In one of the most important decisions of the year for corporate legal departments, on June 27, the D.C. Circuit held that a company’s internal investigation documents were protected by the attorney-client privilege where “one of the significant purposes” of the investigation was “to obtain or provide legal advice.”1 The issue was before the D.C. Circuit on Kellogg Brown & Root’s (“KBR”) petition for a writ of mandamus seeking review of a surprising decision in which the District Court had ordered KBR to produce final reports documenting its prior internal investigations. While corporate legal departments breathe a collective sigh of relief, this case underscores the need to structure internal investigations thoughtfully in order to maximize attorney-client privilege protection.
FACTUAL AND PROCEDURAL BACKGROUND -
In 2005, Harry Barko, who worked for KBR, filed a whistleblower complaint under seal pursuant to the qui tam provisions of the False Claims Act. The complaint alleged that KBR, a former subsidiary of Halliburton, defrauded the federal government by inflating costs and accepting kickbacks while performing reconstruction contracts in Iraq. The complaint remained under seal until 2009.
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