Maximizing Work Product Protection After an Ordinary Course Internal Investigation Uncovers Serious Problems that Could Trigger Litigation

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The work product doctrine only protects internal corporate investigations initiated by the corporation's anticipation of litigation. Thus, the protection normally does not extend to investigations required by some external or internal mandate, or undertaken in the ordinary course of business. But unprotected ordinary course investigations might uncover something that could trigger litigation. What happens then?

In Patel v. L-3 Communications Holdings, Inc., Nos. 14-CV-6038, -6182, & -6939 (VEC), 2016 U.S. Dist. LEXIS 97241 (S.D.N.Y. July 25, 2016), L-3's in-house lawyer initiated an internal corporate investigation into misconduct allegations about one government contract. L-3 later hired Simpson Thacher "to complete the investigation." Id. at *4. About five weeks later, Simpson Thacher retained a forensic accounting firm to assist in a broader investigation into other potential accounting misconduct or errors. Because Simpson Thacher's initial contract-specific investigation "was largely complete" by that time, the forensic accounting firm "'had no role or involvement'" in that earlier narrower investigation. Id. (internal citation omitted). L-3 self-reported on the contract-specific investigation results, but in later litigation claimed work product protection for the broader investigation documents – arguing that the later investigation was "entirely separate from Simpson's investigation into the [specific] Contract accounting irregularities and was focused more broadly." Id. at *8. Judge Caproni noted that the work product could apply to internal investigations "conducted . . . in large part [not exclusively] because of expected litigation," because "work product protection applies even when documents are created for multiple purposes." Id. at *12. She then found the work product doctrine applicable, noting that (1) Simpson Thacher had hired the forensic accountant "to conduct a broader review" so "the scope and manner of conducting the investigation was clearly influenced by the expectation and reality of litigation"; and (2) a Simpson Thacher partner's declaration "attested that Simpson and [the forensic accountant] would not have conducted the review in the manner they did in the absence of anticipated litigation." Id. at *11, *12.

Companies trying to maximize work product protection in this scenario should ideally (1) complete -- and disclaim work product protection for -- the ordinary course of business investigation (keeping in mind that adversaries will thus be able read documents related to that investigation); (2) initiate a new lawyer-driven parallel or successive investigation (which may even involve re-interviewing witnesses), preferably with new consultants; (3) assure that communications and other documents generated during this separate investigation reflect on their face its different or special litigation-motivated nature; and (4) be prepared to present evidence that the litigation-motivated investigation was different from the earlier ordinary course investigation.

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.

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