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August 14, 2015
D.C. Circuit Again Defends Attorney-Client Privilege Protections in Internal Investigations

On August 11, 2015—for the second time in just over a year—the U.S. Court of Appeals for the District of Columbia Circuit issued a strong defense of the attorney-client privilege that exists in internal investigations overseen by in-house counsel. The court took the unusual step of granting a second writ of mandamus and vacating the district court’s orders requiring the production of documents from an internal investigation of kickback allegations.

In 2005, whistleblower Harry Barko filed a qui tam False Claims Act action against defense contractor Kellogg, Brown and Root (KBR), alleging that KBR defrauded the federal government by inflating prices and accepting kickbacks on Iraq War contracts. Before the lawsuit, KBR’s in-house counsel oversaw an internal investigation pursuant to its Code of Business Conduct. Last year, the D.C. Circuit granted KBR’s first writ of mandamus, In re Kellogg Brown & Root, Inc., 756 F.3d 754 (D.C. Cir. 2014), and relied on Upjohn Co. v. United States to overturn the district court’s order that documents related to the internal investigation were not privileged. 449 U.S. 383 (1981) (holding that communications made during an internal investigation led by in-house counsel are protected by the attorney-client privilege). But the D.C. Circuit allowed that the district court might consider other arguments for why the documents were not covered by either the attorney-client privilege or work-product protection. The district court did just that, and in a series of rulings held that the documents were not covered by a privilege because they were used to prepare a Rule 30(b)(6) witness and were referenced in a footnote in KBR’s motion for summary judgment.

On the second writ of mandamus, the D.C. Circuit rejected the lower court’s reasoning, explaining that “[i]f allowed to stand, the District Court’s rulings would ring alarm bells in corporate general counsel offices throughout the country about what kinds of descriptions of investigatory and disclosure practices could be used by an adversary to defeat all claims of privilege and protection of an internal investigation.” See In re Kellogg Brown & Root, Inc., No. 14-5319, August 11, 2015 slip op. at 24. “If all it took to defeat the privilege and protection attaching to an internal investigation was to notice a deposition regarding the investigations (and the privilege and protection attaching them), we would expect to see such attempts to end-run these barriers to discovery in every lawsuit in which a prior internal investigation was conducted relating to these claims.” Id.

The Court of Appeals also relied on Upjohn’s admonition that “[a]n uncertain privilege, or one which purports to be certain but results in widely varying applications by the courts, is little better than no privilege at all.” Id. at 11, citing 449 U.S. at 393.

For a link to the opinion, please click here.

We encourage you to contact any of the following attorneys if you have questions or would like more information.

Amy Conners
White Collar Criminal & Regulatory Defense
612.349.5665

Thomas Heffelfinger
White Collar Criminal & Regulatory Defense
612.349.5657

Sarah Crippen
Labor & Employment Law
612.341.9733

Ashleigh Leitch
Labor & Employment Law
612.843.5824

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