The difference between 'the' and 'a': the ongoing attorney-client privilege debate
2023 PRINDBRF 0108
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By Kory Ann Ferro, Esq., Greenspoon Marder LLP
Practitioner Insights Commentaries
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March 7, 2023
(March 7, 2023) - Kory Ann Ferro of Greenspoon Marder LLP discusses the landscape of attorney-client privilege in light of issues raised by In re Grand Jury, and provides best practices to protect communications.
The United States Supreme Court elevated the profile of this issue by initially granting certiorari resulting in 16 amicus submissions. However, the Court ultimately dismissed the appeal as being improvidently granted, thus failing to address this hot button issue. In re Grand Jury, No. 21-1397, , at *1 (U.S. Jan. 23, 2023). As the landscape of this privilege remains murky, clients and attorneys alike must employ best practices to protect communications.
The purpose of the attorney-client privilege is "to encourage full and frank communication between attorneys and their clients." Upjohn, 449 U.S. at 389, 101 S. Ct. at 682, 66 L. Ed. 2d 584. "[S]ound legal advice or advocacy" is dependent upon "the lawyer[] being fully informed by the client." Id.
However, this privilege has its limits as it "applies only where necessary to achieve its purpose." Id. As such, it "protects only those disclosures necessary to obtain informed legal advice[.]" Id. The fact is, legal advice is protected, but business advice is not.
The differentiation between whether the giving or receiving of legal advice must be "a" or "the" primary purpose is crucial since "[l]egal advice concerning commercial transactions is often intimately intertwined with and difficult to distinguish from business advice." Sedco Int'l, S. A. v. Cory, 683 F.2d 1201, 1205 (8th Cir. 1982).
The manner in which "primary purpose" is practically applied informs the manner in which clients communicate with their counsel when their legal needs and their business needs are entangled. Both attorney and client need some degree of certainty about which discussions will be protected because "[a]n 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." Upjohn, 449 U.S. at 393, 101 S. Ct. at 684, 66 L. Ed. 2d 584.
The Circuits however have applied the term and test of "primary purpose" quite differently:
(1) District of Columbia U.S. Circuit Court of Appeals: The D.C. Circuit held, in the context of internal investigations, that "if one of the significant purposes . . . was to obtain or provide legal advice, the privilege will apply." In re Kellogg Brown & Root, Inc., 756 F.3d 754, 760 (D.C. Cir. 2014). See alsoFederal Trade Commission v. Boehringer Ingelheim Pharmaceuticals, Inc., 892 F.3d 1264, 1266 (D.C. Cir. 2018). This test, referred to as the Kellogg test, highlighted that attempting to discern one primary purpose "can be inherently impossible" and a court cannot "presume that a communication can only have one primary purpose." Kellogg, 756 F.3d at 759-60. As such, the correct question is: "Was obtaining or providing legal advice a primary purpose of the communication, meaning one of the significant purposes of the communication?" Id.
(1) 9th Circuit: In the 9th Circuit, the predominant or primary purpose of the communication governs with the understanding that "a dual-purpose communication can only have a single 'primary' purpose." In re Grand Jury, 23 F.4th at 1091, 1095. This test will necessarily require an inspection of each communication to ascertain the single primary purpose rather than a significant purpose.
That being said, the Supreme Court's non-decision creates even more uncertainty about when information can be protected and how the Courts will evaluate privilege moving forward especially because the 9th Circuit left open the possible future application of the Kellogg test.
Some practical tips and best practices to protect privilege in this climate are:
(1) Do your utmost to keep legal and non-legal advice separate.
(2) Be aware of what qualifies as business advice.
(6) Do not forward attorney communications outside the company.
(7) Keep counsel on all communications you seek to protect and engage them in the discussion, but know that just adding a "cc" may not be enough.
Until the Supreme Court weighs in on the "a" versus "the" debate, clients and counsel must remain extra vigilant to protect communications. If in doubt, pick up the phone and ask your lawyer how best to communicate.
By Kory Ann Ferro, Esq., Greenspoon Marder LLP
Kory Ann Ferro is an attorney in the litigation practice group at Greenspoon Marder LLP. She represents local, national, and global companies in commercial litigation on both the plaintiff and defense side. Her litigation experience includes employment law and breach of contract, including violations of restrictive covenants, breach of the covenant of good faith and fair dealing, breach of fiduciary duties, tortious interference, misappropriation of trade secrets, civil conspiracy, patent violations, and defamation. She is based in Newark, N.J., and can be reached at [email protected].