Today (June 27, 2014), the D.C. Circuit granted a mandamus petition in an important case, In re Kellogg Brown & Root, involving to preservation of the attorney client privilege for internal investigations in today's heavily regulated government contracting environment. The ability of companies to seek and protect the advice of counsel—which is critical to a company's ability to conduct its business, and respond to and investigate compliance issues—is substantially bolstered by the decision in two vital ways.
First, the D.C. Circuit determined that the fact that an internal investigation involved individuals under the direction of counsel, whether in-house or outside counsel, does not dilute the privilege. The court specifically noted that communications made by and to non-attorneys serving as agents of attorneys in internal investigations are protected. This is an important clarification because the issues that counsel for contractors face often involve the application of not only complex regulations, but analysis of highly technical facts that require the assistance of internal experts such as engineers and accountants. Companies should be able to obtain information from such employees in the most efficient means possible, and that will often include an employee working under the direction of counsel. Clarification that such information collection will not vitiate the privilege is helpful to contractors.
Second, the D.C. Circuit dismantled the district court's position that an internal investigation undertaken in part to comply with regulations vitiated the privilege. The appeals court recognized that communications by (or at the direction of) attorneys can have more than one purpose, and it rejected the notion that an attorney client communication must have only a legal purpose. For Government contractors, compliance with the procurement statutes and regulations is an essential part of everyday business—the FAR and its supplements run to 18 volumes and there are numerous new statutes and regulations every year. The district court's position that a contractor cannot obtain the advice of counsel in a question if those communications intertwine business needs and regulatory issues departs from reality. Indeed, the D.C. Circuit noted that the district court's privilege ruling would have upset "settled understandings and practices."
The business community weighed in heavily in this case with amicus participation addressing the impact of the uncertainty created by the district court's opinion. Those amici briefs were cited repeatedly in the appellate court's opinion, and that collective view regarding problems with lower court ruling appears to have made a big difference in the decision to grant mandamus.
The post The D.C. Circuit Grants Mandamus in Important Case Regarding Limitations on Attorney-Client Privilege in Contractors' Internal Investigations appeared first on Meaningful Discussions.
Tags: Attorney-Client Privilege
Visit us at mayerbrown.com
Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.
© Copyright 2014. The Mayer Brown Practices. All rights reserved.
This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.
