On June 27, 2014, the United States Court of Appeals for the District of Columbia Circuit issued a decision in In re: Kellogg Brown & Root, Inc., an important ruling which confirms the application of the attorney-client privilege to corporations within the business setting as set forth by the Supreme Court over thirty years ago in Upjohn Co. v. United States. In Kellogg Brown & Root, the D.C. Circuit vacated a district court’s decision that denied the protection of the attorney-client privilege to documents created during the course of an internal investigation by the company’s in-house lawyers. Recognizing that the district court’s decision had generated substantial uncertainty about the scope of the attorney-client privilege in the business setting, the Court held that the attorney-client privilege applied to documents generated during an internal investigation provided that obtaining legal advice was one of the significant purposes of the internal investigation.

Case Background -

On March 6, 2014, Judge James G. Gwin of the United States District Court for the District of Columbia granted the plaintiff-relator’s motion to compel production of materials that had been created by the defendant in connection with an internal investigation. The district court applied a very narrow interpretation of the attorney-client privilege, finding that the documents sought in discovery were not privileged because the investigation for which they were prepared was undertaken pursuant to regulatory law and corporate policy, rather than for the purpose of obtaining legal advice or in anticipation of litigation. The district court denied the application of the attorney-client privilege, ruling that a party invoking the privilege must show that a communication would not have been made “but for” a request for legal advice. The district court denied KBR’s motion for interlocutory appeal or for a stay pending its petition for a writ of mandamus. KBR filed a petition for mandamus with the D.C. Circuit, which granted a stay of the requested document production.