United States Supreme Court To Review The Scope Of The Attorney-Client Privilege

• Published date: 11 October 2022
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Corporate and Company Law, Trials & Appeals & Compensation, Privilege
• Law Firm: Jenner & Block
• Author: Mr David M. Greenwald, Alexander N. Ghantous, Allison M. Tjemsland, Andrew Whinery and Sol Gelsomino

On October 3, 2022, the U.S. Supreme Court granted review in a federal grand jury proceeding that may result in the Court expanding the scope of the attorney-client privilege for dual-purpose business communications. ¹ Petitioner argues that the Court should adopt the test articulated in two decisions by the U.S. Court of Appeals for the D.C. Circuit, which were authored by then Judge Brett Kavanagh.

Petitioner is a law firm that provided tax advice and prepared tax returns for the target of a criminal investigation. The grand jury subpoenaed Petitioner for production of documents relating to the preparation of the client's tax returns. Petitioner produced some documents, but invoked the attorney-client privilege over communications that had the dual purposes of enabling Petitioner to provide legal advice and to prepare client's tax returns.

Petitioner explains that, in the tax context, courts distinguish between two types of work performed by an attorney. ² Advice regarding tax planning and controversy is treated as legal, and communications for that purpose are privileged. ³ Preparation of tax returns is deemed a non-legal function, and communications for that purpose are not privileged. ⁴ Where a lawyer provides legal advice and prepares tax returns, inevitably there will be communications with mixed business and legal purposes.

The Primary Purpose Test - Narrow Approach

Communications are not privileged unless they are for the purpose of obtaining or providing legal advice. Where communications are motivated by mixed business and legal purposes, courts apply some form of the "primary purpose" test to determine which communications deserve protection. ⁵ The narrow application of the test requires the court to determine whether the primary or predominant purpose of a communication was to seek or provide legal advice or instead to further business interests. In this case, the district court applied the narrow test to Petitioner's dual-purpose communications and granted part of the government's motion to compel. ⁶

The Primary Purpose Test - Broader Approach

A broader approach to the primary purpose test was established by the D.C. Circuit in In re Kellogg Brown & Root, Inc. ("KBR I"). ⁷ In a decision authored by then Judge Kavanagh, the court explained that it is not correct for a court to presume that a communication can have only one primary purpose, or for a court to find "the one primary purpose in cases where a given communication plainly has multiple purposes." ⁸ "[T]he primary...