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Senior in-house lawyers often confront a recurring question: how to effectively utilize the findings of an internal investigation led by outside counsel in business decision-making without jeopardizing privilege and work-product protections. In a closely watched ruling, the U.S. Court of Appeals for the Sixth Circuit has helped ease concerns regarding waiver.
Granting mandamus and vacating a production order against FirstEnergy, the court reaffirmed that attorney–client privilege and work-product protection attach to outside-counsel investigations undertaken “because of” significant legal risk, and are not lost merely because the results inform later business actions or are shared with independent auditors.
This decision will resonate well beyond the United States. Multinationals frequently conduct internal investigations against the backdrop of an intense regulatory, civil and/or criminal context, while simultaneously managing disclosure obligations and auditor interactions. The Sixth Circuit's opinion reaffirms a company's ability to preserve core protections in that environment.
Background – a securities class action and two internal investigations
The case arose out of a securities class action that followed a high-profile criminal complaint against a former Ohio House Speaker linked to an alleged bribery scheme associated with Ohio House Bill 6. According to the Sixth Circuit decision, although the complaint did not name FirstEnergy, it implicated the company, triggered criminal subpoenas, and prompted a 45% stock price drop. In this context, FirstEnergy's board engaged outside counsel to conduct two internal investigations focused on potential misconduct and legal exposure.
In a subsequently filed securities class action against FirstEnergy, plaintiffs sought to compel “all previously withheld documents” from those investigations and to force FirstEnergy's witnesses to answer questions about the work. They argued the investigations were driven by business and human resources purposes, not legal advice. FirstEnergy responded that two firms were retained as outside counsel to provide legal advice and to prepare for anticipated criminal, regulatory and civil proceedings, supported by a board member's declaration describing the motive behind the investigations being the extraordinary legal risk at the time.
A special master recommended production, and the district court adopted that recommendation, placing heavy weight on the investigations' perceived business purpose, including for the purpose of adhering to SEC requirements for public companies.
FirstEnergy obtained a stay and petitioned for mandamus. The Sixth Circuit granted the petition and vacated the production order.
Attorney–client privilege: focus on why legal advice was sought, not how it was later used
Reaffirming the Upjohn framework, the Sixth Circuit focused on the core question: Did the company seek legal advice? The dispositive inquiry is the legal purpose for which outside counsel was retained, not how it is later deployed in business decision-making.
The record showed that the board retained outside counsel to investigate potential wrongdoing and to provide legal analyses of criminal and civil exposure. Just because the results informed subsequent business decisions did not mean that privilege was lost: “it will be the rare company that does not have parallel business considerations when it seeks essential legal advice in the face of significant legal risk.”
Importantly, the court rejected the notion that outside counsel's work was a mere factual recitation divorced from legal analysis. The work encompassed legal assessments integral to the advice provided.
Work-product doctrine: “because of” litigation, not ordinary business
The court likewise held that the work-product doctrine protected the materials because they were prepared “because of” actual and reasonably anticipated litigation. Timing and context were decisive. The investigations began immediately after the criminal complaint, the issuance of subpoenas and the steep stock decline, and while multiple civil suits and regulatory actions were pending or expected. Against that backdrop, the court concluded the investigations were plainly litigation-focused, and the district court's contrary finding failed to grapple with the realities FirstEnergy faced.
The court also addressed waiver. Disclosing information to independent auditors did not waive work-product protection. Work-product is not automatically forfeited by third-party disclosure; waiver generally requires disclosure to an adversary. The independence and ethical obligations of the auditor, coupled with workpapers noting that privileged materials were withheld, undercut claims that the auditor stood as an adversary.
The court also concluded that overlapping disclosures in other proceedings did not amount to waiver of privilege or attorney work product, distinguishing between non-privileged factual overlap or high-level conclusions and the substance of counsel's advice.
Conclusion
The Sixth Circuit's decision reaffirms Upjohn's clear message: outside-counsel internal investigations launched in response to significant legal risk are protected by attorney–client privilege and the work-product doctrine. Those protections are not undone by subsequent business use or by disciplined disclosures to independent auditors.
Although privilege rules vary across jurisdictions, the principles reflected here (clear legal purpose, litigation context, integrated legal analysis and controlled third-party interactions) resonate with effective privilege strategies in the UK and internationally.
In an environment where internal investigations increasingly intersect with legal, regulatory, and business imperatives, FirstEnergy provides timely reassurance that disciplined structure and documentation can help to preserve the protections that matter most.
Case: In re FirstEnergy Corp., No. 24-3654 (6th Cir. Oct. 3, 2025)
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