Big Win for KBR and Attorney-Client Privilege

Big Win for KBR and Attorney-Client Privilege

It’s been a good week — make that 14 months — for Kellogg Brown & Root (KBR), a global engineering, construction and services company based in Houston, Texas. As reported by blogger Alison Frankel, the U.S. Court of Appeals for the D.C. Circuit granted KBR’s motion for a writ of mandamus against U.S. District Judge James Gwin, thus vacating his rulings that KBR had waived privilege and would have to turn over internal investigation documents to whistleblower Harry Barko, who was suing the company under the False Claims Act.

In 2014, Judge Gwin ruled that when KBR produced its in-house lawyer as a deposition witness, and counsel had reviewed internal investigation documents prior to the deposition and referenced the investigation’s outcome in a motion for summary judgment, the company had waived attorney-client privilege.

In this week’s ruling, the three-judge panel stated that there was a “fundamental flaw” in Judge Gwin’s rulings, and that “they run contrary to precedent by injecting uncertainty into the application of attorney-client and work product protection to internal investigations.”

Per Frankel, in June 2014, another three-judge panel undid a previous ruling by Judge Gwin in the KBR-whistleblowing case, in which the judge stated that Barko “was entitled to see privileged KBR documents because the primary purpose of the company’s internal investigation was not to obtain legal advice but to comply with U.S. regulations for government contractors.” The judges then, too, cited a “fundamental flaw” in this ruling, and said it was counter to Upjohn v. United States.

This week, the D.C. Circuit stated that if it had permitted Gwin’s decisions to stand, the “District Court’s rulings would ring alarm bells in corporate general counsel offices throughout the country about what kinds of descriptions of investigatory and disclosure practices could be used by an adversary to defeat all claims of privilege and protection of an internal investigation.”

As Frankel succinctly asserted in her blog, the “appeals court had once again rejected trial court rulings that would have bored holes in the shield of attorney-client privilege.”

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