For the first time in some time, the United States Supreme Court agreed to hear a case involving the corporate attorney–client privilege. The issue is the proper standard courts should use to determine whether the attorney–client privilege protects dual-purpose communications—those created for legal and non-legal purposes. In re Grand Jury, No. 21–1397 (U.S.). The specific question presented is—
Whether a communication involving both legal and non-legal advice is protected by attorney–client privilege where obtaining or providing legal advice was one of the significant purposes behind the communication.
In a series of posts, I’ll follow and comment on the case and final decision. I previously examined the Court of Appeals’ decision, reviewed the appellant’s petition for writ of certiorari, the government’s opposition, and the supporting amici positions, and examined the petitioner’s merits arguments. Fourteen amicus parties filed amicus briefs that argued against the Ninth Circuit’s primary purpose test, so let’s see what they have to say.
American Bar Association
The ABA’s amicus brief, available here, focused on discrediting the “unhealthy difficulties” of the Ninth Circuit’s primary purpose test. Clients and their lawyers often communicate “without regard to precise purpose-minding,” and requiring courts to dissect the multiple purposes and determine which one is “primary” will result in the disclosure of privileged communications “in unclear and unpredictable ways.” The ABA also views Kellogg‘s significant purpose test as “similarly problematic” because it requires courts to determine whether purposes of a communication are significant. The privilege should instead apply any time “a purpose of the communication is to obtain or provide legal advice.”
American College of Tax Counsel
The ACTC focused its amicus brief, available here, on explaining why the significant purpose test, contrary to the Ninth Circuit’s view, is the appropriate test to apply when determining whether the attorney-client privilege protects communication in the tax context. In the tax context, many courts treat a lawyer’s communications regarding tax-return preparation as non-legal and therefore not privileged. This makes it difficult to ascertain whether a tax lawyer’s communications pertain to, for example, the viability of a tax position (privileged) and preparing the tax return (nonprivileged). The group provided several examples to show “the futility of that endeavor” and urged the Court to rule that the attorney-client privilege protects dual-purpose communications “so long as ‘a significant purpose’ was for the client to obtain confidential legal advice from the lawyer.”
Association of Professional Responsibility Lawyers
The APRL consists of lawyer–members who regularly represent other lawyers in legal ethics and professional responsibility matters. The organization submitted an amicus brief, which you may read here, but not in favor of either party because it has insufficient information about whether the privilege protects the at-issue tax documents. It filed the brief, instead, to emphasize the critical importance of the attorney–client privilege. The group argued that the privilege should apply to any communication where at least one purpose is the seeking or providing of legal advice.
While “the significant purpose” test of Kellogg is the “most viable,” the APRL urged the Court to reject that test and the primary purpose test in favor a “better rule” where the privilege applies if at least one purpose of a communication is legal advice.
Atlantic Legal Foundation
The Atlantic Legal Foundation, a non-profit public-interest law firm with a mission of advancing the rule of law and civil justice, filed its amicus brief, available here, to explain why the Court should adopt a “reasonable, workable rule” that empowers in-house and outside counsel to safely perform their “multifarious legal duties in today’s corporate climate.” The ALF found the Ninth Circuit’s primary purpose test unworkable, in part, because that appellate court did not provide clear guidance on how to apply it. The group therefore advocated for the Kellogg “a primary purpose” or significant purpose test because it provides clear guidance to the business community that when “real legal advice is sought, that communication will be privileged.”
California Lawyers Association
The California Lawyers Association filed an amicus brief at the petition stage, available here, and filed one at the merits stage, available here, as well. The CLA took a Goldilocks approach in its advocacy. It found the Ninth Circuit’s primary purpose test too uncertain, with the decision left to the “subjective discretion” of the trial judge. It found the Seventh Circuit’s test for tax-related communications too rigid and asked the Court to disapprove it. But it found the D.C. Circuit’s significant purpose standard just right because it provides more certainty and furthers the privilege’s purpose.
DRI Center for Law and Public Policy
I was honored to lead a team of lawyers to author the amicus brief, available here, filed by DRI’s Center for Law and Public Policy. The Center, which is the advocacy arm of DRI, the international organization of lawyers involved in the defense of civil litigation, focused its brief on a privilege standard that recognized the “valuable efforts” of in-house counsel in ensuring their business clients comply with the law. In-house lawyers operate closer to corporate employees and engage in more multipurpose communications than other lawyers. Given this consideration, the Center advocated for a standard that allows in-house lawyers and their clients to “predict with some degree of certainty whether particular discussions will be protected.” The primary purpose standard “inappropriately conscripts judges into the task of determining the sole purpose for communications that do not have a sole purpose.” The significant purpose test, by contrast, “creates a more predictable foundation through which in-house attorneys can assure their clients of the confidentiality of their communications.” We concluded with this request:
The Court should task trial courts with answering the question that better aligns with this Court’s precedent: “Was obtaining or providing legal advice a primary purpose of the communication, meaning one of the significant purposes of the communication?”
Federation of Defense and Corporate Counsel
The terrific lawyer Mary-Christine Sungaila filed an amicus brief, available here, on behalf of the FDCC, an invitation-only organization composed of 1,550 defense and corporate counsel working in private practice, as in-house counsel, and as insurance industry professionals. The FDCC emphasized that an effective attorney–client privilege is a predictable one and that this need for certainty “is heightened further by the new realities of corporate life.” This new reality means that corporate clients often seek advice through digital channels, such as emails and Slack chains, that lead to “even more dual-purpose communications.” The Kellogg “one significant purpose” test better absorbs the expanding role of in-house counsel and the ubiquitous use of email and online communications, and the FDCC argued that this test “strikes the right balance between what is privileged and what is not.”
Lawyers for Civil Justice
The Lawyers for Civil Justice, in an amicus brief available here, focused its comments on the mandate that courts must interpret rules “to promote efficiency and fairness.” The Ninth Circuit’s primary purpose standard “does the opposite” and is “effectively impossible to apply in practice.” In particular, this test is unworkable in the context of modern business communications. The significant purpose test “is a more easily applied, practical, and predictable standard.” The LCJ emphasized that this test will lead to fewer time-consuming and expensive privilege disputes and in camera reviews. And that’s a good thing!
Silicon Valley Tax Directors Group
The SVTDG consists of tax-focused representatives from technology and other companies and promotes sound, long-term tax policies that support innovation and global competitiveness of the U.S. technology industry. This tax group, in an amicus brief available here, found the Ninth Circuit’s primary purpose test “deeply flawed” because it subjects lawyer–client communications to “an indeterminate, post hoc assessment of whether ‘legal’ or non-legal ‘business’ concerns were the principal driver.” And these problems are “vividly illustrated” in the tax context. While tax advice is legal advice, that advice often encompasses business advice because “the tax consequences of a particular transaction often bear directly on a business’s bottom line.” To the extent the Ninth Circuit and the government argue that a less protective test should apply in the tax context, “that approach has nothing to commend it.”
The Buckeye Institute
The Buckeye Institute is a think tank that advances free-market public policies and solutions in Ohio and states throughout the country. In its amicus brief, available here, the institute emphasized that any person trying to engage in productive activity faces a “complicated morass” of tax authorities where even “minor reporting foot-falls can trigger massive penalties.” As a result, and with no federal accountant–client privilege, it is essential that attorneys and clients have open and candid communications in the tax context. But the Ninth Circuit’s standard is “simply unworkable” and the Court should reject it. The Court should also reject the Seventh Circuit’s treatment of tax-related communications in United States v. Frederick because those communications do “not justify a different rule.” The Kellogg significant purpose test, the institute argued, is “more appropriate.”
U.S. Chamber of Commerce, Association of Corporate Counsel, and Securities Industry and Financial Markets Association
The U.S. Chamber, ACC, and SIFMA joined forces in this amicus brief to supply the Court with multiple examples of how corporate counsel, and specifically in-house counsel, deal with a mixture of legal and business issues in their daily lawyer lives. And using these examples, this troika argued against the Ninth Circuit’s primary purpose standard, declaring that judges should not have to wade through various legitimate purposes of a lawyer’s communication to “divine some metaphysical ‘primary’ purpose to the request for legal advice.” The significant purpose test, on the other hand, reflects the realities of how companies and their counsel operate in today’s highly regulated environment.
Washington Legal Foundation
The Washington Legal Foundation filed an amicus brief at the petition stage, available here, and returned at the merits stage because “there are few things more important in our legal system than clients’ ability to communicate with their counsel without fear of having those communications later disclosed in litigation.” Its second amicus brief, available here, the WLF argued that companies lean heavily on in-house counsel for internal investigations and the Ninth Circuit’s primary purpose test “would have a chilling effect on the free exchange of information between in-house counsel and corporate executives.” The WLF also criticized the Seventh Circuit’s “tax exceptionalism” privilege rule, arguing that it is “poorly reasoned as it misunderstands the intersection of tax preparation and legal advice.” And the Ninth Circuit’s test is simply “a different type of tax exceptionalism” even though “there is no reason that a dual-purpose communication should be treated differently in the tax context than it is in other contexts.” The Court has rejected tax exceptionalism before, the WLF argued, and “it should do so again.”