Wait, What? U.S. Supreme Court Dismisses Privilege Case Following Oral Argument

The U.S. Supreme Court was, for the first time in some time, ready to issue an opinion involving the corporate attorney–client privilege.  The issue was 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 was—

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.

I have been following the case in a series of posts, having (1) examined the Court of Appeals’ decision, (2) reviewed the appellant’s petition for writ of certiorari, the government’s opposition, and the supporting amici positions, (3) examined the petitioner’s merits arguments, (4) reviewed the briefs of the fourteen amicus parties, (5) discussed the government’s merits opposition, and (6) commented on the petitioner’s reply brief. I even authored an amicus brief.

U.S. Supreme Court Dismisses Writ of Certiorari as “Improvidently Granted”

The Court held oral argument on January 9, 2023, but, two weeks later, dismissed the writ as “improvidently granted.” See the per curiam order here. But why? Was it the oral argument? You may read the transcript here or listen to the argument here to make your own determination.

Changing Positions?

The justices recognized that each of the parties appeared to change its standard for privilege protection of dual-purpose communications. The petitioner initially submitted that the significant purpose test protects clients’ ability to seek “bona fide legal advice” from their lawyers. But when the Chief Justice and Justice Alito questioned whether “bona fide” meant good-faith legal advice, the position seemed to change “any legal purpose” rather than a “significant legal purpose.” Justice Jackson noted that the petitioner came up with a “new, perhaps, definition of significant.” And the petitioner and Justice Alito had this exchange:

Justice Alito: Is there a difference between something being significant and something being done not in good faith?

Petitioner: Those are the flip side.

Justice Alito: You’ve changed your position.

Justice Alito proved an equal-opportunity jurist, telling the government that it “was walking away from [its] argument too.” The government argued for the primary purpose test but agreed that the significant purpose test should apply when trial courts cannot disentangle the communication’s legal purpose from its nonlegal purpose, stating this–

Once 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, we are fine with kind of a tie goes to the runner rule in favor of the privilege in those cases.

The government and the Chief Justice discussed percentages, with the government conceding that if the significant purpose test should apply even if the legal purpose is less than 50%, even if 60% of the communication was non-legal and 40% legal.

Judges Don’t Do Math

Perhaps it was inevitable, but the colloquy between the justices and counsel drifted into a discussion of percentages. Under the primary purpose test, the privilege applies if the trial judge determines that 51% or more of the putatively privileged communication’s purpose related to legal advice, right? Setting the bar at 51%, however, would discourage corporate employees from seeking legal advice, the petitioner argued. It should not matter whether the legal-advice component was as low as 25%, the privilege should apply so long as the advice is “bona fide.” This prompted Justice Sotomayor to comment that, essentially, “there is no percentage to significant.”

Justice Jackson raised the hypothetical of a business meeting where a lawyer attends but talks for only fifteen minutes–does that rise to the level of a significant legal purpose so that the privilege protects the entire meeting from discovery? The Chief Justice wanted to know when the legal purpose became insignificant–52/48? 60/40? Justice Barrett tried to move away from a discussion of percentages by focusing on the “practicalities” that the privilege proponent has the burden of persuading the trial judge that the communication’s legal purpose is significant.

But they couldn’t move away from it. Justice Jackson noted that trial courts should not do math, and the government, after discussing percentages, echoed that “judges don’t do math.” The government backed away from its concession that a 40% legal purpose sufficed to secure privilege protection, but then denied that the percentage had to be 51%. This prompted Justice Gorsuch to concede: “I’m really confused now” but at least he understood “the source of the confusion.” That’s right–even though “judges don’t do math,” the justices and lawyers referred to percentages over 30 times.

Reason and Experience

Federal Rule of Evidence 501 dictates that the common law, as interpreted “in the light of reason and experience,” governs privilege claims. Justice Alito focused on the “reason” part of that dictate, challenging the government’s argument that the primary purpose test is “easy to administer.” He sought feedback on a test focused on importance–

What’s wrong with saying, if there’s an important legal purpose, then it’s privileged?

The government instead wanted to discuss the experience side of Rule 501’s dictate, arguing that “the weight of authority” favors the primary purpose test. But Justice Alito noted that this authority was not binding and asked, “what if we thought that reason and experience pointed in different directions?”

If It Ain’t Broke, Don’t Fix It

Other justices wanted to focus on experience. Justice Kagan raised “the ancient legal principle, if it ain’t broke, don’t fix it,” referring to the argument that the majority of courts employ the primary purpose test. Justice Sotomayor, also highlighting the “experience” part of the dictate, said that the Court should look at what the “state courts are doing.” The justice saw no evidence that state courts were having difficulty applying the primary purpose test, as the petitioner argued. She expressed concern that the Court’s decision would change the states’ common-law test or at least result in the significant purpose test applying in federal courts and the primary purpose test applying in state courts.

The petitioner countered that, upon closer examination, the courts employing a so-called primary purpose test were actually determining whether the purported legal purpose was significant enough to warrant privilege protection. And the Chief Justice, when discussing significant versus primary, recognized that, “to a certain extent, … we’re talking about labels rather than analysis.”

Justice Kavanaugh to the Rescue?

Justice Kavanaugh, the author of the Kellogg opinion that rejected the primary purpose test in favor of the significant purpose test, attempted to rescue the discussion. He bolstered that petitioner’s argument by stating that, “when you actually get into the cases and look at them,” the courts articulating a primary purpose test are “not really doing what the label primary purpose would say.” He reinforced the government’s concession that, if trial courts cannot disentangle a communication’s legal and non-legal purposes, then they do not need to some “metaphysical parsing” to render the privilege decision.

So, What’s Next?

Why did the Court dismiss the writ of certiorari as improvidently granted? In short, we do not know. But the Court initially accepted the case, which shows that it has an interest in this important issue. We know Justice Kavanaugh has an interest in the issue, having authored the Kellogg decision and the Boehringer decision preferring the significant purpose test.

The discussion at oral argument, however, perhaps gives us some insight. The justices seemed perplexed that the parties could not clearly articulate and define the test that trial courts should use when deciding whether the attorney-client privilege protects communications with legal and non-legal purposes. Questions remain whether, as the Chief Justice and Justice Kavanaugh indicated, federal and state courts “label” the exercise as a primary purpose test even though the actual “analysis” employs a significant purpose test. Whatever the reason for the dismissal, the dismissal is disappointing to those wanting better predictability regarding when corporate communications will receive privilege protection.

So, what now? Remember that the In re Grand Jury case would have produced a decision under federal common law, meaning its application applies only in those cases, like federal-question cases, where federal law supplies the rule of decision. The result would not have governed federal cases arising under diversity jurisdiction, where state privilege law applies.

This choice-of-law difference, coupled with the oral argument, should persuade lawyers and courts–both federal and state–to better explain the test when presented with a privilege question over dual-purpose communications. If labeling the standard as “primary purpose,” are courts really weighing and balancing multiple purposes to identify the lone, primary purpose? If not, then let’s appropriately “label” the “analysis,” as the Chief might say.

We can all agree that, as the Court stated 40 years ago in Upjohn, “An uncertain privilege, or one which purports to be certain but results in widely varying applications by the courts, is little better than no privilege at all.” Yet, with the dismissal of In re Grand Jury, we remain in a state of privilege uncertainty when it comes to multipurpose communications. Let’s return to the drawing board, be diligent, disciplined, and thoughtful in our privilege arguments, and only then will some certainty emerge.