Ninth Circuit Mildly Praises Judge Kavanaugh’s Expansive Privilege Approach to Corporate Investigation Materials

April 20, 2022

Essentially all courts apply a “primary purpose” test when assessing privilege protection. But while on the D.C. Circuit Court, Judge Kavannaugh articulated a far more corporate-friendly standard in analyzing an internal corporate investigation’s materials: “[w]as obtaining or providing legal advice a primary purpose of the communication, meaning one of the significant purposes of the
communication?” In re Kellogg Brown & Root, Inc., 756 F.3d 754, 760 (D.C. Cir. 2014) (emphasis added). Significantly, under the Kellogg standard an externally-mandated corporate investigation might deserve privilege protection – if gathering facts necessary for the provision of legal advice was “one significant purpose” of the investigation. But only a handful of courts have tiptoed toward that standard.

In In re Grand Jury, Nos. 21-55085 & 21-55145, 2021 U.S. App. LEXIS 39178 (9th Cir. Jan. 27, 2022), the court did not adopt the “one significant purpose” standard. But the court cited several district courts that have, and also explicitly stated that “[w]e see the merits of the reasoning in Kellogg.” Id. at *14. But the court also conceded that “[n]one of our other sister circuits have openly embraced Kellogg,” and “recognize[d] that Kellogg dealt with the very specific context of internal corporate investigations” (concluding that “its reasoning does not apply with equal force in the tax context”). Id.

No previous circuit court opinion has said anything nice about the Kellogg “one significant purpose” standard. It is too early to tell if this is a trend, but corporations might keep their fingers crossed that other courts will move toward the more favorable standard.