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When Is an Internal Corporate Investigation Protected by the Attorney-Client Privilege?

By: Frank H. Stoy
July 31, 2014

            The United States Court of Appeals for the D.C. Circuit recently overturned a district court ruling that, if allowed to stand, would have limited the protection of the attorney-client privilege in corporate internal investigations. The case, In re Kellogg Brown & Root, Inc., 2014 U.S App LEXIS 12115 (D.C. Cir. 2014), involved a company’s challenge of a district court’s order to produce documents from an internal investigation by its legal department. In an unprecedented move, the district court found that the attorney-client privilege applied to communications only where those communications were made solely for the purpose of obtaining legal advice. Under this standard, the company was required to produce its internal investigation documents because the investigation in question was conducted not just to obtain legal advice, but also for business purposes related to compliance with government regulations.
 
           The D.C. Circuit Court of Appeals flatly rejected this approach, holding that so long as one of the significant purposes of a communication was to obtain or provide legal advice, the privilege applies even where the investigation has been conducted for both business and legal reasons. In addition, according to the Kellogg analysis, the privilege applies regardless of whether the investigation was conducted by inside or outside counsel or non-attorneys, as long as the investigation was at the direction of the law department. In light of this standard, counsel should be diligent in documenting that a significant purpose of any investigation is to obtain or provide legal advice in order to ensure that the privilege is preserved.