D.C. Circuit Upholds Privilege Protections in Compliance Investigations

3 July 2014
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Key takeaways:

  • On June 27, 2014, the U.S. Court of Appeals for the D.C. Circuit granted a writ of mandamus and overturned a widely publicized decision by the district court, United States ex rel. Harry Barko v. Halliburton Company et al., which had held that documents relating to an internal investigation were not protected from disclosure by the attorney-client privilege.‬
  • The D.C. Circuit held that, in cases in which an attorney-client communication has both legal and business purposes, the privilege applies if “one of the significant purposes” of the communication was to obtain or provide legal advice. The court of appeals reasoned that in the context of internal investigations, the privilege applies so long as obtaining or providing legal advice was one of the significant purposes of the investigation, even if there were other purposes for the investigation, such as complying with a regulation requiring an investigation.
  • The appellate decision recognized the potentially chilling effect of the district court’s decision on communications made in the course of internal investigations conducted by businesses required by law to maintain compliance programs, particularly given the “significant swath of American industry” subject to such requirements. In overturning the district court’s decision, the D.C. Circuit has enabled companies to continue building and investing in robust compliance programs that include self-investigation of potential regulatory violations under the protection of the attorney-client privilege.‬