Supreme Court To Decide Limits Of Attorney Client Privilege: Why The Ninth Circuit Decision Spells Disaster For The Sanctity Of Legal Advice

Published date28 October 2022
Subject MatterCorporate/Commercial Law, Litigation, Mediation & Arbitration, Compliance, Corporate and Company Law, Trials & Appeals & Compensation, Privilege
Law FirmThompson Coburn LLP
AuthorMs Katie Kraft, Booker Shaw, Warren Dean Jr. and Douglas Lang

The attack on the attorney client privilege

This article presents a summary of the issues and concerns regarding the curtailment of the attorney client privilege raised by the In re Grand Jury case decided by the Ninth Circuit Court of Appeals. That case has created nationwide confusion about the extent of the protection. In re Grand Jury, 23 F. 4th 1088 (9th Cir. 2022). Corporate managers and counsel must take heed of this decision because it impacts the confidentiality of legal advice, whether it is routine or strategic. The decision will be reviewed by the United States Supreme Court (SCOTUS), but the outcome of that review is anyone's guess.

In the Grand Jury case, the Ninth Circuit Court of Appeals affirmed a district court's decision that ordered production of a law firm's documents that included so called "dual purpose" advice to its client. That is, advice provided to a client by a lawyer that addresses both business and legal matters.

In writing its opinion, the Court expressly decided against the law firm's position that any document that contained both legal and business advice is protected from production by the attorney client privilege. Instead, the Ninth Circuit crafted a "test" that must be employed in order to determine whether the documents must be produced for review by an adversary as follows: Where "dual purpose" advice is provided, if the nonlegal purpose of the advice is found to outweigh the legal purpose, then the communication is not privileged and is subject to disclosure. See In re Grand Jury, 23 F. 4th at 109.

The primary concern about this "test" is that it gives the trial judge unfettered discretion to "weigh" the advice given. That discretion is seemingly without limit. Admittedly, the "weight" of the advice cannot be determined as if the advice were placed on a counter scale in a meat market. However, no guidelines have been provided by the Ninth Circuit about how to conduct that weighting of the advice.

Without question, management and corporate counsel must be aware of the Grand Jury decision since most businesses regularly obtain "dual purpose" advice. Strategies should be developed regarding the request and rendering of legal advice in order to deal with a SCOTUS decision that might approve of the Ninth Circuit's ruling. Also, this article describes the significant and rare opportunity that businesses and their counsel have right now to present their views directly to SCOTUS about how the controversy should be resolved. The vehicle for presenting those views, without becoming embroiled in the case as a party, is an amicus curiae, or friend of the court, brief that can be prepared by legal counsel and filed directly with SCOTUS. See SUP. CT. R. 37.1, 37.3(a) (Filing deadlines and other conditions precedent are strictly enforced.).

Factual context of In re Grand Jury.

In order to fully grasp the threat to the attorney client privilege, it is important to understand the facts in the Grand Jury case. That case arose from a grand jury proceeding initiated by the federal government to investigate a company's suspected tax fraud. As part of that investigation, the federal government's lawyers demanded the company's lawyers produce all documents that contained tax advice it gave to the company. The law firm objected to production...

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