Courts Reject Protection for Corporate Investigations, but Offer Helpful Guidance: Part II

November 25, 2015

Last week’s Privilege Point described two cases rejecting defendant’s protection claims for internal investigations. In each case, the court held that the defendant undertook its investigation in the ordinary course of its business.

A few days later, in In re Symbol Technologies, Inc. Securities Litigation, No. CV 05-3923 (DRH) (AKT), 2015 U.S. Dist. LEXIS 131478 (E.D.N.Y. Sept. 29, 2015), the court dealt with Symbol’s internal investigation of possible revenue overstatement. Citing an earlier decision, the court acknowledged that “‘[a]lthough at some point, a company’s investigation may shift from the ordinary course of business to an anticipation of litigation, there is no hard and fast rule as to when this occurs.'” Id. at *20 (quoting U.S. Fid. & Guar. Co. v. Brasperto Oil Servs. Co., No. 97 Civ. 6124, 2000 U.S. Dist. LEXIS 7939, at *33 (S.D.N.Y. June 8, 2000)). The court concluded that it “does not have sufficient factual information” to analyze this possible shift, and ordered Symbol to prepare a privilege log and possibly produce documents for the court’s in camera review. Id. at *21.

When courts analyze the alleged morphing of ordinary course investigations into privileged or work product-protected investigations, they will look for evidence that the company did something different or special because it needed legal advice or anticipated litigation. Companies and their lawyers should remember that this shift should appear on the face of the investigation documents the court will review in camera.