Once In a Blue Moon Privilege Ruling

By TODD PRESNELL

The idiom “once in a blue moon” refers to something that happens rarely, of course, and derives from the real-life phenomenon of a second full moon appearing in a calendar month. According to Encyclopedia Britannica, a blue moon occurs about once every 33 months.

U.S. Supreme Court decisions on the corporate attorney/client privilege seem rarer than that, perhaps once every four blue moons. There are many reasons for that. The Court has shut down parties’ ability to appeal adverse privilege rulings through the collateral order doctrine, and achieving an interlocutory appeal requires approval of the district court and appellate court. And even if one makes it through the appellate maze, the Supreme Court must exercise its discretion to accept it.

But it’s happening. In this 2022–2023 term, the Supreme Court will issue a decision on the corporate attorney/client privilege that will likely have a significant impact on how in-house lawyers communicate in a privileged manner. The legal issue is the standard by which courts should assess whether the privilege protects dual-purpose communications from discovery: one legal-related and one non-legal, or generally business-related, in In re Grand Jury, No. 21–1397 (U.S.).

The Court may formulate its own standard of course, or do any number of things, but three potential standards seem to be in contention. First, the “because of” standard, rejected by the lower court, derives from work-product doctrine. When applied in the attorney/client privilege context, the standard protects dual-purpose communications when created because of anticipated litigation, and would not otherwise have been created except for the prospect of litigation. This standard may work well in the work-product arena but seems ill-equipped to govern an in-house lawyer’s communications, many of which have nothing to do with litigation.

In this term, the Supreme Court will issue a decision on the corporate attorney/client privilege that will likely have a significant impact on how in-house lawyers communicate in a privileged manner.

Second, “the primary purpose” test is the standard used in some form by the majority of federal and state courts. Under this test, courts examine the putatively privileged communication, sift through and weigh its many purposes, and determine whether the communication’s primary purpose was to give or receive legal advice as opposed to business-related, non-legal advice. This inquiry necessarily means that a multipurpose communication can only have a single primary purpose. And if that purpose isn’t legal advice, then there is no privilege protection.

Third, then-Judge Brett Kavanaugh, in In re Kellogg Brown & Root, Inc. (D.C. Cir. 2014), authored an opinion applying a test that upholds privilege protection when one of the communication’s significant purposes is legal advice related. This standard arose because the Kellogg court determined that weighing and balancing a communication’s multiple purposes can be difficult, if not impossible. The better rule, according to Kellogg, is for district courts reviewing documents for privilege protection to assess whether a significant purpose, as opposed to the primary purpose, of the communication was to provide or obtain legal advice. If so, the privilege shelters the document from discovery.

Whether the Supreme Court adopts the because of, primary purpose, significant purpose or another test, without doubt the privilege blue moon arrives in 2023. It may alter how in-house attorneys communicate with their company’s employees and agents.

Todd Presnell is a trial lawyer in Bradley’s Nashville office. He is the creator and author of the legal blog Presnell on Privileges, presnellonprivileges.com, and provides internal investigation and privilege consulting services to in-house legal departments.