noted that the company hired CodeMap "without any direction from counsel," and that CodeMap "conducted and completed [its] coding review and transmitted the results" to NeuroScience before any lawyer's involvement. Id. at *24. And after the lawyers' "post-hoc retention of CodeMap," there was no evidence that "the focus of CodeMap's audits changed." Id. at *25. The court therefore concluded that "there is no question that [the outside law firm's] retention of CodeMap was a subterfuge specifically designed to cloak the audits with privilege." Id. at *26.

This and other similar cases highlight the wisdom of involving lawyers at the first hint of a problem, and assuring their intense hands-on involvement in any consultants' work the company intends to withhold as privileged or as work product.

Case Date Jurisidction State Cite Checked
2015-02-10 Federal WI
Comment:

key case


Chapter: 22.7

Case Name: Wultz v. Bank of China Ltd., 11 Civ. 1266 (SAS) (GWG), 2015 U.S. Dist. LEXIS 8605 (S.D.N.Y. Jan. 21, 2015)
(in an opinion by Judge Gorenstein, finding that a compliance-initiated investigation into a defendant's possible tie with terrorists did not deserve privilege or work product protection; "'The actual evidence supplied by BOC nowhere refers to an attorney directing that any particular steps be taken by anyone, let alone that particular documents on the privilege log were generated at the direction of counsel.'")

Case Date Jurisidction State Cite Checked
2015-01-21 Federal NY

Chapter: 22.7

Case Name: Wultz v. Bank of China Ltd., 11 Civ. 1266 (SAS) (GWG), 2015 U.S. Dist. LEXIS 8605 (S.D.N.Y. Jan. 21, 2015)
(in an opinion by Judge Gorenstein, finding that a compliance-initiated investigation into a defendant's possible tie with terrorists did not deserve privilege or work product protection; "Here, by contrast [with Upjohn [Upjohn, 449 U.S. 383, 101 S. Ct. 677, 66 L. Ed. 2d 584] and In re Kellogg Brown & Root, Inc. [In re Kellogg Brown & Root Inc., 756 F.3d 754 (D.C. Cir. 2014)]], no communications with any attorneys are being sought and there is no evidence that any of the documents at issue were created at the direction of an attorney.")

Case Date Jurisidction State Cite Checked
2015-01-21 Federal NY

Chapter: 22.7

Case Name: In re General Motors LLC Ignition Switch Litig., 14-MD-2543 (JMF), 2015 U.S. Dist. LEXIS 5199 (S.D.N.Y. Jan. 15, 2015)
(finding that the attorney-client privilege and the work product doctrine protected notes and memoranda relating to the witness interviews conducted by the Jenner lawyers during the firm's investigation into General Motors ignition switch incidents; "[A]lthough the investigation here was conducted by outside counsel rather than in-house counsel, that difference from Upjohn strengthens rather than weakens New GM's claim to the privilege.")

Case Date Jurisidction State Cite Checked
2015-01-15 Federal NY

Chapter: 22.7

Case Name: In re Kellogg Brown & Root, Inc., No. 14-5055, 2014 U.S. App. LEXIS 12115, at *6-7 (D.C. Cir. June 27, 2014)
(granting a petition for writ of mandamus and vacating a lower court's holding that the privilege did not protect documents created during an internal corporate investigation of possible foreign wrongdoing; holding among other things that a privilege applied to an investigation if one "significant purpose" was the collection of facts lawyers required to give legal advice; "KBR's assertion of the privilege in this case is materially indistinguishable from Upjohn's assertion of the privilege in that case. As in Upjohn, KBR initiated an internal investigation to gather facts and ensure compliance with the law after being informed of potential misconduct. And as in Upjohn, KBR's investigation was conducted under the auspices of KBR's in-house legal department, acting in its legal capacity. The same considerations that led the Court in Upjohn to uphold the corporation's privilege claims apply here.")

Case Date Jurisidction State Cite Checked
2014-06-27 Federal

Chapter: 22.7

Case Name: In re Kellogg Brown & Root, Inc., No. 14-5055, 2014 U.S. App. LEXIS 12115, at *11-12 (D.C. Cir. June 27, 2014)
(granting a petition for writ of mandamus and vacating a lower court's holding that the privilege did not protect documents created during an internal corporate investigation of possible foreign wrongdoing; holding among other things that a privilege applied to an investigation if one "significant purpose" was the collection of facts lawyers required to give legal advice; "The District Court erred because it employed the wrong legal test. The but-for test articulated by the District Court is not appropriate for attorney-client privilege analysis. Under the District Court's approach, the attorney-client privilege apparently would not apply unless the sole purpose of the communication was to obtain or provide legal advice. That is not the law.")

Case Date Jurisidction State Cite Checked
2014-06-27 Federal

Chapter: 22.7

Case Name: In re Kellogg Brown & Root, Inc., No. 14-5055, 2014 U.S. App. LEXIS 12115, *13-14 (D.C. Cir. June 27, 2014)
(granting a petition for writ of mandamus and vacating a lower court's holding that the privilege did not protect documents created during an internal corporate investigation of possible foreign wrongdoing; holding among other things that a privilege applied to an investigation if one "significant purpose" was the collection of facts lawyers required to give legal advice; "[I]t is clearer, more precise, and more predictable to articulate the test as follows: Was obtaining or providing legal advice a primary purpose of the communication, meaning one of the significant purposes of the communication? . . . Sensibly and properly applied, the test boils down to whether obtaining or providing legal advice was one of the significant purposes of the attorney-client communication. In the context of an organization's internal investigation, if one of the significant purposes of the internal investigation was to obtain or provide legal advice, the privilege will apply. That is true regardless of whether an internal investigation was conducted pursuant to a company compliance program required by statute or regulation, or was otherwise conducted pursuant to company policy.")

Case Date Jurisidction State Cite Checked
2014-06-27 Federal

Chapter: 22.7

Case Name: In re Kellogg Brown & Root, Inc., No. 14-5055, 2014 U.S. App. LEXIS 12115, at *8-9 (D.C. Cir. June 27, 2014)
(granting a petition for writ of mandamus and vacating a lower court's holding that the privilege did not protect documents created during an internal corporate investigation of possible foreign wrongdoing; holding among other things that a privilege applied to an investigation if one "significant purpose" was the collection of facts lawyers required to give legal advice; "[T]he District Court pointed out that in Upjohn the interviewed employees were expressly informed that the purpose of the interview was to assist the company in obtaining legal advice, whereas here they were not. The District Court further stated that the confidentiality agreements signed by KBR employees did not mention that the purpose of KBR's investigation was to obtain legal advice. Yet nothing in Upjohn requires a company to use magic words to its employees in order to gain the benefit of the privilege for an internal investigation. And in any event, here as in Upjohn employees knew that the company's legal department was conducting an investigation of a sensitive nature and that the information they disclosed would be protected. . . . KBR employees were also told not to discuss their interviews 'without the specific advance authorization of KBR General Counsel.'")

Case Date Jurisidction State Cite Checked
2014-06-27 Federal

Chapter: 22.7

Case Name: In re Kellogg Brown & Root, Inc., No. 14-5055, 2014 U.S. App. LEXIS 12115, at *8 (D.C. Cir. June 27, 2014)
(granting a petition for writ of mandamus and vacating a lower court's holding that the privilege did not protect documents created during an internal corporate investigation of possible foreign wrongdoing; holding among other things that a privilege applied to an investigation if one "significant purpose" was the collection of facts lawyers required to give legal advice; "[T]he investigation here was conducted at the direction of the attorneys in KBR's Law Department. And communications made by and to non-attorneys serving as agents of attorneys in internal investigations are routinely protected by the attorney-client privilege.")

Case Date Jurisidction State Cite Checked
2014-06-27 Federal

Chapter: 22.7

Case Name: In re Kellogg Brown & Root, Inc., No. 14-5055, 2014 U.S. App. LEXIS 12115, at *7 (D.C. Cir. June 27, 2014)
(granting a petition for writ of mandamus and vacating a lower court's holding that the privilege did not protect documents created during an internal corporate investigation of possible foreign wrongdoing; holding among other things that a privilege applied to an investigation if one "significant purpose" was the collection of facts lawyers required to give legal advice; "But Upjohn does not hold or imply that the involvement of outside counsel is a necessary predicate for the privilege to apply.")

Case Date Jurisidction State Cite Checked
2014-06-27 Federal

Chapter: 22.7

Case Name: McCullough v. Fraternal Order of Police, Chicago Lodge 7, No. 12 C 9359, 2014 U.S. Dist. LEXIS 79281, at *7-8 (N.D. Ill. June 11, 2014)
(analyzing defendant's investigation of possible sexual harassment; holding that the investigation-related documents deserved privilege protection and work product protection; holding that the defendant could refer to remedial steps and the investigation, but would waive any protection by using investigation-related documents at the trial; "[T]he Court finds that the D'Alba Report (and associated notes and memoranda) is protected by the attorney client and work product privileges. FOP asserts that the report contains 'legal analysis and advice' from D'Alba, which was hired 'in response to a complaint of sexual harassment by an employee' and 'due to the prospect of litigation.' . . . . The firm conducted 'confidential interviews,' prepared the report, marked the report 'privileged and confidential,' and shared the report with only certain FOP management employees and no third parties. . . . "The conduct of the D'Alba attorneys during their investigation is persuasive; the attorneys conducted confidential interviews, marked their report 'privileged and confidential,' and restricted access by third parties to the report.")

Case Date Jurisidction State Cite Checked
2014-06-11 Federal IL

Chapter: 22.7

Case Name: Wultz v. Bank of China Ltd., No. 11 Civ. 1266 (SAS), 2013 U.S. Dist. LEXIS 165210, at *4-5 (S.D.N.Y. Nov. 19, 2013)
(reconsidering an October 24, 2013, opinion, and affirming the court's early conclusions; "I will stress again that neither attorney-client privilege nor work-product protection applies 'to "an internal corporate investigation . . . made by management itself."' To assert privilege over any documents pertaining to the internal investigation into plaintiffs' demand letter, BOC must show that the communications were made as part of an internal investigation that proceeded at the direction of counsel for the purpose of obtaining legal advice." (citation omitted))

Case Date Jurisidction State Cite Checked
2013-11-19 Federal NY B 5/14

Chapter: 22.7

Case Name: Freescale Semiconductor, Inc. v. Maxim Integrated Prods., Inc., A-13-CV-075-LY, 2013 U.S. Dist. LEXIS 155391, at *11-12, *12-13 (W.D. Tex. Oct. 30, 2013)
(concluding that a company could not claim privilege protection for the first call it received from a whistleblowing employee about possible misconduct within the corporation, but that the privilege could protect later communications between the anonyomous whistleblower and the company's lawyer; "[T]he anonymous whistleblower made three submissions via the EthicsPoint portal used by Maxim. An initial submission was made on December 14, 2011, and two follow-up communications were submitted on December 20, 2011, and February 24, 2012. Maxim's Chief Compliance Officer and General Counsel, Ed Medlin, communicated with the anonymous whistleblower twice via EthicsPoint -- once on December 14, 2011, in response to the initial submission and again on February 27, 2012, in response to the whistleblower's submission on February 24, 2012. Upon review of the documents containing these discussions, the Court determines that the initial submission made by the anonymous whistleblower on December 14, 2011, is not protected by the attorney-client privilege and should be produced. The initial submission is distinguishable from the questionnaires at issue in Upjohn [Upjohn Co. v. United States, 449 U.S. 383 (1981)] because it was made prior to the start of any investigation by Maxim into the specific allegations that Freescale's software was being improperly used at Maxim. There is also insufficient evidence to demonstrate that the anonymous whistleblower was seeking legal advice or that this information was somehow solicited by Maxim in order for Maxim's legal counsel to render legal advice to the company. Consequently, the Court concludes that the initial submission by the anonymous whistleblower is not protected by the attorney-client privilege and must be produced."; "However, the subsequent communications between Ed Medlin and the anonymous whistleblower via EthicsPoint are protected by the attorney-client privilege. . . . In the initial communication the whistleblower identifies him or herself as a Maxim employee. The content of the subsequent communications show that more specific information was being solicited from the anonymous whistleblower -- a Maxim employee -- in order for Maxim's General Counsel, Ed Medlin, to investigate the allegations and render legal advice to Maxim. Additionally, the content of the follow-up communications also clarifies that the messages were exchanged after Maxim had started its investigation into the anonymous whistleblower's claims.")

Case Date Jurisidction State Cite Checked
2013-10-30 Federal TX B 5/14

Chapter: 22.7

Case Name: Wultz v. Bank of China Ltd., No. 11 Civ. 1266 (SAS), 2013 U.S. Dist. LEXIS 51181, at *51-52 (S.D.N.Y. Apr. 9, 2013)
(finding that neither the attorney-client privilege nor the work product doctrine protected an investigation by a company's compliance department into a terrorism bombing; "The evidence cited by both parties consists solely of an excerpt from the deposition of BOC's Chief Compliance Officer John Beauchemin as well as his declaration. These materials do not show that any attorneys were involved in the preparation of the Shurafa Files, nor that the Files contain attorney work-product or attorney-client communications. As plaintiffs suggest, the cited materials indicate that after Beauchemin received plaintiffs' demand letter, he called outside counsel, then set about performing the investigation within the Compliance Department -- without the involvement of any counsel, and not for the purpose of obtaining legal assistance." (footnote omitted))

Case Date Jurisidction State Cite Checked
2013-04-09 Federal NY B 3/14

Chapter: 22.7

Case Name: Baird v. Dolgencorp, L.L.C., No. 4:11 CV 1589 DDN, 2013 U.S. Dist. LEXIS 17269, at *3 (E.D. Mo. Feb. 5, 2013)
(finding that a plaintiff could depose the defendant's investigator, who had videotaped plaintiff as part of the investigation; "The privilege also extends to communications between investigators and attorneys.")

Case Date Jurisidction State Cite Checked
2013-02-05 Federal MO B 2/14

Chapter: 22.7

Case Name: Farzan v. Wells Fargo Bank, No. 12 Civ. 1217 (RJS) (JLC), 2012 U.S. Dist. LEXIS 183623, at *4 (S.D.N.Y. Dec. 28, 2012)
(holding that communications to and from a bank's EEO consultant working under the supervision of the law department deserved privilege protection, because the consultant was working as the lawyer's agent; "[I]t is well-settled that '[f]actual investigations conducted by an agent of the attorney, such as 'gathering statements from employees, clearly fall within the attorney-client rubric.'"; "Although Defendant Bernard [EEO consultant working under supervision of defendant's legal department] is not an attorney, it is undisputed that she conducted the internal investigation on behalf of Wells Fargo's in-house counsel for the purpose of representing Wells Fargo in its proceedings before the EEOC. Thus, her conversations with Wells Fargo employees are plainly protected by the attorney-client privilege.")

Case Date Jurisidction State Cite Checked
2012-12-28 Federal NY B 5/13

Chapter: 22.7

Case Name: United States v. ISS Marine Services, Inc., Misc. A. No. 12-481 (BAH), 905 F. Supp. 2d 121, 2012 U.S. Dist. LEXIS 166088 (D.D.C. Nov. 21, 2012)
("If a communication would have been made even if legal advice were not explicitly being sought, then it is difficult to say that that communication's primary purpose was to seek legal advice."; "In applying these principles, the Government argues that the Audit Report was not created for the purpose of seeking legal advice. The Government posits that 'nothing about the March 2008 Audit Report indicates that it was part of a request for legal advice,' the Report was 'not directed to any attorney or a person employed by an attorney,' it 'does not contain any legends indicating that it is privileged,' and 'Inchcape's CEO waited nearly two months after it was completed to forward the Audit Report to its outside counsel.'. . . In support of this argument, the Government offers the sworn declaration of Larry Cosgriff, who served as the Senior Vice President of Inchcape Government Services during the relevant time period. As discussed above, Cosgriff states that it was his understanding that Hyldager and Tory 'undertook this internal audit to obtain information to enable Messrs. Hyldager and Tory, the Inchcape audit committee and the Inchcape Board of Directors to make a business decision as to what further action, if any, Inchcape would take to address' the allegations raised by the two Inchcape employees."; "At bottom, the respondent's claim to privilege appears to be premised on a gimmick: exclude counsel from conducting the internal investigation but retain them in a watered-down capacity to 'consult' on the investigation in order to cloak the investigation with privilege. Unfortunately for the respondent, this sort of 'consultation lite' does not qualify the Audit Report for the protections of the attorney-client privilege. First and foremost, the fact that Inchcape purposefully eschewed the involvement of outside counsel – or any attorneys whatsoever – in the internal investigation and audit militates strongly against applying the attorney-client privilege. When a company fails to involve lawyers directly in an internal investigation, the company faces a higher burden to demonstrate that the attorney-client privilege applies to the results of that investigation. The Tory Declaration indicates that, at most, A&P generically 'recommended initiating an internal investigation' and drafted a memorandum that 'framed' the issues relating to 'potential criminal and civil liability implicated by the activities as reported.'. . . The Tory Declaration also states that A&P 'prepared a list of documents necessary to more fully assess the issues identified,'. . . though Tory notably does not specify that A&P would be the ones 'more fully assess[ing] the issues identified.' Although Tory states that he pursued the internal investigation 'in consultation with outside counsel,'. . . the record is devoid of any evidence to suggest that A&P provided any consultation to ISS Marine while the investigation was actually being conducted. A&P's framing of the issues related to potential liability and its guidance about the types of documents that would be helpful all took place before the investigation began. As Cosgriff explains: "A&P did not participate in the interview process or the review of documentary evidence.'. . . Even when Inchcape took steps to verify the information in the Audit Report, Tory indicates that Hyldager performed this 'follow up,' rather than an attorney."; "This sort of arms-length coaching by counsel, as opposed to the direct involvement of an attorney, undercuts the purposes of the attorney-client privilege in the context of an internal investigation."; "Thus, the Audit Report memoralizing the contents of the documents and information gathered from this investigation and audit does not justify the protection of the attorney-client privilege. For the results of an internal investigation to enjoy the attorney-client privilege, the company must clearly structure the investigation as one seeking legal advice and must ensure that attorneys themselves conduct or supervise the inquiries and, at the very least, the company must make clear to the communicating employees that the information they provide will be transmitted to attorneys for the purpose of obtaining legal advice.")

Case Date Jurisidction State Cite Checked
2012-11-21 Federal DC
Comment:

key case


Chapter: 22.7

Case Name: United States v. ISS Marine Servs., 905 F. Supp. 2d 121, 130 (D.D.C. 2012)
(analyzing privilege and work product protection for an audit; noting that the company had specifically indicated that it did not need the assistance of Arnold & Porter in connection with the audit; "Although Tory [defendant's officer] states [in his affidavit] that he pursued the internal investigation 'in consultation with outside counsel,' . . . the record is devoid of any evidence to suggest that A&P provided any consultation to ISS Marine while the investigation was actually being conducted. A&P's framing of the issues related to potential liability and its guidance about the types of documents that would be helpful all took place before the investigation began.")

Case Date Jurisidction State Cite Checked
2012-01-01 Federal DC B 7/13

Chapter: 22.7

Case Name: United States v. ISS Marine Servs., 905 F. Supp. 2d 121, 130 (D.D.C. 2012)
(analyzing privilege and work product protection for an audit; noting that the company had specifically indicated that it did not need the assistance of Arnold & Porter in connection with the audit; "This sort of arms-length coaching by counsel, as opposed to the direct involvement of an attorney, undercuts the purposes of the attorney-client privilege in the context of an internal investigation. Clearly, when an attorney is absent from the information-gathering process, 'the original communicator has no intention that the information be provided a lawyer for the purposes of legal representation.'" (citation omitted))

Case Date Jurisidction State Cite Checked
2012-01-01 Federal DC B 7/13

Chapter: 22.7

Case Name: United States v. ISS Marine Servs., 905 F. Supp. 2d 121, 129-30 (D.D.C. 2012)
(analyzing privilege and work product protection for an audit; noting that the company had specifically indicated that it did not need the assistance of Arnold & Porter in connection with the audit; "[T]he respondent's claim to privilege appears to be premised on a gimmick: exclude counsel from conducting the internal investigation but retain them in a watered-down capacity to 'consult' on the investigation in order to cloak the investigation with privilege. Unfortunately for the respondent, this sort of 'consultation lite' does not qualify the Audit Report for the protections of the attorney-client privilege. First and foremost, the fact that Inchcape [affiliate of defendant] purposefully eschewed the involvement of outside counsel -- or any attorneys whatsoever -- in the internal investigation and audit militates strongly against applying the attorney-client privilege. When a company fails to involve lawyers directly in an internal investigation, the company faces a higher burden to demonstrate that the attorney-client privilege applies to the results of that investigation.")

Case Date Jurisidction State Cite Checked
2012-01-01 Federal DC B 7/13

Chapter: 22.7

Case Name: United States v. ISS Marine Servs., 905 F. Supp. 2d 121, 131 (D.D.C. 2012)
(analyzing privilege and work product protection for an audit; noting that the company had specifically indicated that it did not need the assistance of Arnold & Porter in connection with the audit; "For the results of an internal investigation to enjoy the attorney-client privilege, the company must clearly structure the investigation as one seeking legal advice and must ensure that attorneys themselves conduct or supervise the inquiries and, at the very least, the company must make clear to the communicating employees that the information they provide will be transmitted to attorneys for the purpose of obtaining legal advice.")

Case Date Jurisidction State Cite Checked
2012-01-01 Federal DC B 7/13

Chapter: 22.7

Case Name: Planicka v. Am. Anesthesiology of Va., P.C., CL 2011 1344, 2011 Va. Cir. LEXIS 135, at *2 (Va. Cir. Ct. Nov. 22, 2011)
("Upon review of Carey's investigation notes, the Court finds the investigation proceeded with guidance and direction from counsel, and in anticipation of litigation. Such information is privileged under Rule 4:1(b)(3) work product doctrine and under attorney-client privilege, and is not discoverable by Plaintiff Planicka in this matter.")

Case Date Jurisidction State Cite Checked
2011-11-22 State VA

Chapter: 22.7

Case Name: Wierciszewski v. Granite City Ill. Hosp. Co., Case No. 11-cv-120-GPM-SCW, 2011 U.S. Dist. LEXIS 128772, at *4 (S.D. Ill. Nov. 7, 2011)
("[I]n this case it is clear from the content of the emails that counsel was not directing the investigation. Contrary to the arguments of Defendant, it appears from the emails presented in the privilege log that these emails constituted communications between Ron Payton and his supervisor, Bud Wood, regarding the investigation of and determination to ultimately terminate Plaintiff's employment. The context and content of the emails suggest that Bud Wood was directing the investigation, not attorney Rhea Garrett as argued by Defendant. While Defendant's general counsel was carbon copied (CC'd) on some of the emails, it appears from the context of the emails that Ron Payton and others were merely making attorney Garrett aware of the situation and were not emailing him for the purpose of seeking legal advice from counsel.")

Case Date Jurisidction State Cite Checked
2011-11-07 Federal IL B 7/16

Chapter: 22.8

Case Name: In re Experian Data Breach Litig., SACV 15-01592 AG (DFMx), Slip Op. at 2, 5 (C.D. Cal. May 18, 2017)
(finding that the work product doctrine protected materials created by a forensic consultant hired by Jones Day to investigate Experian's data breach, making it unnecessary to analyze possible privilege protection; holding that: (1) the work product doctrine protected the documents; (2) plaintiffs could not overcome the work product protection; and (3) Experian did not waive the work product protection by disclosing the forensic consultant's report internally and to fellow common interest participant T-Mobile (Experian's client); explaining that "in this circuit, a 'because-of' test is used to determine whether a document was prepared in anticipation of litigation, which means that a document doesn't need to be prepared exclusively for use in litigation."; in supporting its conclusion (3), explaining as follows: "The final issue to be addressed is whether the protection of the work product doctrine over Mandiant's report was waived by Experian. Parties may disclose documents without waiving work product protection if that disclosure is consistent with maintaining the secrecy against opponents. . . . The disclosure here was very limited and closely controlled by Jones Day and Experian's in-house legal department. The report wasn't given to Experian's Incident Response Team or to the personnel working on remediation of the systems involved in the attack. Further, just before Jones Day retained Mandiant, Experian and T-Mobile, its client, entered into a joint defense agreement ('JDA') because they recognized the risk of litigation arising from the breach. And Experian's counsel gave T-Mobile's counsel the report under the JDA, in redacted form. The disclosure here doesn't amount to a waiver of the work product doctrine." (emphasis added))

Case Date Jurisidction State Cite Checked
2017-05-18 Federal CA
Comment:

key case


Chapter: 22.8

Case Name: In re Fairway Methanol LLC and Celanese Ltd., No. 14-16-00884-CV, 2017 Tex. App. LEXIS 830 (Tex. App. 14d Jan. 31, 2017)
(protecting as privileged documents created by a company's in-house lawyer investigation; noting that Texas did not following the "primary purpose" test; but finding the work product doctrine applicable after noting that a company affidavit indicated that the departments role in the investigation was not ordinary; "According to Rowen [Celanese's corporation's in-house lawyer], the primary purpose for the investigation and creation of documents and communications therefrom was to aid Celanese in preparing to defend itself in anticipated litigation. As a secondary concern, the information communicated from the investigative team to the legal department was necessary for the legal department to provide Celanese with business and legal advice with respect to the potential termination of employees involved in the accident. The team members were immediately informed that the investigation was for the purpose of assisting counsel and that all communications and documents generated during their investigation must be kept confidential and marked as 'Privileged and Confidential' or 'Attorney-Client Privilege -- Attorney Work Product.' The investigative team conducted interviews and site inspections and communicated their findings to the Celanese Law Department. They prepared a root cause analysis which was necessary for the Celanese Law Department to evaluate liability and begin developing a strategy for defending itself in likely civil and regulatory litigation. Rowen states, 'All of the communications withheld by Celanese were communications between Celanese in-house and outside counsel and their representatives made for the purposes of providing and communicating legal advice or otherwise facilitating or providing professional legal services.'"; "Plaintiffs cite no Texas authority for their position that the communication must have been made for the primary purpose of soliciting legal, rather than business advice. And the federal decisions supporting Plaintiffs' position are not binding on our court. More important, the language of Rule 503(b) does not require that the primary purpose of the communication be to facilitate the rendition of legal services; it only requires that the communication be made to facilitate the rendition of legal services.")

Case Date Jurisidction State Cite Checked
2017-01-31 Federal TX
Comment:

key case


Chapter: 22.8

Case Name: Hawa v. Coatesville Area School Dist., Civ. A. No. 15-4828, 2016 U.S. Dist. LEXIS 122912 (E.D. Pa. Sept. 12, 2016)
(holding that defendant's release of an investigation report about possible management misconduct did not result in a subject matter waiver; explaining that defendant school district investigated allegedly racist text messages, and ultimately publicized the report; "In an effort to be transparent regarding various allegations of misconduct by CASD, CASD released the Report to the public."; "CASD moves to quash the subpoenas, asserting, inter alia, that they seek privileged information. . . . Plaintiffs argue that CASD has waived any claim of privilege over the responsive documents by publishing the Report. . . . In response, CASD contends that its publication of the Report did not act as a waiver with respect to any attorney-client privileged information related to the Report that was not disclosed."; "There is no question that the work of 'an attorney who investigates complaints and conducts interviews within a company or an organization retains the same entitlement to the attorney-client privilege as if he or she were offering pure legal advice.'. . . Here, Plaintiffs argue that by releasing the Report CASD's attorneys had produced as the result of their investigation, CASD has waived its attorney-client privilege as to all documents that were consulted in the preparation of the Report as well as all related communications."; "It is true, as CASD contends, that a party generally waives the privilege if it voluntarily discloses a privileged communication to a third party. . . . However, it also is well-recognized that a party may make a partial waiver of the attorney-client privilege with respect to attorney-client communications actually disclosed without waiving its attorney-client privilege in its entirety unless a partial waiver would be unfair to a party's adversary. . . . The 'central element' in determining whether a partial waiver exists is the question of fairness."; "The doctrine of partial waiver is applicable in cases where attorneys conduct investigations on behalf of a client and the client then releases the attorney's report without releasing underlying documents and communications."; "In the present case, the Attorneys prepared the Report as part of a wide-ranging investigation of an array of improper and potentially unlawful activities allegedly carried out by CASD's former leadership that had become the subject of a publicly-reported investigative grand jury report. . . . as a public entity, released the Report to provide transparency to its constituents as to a matter of significant public interest. Plaintiffs have not argued that CASD has made any strategic use of the Report in this litigation, that it relies on the Attorneys' investigation as a form of defense in this action or that it has "'made factual assertions, the truth of which can only be assessed by examination of the privileged communications.'". . . They have not articulated any basis on which nondisclosure of the communications and materials underlying the Report would impose any unfairness on them. Nor have they argued, or provided any basis for the Court to conclude that any of the non-privileged materials the Attorneys collected in their investigation are not available to them through ordinary discovery addressed to the materials' original sources. Plaintiffs have merely alleged a blanket waiver of the attorney-client privilege for all materials consulted or obtained in the preparation of the Report and all communications relating to it. . . . As the authority discussed above demonstrates, Plaintiffs' blanket-waiver argument is unavailing.")

Case Date Jurisidction State Cite Checked
2016-09-12 Federal PA

Chapter: 22.8

Case Name: U.S. Bank National Association v. PHL Variable Insurance Company, Civ. No. 12-877 (JRT/TNL), 2016 U.S. Dist. LEXIS 42670 (D. Minn. March 30, 2016)
(finding that neither the attorney-client privilege nor the work product doctrine protected a risk analysis prepared by Bracewell & Guiliani; including after an in camera review the risk assessment involved business rather than legal concern; "PHL argues generally that portions of the Report that make specific recommendations should be protected as legal advice. However, as discussed above, aside from the additional portions of this Court finds protected, the rest of the recommendations are improvements to PHL's business practices in order to minimize the economic risk of STOLI transactions and not legal recommendations.")

Case Date Jurisidction State Cite Checked
2016-07-30 Federal MN

Chapter: 22.8

Case Name: Thomas v. Kellogg Company, Case No. C13-5136-RBL, 2016 U.S. Dist. LEXIS 66881 (W.D. Wash. May 20, 2016)
(finding that work prepared by a consulting firm or Kellogg did not deserve privilege or work product protection; noting that plaintiff's Rule 30(b)(6) witness did not know who commissioned the report; also noting that the court realized the engagement letter between Kellogg and the consultant and the consultant's report itself; "A review of the report confirms that it was not prepared for Kellogg's attorneys so they could provide legal advice; it was patently prepared to assist Kellogg's in making its workforce more efficient and 'effective in growing sales' -- quintessential business advice."; "The engagement letter (sent by Willard Bishop to a Mr. Martin at 'DSD cost control'), the agreement, and the Report itself all confirm what the 30(b)(6) witness explained: the Report was a study of the efficiencies or 'effectiveness' of the RSRs."; "[N]one of the documents references any legal issue or litigation. And while virtually all business decisions can or do have 'legal implications' that does not mean that every business decision run through an in-house attorney is attorney-client privileged."; also finding the work product doctrine inapplicable)

Case Date Jurisidction State Cite Checked
2016-05-20 Federal WA
Comment:

key case


Chapter: 22.8

Case Name: U.S. Bank National Association v. PHL Variable Insurance Company, Civ. No. 12-877 (JRT/TNL), 2016 U.S. Dist. LEXIS 42670 (D. Minn. March 30, 2016)
(finding that neither the attorney-client privilege nor the work product doctrine protected a risk analysis prepared by Bracewell & Guiliani; including after an in camera review the risk assessment involved business rather than legal concern; "PHL argues generally that portions of the Report that make specific recommendations should be protected as legal advice. However, as discussed above, aside from the additional portions of this Court finds protected, the rest of the recommendations are improvements to PHL's business practices in order to minimize the economic risk of STOLI transactions and not legal recommendations.")

Case Date Jurisidction State Cite Checked
2016-03-30 Federal MN
Comment:

key case


Chapter: 22.8

Case Name: U.S. Bank National Ass'n v. PHL Variable Insurance Co., Civ. No. 12-877 (JRT/TNL), 2016 U.S. Dist. LEXIS 42670, at *3 (D. Minn. Mar. 30, 2016)
May 25, 2016 (PRIVILEGE POINT)

"Court Finds Bracewell & Guiliani Report Unprotected by the Privilege or the Work Product Doctrine"

Many clients assume that the attorney-client privilege will almost always automatically protect any law firm's report to them, and that the work product doctrine will also apply whenever they anticipate litigation. Like other common client assumptions, this overly optimistic view is frequently wrong.

In U.S. Bank National Ass'n v. PHL Variable Insurance Co., defendant PHL withheld from production a 39-page report written by three lawyers from the law firm then known as Bracewell & Guiliani — supporting its privilege and work product claim with a declaration that it retained Bracewell & Guiliani "for the purpose of seeking legal consultation, advice and counsel." Civ. No. 12-877 (JRT/TNL), 2016 U.S. Dist. LEXIS 42670, at *3 (D. Minn. Mar. 30, 2016). But the court rejected both claims. Among other things, the court pointed to non-protected emails, undoubtedly written by the defendant's business folks -- announcing that the company had hired Bracewell & Guiliani "'to review our current procedures,'" because that law firm had provided services to others "'serious about ensuring the quality of business.'" Id. At *6 (internal citations omitted). Other unprotected client documents described the law firm's activities as "'consulting,'" and mentioned the firm's recommendations about the company's "'business plan.'" Id. At *7 (internal citations omitted). The court also reviewed in camera the Bracewell & Guiliani report itself — noting that "the majority of the Report suggests improvements to PHL's business practices." Id. The court again pointed to its in camera review of the report in also rejecting PHL's work product claim — noting that the firm's report "was not 'mapping litigation strategy.'" Id. At *16 (citation omitted).

Corporations hiring law firms should remember that a court might review business executives' description of the law firm's role, and also read the law firm's communications.

Case Date Jurisidction State Cite Checked
2016-03-30 Federal MN
Comment:

key case


Chapter: 22.8

Case Name: In re Kellogg Brown & Root, Inc., No. 14-5319, 2015 U.S. App. 14016 (D.C. App. Aug. 11, 2015)
(granting a writ of mandamus and reversing the trial court's holding that KBR waived protections by disclosing documents while preparing its Rule 30(b)(6) deponent, and by inferring in a pleading footnote that its investigation did not uncover any wrongdoing; "If allowed to stand, the District Court's rulings would ring alarm bells in corporate general counsel offices throughout the country about what kinds of descriptions of investigatory and disclosure practices could be used by an adversary to defeat all claims of privilege and protection of an internal investigation."; "These alarm bells would be well founded. If all it took to defeat the privilege and protection attaching to an internal investigation was to notice a deposition regarding the investigations (and the privilege and protection attaching them), we would expect to see such attempts to end-run these barriers to discovery in every lawsuit in which a prior internal investigation was conducted relating to the claims. Accordingly, we think it is essential to act on this Petition in order to protect our privilege waiver jurisprudence.")

Case Date Jurisidction State Cite Checked
2015-08-11 Federal DC
Comment:

key case


Chapter: 22.8

Case Name: Frickey v. Kobelco Stewart Bolling, Inc., Civ. A. No. 14-2 Sec. "I" (2), 2015 U.S. Dist. 27264 (E.D. La. March 5, 2015)
(finding that Dow's post-accident root cause analysis did not deserve privilege protection; noting Dow had already produced all witness statements and factual documents collected during the investigation, despite an in-house lawyer's involvement in the investigation; "Dow admitted that Root Cause Investigations 'are standard business practice' for 'run-of-the-mill matters that occur during the day-to-day operation of facilities,' although Dow states that these investigations are not typically managed by counsel. Dow tries to distinguish the subject Root Cause Investigation from 'run-of-the-mill matters,' based on Eddlemon's participation on the investigative team. However, the evidence shows that Root Cause Investigations of serious matters in general and of this particular case, leading to a single -- and the only -- analytical report to determine the root causes of an event and implement appropriate remedial measures, are just as much Dow's standard business practice as investigations of more mundane incidents. Eddlemon's professed anticipation of litigation, her participation on the team and Dow's policy of keeping the investigation confidential cannot convert a factual report prepared in the ordinary course of business into attorney-client privileged material. Dow cannot convert what is standard business practice performed for a variety of non-legal purposes into privileged material through the simple expedient measure of adding a lawyer into the mix. Dow has failed to show that the report refers to legal, rather than business or technical, advice and recommendations.")

Case Date Jurisidction State Cite Checked
2015-03-05 Federal LA B 7/15

Chapter: 22.8

Case Name: Frickey v. Kobelco Stewart Bolling, Inc., Civ. A. No. 14-2 Sec. "I" (2), 2015 U.S. Dist. 27264 (E.D. La. March 5, 2015)
(finding that Dow's post-accident root cause analysis did not deserve privilege protection; noting Dow had already produced all witness statements and factual documents collected during the investigation, despite an in-house lawyer's involvement in the investigation; "Every page of the Root Cause Investigation report is marked 'attorney-client privileged.' The second page states that the report is an attorney-client communication that was prepared for the purpose of obtaining legal advice and notifies recipients that they may not disseminate it without permission from Dow Legal or Eddlemon. . . . The report contains no other references to law, legal advice or litigation. It includes factual analyses of the root causes that led to the accident and action items to address the identified causes. None of the action items are assigned to Eddlemon. The final page summarizes what has been learned and makes a few recommendations for what appear to be longer term actions."; "I find that Eddlemon's affidavit and the Root Cause Investigation report contain only conclusory and self-serving allegations about attorney-client privilege. Viewed in light of the overall content of the report, these allegations fail to carry Dow's burden to prove that the report was not prepared in the ordinary course of business of investigating an accident.")

Case Date Jurisidction State Cite Checked
2015-03-05 Federal LA B 7/15
Comment:

key case


Chapter: 22.8

Case Name: Mitre Sports International Ltd. v. Home Box Office, Inc., 08 Civ. 9117 (GBD) (HBP), 2015 U.S. Dist. LEXIS 3812 (S.D.N.Y. Jan. 13, 2015)
(holding that the subject matter waiver doctrine did not require plaintiff to disclose additional work product protected documents based on its Rule 30(b)(6) witnesses testimony or its attachment of investigation-related documents to its complaint against HBO; "The Special Master correctly observed that there is a distinction between the results of the investigation and the investigation itself and that reliance on the facts learned in the investigation, when offered from a source other than the investigator, does not put the investigation in issue. . . . When an employer asserts the so-called Faragher/Ellerth defense, the adequacy of its investigation is relevant to the issue of the adequacy of its corrective actions. In this case, however, the adequacy of plaintiff's investigation simply has no relationship to any of the issues in the case.")

Case Date Jurisidction State Cite Checked
2015-01-13 Federal NY

Chapter: 22.8

Case Name: Mitre Sports International Ltd. v. Home Box Office, Inc., 08 Civ. 9117 (GBD) (HBP), 2015 U.S. Dist. LEXIS 3812 (S.D.N.Y. Jan. 13, 2015)
(holding that the subject matter waiver doctrine did not require plaintiff to disclose additional work product protected documents based on its Rule 30(b)(6) witnesses testimony or its attachment of investigation-related documents to its complaint against HBO; "Although Mitre's attaching the products of its investigation to its complaint seems to have been done more for public relations reasons than legal reasons, Mitre's pleading does not put the investigation in issue. The complaint is not evidence, and Mitre cannot offer it as such.")

Case Date Jurisidction State Cite Checked
2015-01-13 Federal NY
Comment:

key case


Chapter: 22.8

Case Name: Mitre Sports International Ltd. v. Home Box Office, Inc., 08 Civ. 9117 (GBD) (HBP), 2015 U.S. Dist. LEXIS 3812 (S.D.N.Y. Jan. 13, 2015)
(holding that the subject matter waiver doctrine did not require plaintiff to disclose additional work product protected documents based on its Rule 30(b)(6) witnesses testimony or its attachment of investigation-related documents to its complaint against HBO; "HBO argues that Mitre waived work-product protection by (1) permitting James Boocock to testify to certain matters concerning Mitre's investigation and designating that testimony as its 30(b)(6) testimony and (2) by attaching the products of its investigation to its complaint."; "Boocock's answering HBO's deposition questions did not put Mitre's investigation in issue for the simple reason that providing such testimony was not an attempt by Mitre to use protected information to influence a decision maker. In many cases, the vast majority of deposition testimony taken in discovery is never put before any decision maker; frequently, only a small fraction of the deposition testimony taken in a case is cited in connection with a summary judgment motion or offered at trial. Thus, the mere fact that a party makes a partial disclosure of privileged or protected information in a deposition does not result in a subject-matter waiver because there is no use of the testimony by the party holding the privilege."; "HBO's second argument concerning Boocock's testimony -- that Mitre has made affirmative use of the testimony by designating portions as Mitre's 30(b)(6) testimony does not alter this result. The authorities cited above teach that the critical inquiry is whether protected information has been partially disclosed to a decision maker in an effort to influence a decision. A party's deposition testimony, whether from an individual witness or a 30(b)(6) witness, does not constitute such a use. Although HBO argues that Mitre is trying to utilize the work-product doctrine as both a sword and a shield, it has not cited any instance in which Mitre affirmatively used Boocock's testimony and has not, therefore, established Mitre's use of the work-product doctrine as a sword."; "'I am aware that subsequent to Boocock's deposition, the parties have submitted voluminous materials in connection with their motions for summary judgment. However, HBO does not cite any instances in which Mitre has made any affirmative use of Boocock's testimony in connection with these motions.'")

Case Date Jurisidction State Cite Checked
2015-01-13 Federal NY
Comment:

key case


Chapter: 22.8

Case Name: In re Kellogg Brown & Root, Inc., No. 14-5055, 2014 U.S. App. LEXIS 12115, at *6-7 (D.C. Cir. June 27, 2014)
(granting a petition for writ of mandamus and vacating a lower court's holding that the privilege did not protect documents created during an internal corporate investigation of possible foreign wrongdoing; holding among other things that a privilege applied to an investigation if one "significant purpose" was the collection of facts lawyers required to give legal advice; "KBR's assertion of the privilege in this case is materially indistinguishable from Upjohn's assertion of the privilege in that case. As in Upjohn, KBR initiated an internal investigation to gather facts and ensure compliance with the law after being informed of potential misconduct. And as in Upjohn, KBR's investigation was conducted under the auspices of KBR's in-house legal department, acting in its legal capacity. The same considerations that led the Court in Upjohn to uphold the corporation's privilege claims apply here.")

Case Date Jurisidction State Cite Checked
2014-06-27 Federal

Chapter: 22.8

Case Name: Telamon Corp. v. Charter Oak Fire Ins. Co., Case No. 1:13-cv-00382-RLY-DML, 2014 U.S. Dist. LEXIS 6583, at *12, *13-14, *14 n.1 (S.D. Ind. Jan. 17, 2014)
(finding that an internal corporate investigation conducted by Barnes & Thornburg into possible theft of inventory did not deserve privilege or work product protection; addressing these issues in a first party insurance case, in which the defendant insurance company sought documents from the investigation company Chamberlain; finding attorney-client privilege protection inapplicable; "The court's in camera examination reveals that nearly all of Chamberlain's file materials could not be classified as privileged attorney-client communications because they are public records or Telamon's business records. The gathering of public and business records by an investigator, or the funneling of business documents through one's attorney's office (or through one's fraud investigator), does not make those documents privileged."; "[S]ome of the communications obviously were not made to obtain legal advice, were not maintained in confidence, or were not even intended as a confidential communication in the first place. For example, the communications include (a) an email chain sent by the lawyers to Chamberlain lauding its reputation as a fraud investigator; (b) emails to set up meetings; and (c) emails that do not involve counsel at all or any bona fide connection to legal advice. . . . [D]documents within Chamberlain's file reveal that Chamberlain's investigatory work was not inextricable from Barnes & Thornburg's provision of legal advice and that its work was conducted because Telamon had a pressing business reason to uncover what it believed was large-scale inventory fraud by one of its workers. Documents indicate that the use of Barnes & Thornburg as the nominee client to Chamberlain was for the purpose of attempting to shield Chamberlain's work as privileged. It is apparent, however, that Barnes & Thornburg did not in fact direct this investigation, but that Chamberlain designed the investigation and determined the records to gather and review, the persons to interview, the questions to be asked, and the manner of interrogation."; "Moreover, waiver principles would prevent the assertion of the privilege as to the majority of the Chamberlain investigative file. Telamon provided to the insurers a preliminary investigative report prepared by Chamberlain that it otherwise asserts was a privileged communication. That report summarizes 'key' interviews and documents. When the privilege is waived as to an attorney-client communication, the waiver extends to all communications on the same subject matter. . . . The subject matter of the preliminary report is the investigative work conducted by Chamberlain. By producing the preliminary report (apparently for the purpose of proving its insurance claim and the losses suffered), Telamon waived the privilege with respect to the documents in the investigative file that are the 'nuts and bolts' source documents of Chamberlain's work, including the interview summaries, document analyses, and investigative background summaries.")

Case Date Jurisidction State Cite Checked
2014-01-17 Federal IN B 6/14

Chapter: 22.8

Case Name: Edwards v. State Casino Control Comm'n, Dkt. No. A-4738-11T4, 2013 N.J. Super. Unpub. LEXIS 2737, at *29 (N.J. Super. Ct. App. Div. Nov. 13, 2013)
(analyzing protection for an internal investigation into a wrongful termination; ultimately requiring an in camera review; "The attorney-client and work-product privileges do not generally apply to documents created during the course of an internal investigation, especially when a defendant uses that investigation as an affirmative defense; such documents are generally not created in anticipation of litigation but to comply with an employer's internal investigative procedures and policies.")

Case Date Jurisidction State Cite Checked
2013-11-13 State NJ B 5/14

Chapter: 22.8

Case Name: Graff v. Haverhill N. Coke Co., Case No. 1:09 cv 670, 2012 U.S. Dist. LEXIS 162013, at *37 38 (S.D. Ohio Nov. 13, 2012)
(holding that documents created during a 2006 compliance audit deserved privilege protection; "The distribution lists on the emails are limited to SunCoke's General Counsel and senior HES corporate representatives with knowledge of the facts at issue in the 2006 Audit. The audit findings, comments, and tracking changes constitute the factual predicates underlying the provision of legal advice by SunCoke's Legal Department to assess HNCC's compliance with state and federal HES regulations. . . . The withheld documents reflect the factual information from corporate employee with knowledge of audit findings; their responses to the findings or actions taken in response; and that such information was transmitted to counsel for the purpose of providing legal advice to SunCoke on HNCC's compliance with HES requirements. Plaintiffs argue that the evidence suggests at most that Pack and McCormick were providing technical, business-related advice which is not protected. Even if the information is characterized as 'technical' or 'business-related,' those communications were gathered at the request of counsel for the primary purpose of aiding counsel in providing legal services to SunCoke.")

Case Date Jurisidction State Cite Checked
2012-11-13 Federal OH B 7/13

Chapter: 22.8

Case Name: Graff v. Haverhill North Coke Co., Case No. 1:09-cv-670, 2012 U.S. Dist. LEXIS 162013 (S.D. Ohio Nov. 13, 2012)
January 23, 2013 (PRIVILEGE POINT)

"Where Do Courts Look When Determining Whether a Litigant has Proven Attorney Client Privilege or Work Product Protection?: Part III"

The last two Privilege Points noted that some courts assess a privilege or work product claim by relying on extrinsic evidence such as affidavits, while other courts look primarily or exclusively at the withheld documents themselves. Most courts examine both the documents and extrinsic evidence.

In Graff v. Haverhill North Coke Co., Case No. 1:09-cv-670, 2012 U.S. Dist. LEXIS 162013 (S.D. Ohio Nov. 13, 2012), a litigant claimed work product and privilege protection for documents created during a consultant's audit. In rejecting the work product claim for one audit, the court pointed to the documents themselves. Among other things, the company president's memorandum requesting the audit indicated that "the purpose of the audit was to assess general compliance with regulatory requirements and company policies." Id. At *15. Another company executive described the audit as "generic." Id. At *16. Thus, the documents themselves undercut the work product claim. In contrast, the court found that many of the documents deserved attorney-client privilege protection. Among other things, the court noted that the same executive who described the audit as "generic" had submitted an affidavit which "confirms that the audit was prepared to assist counsel with providing legal advice" to the company. Id. At *28.

Lawyers should always teach their clients to articulate the basis for a protection claim on the face of protected documents. Companies involved in litigation should also determine what a pertinent court will examine in assessing the company's withholding of protected documents. Most courts expect an affidavit or other extrinsic evidence.

Case Date Jurisidction State Cite Checked
2012-11-13 Federal OH
Comment:

key case


Chapter: 22.8

Case Name: United States v. ISS Marine Servs., 905 F. Supp. 2d 121, 131-32 (D.D.C. 2012)
(analyzing privilege and work product protection for an audit; noting that the company had specifically indicated that it did not need the assistance of Arnold & Porter in connection with the audit; "One would expect that, if the investigation were conducted primarily to allow A&P to counsel the respondent, some kind of legal advice would have resulted from the Audit Report, but the respondent has not even suggested that A&P provided legal advice based on the Audit Report. Furthermore, the fact that Inchcape [affiliate of defendant] waited two months to transmit the finished Audit Report to A&P is very revealing of the company's intentions -- if the Audit Report had truly been prepared at the direction of counsel for the purpose of obtaining legal advice, communication of the completed report to counsel would have been more prompt than a matter of months. This state of affairs collectively suggests that the Audit Report was sent to A&P not for the primary purpose of seeking legal advice, but rather merely to keep A&P informed about the results of the investigation.")

Case Date Jurisidction State Cite Checked
2012-01-01 Federal DC B 7/13

Chapter: 22.8

Case Name: Collins v. Braden, 384 S.W.3d 154, 160 (Ky. 2012)
("Statements made by a hospital's employees in such circumstances are made as part of a comprehensive program by which the hospital seeks to determine, with the assistance of counsel, the best legal strategy to pursue in regard to the tort that may have happened on the hospital's premises. The policies here were not general business policies, such as those aimed at reducing waste or hiring qualified employees; rather, they were promulgated by the hospital's in-house lawyer for the purpose of assessing the risk of and preparing for possible litigation.")

Case Date Jurisidction State Cite Checked
2012-01-01 State KY B 1/14

Chapter: 22.8

Case Name: Flynn v. Univ. Hosp., Inc., 876 N.E.2d 1300, 1303 (Ohio Ct. App. 2007)
("Generally, the privilege covers incident reports prepared for the risk-management department of a hospital."; "[T]he report was not part of the medical records [and] it was not otherwise available 'to persons outside of the attorney-client relationship and/or quality assurance function.'")

Case Date Jurisidction State Cite Checked
2007-01-01 State OH B 9/13

Chapter: 22.10

Case Name: Frickey v. Kobelco Stewart Bolling, Inc., Civ. A. No. 14-2 Sec. "I" (2), 2015 U.S. Dist. 27264 (E.D. La. March 5, 2015)
(finding that Dow's post-accident root cause analysis did not deserve privilege protection; noting Dow had already produced all witness statements and factual documents collected during the investigation, despite an in-house lawyer's involvement in the investigation; "Kobe avers in its original opposition to Dow's motion, and Dow does not dispute in its supplemental memorandum, that the Root Cause Investigation and report are the only investigation and report that Dow undertook regarding the accident.")

Case Date Jurisidction State Cite Checked
2015-03-05 Federal LA
Comment:

key case


Chapter: 22.10

Case Name: Davis v. Hugo Enters., LLC, Case No. 8:11CV221, 2013 U.S. Dist. LEXIS 22882, at *4 (D. Neb. Feb. 20, 2013)
(finding the a company could waive the privilege for one investigation while maintaining privilege for another investigation that was conducted later by an outside counsel; "Magistrate Judge Gossett acknowledged that voluntary disclosure of privileged communications may waive privileges attached to other communications on the same subject matter, but he recognized that courts have construed 'the same subject matter' narrowly. . . . He noted that the Plaintiffs complained of harassment in August 2009, and the internal investigation of that complaint, conducted by Levitt and Ricketts [defendants], was completed in September 2009. The Plaintiffs' complaint of retaliation followed, with an investigation of that complaint conducted by Turnbull [defendant's lawyer] in November and December 2009. Judge Gossett concluded that the Defendants' waiver of attorney-client privilege with respect to the second investigation did not effect a waiver with respect to attorney-client communications during the first investigation.")

Case Date Jurisidction State Cite Checked
2013-02-20 Federal NE B 2/14

Chapter: 22.10

Case Name: Davis v. Hugo Enters., LLC, No. 8:11CV221, 2013 U.S. Dist. LEXIS 3357, at *10 (D. Neb. Jan. 9, 2013)
(finding the temporal scope of a company's waiver of its privilege protection by relying on an investigation into sexual harassment charges; "In this case, Davis and Duncan complained of alleged harassment in August, 2009. In response, Opportunity Education conducted an internal investigation that was completed by Levitt and Ricketts in September, 2009. In November, 2009, two months after her initial complaint of harassment, Davis submitted a separate complaint of alleged retaliation. Then, in November, Opportunity Education hired outside counsel, Turnbull, to conduct an investigation. Given the facts here, the Court finds that the subject of Defendants' waiver is Turnbull's November/December 2009 investigation, not the internal investigation conducted earlier. Therefore, the Court rejects Plaintiffs' argument that the attorney-client privilege was waived as to the other investigatory materials.")

Case Date Jurisidction State Cite Checked
2013-01-09 Federal NE B 7/13

Chapter: 22.11

Case Name: Freedman v. Weatherford International Ltd., 12 Civ. 2121 (LAK) (JCF), 2014 U.S. Dist. LEXIS 102248 (S.D.N.Y. July 25, 2014)
(denying plaintiffs' effort to obtain documents created during a company's audit committee's investigation; "In accordance with my orders in Dobina, the defendants have produced to the plaintiffs here all documents actually disclosed to the SEC, as well as all factual materials explicitly referenced in those disclosures. The plaintiffs now seek all remaining documents withheld on the basis of attorney client privilege and work product protection, arguing that the defendants waived all privilege and protection over subject matter related to the investigation as a result of Weatherford's 'comprehensive and one-sided disclosure' to the SEC. (Plaintiffs' Motion to Compel the Production of Documents Concerning the Audit Committee Investigation. . . . The plaintiffs clarify that they do not seek opinion work product, but rather the all fact-based portions of interview notes, memoranda, attorney e-mails, and other investigative materials, 'regardless of whether they were produced to the SEC.' (Plaintiffs' Omnibus Reply to Defendants' Oppositions to Plaintiffs' Motions to Compel (1) Reports on Electronic Documents Searches, (2) the Production of Documents Concerning the Audit Committee Investigation, and (3) the Production of Documents Concerning the Latham Investigation."; "While the plaintiffs highlight the depth and breadth of the Audit Committee investigation, leading to the 'disclos[ure] [of] minute details and factual conclusions' to the SEC . . . Those very factual conclusions and details have already been produced pursuant to my previous orders in Dobina. This is not a case where Weatherford appears to be 'pick[ing] and choos[ing] among [its] opponents, waiving the privilege for some and resurrecting the claim of confidentiality to obstruct others, or [] invok[ing] the privilege as to communications whose confidentiality [it] has already compromised for [its] own benefit.'"; reaching the same conclusion about an investigation conducted by the Latham law firm)

Case Date Jurisidction State Cite Checked
2014-07-25 Federal NY

Chapter: 22.12

Case Name: Edwards v. State Casino Control Comm'n, Dkt. No. A-4738-11T4, 2013 N.J. Super. Unpub. LEXIS 2737, at *29 (N.J. Super. Ct. App. Div. Nov. 13, 2013)
(analyzing protection for an internal investigation into a wrongful termination; ultimately requiring an in camera review; "The attorney-client and work-product privileges do not generally apply to documents created during the course of an internal investigation, especially when a defendant uses that investigation as an affirmative defense; such documents are generally not created in anticipation of litigation but to comply with an employer's internal investigative procedures and policies.")

Case Date Jurisidction State Cite Checked
2013-11-13 State NJ B 5/14

Chapter: 22.12

Case Name: Gruss v. Zwirn, 276 F.R.D. 115, 138, 138-39 (S.D.N.Y. 2011)
(analyzing privilege implication of an internal corporate investigation by Gibson Dunn and Schulte Roth involving alleged financial irregularities at several hedge funds; finding the defendants' assertion of a counterclaim did not trigger an "at issue" waiver; "Plaintiff also asserts that defendants' reliance on the findings of the internal investigations in their asserted counterclaims constitutes a waiver of the privilege. Again, were this argument directed towards the talking points, internal reports, or investor memorandum that have already been disclosed to plaintiff, we would be inclined to agree that there could be a waiver. We are more skeptical, however, of this assertion as directed towards the interview notes and summaries created by the law firms in the course of their investigation."; "Defendants make extensive allegations as to specific instances of Gruss's misconduct, none of which rely solely on the findings of the internal investigations. . . . In any event, while it is true that the Zwirn Entities may have originally learned of some of these alleged facts through the internal investigations, their later reference to those facts does not waive the privilege in the communications whereby they gained that knowledge, any more than an assertion of privilege in a particular attorney client communication protects against disclosure of the underlying facts by those who communicated with the attorney.")

Case Date Jurisidction State Cite Checked
2011-01-01 Federal NY B 10/12

Chapter: 22.14

Case Name: Doehne v. EmpRes Healthcare Management, LLC, No. 46467-5-II, 2015 Wash. App. LEXIS 1909 (Wash. App. Aug. 11, 2015)
(holding that the attorney-client privilege and the work product doctrine protected a post-accident investigation following a slip and fall accident at a health facility; noting that the facility's in-house lawyers directed the investigation; "The purpose of EmpRes' risk management position 'is to act as a conduit between the legal department and insurers regarding liability issues, including workers' compensation and third-party liability, with the goal of avoiding litigation and minimizing liability.'. . . The record shows that Clarno's report was prepared to assist in-house counsel in addressing issues of liability and potential litigation.")

Case Date Jurisidction State Cite Checked
2015-08-11 Federal WA
Comment:

key case


Chapter: 22.1102

Case Name: In re Fairway Methanol LLC and Celanese Ltd., No. 14-16-00884-CV, 2017 Tex. App. LEXIS 830 (Tex. App. 14d Jan. 31, 2017)
(protecting as privileged documents created by a company's in-house lawyer investigation; noting that Texas did not follow the "primary purpose" test; but finding the work product doctrine applicable after noting that a company affidavit indicated that the departments role in the investigation was not ordinary; "Rowen's affidavit states that he was serving as counsel for Celanese Corporation, not relator Celanese Ltd., and that he requested that an investigative team provide the Celanese Law Department with the information needed to assess liability in potential litigation. Because the investigation was requested by counsel employed by Celanese Corporation, the investigation was for the benefit of not just relator Celanese Ltd., but also for Celanese Corporation which could anticipate litigation and who Plaintiffs have, in fact, sued in this court proceeding.")

Case Date Jurisidction State Cite Checked
2017-01-31 Federal TX
Comment:

key case


Chapter: 22.1102

Case Name: In re Fairway Methanol LLC and Celanese Ltd., No. 14-16-00884-CV, 2017 Tex. App. LEXIS 830 (Tex. App. 14d Jan. 31, 2017)
(protecting as privileged documents created by a company's in-house lawyer investigation; noting that Texas did not following the "primary purpose" test; but finding the work product doctrine applicable after noting that a company affidavit indicated that the departments role in the investigation was not ordinary; "According to Rowen [Celanese's corporation's in-house lawyer], the primary purpose for the investigation and creation of documents and communications therefrom was to aid Celanese in preparing to defend itself in anticipated litigation. As a secondary concern, the information communicated from the investigative team to the legal department was necessary for the legal department to provide Celanese with business and legal advice with respect to the potential termination of employees involved in the accident. The team members were immediately informed that the investigation was for the purpose of assisting counsel and that all communications and documents generated during their investigation must be kept confidential and marked as 'Privileged and Confidential' or 'Attorney-Client Privilege -- Attorney Work Product.' The investigative team conducted interviews and site inspections and communicated their findings to the Celanese Law Department. They prepared a root cause analysis which was necessary for the Celanese Law Department to evaluate liability and begin developing a strategy for defending itself in likely civil and regulatory litigation. Rowen states, 'All of the communications withheld by Celanese were communications between Celanese in-house and outside counsel and their representatives made for the purposes of providing and communicating legal advice or otherwise facilitating or providing professional legal services.'"; "Plaintiffs cite no Texas authority for their position that the communication must have been made for the primary purpose of soliciting legal, rather than business advice. And the federal decisions supporting Plaintiffs' position are not binding on our court. More important, the language of Rule 503(b) does not require that the primary purpose of the communication be to facilitate the rendition of legal services; it only requires that the communication be made to facilitate the rendition of legal services.")

Case Date Jurisidction State Cite Checked
2017-01-31 Federal TX
Comment:

key case


Chapter: 22.1102

Case Name: Johnson v. Ford Motor Co., Case No. 3:13-cv-06529, 2016 U.S. Dist. LEXIS 44267, at *82 84 (S.D. W. Va. Mar. 28, 2016)
("Under both West Virginia law and federal law, the withheld ASO documents are protected from disclosure under attorney-client privilege. First, Ford's OGC, specifically Mr. Logel, and Ford's ASO contemplated that an attorney-client relationship existed at the time that the OGC engaged the ASO to analyze the VOQs and TREAD Act data. Mr. Logel's affidavit, Mr. Love's affidavit, and Mr. Nevi's deposition testimony all support this conclusion. Second, as explained above, the ASO prepared and submitted the logged documents at the request of the OGC for the purpose of rendering legal advice to Ford. Although Ford's OGC may have been the initiating party by requesting that the ASO conduct an analysis of the pertinent data, that fact alone does not render the attorney-client privilege inapplicable. As explained above, communications during fact-finding investigations conducted by an attorney in his or her legal capacity are protected. . . . Indeed, even with the understanding that the privilege should be construed narrowly . . . it would be an unreasonable interpretation of the privilege to hold that a proactive, fastidious in-house attorney who seeks information from his client for the purpose of rendering legal advice cannot claim privilege over the information that he receives in response to his request simply because he was the first to act. . . . Third, and finally, the communication of the information (i.e. the sending of the documents) from Ford's ASO to the OGC was intended to be confidential. As Mr. Logel's affidavit explains, '[t]he documents identified on Ford's ASO Privilege Log have not been disseminated beyond those Ford employees and consultants working directly with Ford's counsel in this regard.' . . . There is no evidence that Mr. Logel's assertion is false or that it was 'the intention or understanding of [Ford] that the communication [was] to be made known to others.'" (citation and footnote omitted))

Case Date Jurisidction State Cite Checked
2016-03-28 Federal WV B 8/16
Comment:

key case


Chapter: 22.1102

Case Name: Patel v. Kensol-Franklin, Inc., Civ. A. No. 3:14-1439, 2016 U.S. Dist. LEXIS 36684 (M.D. Pa. March 22, 2016)
(in a bad faith insurance case, analyzing privilege and work product protection for a post-accident investigation; finding that both protections applied; "The court finds that only the photographs contained in the investigation report should be produced by Letica to the parties. All of the other documents were part of the post-accident investigation which was not in the ordinary course of business, and they were prepared under direction of attorney Michael for possible subsequent litigation closely related to this case, including the OSHA investigation. Attorney Michael had direct involvement with and controlled the fatal accident investigation from its inception. Also, Letica reasonably anticipated litigation immediately after the accident and communications in the investigation report following the accident fell within the work-product doctrine. The court's in camera review further shows that the Exhibits discussed above to which Letica asserts the attorney-client privilege do in fact contain 'information exchanged in order to facilitate the professional relationship between an attorney and his client with regard to ongoing or potential legal proceedings.'. . . As such, these documents are protected from disclosure by the attorney-client privilege and the work-product doctrine.")

Case Date Jurisidction State Cite Checked
2016-03-22 Federal PA

Chapter: 22.1102

Case Name: Patel v. Kensol-Franklin, Inc., Civ. A. No. 3:14-1439, 2016 U.S. Dist. LEXIS 36684 (M.D. Pa. March 22, 2016)
(in a bad faith insurance case, analyzing privilege and work product protection for a post-accident investigation; finding that both protections applied; "The court finds that this report was not complied in the ordinary course of business since it was intended to assist attorney Michael with an OSHA investigation as well as to implement post-accident modifications. It makes no difference that Hunter [Employee] prepared the report since the work-product doctrine also protects 'materials prepared by an attorney's agent.'. . . The report and the referenced communications involving the accident investigation performed at the direction of attorney Michael also are protected by the attorney-client privilege.")

Case Date Jurisidction State Cite Checked
2016-03-22 Federal PA

Chapter: 22.1102

Case Name: Epic Systems Corp. v. Tata Consultancy Services Ltd., 14-cv-748-wmc, 2015 U.S. Dist. LEXIS 166438 (W.D. Wis. Dec. 10, 2015)
(analyzing privilege and work product issues in connection with internal corporate investigations conducted by Loeb & Loeb; finding the privilege inapplicable and concluding that the plaintiff could overcome any possible work product protection; finding that the privilege did not apply because (among other things) "the report contains no legal advice."; inexplicably concluding that the investigation's focus might have deserve privilege protection; "The court found Muthuswami's [Defendant's president] reliance on summary documents to be routine, and did not constitute a waiver of the underlying attorney-client privilege, although counsel rightly disclosed the summary documents as an aid to Muthuswami's testimony. To the extent that the information in the summary documents came from Loeb & Loeb's earlier investigations, perhaps the production of those documents coupled with Muthuswami's testimony would have constituted waiver, but TCS's counsel at the hearing represented that she had independently prepared those summary documents and the court has no basis to find otherwise. While the court continues to find fault with the designation of Muthuswami as the sole 30(b)(6) designee given his limited knowledge on a variety of designated subjects, this, too, is no basis for stripping away at the attorney-client privilege between defendants and their trial counsel.").

Case Date Jurisidction State Cite Checked
2015-12-10 Federal WI

Chapter: 22.1102

Case Name: Armouth International, Inc. v. Dollar General Corp., No. 3:14-0567, 2015 U.S. Dist. LEXIS 148784 (M.D. Tenn. Nov. 2, 2015)
(finding that the attorney-client privilege protected communications to and from a company's in-house lawyer also serving as its compliance director; "According to Dollar General, the communications at issue involve emails that are: (1) from Mr. Stephenson [Dollar General's "Assistant General Counsel," who also served as "head of the Compliance Department" and "supervisor to the Senior Director of Global Sourcing"] providing legal advice to Dollar General employees regarding the tested merchandise; (2) from employees to Mr. Stephenson requesting legal advice; (3) from employees to Mr. Stephenson providing information necessary for Mr. Stephenson to provide adequate legal advice regarding the tested merchandise; or (4) between employees relaying Mr. Stephenson's legal advice as it pertains to the ongoing situation with Armouth [supplier of products to Dollar General, suing the company for not paying its invoices]. . . . Dollar General contends that all such communications are protected by the attorney-client privilege."; "In Zolin [U.S. v. Zolin, 491 U.S. 554, 570-71, 109 S.Ct. 2619, 105 L.Ed.2d 469 (1989)], the Supreme Court delineated the standard for determining whether an assertion of attorney-client privilege warrants an in camera review by the presiding judge. While the Supreme Court applied this standard specifically to the crime-fraud exception, this Court finds that the standard is appropriate in this matter to evaluate whether the documents requested for in camera review may reveal evidence of business advice that is not shielded from discovery by the attorney-client privilege."; "[A]s Dollar General states in its response, the decision to release the hold was made by Mr. Stephenson precisely because it required the legal opinion of an attorney. . . . Furthermore, even if Mr. Stephenson had considered some aspects of business in making his decision, such consideration does not necessarily remove the coverage afforded by the attorney-client privilege. Dollar General correctly notes that district courts have held that the 'mere fact that business considerations are weighed in the rendering of legal advice does not vitiate the attorney-client privilege."; "The privilege log indicates that this email consisted of Mr. Vasos 'relaying Rob Stephenson's legal advice related to the non-conforming scrubs' to Mr. Gatta. . . . This appears to match the substance of the email's content prior to the redacted portion, which concludes with, 'now for the bad news. Their label does not match the product.'. . . It is logical that the remainder of the email would pertain to Mr. Stephenson's legal advice regarding the nonconforming goods."; agreeing with Dollar General that the company's decision to put a hold on the invoices primarily involved a legal rather than a business issue; "Here, Dollar General's claims of privilege are narrow and specific. Dollar General has reasonably rebutted the speculation by Armouth that Mr. Stephenson was giving business advice (or predominately giving business advice) rather than legal advice.")

Case Date Jurisidction State Cite Checked
2015-11-02 Federal TN
Comment:

key case


Chapter: 22.1102

Case Name: Doehne v. EmpRes Healthcare Management, LLC, No. 46467-5-II, 2015 Wash. App. LEXIS 1909 (Wash. App. Aug. 11, 2015)
(holding that the attorney-client privilege and the work product doctrine protected a post-accident investigation following a slip and fall accident at a health facility; noting that the facility's in-house lawyers directed the investigation; "The purpose of EmpRes' risk management position 'is to act as a conduit between the legal department and insurers regarding liability issues, including workers' compensation and third-party liability, with the goal of avoiding litigation and minimizing liability.'. . . The record shows that Clarno's report was prepared to assist in-house counsel in addressing issues of liability and potential litigation.")

Case Date Jurisidction State Cite Checked
2015-08-11 Federal WA
Comment:

key case


Chapter: 22.1102

Case Name: Perino v. Edible Arrangements Int'l, Inc., Civ. No. 3:13CV1411 (JBA), 2015 U.S. Dist. 39131 (D. Conn. March 27, 2015)
(finding that the privilege protected a forensic audit of plaintiff's alleged misconduct prepared by an outside accounting firm retained by a lawyer; also finding that the defendant did not waive the privilege by mentioning the report in press releases, because it did not intend to rely on the report at trial; "[D]efendant represents in its brief, and reiterated at the March 2 conference, that its in-house counsel Catherine Gilroy initiated an investigation to determine the scope of plaintiff's offline accounting activities so that Ms. Gilroy could provide