The year 2022 brought us more privilege-related issues and court rulings—some baffling, some concerning, and all educational.  Others published timely articles on a few unsettled privilege questions, which I identify and link in Ideas, Opinions, and Advocacy: Privilege Publications in 2022.  As for judicial decisions, the year 2022 saw the U.S. Supreme Court wade into two significant privilege areas, courts grapple with privilege issues arising in internal investigations, courts concerned with government filter teams, and an unfortunate lawyer suspension for a privilege breach. Let’s review 2022 and learn from it as we anticipate major privilege decisions in 2023.

Attorney-Client Privilege in the U.S. Supreme Court

In October 2022, the U.S. Supreme Court agreed to hear a case about the scope of the corporate attorney-client privilege. The question is whether the privilege protects so-called dual-purpose communications–those communications created for legal-advice purposes and non-legal purposes. The petitioner argues for the significant-purpose test, adopted in then-Judge Kavanaugh’s opinion in In re Kellogg Brown & Root, Inc., a decision I discussed here, which applies the privilege to a dual-purpose communication so long as one of its significant purposes is legal advice. The federal government argues for the primary-purpose test, which applies the privilege only where the communication’s primary purpose is seeking or delivering legal advice.

I authored and filed an amicus brief on behalf of DRI’s Center for Law and Public Policy, arguing that the Kellogg significant-purpose test better recognizes the role that in-house lawyers play in today’s corporate environment. I have also followed and explained arguments of other amici, the petitioner, and the government, including arguments made at the petition stage. Oral argument will be held in January 2023 and we expect this much-needed and important decision to arrive before the end of the current term.

State-Secrets Privilege in the U.S. Supreme Court

Quite remarkably, the U.S. Supreme Court issued two decisions in 2022 that bolstered the state-secrets privilege. This privilege allows the federal government to prevent disclosure of information related to the country’s national security interests.  In United States v. Zubaydah, ___ U.S. ___ (2022), available here, the Court held that the privilege permitted the CIA to withhold information that would confirm–or deny–that it maintained a detention camp in Poland.  In FBI v. Fazaga, ___ U.S. ___ (2022), available here, the Court held that the Foreign Intelligence Surveillance Act of 1978 (FISA) does not displace or override the government’s ability to assert the state-secrets privilege.  Texas Law Professor Robert Chesney published this article in the Harvard Law Review addressing these two opinions, and I commend it to you.

Internal Investigations

Courts continue to grapple with deciding privilege issues that arise during an entity’s internal investigation, and we saw at least two decisions that illustrate the importance of a lawyer’s engagement letter in determining whether the lawyer’s investigation was for legal-advice purposes or simply to gather facts. In a case involving the University of Iowa’s internal investigation into race-related allegations by current and former football players, the Court found that the engagement letter proved the lawyer’s investigation was not for legal-advice purposes. Read about it in No Privilege for University of Iowa’s Internal Investigation, Court Rules.

By contrast, an Illinois court ruled that a lawyer’s engagement agreement sufficiently proved that the privilege protected her investigation because it specifically noted the legal-advice reasons for her retention. Learn why in Court Upholds Privilege for Company’s Internal Investigation—Here’s Why

North Carolina’s Major Decision

Speaking of internal investigations, the North Carolina Supreme Court issued a decision–that effectively incorporated a lengthy opinion from a Business Court–holding that the privilege did not protect from disclosure a law firm’s internal investigation into sexual-harassment allegations. The decision did not specifically turn on the law firm’s engagement letter but instead on the entity’s sexual-harassment policy mandating an investigation. The court held that the mandate meant that any investigation had to be for business reasons and not legal reasons–no matter how the investigating law firm papered the engagement. The opinions in this case make it difficult to ascertain the exact reasons why the privilege failed, so read my analysis in N.C. Courts Speak on Privilege Consequences of Required Investigations and Legal Purpose. We Should Listen and see how this may affect your future investigations.

Waiver–Precarious and Broad

Each year brings several waiver decisions and 2022 was no different. For my 400th post since starting this blog, I discussed a court’s decision distinguishing waiver rules for the work-product doctrine and the attorney-client privilege. Read about it in My 400th Post: Court Applies Different Waiver Rules for Work-Product Doctrine and Attorney–Client Privilege.

One company lost privilege protection by disclosing privileged internal-investigation information to the SEC, with the court imposing the broad subject-matter waiver doctrine, which it found to be a significant waiver. See what you think of the opinion by reading Court Imposes “Significant Waiver” for Disclosure of Privileged Investigation to DOJ and SEC.

Subject-matter waiver was also front-and-center in a Connecticut case where the court adopted doctrine as a matter of state common law. Understand why and the doctrine’s limits in First Impression: Connecticut Court Adopts Subject Matter Waiver Doctrine.

Batson Challenge and Privilege

Aren’t a lawyer’s jury-selection notes protected by the work-product doctrine? One would think so, but a court found that an opposing party’s Batson challenge may require waiver of the work-product protection so that the striking lawyer can prove a non-discriminatory reason for her decision. Perhaps these are unique facts, but read my discussion of the issue in Hobson’s Choice? Batson Challenge, Jury-Selection Notes, and Work-Product Waiver and see how this waiver issue may apply in future Batson challenges.

Prosecutors and Filter Teams

The year 2022 saw more attention given to federal prosecutors’ use of a filter team to review putatively privileged information before turning over ostensibly nonprivileged documents to their investigating peers. In fact, I appeared on MSNBC’s The Katie Phang Show to discuss use of a Special Master when a federal district judge did not approve of U.S. Attorneys’ use of a filter team to review former President Trump’s documents seized from Mar-a-Lago.

In another case, a federal district judge disapproved of prosecutors’ self-imposed protocols on its filter team and imposed its own standards. Read about this decision in Fox in the Privilege Henhouse: Court Scraps USAO’s Filter Team Protocol and Unilateral Privilege Decisions and see if this will guide your actions when clients face this issue.

Business Communications or Marital Communications?

The marital-communications privilege protects from disclosure a married couple’s private conversations, right? But is that true when those cozy conversations pertain to their business interests? One court adopted a business-communications exception, and I suggest you read about it in Honey, I Shrunk the Profits! Court Adopts “Business Communications” Exception to the Marital Communications Privilege because I suppose lawyers overlook this potentially wide-ranging exception.

Stolen Privileged Documents–Don’t Do It

Discovery takes many forms, mostly formal but some informal. But when that informal discovery results in the receipt of obviously privileged information, bad things can happen, as the lawyer suing Cristiano Ronaldo learned in a case I discussed in Red Card! Court Terminates Case for Lawyer’s Use of Cristiano Ronaldo’s Purloined Privileged Documents.

Privilege Breaches and Lawyer Sanctions

What seems obvious in retrospect often is not so obvious in real time, or at least that is what one lawyer argued after he signed an affidavit revealing privileged information received from a former client. The disciplinary authority was not amused, issuing severe sanctions as I relay in Only in the Movies? Court Suspends Lawyer for Breaching Attorney–Client Privilege. Read it, heed it, and don’t let this happen to you.

Somewhat remarkably, I am not the only lawyer who writes about evidentiary privileges.  I maintain a resources page listing influential treatises, newsletters, and articles. Some of these same authors, along with new ones, published articles in 2022 ranging from the rarely litigated states-secrets privilege to a piece advocating for a privilege for discussions held in the presence of Alexa—yes, that Alexa.  I’ll briefly identify and summarize these important articles below, and I commend them to your reading list.

2022 Witnessed Several Doggone Good Privilege Articles

Functional Equivalent Doctrine

The terrific Louisville Law Professor and prolific privilege scholar Grace Giesel has again published a must-read law review article on the attorney-client privilege.  Recognizing that the attorney-client privilege generally protects communications between a company’s lawyer and its employee-representatives, Professor Giesel notes that courts have struggled with a rational analytical framework for applying the privilege to a company’s non-employee representatives—consultants. Most courts apply the privilege to those individuals who operate as a “functional equivalent” of an employee, but the professor challenges the factors that courts consider to make this decision, particularly in a post-pandemic world, and proposes a different analysis.  Read the article, available here, to see that analysis—it’s worth your time.

Healthcare Consultants and Privilege

Three Foley & Lardner lawyers published a nice article on how to handle privilege issues when healthcare clients engage third-party consultants, such as statisticians, coding experts, and clinical specialists.  After identifying several issues, the authors raise the question how “can the work of a non-lawyer consultant fall under the protection of either attorney-client privilege or work product?”  They discuss how the Kovel doctrine, which I explained in Deck the Halls with Boughs of Kovel, and address several points “that an attorney and health care client should keep in mind.”  You may access the article on Westlaw at 24 No. 5 J. Health Care Compliance 17.

Common Interest Doctrine

Anyone who has attended one of my privilege presentations has likely heard my discussion on courts’ completely inconsistent and incongruent application of the common-interest doctrine.  Cody Michael Austin apparently agrees, because his article published in the Mississippi Law Journal states that “there are many variations of the doctrine with little-to-no consistency across jurisdictions.”   While I may quibble with the author’s identifying the concept as a “privilege” and “an extension of the attorney-client privilege”—it’s a non-waiver doctrine—he does a good job of reviewing the history of the doctrine’s evolution and proposing a new model doctrine to bring some uniformity in this non-uniform area.  Read the article here.

Mediation Privilege

Lawyers published two articles discussing the federal mediation privilege, with both advocating for some consistency in application. Kate Myers of Phoenix firm Christian Dichter & Sluga, home of super lawyer Gena Sluga, published an article comparing mediation privileges under federal law and state law, noting that “they vary widely in their definition and application.”  Kate offers a few takeaways, which you may read here.

Tyler Layne of Nashville’s Waller Lansden firm authored a piece in the American Bankruptcy Institute Journal discussing how bankruptcy courts’ local rules, combined with inconsistent recognition of a common-law mediation privilege, can make it difficult for mediation parties to know what will remain confidential and what will not.  You may access the article on Westlaw at 41-MAY Am. Bankr. Inst. J. 42.

Privilege Application in Transactions

Alicia F. Castro published a nice article in Corporate Counsel Review discussing how to “thread the needle” between disclosures and the attorney-client privilege in merger-and-acquisition transactions.  She provides an appropriate overview of the privilege and compares the privilege elements to disclosure considerations that arise in the M&A area. As if that isn’t enough, she weaves in a discussion of pertinent ethical considerations.  You may access the article on Westlaw at 41 Corp. Couns. Rev. 1.

Lawyers Chip Leyens and Natalie Maples published an interesting article discussing whether and how the attorney-client privilege applies in real-estate transactions, including in such practical situations where the attorney, client, and real-estate broker participate in a conversation.  You may purchase the article at this site or access it on Westlaw at 68 No.2 PRACLAW 13.

State-Secrets Privilege

The U.S. Supreme Court issued two opinions in 2022 dealing with the state-secrets privilege, which protects from disclosure governmental communications that implicate national security concerns, a phenomenon that is “remarkable.”  Texas Law Professor Robert Chesney published an article in Harvard Law Review providing a history of the state-secrets privilege and discussing how the two opinions bolster the privilege’s application. Read this thorough article here.

Alexa, Assistants, and Privilege

Did you know that Alexa, Siri, and other so-called assistants can listen, record, and do who-knows-what with your conversations?  Scary.  Lauren Chlouber Howell discusses these issues in her Comment, Alexa Hears with Her Little Ears—But Does She Have a Privilege?.  Ms. Howell ultimately advocates for recognition of evidentiary privilege to protect those eavesdropped conversations. Do you agree? Read the article here and decide.

Guardians Ad Litem and Privilege

Courts routinely appoint guardians ad litem for minors, but not to serve them as a lawyer but rather to represent their best interests.  Lawyer Jacqueline M. Valdespino and family law consultant Laura Morgan note in their article that a guardian ad litem is not an attorney per se but an investigator and reporter.  Their article discusses confidentiality issues that arise in this relationship, including the degree to which the guardian ad litem holds the child’s privilege and whether the guardian ad litem can pierce the privilege of the parties.  You may read the article here.

Privilege in the Tax Context

Lawyers from Skadden and Ropes & Gray published an article discussing applicable privileges and the work-product doctrine in the tax context, including waiver issues and application of the crime-fraud exception.  This article is particularly pertinent given the upcoming Supreme Court opinion on privilege protection for dual-purpose tax-related communications.  You may purchase the article at the ALI page or access it on Westlaw at 36 No. 3 Prac. Tax Law. 8.

Restorative Justice

Restorative justice programs, generally speaking, offer an alternative to criminal punishment through use of a facilitator that, similar to a mediator, oversees meetings and discussions between the criminal defendant and the victim.  As one can imagine, comments from the participants could be used in subsequent criminal or civil proceedings, so the question arises whether an evidentiary privilege should protect restorative justice discussions.  Retired Judge Stuart Katz and Patrick Keenan-Devlin published an article in the Illinois Bar Journal explaining a new statutory privilege for restorative-justice communications—a statute written by the judge himself.  You may read it here.

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 (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, and (4) reviewed the briefs of the fourteen amicus parties.  The government has now filed its opposition brief, available here, so let’s explore what privilege standard it seeks and why.

Every Man’s Evidence

With the petitioner and fourteen amicus parties arguing for privilege protection of a communication where one of its purposes is nonlegal (so long as another, significant one is legal), the federal government reminded the Court that its starting baseline is that “the public has a right to every man’s evidence.”  Evidentiary privileges inherently shield otherwise relevant information and courts should treat them as exceptions to this long-held “fundamental principle.”  This principle compels courts to neither “lightly create” nor “expansively construe” privileges, including existing privileges such as the attorney–client privilege:

An existing privilege must be recognized only within the narrowest limits required by principle because every step beyond these limits helps to provide, without any real necessity, an obstacle to the administration of justice.

And, the government argued, this limiting principle is particularly critical in grand-jury proceedings because a grand jury’s investigative function is best served by making available all evidence needed to determine whether the target committed a criminal offense.

The Solicitor General Argues for the Primary Purpose Test

The Primary Purpose Test is Inherently Sound

The federal government emphasized that the narrow question before the Court is how to apply the attorney–client privilege to communications where segregation of legal and non-legal portions is not possible.  When courts can readily isolate a communication’s legal segment, they will permit that segment’s redaction and compel production of the rest.

For those communications where legal and nonlegal purposes are inextricably intertwined, however, the primary purpose test best serves the privilege’s rationale.  The attorney–client privilege encourages clients to communicate freely with their lawyers and the lack of privilege protection undesirably chills those communications. “The privilege is not intended to encourage clients to seek business or accounting advice from lawyers,” the government stated, and the primary purpose test is “the best measure of whether that particular communication would have been made absent the privilege.”

The petitioner and its amici expressed great concern that the primary purpose test discourages clients from seeking legal advice, but the government said that the threshold steps of segregation and redaction means that, “at most, clients will be discouraged from ‘intertwining’ a request for legal advice within a single portion of the communication.”

The government highlighted that a majority of states apply the primary purpose test, including two recent decisions from the supreme courts of Minnesota, In re Polaris, Inc., 967 N.W.2d 397 (Minn. 2021), and North Carolina, Buckley, LLP v. Series 1 of Oxford Ins. Co., NC, LLC, 876 S.E.2d 248 (N.C. 2022), which I reviewed and criticized in this blog post. The government argued that this majority rule of state courts “has proved to be a sensible test for reining in aggressive claims of privilege,” and concluded:

Overturning the consensus would destabilize courts, engender uncertainty in the application of a new approach, and impede the justice system’s search for truth.

Neither Logic nor Precedent Supports the Kellogg Significant Purpose Test

This “new approach,” of course, is the significant purpose test adopted and applied by the D.C. Circuit in In re Kellogg Brown & Root, Inc., 756 F.3d 754 (2014) (Kavanaugh, J.) that I discussed in this blog post and further explored in this blog post.  The government identified this test as “relatively novel” with “little foundation in the animating principle of the attorney–client privilege.”  The test, as—according to the government—the petitioner and amici would apply it, “appears to be shepherding in a vast expansion of the privilege.”  And while the petitioner and amici argued that the significant purpose test would “provide clarity and predictability,” “it would in fact do the opposite,” the government claimed.

The privilege predictability falters because the term “significant” is “an amorphous concept.” The government argued that “any proffered definition would be unlikely to provide the concrete guidance that this context requires,” noting that the amicus briefs of the U.S. Chamber and DRI Center for Law and Public Policy Merits Stage Amicus Brief define significant as “legitimate or genuine” and “not incidental,” respectively. Moreover, two other amici, the ABA and APRL, argued for a less-stringent standard because determining whether a communication has a significant legal purpose is “susceptible to differing results” and “could likewise be difficult and unpredictable.”

Yet, for all its criticism, the government echoed the Ninth Circuit’s recognition of the merits of the significant purpose test by admitting that the test “might be easier to apply” “in some cases,” such as internal investigations. And, while effectively recognizing that the Court may find that the significant purpose test “would increase certainty for clients and lessen privilege-related litigation,” the government argued that the test would inappropriately expand the privilege, particularly for highly regulated industries and in-house counsel:

Given the reality of widespread regulation … and the broad participation by in-house counsel in “regular business matters,” … petitioner’s novel and expansive “significant purpose” standard would open the gates to a flood of attorney–client privilege claims colorably asserting that at least some non-insignificant purpose of a communication was related to legal advice.

Let’s Focus on the Tax Documents at Issue

The government argued that dual-purpose tax-related communications—the communications at issue here—exacerbate the problematic issues associated with the significant purpose test.  Federal common law does not recognize an accountant–client privilege and courts typically reject the attorney–client privilege for tax-preparation communications.  Adopting the significant purpose test, the government claimed, would raise to privileged status tax-preparation communications that would otherwise be subject to government review.

Tax-return preparation advice that an accountant could give is therefore not legal advice for purposes of the attorney–client privilege, even when performed by an attorney. … And a client may not buy a privilege by retaining an attorney to do something that a non-lawyer could do just as well.

As for the documents at issue, the government asserted, the district court got it right.  It ordered production of only communications solely related to tax-return preparation, and most of these communications were between the client and an accountant.  In fact, the at-issue communications are “so far from legal advice” that the privilege would not protect them even if the Court adopted and applied the significant purpose test.  In the end, regardless of the test adopted, “the grand jury is entitled to these documents.”