Showing 341 of 341 results

Chapter: 43.1

Case Name: Smith v. Ergo Solutions, LLC, Civ. A. No. 14-382 (JDB), 2017 U.S. Dist. LEXIS 94337 (D.D.C. June 20, 2017)
("'The term 'internal investigation' has been used by both parties throughout this adjudication and, therefore, will be used in this opinion as well for consistency. However, technically the investigation was an 'external investigation' because it was conducted by outside counsel, not by in-house counsel.'")

Case Date Jurisidction State Cite Checked
2017-06-20 Federal DC

Chapter: 43.5

Case Name: In re Experian Data Breach Litig., SACV 15-01592 AG (DFMx), Slip Op. at 2, 3, 4, 4-5 (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 (1), explaining as follows: "Some background is helpful for this analysis. In September 2015, Experian learned that one of its systems was breached by an unauthorized third party. Experian immediately retained Jones Day, its outside litigation counsel, for legal advice regarding the attack. Jones Day then hired Mandiant to conduct an expert report analysis of the attack. And according to Experian, the only purpose of that report is to help Jones Day provide legal advice to Experian regarding the attack."; "On October 1, 2015, Experian announced its data breach. One day later, the first complaint was filed alleging claims related to the data breach. That complaint was then consolidated with over forty other consumer complaints, which created the pending litigation. Mandiant finished its report by the end of October 2015 and gave it to Jones Day. Then Jones Day gave the report to Experian's in-house counsel. The report has several components and includes an individual sub-report for each server image that Mandian investigated. Jones Day and Experian's in-house counsel have used and continue to use the report to develop their legal strategy."; acknowledging that "Experian . . . had duties under the law to investigate data breaches and under its contract [with] T-Mobile, Experian had the duty to remedy, investigate, and remediate any data breach. But the record before the Court makes it clear that Mandiant conducted the investigation and prepared its report for Jones Day in anticipation of litigation, even if that wasn't Mandiant's only purpose."; "Mandiant was hired by Jones Day to assist Jones Day in providing legal advice in anticipation of litigation. This is supported by declarations as well as the fact that Mandiant's full report wasn't given to Experian's Incident Response Team. If the report was more relevant to Experian's internal investigation or remediation efforts, as opposed to being relevant to defense of this litigation, then the full report would have been given to that team. The evidence here establish that Jones Day instructed Mandiant to do the investigation and, but for the anticipated litigation, the report wouldn't have been prepared in substantially the same form or with the same content."; acknowledging that Mandiant had worked previously for Experian, but finding that such earlier work did not destroy work product protection for its post-data breach work; "Plaintiffs argue that since Mandiant had previously worked for Experian, that's proof that Mandiant was just again doing work in the course of ordinary business for Experian when it created the report. But that argument isn't convincing in part because Mandiant's previous work for Experian was separate from the work it did for Experian regarding this particular data breach. . . . [T]he Court is not concluding that Mandiant's 2013 report is privileged. The Court also is not concluding that any work done by Experian or Mandiant regarding the breach before Jones Day was hired is privileged." (emphases added))

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

key case


Chapter: 43.5

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: 43.5

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: 43.5

Case Name: In re Symbol Technologies, Inc. Sec. Litig., CV 05-3923 (DRH) (AKT), 2016 U.S. Dist. LEXIS 139200 (E.D.N.Y. Sept. 30, 2016)
(holding that the work product doctrine protected documents created during a company's investigation of accounting problems; also holding that disclosure to the SEC did not waive the work product doctrine, because the SEC and the company had a common interest in complying with an earlier consent decree; "In March 2002, after learning of the investigations being pursued by both the U.S. Attorney's Office and the SEC, Symbol 'retained the law firm of Swidler Berlin Shereff Friedman, LLP . . . to conduct an internal investigation into Symbol's accounting and financial practices.' Id. The investigation, which was conducted with the assistance of a third-party forensic accounting team, involved 'more than 200 interviews and the review of hundreds of thousands of pages of documents and emails. The results of this investigation were shared with both the U.S. Attorney's Office and the SEC pursuant to a Confidentiality Agreement entered into by all parties in November 2002.'"; "On June 3, 2004, Symbol announced that it had 'resolved the investigation by the [U.S. Attorney's Office] relating to [its] past accounting practices by entering into a non-prosecution agreement with the [U.S. Attorney's Office].'"; "[O]n November 8, 2004, 'Symbol announced it was delaying the third-quarter 2004 10-Q filing as the company [ ] discovered certain discrepancies in the amount of inventory that affected third-quarter 2004 results. . . .'"; "Upon learning of the issues surrounding the release of its third quarter earnings, Symbol immediately commenced an internal investigation. . . . The internal investigation was led by James Langrock, Vice President of the internal audit group. . . . During the pendency of the internal investigation conducted by Symbol's audit group, outside counsel from Swidler was retained to conduct 'a confidential investigation of the issues surrounding the misreporting of inventory . . . for the purpose of determining the nature and cause of the incidents.'"; "Based upon the particular circumstances in this case, and in light of the fact that '[n]othing" in Rule 26(b)(3) states or suggests that documents prepared 'in anticipation of litigation' with the purpose of assisting in the making of a business decision do not fall within its scope,' Adlman, 134 F.3d at 1198-99, the Court finds that the documents at issue are protected by the work product privilege. . . . when it conducted the internal investigation into its 2004 third quarter earnings overstatement, Symbol had every conceivable reason to believe that once the issues were publicly disclosed, it could be facing the real prospect of additional shareholder suits as well as further investigations by both the SEC and the U.S. Attorney's Office. Indeed, such a specter was a very real possibility, particularly in light of the fact that barely five months prior to the 2004 revenue overstatement, Symbol had entered into a deferred prosecution agreement with the U.S. Attorney's Office as well as a consent judgment with the SEC in order to settle claims pertaining to previous accounting improprieties."; "To be sure, Symbol did have a business reason for engaging in its internal investigation. Mark Greenquist, Symbol's Chief Financial Officer, testified that 'the most important thing was to get the numbers right so that we could file the [10-]Q, but that wasn't necessarily the end of it because then after that I guess the lesson learned chart would demonstrate that we continued to look at like, okay, what happened, and therefore what could we do better to make sure that we avoided that in the future.'. . . In addition, Symbol referenced the internal investigation in its November 8, 2004 press release in which Chief Executive Officer, William Nuti stated that '[a]s part of our regular control procedures, we discovered certain discrepancies in the amount of inventory at a distributor as well as inventory on hand that affected our previously announced results . . . We've moved swiftly to ascertain the nature and extent of these discrepancies . . . Symbol is committed to ensuring that its financial statements are accurate and can be relied upon by our shareholders.' Wernke Decl., Ex. O. Thus, Symbol had an interest in assuaging the public, its shareholders and the entire business community that it was acting in the manner expected of a responsible business entity. However, conducting an investigation for business purposes on the one hand and in anticipation of litigation on the other are not mutually exclusive, especially when viewed through the lens of the facts in the instant case. Indeed, in light of the factual circumstances attendant in the present case '[a]pplying a distinction between 'anticipation of litigation' and 'business purposes' is . . . artificial, unrealistic, and the line between [the two] is [therefore] essentially blurred to oblivion.'; "[T]he reasoning utilized in Kidder [In re Kidder Peabody, 168 F.R.D. 459, 473 (S.D.N.Y. 1996)] is inapplicable to the instant case inasmuch as the court relied on the 'principally or exclusively' standard that is no longer the appropriate test for determining whether the work-product privilege applies in the first instance.")

Case Date Jurisidction State Cite Checked
2016-09-30 Federal NY
Comment:

key case


Chapter: 43.5

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: 43.5

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: 43.5

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: 43.5

Case Name: In re Bard IVC Filters Products Liability Litig., MDL No. 2641, 2016 U.S. Dist. 17583 (D. Ariz. Feb. 11, 2016)
(finding that the work product doctrine protected a report in deaths connected to the defendant's medical device prepared by a former employee obtained by the defendant's lawyer as a consultant; concluding after an in camera review that the report was different from normal health hazard evaluations prepared in the ordinary course of the defendant's business; "Plaintiffs also argue that the Report was used for Bard's business purposes, and that there is no evidence it was used for litigation purposes. . . . Plaintiffs identify three internal Bard documents that contain information from the Report . . . . Used in creating them. Bard also admitted this fact during oral argument and in its reply brief. . . . But use of the Report to create internal HHEs and RAPs does not deprive the Report of work product protection. To the contrary, the 'because of' test is directed at documents that serve both litigation and business purposes.")

Case Date Jurisidction State Cite Checked
2016-02-11 Federal AZ
Comment:

key case


Chapter: 43.5

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 trial court concluded that three of the four paragraphs in the Clarno report were prepared in anticipation of litigation. Doehne does not challenge this conclusion. We question whether paragraphs in a single document can be prepared for different purposes. Nevertheless, we turn to Doehne's argument that the Clarno report was prepared in the ordinary course of business and thus is exempt from work product protection."; "Clarno prepared a report about Doehne's accident for distribution to the company's risk management and legal departments. This document would not have been prepared but for Doehne's injuries. The lawyers' participation was not merely incidental, and EmpRes' anticipation of potential litigation was reasonable."; "We conclude that the entire Clarno report was prepared in anticipation of litigation and that the trial court abused its discretion in compelling the discovery of the final sentence of the first paragraph, which clearly constitutes opinion work product. And, as stated, the entire first paragraph is protected from disclosure by the attorney-client privilege.")

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

key case


Chapter: 43.5

Case Name: Elbert v. C.R. Bard, Inc., Civ. A. No. 12-01253, 2014 U.S. Dist. LEXIS 57073 (E.D. Pa. April 24, 2014)
("'Even if the HHE and RAP were used for compliance purposes after the Report was created for litigation purposes, this would not destroy the protection.'")

Case Date Jurisidction State Cite Checked
2014-04-24 Federal PA

Chapter: 43.5

Case Name: Hooke v. Foss Maritime Co., Case No.13-cv-00994-JCS, 2014 U.S. Dist. LEXIS 50741 (N.D. Cal. Apr. 10, 2014)
July 30, 2014 (PRIVILEGE POINT)

"Do Corporations Enhance Their Work Product Claims by Sending Post-Accident Reports to Outside Counsel?"

The work product doctrine can protect documents created in anticipation of litigation — as long as they were motivated by that litigation. The doctrine does not protect documents created in the ordinary course of business, or pursuant to some external or internal requirement. In essence, litigants must prove that they did something different or special because they anticipated litigation.

In Hooke v. Foss Maritime Co., Case No.13-cv-00994-JCS, 2014 U.S. Dist. LEXIS 50741 (N.D. Cal. Apr. 10, 2014), defendant claimed work product protection for documents created after plaintiff suffered job-related injuries. After noting that the defendant's internal processes required investigation reports after nearly every accident, the court turned to the company's argument that "the [post-accident] process is overseen in some way by the General Counsel." Id. at *11. The court surmised that "testimony that Internal Incident Investigation Reports are sent to outside counsel in the event that a litigation threat arises is apparently proffered to show its connection with anticipated litigation." Id. However, the court concluded that the testimony hurt defendant's work product claim — because it "actually reveals that those reports are created in substantially the same form regardless of the specific threat of litigation, and the reports are only sent to outside counsel if litigation actually becomes likely." Id. (emphasis added).

Some companies eventually regret their attempt to bolster a work product claim by involving lawyers in the post-accident process. Here, the supposedly helpful testimony instead confirmed that the company prepared the post-accident reports sought by plaintiff in the ordinary course of its business. Ironically, sending every post-accident report to a lawyer might have the same adverse effect — because the company could not prove that it did something different or special because it anticipated litigation.

Case Date Jurisidction State Cite Checked
2014-04-10 Federal CA
Comment:

key case


Chapter: 43.5

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 *6, *7-8, *9, *10-11 (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 the work product doctrine inapplicable; "Chamberlain has not shown that the documents it created or gathered as part of the investigation for Telamon and its lawyers are work product. Chamberlain cannot even identify any particular litigation, the prospect of which was a motivating reason for its hiring or its work. Chamberlain does not contend that its hiring or the conduct of its investigation was because of likely insurance coverage litigation. Instead, it points to the FBI's involvement and to J.B.'s filing of a charge of discrimination with the EEOC as satisfying the 'anticipation of litigation' element. But neither of these circumstances tends to show that Barnes & Thornburg or Telamon hired Chamberlain, or that Chamberlain conducted its investigation, because 'some articulable claim, likely to lead to litigation,' had arisen." (citation omitted); "Chamberlain does not counter the fact that it was the results of its investigation that led Chamberlain and the lawyers to reach out to the FBI; Chamberlain's hiring and its work were not primarily for the purpose of assisting the FBI in gathering evidence for potential criminal proceedings. . . . [A]ny contemplated criminal proceedings involved J.B. and perhaps other rogue employees as the suspects and potential defendants, with Telamon always as victim. The anticipated litigation for which an entity or its representative may create documents protectable as work product must be litigation to which one expects to be a party, and there is no indication that anyone feared Telamon might be targeted as a potential defendant in any criminal proceeding."; "The fact that Barnes & Thornburg -- rather than Telamon itself -- hired Chamberlain does not tip the scale to satisfy the anticipation of litigation requirement."; "Chamberlain has not met its burden to show that it was hired, or that it conducted its work, because of any particular matter that Telamon or its lawyers thought likely to lead to litigation involving Telamon. Instead, the evidence demonstrates that Chamberlain was hired, and prepared and gathered the documents in its investigative file, because Telamon had a strong business need to determine how hundreds of thousands of dollars of inventory went missing and which of its employees was responsible, wholly apart from the prospect of any litigation.")

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

Chapter: 43.5

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: 43.5

Case Name: Graff v. Haverhill N. Coke Co., Case No. 1:09 cv 670, 2012 U.S. Dist. LEXIS 162013, at *13 14, *15 16 (S.D. Ohio Nov. 13, 2012)
(holding that a 2008 audit conducted by a third party consultant did not deserve work product protection; "Defendants hired URS to conduct an audit of HNCC's facility on August 13 and 15, 2008. Defendants assert the purpose of the audit was to obtain a 'legal' audit of HNCC and to provide outside counsel (Anthony Sullivan of Barnes & Thornburg) with opinions about HNCC's compliance with regulations and laws."; "These events, in themselves, do not indicate that a threat of litigation was the driving force behind the request for the audit when viewed in the context of the July 25, 2008 memorandum by SunCoke's President requesting the audit, the scope of the audit, and the subsequent use of the audit by defendants. The memorandum indicates the purpose of the audit was to assess general compliance with regulatory requirements and company policies, which are primarily business concerns for a regulated entity like HNCC, and not because of a threat of Clean Air Act litigation. The memo does not indicate a concern over a threatened enforcement action by any governmental entity or a concern over litigation. In addition, the 'mid-2008' events cited by defendants in support of their contention occurred after the request for the audit had already been made by SunCoke's President and could not have motivated defendants to seek the URS audit out of a fear of litigation. . . . Additionally, the scope of the audit exceeds that which would be anticipated if the driving force behind the audit was litigation. The audit was described as 'generic' by the Director of Corporate HES and covered all aspects of the facility bolstering the conclusion that the purpose of the audit was to assess regulatory compliance in the ordinary course of business, and not because of the threat of litigation." (footnote omitted))

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

Chapter: 43.6

Case Name: Robinson v. Vineyard Vines, LLC, 15 Civ. 4972 (VB)(JCM), 2016 U.S. Dist. LEXIS 27948 (S.D.N.Y. March 4, 2016)
(holding that work product doctrine was prepared during a resources consulting group's investigation into a company employee's allegation that she was raped; noting that the defendant dropped an affirmative defense that arguably asserted a Faragher-Ellerth defense, and disclaimed relying on Faragher-Ellerth; "In employment discrimination cases, courts often find that an employer's investigation 'shift[s] from an internal investigation in response to [a plaintiff's] claims to an investigation for the purposes of mounting a legal defense against any such claims,' and hold that documents created during the latter portion of the investigation are privileged work product.")

Case Date Jurisidction State Cite Checked
2016-03-04 Federal NY

Chapter: 43.6

Case Name: Robinson v. Vineyard Vines, LLC, 15 Civ. 4972 (VB)(JCM), 2016 U.S. Dist. LEXIS 27948 (S.D.N.Y. March 4, 2016)
(holding that work product doctrine was prepared during a resources consulting group's investigation into a company employee's allegation that she was raped; noting that the defendant dropped an affirmative defense that arguably asserted a Faragher-Ellerth defense, and disclaimed relying on Faragher-Ellerth; "Here, HRCG is clearly a 'representative' of Vineyard Vines for the purposes of the work-product doctrine -- it was, at the very least, acting as Vineyard Vines' 'consultant' when it provided 'the full range of human resources services to Vineyard Vines . . . Including responding to employee issues that were brought to HRCG's attention by Vineyard Vines' managers or employees.'. . . I also find that the documents generated after HRCG received the January 9 Email were created 'in anticipation of litigation.' HRCG affirms that "as of January 9, 2013, the focus of the information-gathering by HRCG concerning [Plaintiff] shifted,' and it was HRCG's 'understanding at the time that the information that HRCG was gathering in response to the [January 9 Email] . . . Was to be provided to Vineyard Vines and/or its counsel for their use in defending against the [claims in the January 9 Email].'")

Case Date Jurisidction State Cite Checked
2016-03-04 Federal NY

Chapter: 43.6

Case Name: In re Symbol Technologies, Inc. Securities Litigation, No. CV 05-3923 (DRH) (AKT), 2015 U.S. Dist. LEXIS 131478 (E.D.N.Y. Sept. 29, 2015)
November 25, 2015 (PRIVILEGE POINT)

"Courts Reject Protection for Corporate Investigations, but Offer Helpful Guidance: Part II"

Last week's Privilege Point described two cases rejecting defendant's protection claims for internal investigations. In each case, the court held that the defendant undertook its investigation in the ordinary course of its business.

A few days later, in In re Symbol Technologies, Inc. Securities Litigation, No. CV 05-3923 (DRH) (AKT), 2015 U.S. Dist. LEXIS 131478 (E.D.N.Y. Sept. 29, 2015), the court dealt with Symbol's internal investigation of possible revenue overstatement. Citing an earlier decision, the court acknowledged that "'[a]lthough at some point, a company's investigation may shift from the ordinary course of business to an anticipation of litigation, there is no hard and fast rule as to when this occurs.'" Id. At *20 (quoting U.S. Fid. & Guar. Co. v. Brasperto Oil Servs. Co., No. 97 Civ. 6124, 2000 U.S. Dist. LEXIS 7939, at *33 (S.D.N.Y. June 8, 2000)). The court concluded that it "does not have sufficient factual information" to analyze this possible shift, and ordered Symbol to prepare a privilege log and possibly produce documents for the court's in camera review. Id. At *21.

When courts analyze the alleged morphing of ordinary course investigations into privileged or work product-protected investigations, they will look for evidence that the company did something different or special because it needed legal advice or anticipated litigation. Companies and their lawyers should remember that this shift should appear on the face of the investigation documents the court will review in camera.

Case Date Jurisidction State Cite Checked
2015-09-29 Federal NY
Comment:

key case


Chapter: 43.6

Case Name: In re Symbol Technologies, Inc. Securities Litigation, No. CV 05-3923 (DRH) (AKT), 2015 U.S. Dist. LEXIS 131478 (E.D.N.Y. Sept. 29, 2015)
November 25, 2015 (PRIVILEGE POINT)

"Courts Reject Protection for Corporate Investigations, but Offer Helpful Guidance: Part II"

Last week's Privilege Point described two cases rejecting defendant's protection claims for internal investigations. In each case, the court held that the defendant undertook its investigation in the ordinary course of its business.

A few days later, in In re Symbol Technologies, Inc. Securities Litigation, No. CV 05-3923 (DRH) (AKT), 2015 U.S. Dist. LEXIS 131478 (E.D.N.Y. Sept. 29, 2015), the court dealt with Symbol's internal investigation of possible revenue overstatement. Citing an earlier decision, the court acknowledged that "'[a]lthough at some point, a company's investigation may shift from the ordinary course of business to an anticipation of litigation, there is no hard and fast rule as to when this occurs.'" Id. At *20 (quoting U.S. Fid. & Guar. Co. v. Brasperto Oil Servs. Co., No. 97 Civ. 6124, 2000 U.S. Dist. LEXIS 7939, at *33 (S.D.N.Y. June 8, 2000)). The court concluded that it "does not have sufficient factual information" to analyze this possible shift, and ordered Symbol to prepare a privilege log and possibly produce documents for the court's in camera review. Id. At *21.

When courts analyze the alleged morphing of ordinary course investigations into privileged or work product-protected investigations, they will look for evidence that the company did something different or special because it needed legal advice or anticipated litigation. Companies and their lawyers should remember that this shift should appear on the face of the investigation documents the court will review in camera.

Case Date Jurisidction State Cite Checked
2015-09-29 Federal NY
Comment:

key case


Chapter: 43.6

Case Name: In re Symbol Technologies, Inc. Securities Litig., CV 05-3923 (DRH) (AKT), 2015 U.S. Dist. LEXIS 131478 (E.D.N.Y. Sept. 29, 2015)
(requiring more facts to determine if an internal corporate investigation into a "revenue misstatement" had changed in some way so that the work product doctrine was applicable; " The circumstances within which the documents at issue were created appear to stem from Symbol's investigation into its overstatement of revenue beginning in November 2004 -- an investigation for which it retained representation by outside counsel. . . . In cases such as this, where an attorney-assisted investigation has been conducted, 'the court must make a 'fact specific inquiry' to determine if and when an investigation changed from being within the ordinary course of business to being because of litigation.' Koumoulis v. Indep. Fin. Mktg. Group, Inc., 295 F.R.D. 28, 40 (E.D.N.Y. 2013), aff'd 29 F. Supp. 3d 142 (E.D.N.Y. 2014); see U.S. Fid. & Guar. Co. v. Braspetro Oil Srvs. Co., No. 97 Civ. 6124, 2000 U.S. Dist. LEXIS 7939, 2000 WL 744369, at *9 (S.D.N.Y. June 8, 2000) ('Although at some point, a company's investigation may shift from the ordinary course of business to an anticipation of litigation, there is no hard and fast rule as to when this occurs; rather, a fact-specific inquiry is required to determine when this shift occurs.'"; "At this juncture, the Court is hampered by the fact that it does not have sufficient factual information concerning the particular documents at issue in order to make such a factual determination. To date, Symbol has not produced the required privilege log in this case particularizing the documents being withheld based on privilege. Nor has either party requested an in camera review of the documents at issue so that the Court can properly engage in a case-specific assessment whether the work product privilege is applicable here in the first instance.").

Case Date Jurisidction State Cite Checked
2015-09-29 Federal NY

Chapter: 43.6

Case Name: Meighan v. Transguard Ins. Co. of Am., Inc., 298 F.R.D. 436, 441 (N.D. Iowa 2014)
("To the extent that factual investigation and trial preparation overlap in the investigation, the work product doctrine applies.")

Case Date Jurisidction State Cite Checked
2014-01-01 Federal IA B 8/14

Chapter: 43.6

Case Name: In re MDM Marina Corp., No. 13-cv-597 (ENV) (VMS), 2013 U.S. Dist. LEXIS 177916, at *12-13 (E.D.N.Y. Dec. 18, 2013)
(analyzing protections in a first party insurance context; "MDM has met its burden in this case based on Mr. Resnick's [Great Am. Ins. Co. claims specialist] affidavit. Mr. Resnick stated that it was not the insurer's policy to obtain witness statements for every claim, but he decided to obtain the witness statements in order to assist the attorneys that he would eventually retain. . . . He based his decision on his review of the case, conversations with MDM, the fact that Ms. Cera had already retained counsel, his opinion as to MDM's liability, and his opinion that because this was a maritime claim, the vessel's owner was likely to proactively file an action for exoneration. . . . Importantly, he stated that he decided to obtain the two statements 'purely in anticipation of likely litigation.'. . . (emphasis added). As in Hamilton [v. Great Lakes Dredge & Dock Co., No. 05 Civ. 3862 (DGT), 2006 U.S. Dist. LEXIS 50760 (E.D.N.Y. July 25, 2006)], Claimant offers no evidence to dispute Mr. Resnick's sworn testimony, and the Court has no reason to doubt his credibility. Thus, MDM has met its burden of establishing that the witness statements are privileged work-product.")

Case Date Jurisidction State Cite Checked
2013-12-18 Federal NY B 5/14

Chapter: 43.9

Case Name: In re Weatherford Int’l Sec. Litig., No. 11 Civ. 1646 (LAK (JCF), 2013 U.S. Dist. LEXIS 170559, at *27 (S.D.N.Y. Nov. 5, 2013)
February 19, 2014 (PRIVILEGE POINT)

"Avoiding Waiver When Disclosing Facts to the Government: Part II"

Last week's Privilege Point described a Southern District of New York decision holding that a company providing information to the SEC about two internal corporate investigations waived privilege and fact work product protection for material or oral representations given to the SEC, and any "underlying factual material explicitly referenced" in such material or representations. In re Weatherford Int’l Sec. Litig., No. 11 Civ. 1646 (LAK (JCF), 2013 U.S. Dist. LEXIS 170559, at *27 (S.D.N.Y. Nov. 5, 2013).

About a month later, the court had to provide additional guidance. In In re Weatherford International Securities Litigation, No. 11 Civ. 1646 (LAK) (JCF), 2013 U.S. Dist. LEXIS 176278, at *7 (S.D.N.Y. Dec. 16, 2013), the court first focused on "interview materials" Davis Polk lawyers used to create four PowerPoint presentations to the SEC. The court held that the company did not have to produce any interview materials "unless those specific materials are explicitly identified, cited, or quoted in information disclosed to the SEC." Id. At *10. Interestingly, the court rejected plaintiffs' argument that the company crossed that line "where the presentations assert that a particular witness made a statement." Id. At *7. The court acknowledged that such a representation to the SEC obviously implied "that an interview took place" and also provided "a strong inference that it was memorialized in some way" – but ultimately concluded that "plaintiffs have not shown that those memorializations were, themselves, explicitly referenced in communications with the SEC." Id. At *7-8.

The court then turned to the company's redactions in the interview summaries produced in response to the earlier ruling. Next week's Privilege Point will address that analysis.

Case Date Jurisidction State Cite Checked
2015-11-05 Federal NY
Comment:

key case


Chapter: 43.9

Case Name: In re Weatherford International Securities Litigation, No. 11 Civ. 1646 (LAK) (JCF), 2013 U.S. Dist. LEXIS 176278, at *7 (S.D.N.Y. Dec. 16, 2013)
February 19, 2014 (PRIVILEGE POINT)

"Avoiding Waiver When Disclosing Facts to the Government: Part II"

Last week's Privilege Point described a Southern District of New York decision holding that a company providing information to the SEC about two internal corporate investigations waived privilege and fact work product protection for material or oral representations given to the SEC, and any "underlying factual material explicitly referenced" in such material or representations. In re Weatherford Int’l Sec. Litig., No. 11 Civ. 1646 (LAK (JCF), 2013 U.S. Dist. LEXIS 170559, at *27 (S.D.N.Y. Nov. 5, 2013).

About a month later, the court had to provide additional guidance. In In re Weatherford International Securities Litigation, No. 11 Civ. 1646 (LAK) (JCF), 2013 U.S. Dist. LEXIS 176278, at *7 (S.D.N.Y. Dec. 16, 2013), the court first focused on "interview materials" Davis Polk lawyers used to create four PowerPoint presentations to the SEC. The court held that the company did not have to produce any interview materials "unless those specific materials are explicitly identified, cited, or quoted in information disclosed to the SEC." Id. At *10. Interestingly, the court rejected plaintiffs' argument that the company crossed that line "where the presentations assert that a particular witness made a statement." Id. At *7. The court acknowledged that such a representation to the SEC obviously implied "that an interview took place" and also provided "a strong inference that it was memorialized in some way" – but ultimately concluded that "plaintiffs have not shown that those memorializations were, themselves, explicitly referenced in communications with the SEC." Id. At *7-8.

The court then turned to the company's redactions in the interview summaries produced in response to the earlier ruling. Next week's Privilege Point will address that analysis.

Case Date Jurisidction State Cite Checked
2013-12-16 Federal NY
Comment:

key case


Chapter: 43.9

Case Name: In re Weatherford International Securities Litigation, No. 11 Civ. 1646 (LAK) (JCF), 2013 U.S. Dist. LEXIS 176278, at *10 (S.D.N.Y. Dec. 16, 2013)
February 26, 2014 (PRIVILEGE POINT)

"Avoiding Waiver When Disclosing Facts to the Government: Part III"

The last two Privilege Points (Part I & Part II) discussed the scope of a privilege and fact work product waiver caused by a company's presentations to the SEC about two internal corporate investigations. The Southern District of New York held that the waiver covered materials or oral representations given to the SEC, as well as "any underlying factual material explicitly referenced in" the materials or representations – but then had to provide additional guidance. In re Weatherford Int’l Sec. Litig., No. 11 Civ. 1646 (LAK) (JCF), 2013 U.S. Dist. LEXIS 170559, at *27 (S.D.N.Y. Nov. 5, 2013).

In In re Weatherford International Securities Litigation, No. 11 Civ. 1646 (LAK) (JCF), 2013 U.S. Dist. LEXIS 176278, at *10 (S.D.N.Y. Dec. 16, 2013), the court addressed plaintiffs' complaint that the company had not fully produced those witness interview summaries that were "explicitly identified, cited, or quoted in information disclosed to the SEC." The company explained that it had produced "only the 'portions of summaries . . . That were . . . Read or conveyed in substantial part to the SEC,'" and redacted the rest. Id. At *12 (internal citation omitted). Criticizing that as a "crabbed view of their discovery obligations," the court ordered the company to produce all factual portions of any such interview summaries -- redacting "only material that reflects an attorney's 'explicit mental impressions, conclusions, opinions or legal theories.'" Id. At *12-13 (citation omitted). In other words, the company had to produce all non-opinion portions of any witness interview summaries the company had quoted to the SEC.

It can be very difficult to reconcile two basic principles: (1) disclosure of privileged communications or work product to the government generally waives those protections; and (2) disclosing historical facts does not waive either protection. As explained in these opinions by widely-respected S.D.N.Y. Judge Francis, companies hoping to avoid a broad waiver when making disclosures to the government should limit their presentations to historical facts – without explicitly referencing, identifying, citing, or quoting any underlying material or witness interviews.

Case Date Jurisidction State Cite Checked
2013-12-16 Federal NY
Comment:

key case


Chapter: 43.9

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: 43.9

Case Name: In re Weatherford Int’l Sec. Litig., No. 11 Civ. 1646 (LAK) (JCF), 2013 U.S. Dist. LEXIS 170559, at *27 (S.D.N.Y. Nov. 5, 2013)
February 26, 2014 (PRIVILEGE POINT)

"Avoiding Waiver When Disclosing Facts to the Government: Part III"

The last two Privilege Points (Part I & Part II) discussed the scope of a privilege and fact work product waiver caused by a company's presentations to the SEC about two internal corporate investigations. The Southern District of New York held that the waiver covered materials or oral representations given to the SEC, as well as "any underlying factual material explicitly referenced in" the materials or representations – but then had to provide additional guidance. In re Weatherford Int’l Sec. Litig., No. 11 Civ. 1646 (LAK) (JCF), 2013 U.S. Dist. LEXIS 170559, at *27 (S.D.N.Y. Nov. 5, 2013).

In In re Weatherford International Securities Litigation, No. 11 Civ. 1646 (LAK) (JCF), 2013 U.S. Dist. LEXIS 176278, at *10 (S.D.N.Y. Dec. 16, 2013), the court addressed plaintiffs' complaint that the company had not fully produced those witness interview summaries that were "explicitly identified, cited, or quoted in information disclosed to the SEC." The company explained that it had produced "only the 'portions of summaries . . . That were . . . Read or conveyed in substantial part to the SEC,'" and redacted the rest. Id. At *12 (internal citation omitted). Criticizing that as a "crabbed view of their discovery obligations," the court ordered the company to produce all factual portions of any such interview summaries -- redacting "only material that reflects an attorney's 'explicit mental impressions, conclusions, opinions or legal theories.'" Id. At *12-13 (citation omitted). In other words, the company had to produce all non-opinion portions of any witness interview summaries the company had quoted to the SEC.

It can be very difficult to reconcile two basic principles: (1) disclosure of privileged communications or work product to the government generally waives those protections; and (2) disclosing historical facts does not waive either protection. As explained in these opinions by widely-respected S.D.N.Y. Judge Francis, companies hoping to avoid a broad waiver when making disclosures to the government should limit their presentations to historical facts – without explicitly referencing, identifying, citing, or quoting any underlying material or witness interviews.

Case Date Jurisidction State Cite Checked
2013-11-05 Federal NY
Comment:

key case


Chapter: 43.9

Case Name: In re Weatherford International Securities Litigation, No. 11 Civ. 1646 (LAK) (JCF), 2013 U.S. Dist. LEXIS 170559 (S.D.N.Y. Nov. 5, 2013)
February 12, 2014 (PRIVILEGE POINT)

"Avoiding Waiver When Disclosing Facts to the Government: Part I"

All but a handful of courts find that companies disclosing privileged communications or protected work product to the government waive both of those protections. Courts properly analyzing waiver rules also recognize that disclosing historical facts does not cause a waiver – because historical facts are not privileged.

In two related cases, Judge Francis of the Southern District of New York dealt with the intersection of these basic principles. In In re Weatherford International Securities Litigation, No. 11 Civ. 1646 (LAK) (JCF), 2013 U.S. Dist. LEXIS 170559 (S.D.N.Y. Nov. 5, 2013), Weatherford retained Latham & Watkins and Davis Polk to conduct two separate corporate investigations into material weaknesses in the company's internal controls over financial reporting. The court acknowledged that both investigations deserved work product protection. However, the court also found that the company waived its privilege and fact (but not opinion) work product protection by disclosing information about the investigations to the SEC. In defining the scope of the resulting waiver, the court (1) rejected plaintiffs' argument that the waiver extended to "all materials relevant" to the investigations; (2) found that the waiver covered any material actually given to the SEC, and any oral representations company lawyers made to the SEC; and (3) held that the waiver also extended to any "underlying factual material explicitly referenced" in such material or representations. Id. At *28, *27.

Perhaps not surprisingly, the parties soon disagreed about the company's interpretation of the waiver's scope – which resulted in another opinion one month later. The next two Privilege Points describe that decision.

Case Date Jurisidction State Cite Checked
2013-11-05 Federal NY
Comment:

key case


Chapter: 43.11

Case Name: Lopez v. Woolever, 62 Va. Cir. 198, 202-203 (Va. Cir. Ct. 2003)
(concluding that during the defendant's insurance carrier's investigation deserved work product protection, which could not be overcome; "One fact used by many courts in determining whether the work product doctrine applies is the context in which the materials are prepared. These courts draw a distinction between first party and third party liability coverage. See, e.g., McCullough v. Standard Pressing Machines, 39 Va. Cir. 191 (Fairfax 1996); accord St. Paul Reinsurance Co., Ltd., 197 F.R.D. at 636 ('the court is itself persuaded that such a distinction has merit.') In McCullough, Judge Vierreg wrote that most of the cases denying work product protection to adjuster reports involve 'first party' insurance coverage as distinguished from 'third party' or liability insurance coverage. 39 Va. Cir. at 192. In the case of first party liability, the insurer has a duty to investigate, thus any investigation fulfills this investigatory duty in the ordinary course of business. Id. See also St. Paul Reinsurance Co., Ltd., where the case involved a first-party bad faith claim. The court concluded that an investigation of whether coverage exists is required and the conduct of that much of its investigation is assuredly in the ordinary course of business, not in anticipation of litigation. 197 F.R.D. at 636. In the case of third party liability insurance coverage, however, an insured obtains insurance to protect against liability claims of third persons, which are established in favor of the third party against the insured by litigation in a court of law. See, e.g., McCullough, 39 Va. Cir. at 192. Thus, when an insured is involved in an insured event occurrence, such as an automobile accident, reasonably giving rise to liability, the liability insurer has an incentive to investigate the circumstances surrounding the occurrence in order to fulfill its obligation to its insured to defend against a third party potential action. Id. In the end, liability insurance is essentially 'litigation insurance.' Id. (citing Kandel, 256 N.Y.S.2d at 899). See also, Ashmead v. Harris, 336 N.W.2d 197 (Iowa 1983); Fontaine v. Sunflower Beef Carrier, Inc., 87 F.R.D. 89 (E.D. Mo. 1980).")

Case Date Jurisidction State Cite Checked
2003-01-01 State VA

Chapter: 43.301

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: 43.301

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: 43.301

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