SCOTUS (Almost) Weighs In On Attorney-Client Privilege For Dual Purpose Communications: 5 Practical Tips To Protect Privilege

• Jurisdiction: United States,Federal
• Law Firm: Sheppard Mullin Richter & Hampton
• Subject Matter: Corporate/Commercial Law, Compliance, Corporate and Company Law, Privilege
• Author: Ms Elizabeth Balfour, Jenna A. Fasone, Kathleen M. O'Neill and Siena Sylvester
• Published date: 13 February 2023

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Inside and outside counsel should know that the way they guide clients through legal and business issues may need to change based on a recent Ninth Circuit case governing the protections afforded to those communications.¹ The following update and insights will help you mitigate against the risk of attorney-client emails being produced in litigation:

1. Legal and Non-Legal ("Dual-Purpose") Communications are Common and Potentially Problematic
2. There is a Circuit-Split on What Test Applies to Dual-Purpose Communications
3. The Supreme Court Balks and the Ninth Circuit Reinforces the Primary Purpose Test
4. Five Practical Tips
5. Closing Thoughts

(A) Dual-Purpose Communications are Common and Potentially Dangerous

Communications between attorneys and clients must be for the purpose of giving or receiving legal advice for the attorney-client privilege to apply. A dual-purpose communication is one that has both a legal and a business purpose - they are perilous because the inclusion of the business angle might eviscerate the attorney-client protection.

(B) There is a Circuit-Split on What Test Applies to Dual-Purpose Communications

What Test Applies Depends on What Circuit You're in:

• The Primary Purpose Test: Whether the primary purpose of the communication is to give or receive legal advice, as opposed to business or tax advice'the narrowest test and adopted in some form by the Second, Fifth, Sixth, and Ninth Circuits.²
• The Because Of Test: Whether it can fairly be said that the document was created because of anticipated litigation, and would not have been created in substantially similar form but for the prospect of that litigation- applied by the Ninth Circuit with respect to work product privilege.³
• The Significant Purpose Test: Whether obtaining or providing legal advice was a primary purpose of the communication, meaning one of the significant purposes of the communication'the broadest test adopted by the D.C Circuit and some District Courts in at least the corporate internal investigation context.⁴

(C) The Supreme Court Balks and the Ninth Circuit Reinforces the Primary Purpose Test

Many had hoped the Supreme Court would resolve the circuit split and provide clarity for dual-purpose communications when it agreed to review the Ninth Circuit's decision in In re Grand Jury.⁵ But on January 23, 2023' just two weeks after oral arguments'SCOTUS dismissed the writ of certiorari as improvidently granted.

The scenario presented by In re Grand Jury...