If a company successfully invokes the attorney–client privilege over its internal investigation, a question arises whether the company’s litigation adversary may nevertheless receive an adverse inference that the investigation’s results contained information harmful to the company.
In the long-running False Claims Act case involving Kellogg, Brown & Root (KBR), the USDC for the District of Columbia answered, emphatically, “No.” United States v. Halliburton Co., 2017 WL 1018309 (D.D.C. Mar. 14, 2017). You may read the decision here.
Internal Investigation Privileged—KBR I
KBR provided contract services to the U.S. Government during the Iraqi war. A former KBR subcontract administrator brought claims under the False Claims Act against KBR and one of its subcontractors, Daoud & Partners. The district court ruled that the attorney–client privilege did not cover KBR’s internal investigation.
But, in a thorough opinion, the D.C. Circuit reversed and held that the privilege covered KBR’s internal investigation. See my post, Significant D.C. Circuit Decision for Attorney-Client Privilege and Internal Investigations, for a detailed look at the decision.