D.C. Circuit Court Clarifies Scope of Attorney-Client Privilege in Internal Investigations

by Bracewell LLP

To listen to the podcast, please click here.

On June 27, 2014, the United States Court of Appeals for the District of Columbia Circuit issued an opinion clarifying the application of the attorney-client privilege in internal investigations.

In In re Kellogg Brown & Root, Inc., ________ (June 27, 2014) (available here), the D.C. Circuit rejected a narrow construction of the Supreme Court’s seminal Upjohn decision, which held that the attorney-client privilege protects confidential employee communications made in a company’s internal investigation. The District Court had previously issued an order limiting the application of the attorney-client privilege to internal investigations whose primary purpose was to obtain legal advice. Recognizing that internal investigations are often motivated by many equally important factors, the Court of Appeals reversed the District Court and held that the attorney-client privilege applies if obtaining legal advice was a significant purpose of the investigation “even if there were also other purposes[.]” Id. at 7-8.

In 2005, former Kellogg Brown & Root, Inc. (“KBR”) employee, Harry Barko, filed a False Claims Act complaint against KBR alleging that it defrauded the U.S. Government in connection with certain military contracts. Id. at 2. During discovery, Barko sought documents related to a prior internal investigation that KBR’s Law Department initiated pursuant to the company’s Code of Business Conduct. Id. KBR argued that the documents were protected by the attorney-client privilege because the investigation was conducted for the purpose of obtaining legal advice. Id. at 2-3. The District Court disagreed, holding that the privilege did not apply because the investigation was undertaken pursuant to regulatory law and corporate policy “rather than for the purpose of obtaining legal advice.” Id. at 3 (citation omitted).

The District Court distinguished this case from Upjohn on three factual grounds: (1) KBR’s investigation was conducted in-house without consulting outside lawyers; (2) many of KBR’s interviews were conducted by non-attorneys; and (3) the confidentiality agreements signed by KBR employees did not state that the purpose of the investigation was to obtain legal advice. Id. 6-7. Additionally, the District Court emphasized that, unlike in Upjohn¸ the KBR internal investigation was conducted in order to comply with regulations that required compliance programs to be maintained and internal investigations to be performed in response to allegations of misconduct. Id. at 7.  Thus, the District Court concluded that the purpose of the internal investigation was to comply with the regulatory requirements, not to “obtain or provide legal advice.” Id.

The Court of Appeals rejected the District Court’s Upjohn distinctions. First, the Court determined that Upjohn did not hold that the involvement of outside counsel is necessary for the attorney-client privilege to apply to internal investigations. Id. at 6. The D. C. Circuit reiterated that “a lawyer’s status as in-house counsel ‘does not dilute the privilege.’” Id. (citation omitted). Second, the Court noted that, while KBR’s interviews may have been conducted by non-attorneys, they were done at the direction of attorneys in the company’s Law Department. Id. The Court emphasized that communications made to and by agents of attorneys in internal investigations “are routinely protected by the attorney-client privilege.” Id. Third, and finally, the Court concluded that “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.” Id. at 7.

Ultimately, the Court summarily rejected the District Court’s “primary purpose” test because it eliminated the attorney-client privilege for communications “made for both legal and business purposes[.]” Id. at 9. The proper question is not whether obtaining legal advice is the primary purpose of the investigation, but rather, whether it is a significant purpose. If obtaining legal advice is one of the significant purposes of the internal investigation, the privilege applies despite the existence of other, equally important purposes.

Technically, now, the status quo remains unaffected: the attorney-client privilege applies to confidential employee communications provided in connection with internal investigations. Nevertheless, the D.C. Circuit’s decision crystallizes the scope of the attorney-client privilege for companies contemplating internal investigations in response to regulatory concerns. Furthermore, the opinion simultaneously recognizes the fact that companies may initiate internal investigations for numerous reasons, while refusing to penalize them for it.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Bracewell LLP | Attorney Advertising

Written by:

Bracewell LLP

Bracewell LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.