No 612 Waiver: Privilege Protects In-House Attorney’s Depo-Prep Review of Internal-Investigation Documents

Following its significant July 2014 opinion that the attorney–client privilege covers corporate internal investigations led by in-house counsel, the D.C. Circuit has ruled that the in-house lawyer did not subsequently waive that privilege by reviewing the investigation materials prior to his deposition or by placing the investigation results “at issue” in the case.  In re Kellogg Brown & Root, Inc., 796 F.3d 137 (D.C. Cir. Aug. 11, 2015).  You may read the decision here.

Initial Decision

In a July 2014 opinion that POP discussed in this post, the D.C. Circuit reversed a district court’s decision that the attorney–client privilege did not cover KBR’s internal investigation into whether the company defrauded the government by inflating invoices to the Department of Defense.  The court held that the privilege applies so long as the company’s legal department directed the investigation.

But on Remand …

On remand, KBR presented its in-house counsel as its 30(b)(6) representative on the topic of KBR’s internal investigation.  In preparation for the deposition, KBR’s in-house lawyer reviewed the internal-investigation materials, but KBR’s outside counsel asserted privilege objections to the in-house lawyer’s testimony about the investigation.

KBR later filed a summary judgment motion and, in a footnote, stated that KBR routinely conducts internal investigations; discloses adverse findings to the government but never discloses the investigation on privilege grounds; conducted an internal investigation into this particular matter but did not disclose any findings to the government.

The district court held that, under Federal Rule of Evidence 612, KBR waived the attorney–client privilege because the in-house lawyer reviewed internal-investigation documents in preparation for his deposition. And it ruled that KBR waived the privilege by placing the internal investigation “at issue” by referencing the investigation in a MSJ footnote.

The D.C. Circuit quickly reversed both decisions on a writ of mandamus.

No Rule 612 Waiver

FRE 612 provides that an adverse party may review documents that a witness “uses a writing to refresh memory.” The district court applied a “balancing test,” evaluating reasons to pierce the privilege and reasons to uphold the privilege.  The D.C. Circuit, however, held the balancing test “inappropriate in the first instance” and that, if identifying documents as privileged automatically “constitutes testimonial reliance,” then the attorney–client privilege “would mean nothing at all.”

The court noted that the district court’s decision essentially permits parties to notice “internal investigations” as a deposition topic and, when the deponent reviews the investigation in preparation, defeat the privilege through a Rule 612 waiver argument.  The court rejected the plaintiff’s “absurd position” that KBR should have had someone give the in-house lawyer a “summary” of the internal investigation rather than having him personally review it.

This makes no sense.  Such a rule would encourage entities to provide less knowledgeable corporate representatives for deposition, thus defeating the purpose of civil discovery to establish the fullest possible knowledge of the issues and facts before trial.

In short, a party cannot, through a deposition notice, put a privileged internal investigation “at issue” and then use Rule 612 to seek production of the privilege material.  As the court stated, “[a]llowing privilege and protection to be so easily defeated would defy reason and experience.”

No “At Issue” Waiver

While KBR’s footnote reference to it not providing investigation findings to the Department of Defense “presented a more difficult question,” the court held that KBR did not actually disclose the investigation findings.  And because KBR sought no specific relief by using the internal investigation, it did not put the investigation “at issue” and no waiver occurred.


My thanks to my law partner and excellent appellate lawyer, Scott Smith, for bringing this notable opinion to my attention.