Preserving the Corporate Privilege in Internal Investigations: DC Circuit Clarifies Scope of the Privilege in Important Series of Decisions

by WilmerHale
For the second time in just over a year, the DC Circuit granted the extraordinary remedy of a writ of mandamus to protect a company’s assertion of privilege over materials relating to an internal investigation. In a significant case concerning the application of the corporate privilege – and one in which WilmerHale represented amici arguing against the lower court ruling – the Court vacated the denial of the protection of the privilege and warned, “If allowed to stand, the District Court’s rulings would ring alarm bells in corporate general counsel offices throughout the country.” In re Kellogg Brown & Root, Inc., No. 14-5319, slip op. (DC Cir. Aug. 11, 2015) (“KBR II”)
The 2014 Decision – KBR I  

KBR, a defense contractor, had conducted an internal investigation into allegations that it defrauded the United States by inflating costs and accepting kickbacks while administering military contracts in Iraq. In connection with a False Claims Act suit against KBR, the plaintiff sought documents related to the company’s investigation, which KBR opposed on the basis of the attorney-client privilege. After the District Court rejected KBR’s assertion of privilege, the company sought a writ of mandamus, which the DC Circuit granted. See In re Kellogg Brown & Root, Inc., 756 F.3d 754 (DC Cir. 2014) (“KBR I”). In its opinion, the DC Circuit cited to WilmerHale’s amicus brief on behalf of a coalition of business associations, which criticized the sea change in privilege doctrine reflected in the District Court’s opinion.

The Court of Appeals analyzed and rejected four separate justifications that the District Court had asserted in ordering the documents produced. First, with respect to the District Court’s finding that KBR’s internal investigation was conducted by in-house counsel, the DC Circuit clarified that the Supreme Court’s seminal decision in Upjohn, recognizing the corporate privilege, “does not hold or imply that the involvement of outside counsel is a necessary predicate for the privilege to apply,” and that “a lawyer’s status as in-house counsel does not dilute” the force of the privilege. Second, the Court of Appeals rejected the District Court’s reliance on the fact that the interviews had been conducted by non-attorneys, holding instead that “communications made by and to non-attorneys serving as agents of attorneys in internal investigations are routinely protected by the attorney-client privilege.” Third, the DC Circuit concluded that KBR’s failure to inform employees that the purpose of the interview was to assist the company in obtaining legal advice was of no moment, as “nothing in Upjohn requires a company to use magic words to its employees” to avail the privilege in an internal investigation and, in any event, employees were told not to discuss the interviews without the approval of the legal department. Finally, the Court held that “[s]o long as obtaining or providing legal advice was one of the significant purposes of the internal investigation,” the privilege applies, “even if there were also other purposes for the investigation and even if the investigation was mandated” by DoD regulation.
The 2015 Decision – KBR II
On remand, the District Court found that the “same contested documents” were discoverable because KBR had “impliedly waived” the attorney-client privilege and work product protections. Once again, the company sought a writ of mandamus, which the DC Circuit again granted. WilmerHale again supported the petitioner in KBR II on behalf of a broader coalition of business associations concerned with the uncertainty engendered by the District Court’s opinion.
KBR II has three principal holdings. The first ruling concerns the interplay between the privilege and Federal Rule of Evidence 612, which provides that where a witness uses a writing to refresh his memory before testifying, an adverse party may have the writing produced “if the court decides that justice requires” production. The District Court had concluded that certain documents generated by KBR’s investigation must be produced under Rule 612 on the theory that the company had waived attorney-client and work product protections when its 30(b)(6) witness had “reviewed the documents in preparation for his deposition” on the topic of the internal investigation. Rejecting this conclusion, the DC Circuit held that the District Court’s reasoning would allow the privilege “to be defeated routinely by a counter-party noticing a deposition on the topic of the privileged nature of the internal investigation,” thereby “potentially upend[ing] certain settled understandings and practices about the protections” governing internal investigations.
Second, KBR II addressed whether the company had effected an “at issue” waiver or “implied waiver” by making certain references to its internal investigation in a summary judgment brief. “Under the common-law doctrine of implied waiver, the attorney-client privilege is waived when the client places otherwise privileged matters in controversy.” In a footnote in its summary judgment filing, KBR described aspects of its investigation process without explicitly revealing its findings. Specifically, the brief stated that the company (1) generally reported findings of wrongdoing to the government, (2) had investigated the plaintiff’s allegations of kickbacks, but (3) had made no report of misconduct to the government. The District Court found that KBR had implicitly argued that its investigation had found no wrongdoing, and thus had “actively sought a positive inference in its favor based on what . . . the [investigation] documents show.” According to the District Court, KBR had impliedly disclosed the conclusion of its internal investigation. Recognizing that the issue of implied waiver presented “a more difficult question,” the DC Circuit nevertheless rejected the District Court’s finding because (1) KBR did not intend to make an “unconditional disclosure” of the results of its investigation; (2) KBR’s reference to its investigation was only a “recitation of facts in the motion’s introduction, not in an argument or claim concerning the privileged documents’ contents”; and (3) as the movant for summary judgment, all inferences at this stage based on the contents of the privileged documents were to be drawn against KBR.
Third, the District Court had concluded that substantial portions of the investigation-related documents constituted fact work product, and that the plaintiff had made an adequate showing to overcome the work product protection. The DC Circuit agreed with the District Court that not “everything in an internal investigation is attorney-client privileged,” and that pure fact work product may be discoverable upon a showing of “substantial need” and “undue hardship.” It nevertheless concluded that the lower court had incorrectly compelled production of documents—including a report summarizing employee statements—that went well beyond pure fact work product and implicated both privileged materials and the mental impressions of investigators.
Broadly speaking, this series of decisions helpfully clarifies the scope of the corporate privilege and its potential waiver in internal investigations. The recent decision in KBR II, in particular, is an important reminder to remain vigilant about inadvertently effecting an implied waiver of a company’s privilege. Although the DC Circuit ultimately upheld KBR’s assertion of the privilege, it observed that the company’s discussion of its internal investigation, albeit brief, presented a relatively close call. A description of a privileged investigation in the course of litigation may be perceived—as it was by the District Court—as implicitly trying to convey the investigation’s conclusions. In that regard, KBR II reinforces the need to consider carefully how privileged materials—whether arising from an internal investigation or otherwise—are used in litigation or in discussions with the government.


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.

© WilmerHale | Attorney Advertising

Written by:


WilmerHale 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 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:

- 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.