United States: D.C. Circuit Protects Attorney-Client Privilege In Internal Corporate Investigations

The appellate court clarifies that internal corporate investigations are subject to the attorney-client privilege where one of the significant purposes of the investigation is to secure legal advice for the company.

On June 27, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit held that the attorney-client privilege attaches to internal corporate investigations where one of the significant purposes of the investigation is obtaining legal advice for the company.1 In granting a petition for a writ of mandamus filed by Kellogg Brown & Root, Inc. (KBR), which challenged a lower court ruling compelling production of investigation records in a qui tam action, the D.C. Circuit made clear that reports of voluntary internal investigations do not lose privilege protection just because the investigation was undertaken pursuant to regulatory or corporate obligations. Rather, if a significant purpose of the investigation was to inform legal advice for the company, reports of the investigation should remain protected from disclosure.

Background—Lower Court Applies "But For" Standard

In March 2014, Judge James Gwin, sitting by designation on the U.S. District Court for the District of Columbia,2 ordered that KBR produce several reports, dating from 2004, of internal investigations performed pursuant to KBR's code of business conduct to relator Harry Barko in connection to his False Claims Act qui tam action pending against the company. Barko argued that the reports, which relate to alleged improper conduct by KBR employees, were relevant to his claims that KBR had defrauded the U.S. government under a series of defense contracts. Barko further argued that the reports were not protected by the attorney-client privilege, even though the underlying investigations had been undertaken at the direction of the KBR Law Department. The district court agreed.

The court applied what it called a "primary purpose" test, but held that, for the attorney-client privilege to protect the KBR investigation reports from disclosure, the investigations themselves would not have occurred "but for" the fact that legal advice was being sought.3 Unlike the investigation at issue in the seminal corporate attorney-client privilege case, Upjohn Co. v. United States,4 the court concluded that the KBR investigations were "routine" corporate compliance investigations undertaken pursuant to regulatory requirements of defense contractors that mandate corporate compliance programs. The district court reasoned that, because the KBR investigations satisfied KBR's regulatory requirements, they would have occurred regardless of whether legal advice was being sought. The court held the investigations did not satisfy its "but for" standard and KBR's investigation reports were, therefore, not privileged.5

KBR initially sought to certify the issue for interlocutory appeal but was denied by the lower court. It then filed a petition for a writ of mandamus to the D.C. Circuit, challenging the district court's order.

Attorney-Client Privilege in Internal Investigations—Legal Advice Need Only Be a Primary Purpose, Not the Primary Purpose

The D.C. Circuit agreed with KBR and issued the writ, holding that the district court's ruling constituted clear legal error. In analyzing the underlying privilege claim, the circuit court rejected the lower court's attempt to distinguish KBR's investigations from the investigation conducted in Upjohn, concluding that the two sets of investigations were materially indistinguishable in that both were initiated to gather facts and ensure compliance with the law. Moreover, both were conducted under the auspices of the in-house legal department. The circuit court then explicitly rejected the "but for" standard applied by the lower court and clarified the proper standard that should govern the application of privilege in the internal investigation context. The panel explained that, under this standard, "[s]o long as obtaining or providing legal advice was one of the significant purposes of the internal investigation, the attorney-client privilege applies."6 The privilege applies to internal investigations under this standard, "even if there were also other purposes for the investigation and even if the investigation was mandated by regulation rather than simply an exercise of company discretion."7

Perhaps most significantly, the circuit court recognized the potential damage the district court's ruling could have wrought to the attorney-client privilege—and to corporations seeking to comply with the law through proactive internal investigations—if it had been allowed to stand. Under the lower court's "but for" formulation, "businesses would be less likely to disclose facts to their attorneys and to seek legal advice, which would 'limit the valuable efforts of corporate counsel to ensure their client's compliance with the law.'"8 Instead, the D.C. Circuit recognized that simply because internal investigations can, and often do, serve both business and legal purposes, the dual purpose does not vitiate the privilege.

Conducting Investigations and Maintaining Privilege

Although the D.C. Circuit clarified that the attorney-client privilege attaches to internal investigations "if one of the significant purposes of the internal investigation was to obtain or provide legal advice,"9 clients seeking to ensure that internal investigations retain privilege protections are well advised to take the following steps to remove any doubt as to whether the investigation is privileged:

  • The investigation should be done at the direction and under the supervision of legal counsel. While at the very least, in-house counsel serving in a legal capacity should oversee the investigation, as a best practice, outside counsel should be involved early in the investigative process.
  • Investigators leading employee interviews, even if not legal counsel, should provide Upjohn warnings at the beginning of the interview that clearly state that the investigation is being conducted under the supervision of legal counsel for the purpose of providing legal advice to the company.
  • To the extent possible, all investigatory processes, memoranda, and reports should be prepared by legal counsel acting on behalf of the company and should be clearly marked as subject to the attorney-client privilege and work-product protection.
  • If the investigation uncovers information that may subject the company to civil or criminal liability, outside counsel should be consulted immediately.


1. See In re Kellogg Brown & Root, Inc., No. 14-5055, 2014 WL 2895939 (D.C. Cir. June 27, 2014) (slip op.).

2. Judge Gwin normally sits on the U.S. District Court for the Northern District of Ohio.

3. See United States ex rel. Harry Barko v. Halliburton Co., No. 1:05-CV-1276, 2014 WL 1016784, at *2 (D.D.C. March 6, 2014) (citing United States v. ISS Marine Servs., Inc., 905 F. Supp. 2d 121, 128 (D.D.C. 2012)).

4. 449 U.S. 383 (1981).

5. United States ex rel. Barko, 2014 WL 1016784, at *3 (internal citations omitted) ("The [KBR] investigation was a routine corporate, and apparently ongoing, compliance investigation required by regulatory law and corporate policy. In contrast, the Upjohn internal investigation was conducted only after attorneys from the legal department conferred with outside counsel on whether and how to conduct an internal investigation. As such, the [KBR] investigative materials do not meet the 'but for' test because the investigations would have been conducted regardless of whether legal advice was sought. The [KBR] investigations resulted from the [d]efendants' need to comply with government regulations.").

6. In re Kellogg Brown & Root, 2014 WL 2895939, at *4 (emphasis added).

7. Id.

8. Id. (quoting Upjohn, 449 U.S. at 392).

9. Id. at *5.

This article is provided as a general informational service and it should not be construed as imparting legal advice on any specific matter.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions