On Jan. 9, the U.S. Supreme Court heard oral argument on whether the attorney-client privilege protects against disclosure of dual-purpose communications—where the communications contain both legal and nonlegal advice.
In the January 26,2023 edition of The Legal Intelligencer, Kelly Lavelle wrote “Impact of the Attorney-Client Privilege Purpose Requirement on E-Discovery“
On Jan. 9, the U.S. Supreme Court heard oral argument on whether the attorney-client privilege protects against disclosure of dual-purpose communications—where the communications contain both legal and nonlegal advice. The case In re Grand Jury, 23 F.4th 1088 (9th Cir. 2022) is under review to determine this question. In re Grand Jury arose from a grand jury subpoena to a law firm seeking communications related to tax advice given to a client. The firm refused to produce certain documents citing attorney-client privilege and the work-product doctrine. The government moved to compel the production of the withheld documents, which the court granted in part. Among the withheld documents that the court ordered produced without redactions were emails containing attorney recommendations.
In considering whether the attorney-client privilege attached to the disputed dual-purpose communications, the district court applied the “primary purpose” test. The district court held that the attorney-client privilege did not protect a subset of documents whose predominate purpose was the procedural aspects of tax return preparation and not tax legal advice. The district court acknowledged the “significant purpose” test adopted by the U.S. Court of Appeals for the D.C. Circuit in In re Kellogg Brown & Root, an opinion written by then-Judge Brett Kavanaugh, holding that the attorney-client privilege applies if “solicitation of legal advice was one of the material purposes of the communication.” But the district court rejected that standard, holding that “the relevant consideration is whether the primary or predominate purpose of the communication was to seek legal advice or to provide the corresponding legal advice.”
The district court held the company and the law firm in contempt, and the parties filed an appeal. The Ninth Circuit upheld the contempt orders, rejecting the arguments that the documents were subject to the attorney-client privilege because obtaining legal advice was a significant purpose of the communications. The court held that “the primary purpose test applies to attorney-client privilege claims for dual-purpose communications.”
The court explained the two tests for dual-purpose communications: the “primary purpose” test and the “because of” test. Under the “primary purpose” test, courts look at whether the primary purpose of the communication is to give or receive legal advice, as opposed to business or tax advice. The natural implication of this inquiry is that a dual-purpose communication can only have a single “primary” purpose. On the other hand, the “because of” test “considers whether the communication or document was created because of anticipated litigation. Applying this test would expand the scope of attorney-client privilege and protect the correspondence at issue.
The Ninth Circuit holding that courts must evaluate the communication to determine the single primary purpose, and that the communication is privileged when the primary purpose is legal advice, has raised concerns among in-house counsel, outside counsel and their corporate clients. The strict primary purpose test will likely result in fewer documents being protected. This is a significant concern for companies and attorneys, where modern communication often includes both business and legal communications.
Thirteen amici curiae briefs were filed supporting the petitioner law firm’s argument that the court should reject the single primary purpose test. A recurring argument in the briefs is that determining the primary purpose of a communication has become progressively more difficult with the expanding role of in-house or corporate counsel and the increase in businesses using email to communicate both business and legal matters simultaneously. Email allows counsel to easily participate in routine business matters and the number of emails, sent and received, continues to grow worldwide. Strings of messages on email, chat, text messages and other communication platforms result in legal and business content being even more intertwined. Those in opposition to the primary purpose rule are advocating for a uniform, predictable test that will enable in-house and corporate attorneys who are more likely to deal with these concerns to best forecast when the attorney-client privilege will hold.
Advocates of the “significant purpose” test argue that the “primary purpose” test requires courts to undertake the inherently impossible task of separating and evaluating multiple purposes for a single communication. Several state and district courts have endorsed the “significant purpose” test for good reason. There is a concern that the “primary purpose” test will preclude the application of the attorney-client privilege from legal communications that have a significant legal purpose any time the proponent of the privilege fails to convince a court that legal advice was the single most important purpose. Another concern is that the “primary purpose” test, in modern business communications, does not serve the intent of the federal rules requiring proportionality in cost and burden associated with electronic discovery. The application of the “primary purpose” test may unjustifiably increase costs associated with document review and preparation of privilege logs. One example is the use of email threading. In the review process, email threading saves time and money but poses a danger in the context of applying the “primary purpose” test. Long threads may involve a lawyer weighing in with legal advice within the discussion and applying the “primary purpose” test will require subjective assessments of the advice included in the thread.
As technology evolves, so do the privilege concerns associated with attorney-client communications. With these emerging technologies, courts are only beginning to contend with privilege and electronic discovery issues. In recent cases courts have been confronted with issues regarding access to data from platforms such as Slack, cellphones and cloud-based electronically stored information (ESI). These technological trends are guaranteed to continue to advance. With an increase in remote and hybrid work environments, businesses and attorneys are forced to communicate and interact electronically. This trend makes it difficult to isolate and determine a singular or principal purpose for a communication. Because the “primary purpose” test has the potential to eliminate the attorney-client privilege for dual-purpose communications, the “significant purpose” test may be the best option to reflect the new reality in the technologically advanced corporate environment.
It remains uncertain how the Supreme Court will resolve the issue; however, the court is expected to provide some much-needed guidance in its opinion. The lack of a consistent standard for dual-purpose communications results in uncertain privilege protection. The need for certainty is critical. The outcome of the Supreme Court’s decision will profoundly impact all cases where dual-purpose communications are involved and will be particularly significant in cases with voluminous electronic discovery.
Kelly Lavelle is an associate at Kang Haggerty. She focuses on e-discovery and information management, from preservation and collection to review and production of large volumes of electronically stored information. Contact her at firstname.lastname@example.org.
Reprinted with permission from the January 26, 2023 edition of “The Legal Intelligencer” © 2022 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or email@example.com.