November 30, 2022

Volume XII, Number 334

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November 29, 2022

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November 28, 2022

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Supreme Court to Review Scope of Attorney-Client Privilege for “Dual Purpose” Communications

The Supreme Court recently granted certiorari in In re Grand Jury to resolve a circuit split regarding what standard governs the application of the attorney-client privilege to dual-purpose communications, that is communications which contain both legal and non-legal advice. The petition was filed on behalf of an unnamed law firm which asserted the privilege in response to a federal grand jury subpoena.

The case arose from a grand jury investigation into the law firm’s client (the client, like the law firm, is unnamed). As part of the underlying Department of Justice investigation, the law firm, which specialized in international tax issues, received a grand jury subpoena for materials related to the client. The law firm produced more than 20,000 pages of non-privileged documents in response. But the firm withheld other documents asserting attorney-client privilege. Although the documents contained communications regarding preparation of the client’s tax returns (which are generally not privileged), the law firm asserted that these communications also contained privileged legal advice. The documents were thus “dual-purpose,” made for providing both legal and non-legal advice.

The district court found that these communications were not privileged. In doing so, the district court applied the “primary purpose” test. Under this standard, a document is protected by the attorney-client privilege if the “primary purpose” of the communication is to render legal advice. The district court concluded that the documents at issue, whose primary purpose was about “the procedural aspects” of tax return preparations did not constitute legal advice. Thus, the district court ordered the law firm to produce the documents in response to the grand jury subpoena. When the law firm did not comply, the district court held the firm in contempt. (An order holding a party in contempt for failing to comply with an order to produce materials over which privilege is asserted is immediately appealable under the so-called Cobbledick Doctrine as an exception to the general rule that only final orders can be appealable and that privilege determinations are not final nor appealable.) The Ninth Circuit affirmed the contempt order on appeal, requiring the law firm to produce the documents containing the dual-purpose communications.

In adopting the “primary purpose” test, the Ninth Circuit noted and rejected, the approach taken by the D.C. Circuit in an opinion written by then-Judge Kavanaugh. The D.C. Circuit applied a standard for dual-purpose communications that considered whether one of the purposes of the communication was to give legal advice. The Ninth Circuit instead applied a standard considering whether the sole primary purpose of the communication to give legal advice. The U.S. Chamber of Commerce filed an amicus brief in support of the petition noting that there was also a third standard applied by the circuit courts, which was more restrictive than both the D.C. and Ninth Circuit approaches, namely the Seventh Circuit’s standard that a dual-purpose document, containing both legal advice and non-legal tax preparation advice, is per se not privileged. (The Washington Legal Foundation and California Lawyers Association also filed amicus briefs on behalf of the petitioner law firm.)

The Supreme Court has not yet set an oral argument date for the case yet, but argument will be this term, with a decision expected by the end of June 2023. The case presents an important issue to follow not just for white-collar practitioners, but also litigators and in-house counsel generally. The scope of the attorney-client privilege does not often get litigated in appellate courts, let alone in the Supreme Court, given that disputes generally arise in pre-trial and discovery orders. The Supreme Court’s ultimate decision could have a profound impact on law firms and general counsel’s offices, as well as their client corporations.

©2022 Epstein Becker & Green, P.C. All rights reserved.National Law Review, Volume XII, Number 278
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About this Author

Associate

Jeffrey P. Monigello is an Associate in the Litigation & Business Disputes and Health Care and Life Sciences practices, in the Newark office of Epstein Becker Green. He has extensive commercial litigation, white-collar criminal defense, and appellate litigation experience.

Mr. Mongiello:

  • Represents clients from a wide range of industries, including health care, financial services, and technology, media, and telecommunications, in white-collar criminal and civil government investigations,...
973-848-7719
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