Ordinarily, when a communication between an attorney and her client is disclosed to a third party, that communication loses its privileged status. The common interest privilege operates as an exception to that rule that allows the privilege to extend to communications with certain third parties. For the common interest doctrine to apply, the communication must be in furtherance of a legal interest that is shared by the client and the third party. Historically, New York courts additionally required that the communication relate to legal advice regarding pending or prospective litigation. On December 4, 2014, in a landmark decision, a New York appellate court did away with this additional requirement.
On June 27, 2014, the U.S. Court of Appeals for the D.C. Circuit issued an important, unanimous decision upholding the assertion of attorney-client privilege for an internal investigation. The decision is especially significant because it (a) forcefully reversed a growing trend in the D.C. federal district courts that had narrowly applied the attorney-client privilege to internal investigations and (b) confirmed that communications made during the course of an internal investigation – e.g., interviews and interview notes and reports – are privileged whenever a primary purpose of the communication was to obtain legal advice.
The case involves a False Claims Act claim against Kellogg, Brown & Root (“KBR”), a former Halliburton subsidiary, regarding alleged fraud and other unlawful conduct violating the company’s code of business conduct. The plaintiff sought various materials relating to KBR’s investigation of the alleged conduct. Non-lawyers, acting at the direction of in-house lawyers, conducted the interviews.