A/C Privilege - Corporate Internal Investigations

In Upjohn Co. v. United States, the Supreme Court held that the attorney-client privilege protects confidential employee communications made during an internal investigation led by company lawyers. The decision was recently questioned in In Re: Kellogg Brown & Root, Inc. (2014 WL 2895939). Defense contractor, KBR, came under scrutiny when a former employee filed a complaint under the False Claims Act. The employee then attempted to discover documents created by KBR during an internal fraud investigation. The district court determined the attorney-client privilege did not apply because the purpose of the investigation was not for securing legal advice. After the district court denied KBR’s motion to certify the privilege question to the Court of Appeals, KBR filed a mandamus petition to the same court.

The Court held that the case was materially indistinguishable from Upjohn. The demarcating factors cited by the district court – KBR did not confer with outside counsel, the investigation was completed by agents of the KBR’s attorneys, and confidentiality agreements signed by investigated employees did not state that the investigation was for securing legal advice – were not detrimental to privilege. Privilege applies if seeking legal advice was one of the primary purposes, not necessarily the only primary purpose.

Upon finding that a petition of mandamus was appropriate, the Court granted it.