It is often said that attorneys wear many hats, and that maxim rings true now more than ever — particularly for those representing corporate clients.
As the Chamber of Commerce has observed, “[i]n circumstances tragic and ordinary, involving issues mundane and groundbreaking, lawyers are called upon to advise businesses on problems with legal and nonlegal dimensions” all the time.[1]
Indeed, the Washington Legal Foundation rightly notes that “few corporate communications with counsel are ever solely [for the purpose of seeking or rendering] legal advice.”[2]
Underlying each of these communications is the ever-present question: Will they be subject to future disclosure in litigation? Of course, the attorney-client privilege generally covers those communications solely seeking or providing legal advice, but what about multipurpose communications involving both legal and nonlegal matters? Does the privilege extend to them as well? If so, how far?
On Jan. 9, the U.S. Supreme Court heard argument in In re Grand Jury, a high-stakes case in which it will endeavor to answer that question.
The court’s decision will have wide-reaching implications for the legal profession at large, especially for in-house counsel and corporate defense lawyers. Unfortunately, the oral argument appeared to raise more questions than it answered, as the parties presented moving targets for the justices in their efforts to nail down a predictable and easily applied test for multipurpose communications.
Issue Raised
First recognized in the 16th century,[3] the attorney-client privilege “is the oldest of the privileges for confidential communications known to the common law.”[4] At bottom, it protects from disclosure confidential communications between an attorney and his or her client made to obtain or provide legal advice.[5]
The Supreme Court has long recognized that, “for the attorney-client privilege to be effective, it must be predictable.”[6] Put another way, “the attorney and client must be able to predict with some degree of certainty whether particular discussions will be protected.”[7]
The court has stressed that “[a]n uncertain privilege, or one which purports to be certain but results in widely varying application by the courts, is little better than no privilege at all.”[8]
It is thus unsurprising that the Supreme Court granted certiorari in Grand Jury given the three-way split among the circuit courts of appeals for applying the attorney-client privilege to multipurpose communications.
The first approach comes from the U.S. Court of Appeals for the Seventh Circuit’s 1999 decision in U.S. v. Frederick.[9] There, the court created a hard-line rule that “dual-purpose document[s]” such as “a document prepared for use in preparing tax returns and for use in litigation” can never be privileged; “otherwise, people in or contemplating litigation would be able to invoke, in effect, an accountant’s privilege, provided that they used their lawyer to fill out their tax returns.”[10]
The second approach comes from the U.S. Court of Appeals for the D.C. Circuit’s 2014 decision in In re: Kellogg Brown & Root Inc.[11] Writing for the court, then-Judge Brett Kavanaugh determined that multipurpose communications could be protected so long as the party claiming the privilege could show that “obtaining or providing legal advice [was] a” — rather than the — “primary purpose of the communication, meaning one of the significant purposes of the communication.”[12]
After all, “trying to find the one primary purpose for a communication motivated by two sometimes overlapping purposes (one legal and one business, for example) can be an inherently impossible task.”[13] Thus, then-Judge Kavanaugh reasoned, “[i]t is often not useful or even feasible to try to determine whether the purpose was A or B when the purpose was A and B.”[14]
The third approach — currently being challenged before the Supreme Court — comes from the U.S. Court of Appeals for the Ninth Circuit’s 2021 decision in In re: Grand Jury.[15] That case stems from a grand jury’s issuance of subpoenas to a company and law firm. The company had hired the firm — which specializes in tax law — as it prepared to expatriate from the U.S.
In response to the subpoena, the law firm and company produced over 1,600 documents but withheld others, citing the attorney-client privilege. Relevant here, the U.S. District Court for the Central District of California conducted an in-camera review before holding that 54 of the unproduced documents were not privileged because their primary purpose was to obtain tax advice, not legal advice.
The Ninth Circuit affirmed.
After rejecting the Seventh Circuit’s hard-line Frederick approach, the court split with the D.C. Circuit in holding that when assessing multipurpose communications, “courts [were to] look at whether the primary purpose of the communication [was] to give or receive legal advice, as opposed to business or tax advice.”[16]
In support of this approach, the Ninth Circuit reasoned that “[t]he natural implication of this inquiry is that a dual-purpose communication can only have a single ‘primary’ purpose.”[17]
The law firm petitioned for a writ of certiorari, which the Supreme Court granted.[18]
A Matter of Semantics
Going into the Jan. 9 oral argument — the first of the new year — the parties seemed solidified in their positions.
Based on its opening brief, the law firm, and almost all of the 13 amici supporting it,[19] wanted the court to adopt the D.C. Circuit’s “significant” purpose test.[20]
In contrast, the government urged the court to affirm the Ninth Circuit’s more exacting primary purpose test,[21] while no party thought the Seventh Circuit’s hard-line approach in Frederick was appropriate.
Though the court appeared to agree on this last point, it faced what turned out to be a Sisyphean effort in trying to draw a meaningful distinction between “significant” and “primary” purposes in considering how to best articulate a clear rule.
That challenge was made clear minutes into counsel’s argument on behalf of the unnamed law firm. Posing the first question from the bench, Justice Clarence Thomas asked counsel whether a communication with a “purpose that is admittedly significant but also admittedly subsidiary” should be protected. Law firm counsel responded affirmatively.
In doing so, however, the law firm appeared to pivot from its original support of the “significant” purpose test in its opening brief to something much broader: an attorney-client privilege that would cover communications with any “bona fide legal purpose” — i.e., one that was “real and legitimate.”
Justice Samuel Alito observed that this was a surprising twist given that, before argument, only amici the Association of Professional Responsibility Lawyers[22] and the American Bar Association[23] appeared to affirmatively endorse such a broad application of the privilege, though the law firm had suggested it approved this approach in its reply brief.[24]
When challenged on this point by Chief Justice John Roberts and Justice Brett Kavanaugh, the law firm’s counsel clarified that under the test the law firm was now proffering, “[s]ignificant” did not pertain to “the size or the amount of the legal purpose but, rather … whether the legal purpose is legitimate [and] genuine.” That, according to counsel, would include “long shot” arguments while still allowing the court to guard against pretextual applications of the privilege.
This broad formulation expectedly caused consternation among several members of the court. Justice Alito, for example, suggested that the law firm was “trying to have it both ways,” observing that “[s]ignificance concerns importance … [m]aybe it’s a lot lower perhaps than primary, but it does involve a … certain quantum of importance.”
Justice Sonia Sotomayor too seemed concerned with deviating from the primary purpose test, which she noted nearly all states had adopted. In response, the law firm’s counsel suggested that in practice, most of the states were already applying the significant purpose test, they were just using the word “primary” as a matter of semantics.
Justice Sotomayor responded, however, that she was concerned that the law firm’s new test gutted the word “significant” of any meaning, suggesting that if even “1 percent of the … purpose of th[e] communication was to render legal advice, the whole communication [would] be suppressed.” In other words, she appeared hesitant to adopt a test “simply because [the proponent had been able to] sneak in some minor legal consideration” to an otherwise unprotected communication.
Justice Elena Kagan also appeared concerned with adopting a significant purpose test because until 2014 — i.e., the Kellogg decision — “nobody ever suggested that [such a test] is the right one. Everybody instead used the primary purpose test.” To that end, Justice Kagan and Justice Amy Coney Barrett appeared hesitant to enact any widespread change — especially an expansion as large as the one for which the law firm was now advocating — to the historic rule, especially in the absence of a discernible chill on communications.
For her part, Justice Ketanji Brown Jackson seemed to favor a much narrower view than either party had formulated, essentially arguing that there was no need for a multipurpose exception at all because documents could be redacted on a line-by-line — or even word-by-word — basis to prevent the disclosure of any legal communications.
In other words, Justice Jackson appeared hesitant to adopt a privilege rule protecting a document where “90 percent of it is the description of the background facts and we have a sentence” where the lawyer offers advice of some sort. Indeed, Justice Jackson observed that the law firm’s new test, in particular, would be problematic to the point that it could apply to a communication where a lawyer was merely present in the room when it happened.
Sensing this unease, the law firm’s counsel noted that the key problem with the Ninth Circuit’s test was the level of uncertainty it begat: “[I]f you push the primary purpose test to its serious and logical conclusion, where you require 51 percent to get there [in a dual-purpose communication], you will be in a world in which it is very difficult ex ante to predict that.” Counsel concluded that the law firm would win under either the “significant” or “any bona fide meaningful legal” purpose tests proposed.
Given the law firm’s apparent shift in position, the government leaned heavily on the courts’ historically narrow application of the attorney-client privilege. At the start of her argument, the government’s counsel focused on the widespread application of the primary purpose test and urged the court to formally adopt it.
However, after Justice Thomas posed the first question to the government on how courts should treat documents where “the purposes were in equipoise or if … the legal and nonlegal could not be disentangled,” surprisingly, the government’s counsel appeared to concede that in those “difficult cases,” the government would embrace the court’s applying Kellogg’s “significant” purpose test.
In other words, according to the government, “[o]nce there are multiple really meaningful purposes and courts can’t tell what to do with that and there isn’t a purpose that is clearly predominant, [it is] fine with kind of a tie goes to the runner rule in favor of the privilege in those cases.” Indeed, counsel at one point verged on conceding that even a 60-40 communication where the legal purpose was secondary could still be protected. She stated that the government’s main concern was not diluting the purpose test to a level where any legitimate purpose could justify applying the privilege.
Justice Alito then switched gears, asking the government’s counsel “[w]hat’s wrong with saying, … if there’s an important [i.e., significant] legal purpose, then it’s privileged?” Counsel pointed out the inherent difficulty in the law firm’s argument in quantifying what counts as “important” or “significant” in that context, suggesting this struggle was behind the law firm’s apparent change in position to the broader test for which it was now advocating. The clearer approach, counsel later suggested, would be that in close cases, communications should not be protected so long as the court could identify a nonlegal predominating purpose.
On that point, Justice Jackson observed — as Justice Sotomayor had earlier — that there were very few instances where the district courts encountered those hard cases. She noted that “district courts are not doing math. They have a lot of experience not only in this area but in other document-related, privilege-related contexts, where they make a judgment call,” meaning there is no reason to depart from the primary purpose test as it is currently articulated.
Justice Roberts countered, however, that adopting the Ninth Circuit’s primary purpose test “really puts a lot of work on the judge.” And Justice Kavanaugh rightly pointed out that the court’s ruling was “important in lots of situations, not all of which might reach a district judge,” to which the government agreed.
Conclusion
Near the end of the argument Justice Neil Gorsuch stated what most were thinking when he observed that he was “struggling this morning” and that he was “really confused now.” The parties were all over the map in advocating for which test should be adopted: The primary purpose? A significant purpose? Or any legitimate purpose at all?
That said, it appears likely that the court will apply some hybrid of the parties’ original arguments, formulating its own test rather than expressly embracing that of the Ninth or D.C. Circuits. The court did not appear receptive to the law firm’s newly adopted any purpose formulation.
At the same time, however, several of the justices expressed concerns with narrowing the privilege too much, unintentionally forcing courts to rank multipurpose communications in the search for a sole or predominating reason behind them. Instead, the court seems poised to adopt the Kellogg test’s significant purpose formulation, at least for close calls.
Of course, the court has never quantified or defined “significant,” especially in the attorney-client privilege context. In response to concerns related to the amorphous qualifier, the court may simply view it as a criterion to ensure that the communication’s asserted legal purpose is more than de minimis. Indeed, as the Professional Responsibility Lawyers Association observed:
For over 70 years, courts have used modifiers such as ‘significant’ to describe the requisite importance of a legal purpose in the privilege standard. These modifiers ensure that the attorney-client privilege does not become a ‘carbon copy’ privilege, where every communication involving a lawyer automatically receives protection.[25]
Regardless of the outcome, as Justice Alito and Justice Sotomayor suggested during argument, the court’s ruling in Grand Jury will directly apply only to federal common law. At the same time, its clarification of the attorney-client privilege’s scope and application to multipurpose communications will no doubt influence other jurisdictions as well.
Consider the Supreme Court’s 1981 decision in Upjohn Co. v. U.S. Though that case adopted a clear federal standard for application of the privilege, it “served as persuasive precedent for the states,” most of which have since expressly adopted its reasoning either through codification or case law.[26] Indeed, “the attorney-client privilege occupies a rare space in the legal landscape — a subject on which the Supreme Court of the United States has had a huge impact in nearly every state even as to state law, notwithstanding federal constitutional concerns.”[27]
In short, the Supreme Court’s decision will have wide-reaching implications. Given how often companies operate across borders and jurisdictions, both state and federal, the court’s ruling in Grand Jury will affect companies and corporate counsel’s daily operations across the country. However, based on the justices statements during oral argument, we may have to wait a while before we know just how great that effect will be.
This article originally appeared as an Expert Analysis in Law360.
[1] Chamber of Com. Amicus Br. 24, In re Grand Jury, U.S. (No. 21-1397).
[2] Wash. Legal Found. Amicus Br. 3, In re Grand Jury, U.S. (No. 21-1397).
[3] See A. Kenneth Pye, Fundamentals of the Attorney-Client Privilege, 15 Practical Lawyer 15, 16 (1969).
[4] Upjohn Co. v. United States, 449 U.S. 383, 389 (1981); accord United States v. Louisville & Nashville R.R. Co., 236 U.S. 318, 336 (1915) (“The desirability of protecting confidential communications between attorney and client as a matter of public policy is too well known and has been too often recognized by textbooks and courts to need extended comment now.”); Hunt v. Blackburn, 128 U.S. 464, 470 (1888) (explaining that the attorney-client privilege is “founded upon the necessity, in the interest and administration of justice, of the aid of persons having knowledge of the law and skilled in its practice”); Conn. Mut. Life Ins. Co. v. Schaefer, 94 U.S. 457, 458 (1876) (“If a person cannot consult his legal adviser without being liable to have the interview made public the next day by an examination enforced by the courts, the law would be little short of despotic. It would be a prohibition upon professional advice and assistance.”); Mitchell v. Superior Ct. , 37 Cal. 3d 591, 599–600 (1984) (“The attorney-client privilege has been a hallmark of Anglo-American jurisprudence for [more than] 400 years,” which “our judicial system has carefully safeguarded with only a few specific exceptions.”).
[5] See Fisher v. United States, 425 U.S. 391, 403 (1976); Restatement (Third) of the Law Governing Lawyers § 68 (2000).
[6] United States v. Jicarilla Apache Nation, 564 U.S. 162, 183 (2011) (emphasis added).
[7] Upjohn, 449 U.S. at 393.
[8] Id.
[9] United States v. Frederick, 182 F.3d 496 (7th Cir. 1999).
[10] Id. at 501.
[11] In re Kellogg Brown & Root, Inc., 756 F.3d 754 (D.C. Cir. 2014).
[12] Id. at 760 (citing 1 Restatement (Third) of the Law Governing Lawyers §72 Reporter’s Note, at 554 (2000) (“In general, American decisions agree that the privilege applies if one of the significant purposes of a client in communicating with a lawyer is that of obtaining legal assistance.”)). The D.C. Circuit later applied this test in the context of a regulatory investigation in Federal Trade Commission v. Boehringer Ingelheim Pharmaceuticals, Inc., 892 F.3d 1264 (D.C. Cir. 2018). Then-Judge Kavanaugh, again writing for the court, reiterated that “[i]n a situation … where a communication has multiple purposes … what matters is whether obtaining or providing legal advice was one of the significant purposes.” Id. at 1267–68. If so, the communication is privileged and protected from disclosure.
[13] Id.
[14] Id. (emphasis added).
[15] 23 F.4th 1088 (2021).
[16] Id. at 1091 (emphasis added) (citing In re Cnty. of Erie, 473 F.3d 413, 420 (2d Cir. 2007) (“We consider whether the predominant purpose of the communication is to render or solicit legal advice.”)).
[17] Id. (emphasis added). Though the court saw “the merits of the reasoning in Kellogg,” it nevertheless declined to adopt the D.C. Circuit Court’s reasoning, observing that”[n]one of [its] sister courts” had and that Kellogg “dealt with the very specific context of corporate internal investigations, and its reasoning does not apply with equal force in the tax context.” Id. at 1094-95. To that end, the Ninth Circuit determined that “[t]he Kellogg test would only change the outcome of a privilege analysis in truly close cases, like where the legal purpose is just as significant as a non-legal purpose.” Id.
[18] In re Grand Jury, 143 S. Ct. 80 (2022).
[19] Of course, the number of supporters does not correlate to the soundness of a proposed legal doctrine, but it is compelling that nobody apart from the Government — the party seeking the documents — supports its reasoning for gaining access to the claimed privileged documents.
[20] See generally Br. of Pet’r, In re Grand Jury, U.S. (No. 21-1397).
[21] See generally Br. of Resp., In re Grand Jury, U.S. (No. 21-1397).
[22] Prof. Resp. Laws. Ass’n Amicus Br. 3, In re Grand Jury, U.S. (No. 21-1397) (arguing “that the privilege should apply to any communication where at least one purpose of the communication is that the client is in the process of seeking or the lawyer is rendering legal advice or seeking to gather information to assist in rendering legal advice to the client, and that tests requiring that there be a ‘significant’ or ‘primary’ purpose should be rejected or abrogated” altogether).
[23] Am. Bar. Ass’n Amicus Br. 5, In re Grand Jury, U.S. (No. 21-1397) (“[While a ‘significant purpose’ test is certainly better … it still would leave substantial uncertainty and less protection for clients searching for legal advice.”).
[24] In its reply brief, the law firm suggested that one of the key benefits of the “significant” purpose test was that it “focuses on whether a communication serves a bona fide legal purpose, instead of insisting that courts undertake the intractable task of isolating and then weighing each purpose for communication to determine (often years later) which purpose predominated.” Reply Br. of Pet’r at 3, In re Grand Jury, U.S. (No. 21-1397). In other words, according to the law firm’s new view, “[i]f the communication has a significant legal purpose — meaning the client was communicating confidentially with a lawyer acting as a lawyer, and there was a bona fide legal purpose — then the communication is privileged.” Id.
[25] Prof. Resp. Laws. Ass’n Amicus Br. 13, In re Grand Jury, U.S. (No. 21-1397).
[26] Id. at 8-9.
[27] Id. at 10.
