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In re Kellogg Brown & Root, Inc. - 410 U.S. App. D.C. 382, 756 F.3d 754 (2014)

Rule:

The primary purpose test to determine whether the attorney-client privilege applies, sensibly and properly applied, cannot and does not draw a rigid distinction between a legal purpose on the one hand and a business purpose on the other. After all, trying to find the one primary purpose for a communication motivated by two sometimes overlapping purposes can be an inherently impossible task. It is often not useful or even feasible to try to determine whether the purpose was A or B when the purpose was A and B. It is thus not correct for a court to presume that a communication can have only one primary purpose. It is likewise not correct for a court to try to find the one primary purpose in cases where a given communication plainly has multiple purposes. Rather, it is clearer, more precise, and more predictable to articulate the test as follows: Was obtaining or providing legal advice a primary purpose of the communication, meaning one of the significant purposes of the communication?

Facts:

Harry Barko worked for Kellogg Brown & Root, Inc. (KBR), a defense contractor. In 2005, he filed a False Claims Act complaint against KBR and KBR-related corporate entities, whom we will collectively refer to as KBR. In essence, Barko alleged that KBR and certain subcontractors defrauded the U.S. Government by inflating costs and accepting kickbacks while administering military contracts in wartime Iraq. During discovery, Barko sought documents related to KBR's prior internal investigation into the alleged fraud. KBR had conducted that internal investigation pursuant to its Code of Business Conduct, which is overseen by the company's Law Department. KBR argued that the internal investigation had been conducted for the purpose of obtaining legal advice and that the internal investigation documents therefore were protected by the attorney-client privilege. Barko responded that the internal investigation documents were unprivileged business records that he was entitled to discovery. The District Court determined that the attorney-client privilege protection did not apply because, among other reasons, KBR had not shown that "the communication would not have been made 'but for' the fact that legal advice was sought." KBR's internal investigation, the court concluded, was "undertaken pursuant to regulatory law and corporate policy rather than for the purpose of obtaining legal advice." KBR vehemently opposed the ruling. KBR asked the District Court to certify the privilege question to the federal appellate court for interlocutory appeal and to stay its order pending a petition for mandamus in court of appeals. The District Court denied those requests and ordered KBR to produce the disputed documents to Barko within a matter of days. KBR promptly filed a petition for a writ of mandamus in Court of Appeals for the District of Columbia Circuit. A number of business organizations and trade associations also objected to the District Court's decision and filed an amicus brief in support of KBR. 

Issue:

Did the district court employ the proper legal test in refusing to apply the attorney-client privilege under Fed. R. Evid. 501 to confidential employee communications made during a corporation's internal investigation led by company lawyers?

Answer:

No

Conclusion:

The Court of Appeals for the District of Columbia Circuit held that KBR was entitled to mandamus relief under 28 U.S.C.S. § 1651, because the district court employed the wrong legal test in refusing to apply the attorney-client privilege under Fed. R. Evid. 501 to confidential employee communications made during a corporation's internal investigation led by company lawyers. So long as obtaining or providing legal advice was one of the significant purposes of the internal investigation, the attorney-client privilege applied even if the investigation was mandated by a regulation. The first condition for mandamus was met because there was no other adequate means to obtain relief. The court of appeals refused to reassign the case to a different district court judge because there was no reason to doubt that the district court would render a fair judgment in further proceedings.

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