“The Ninth Circuit’s rule would have a chilling effect on companies’ communications with their in-house and outside counsel.”
—John Masslon, WLF Senior Litigation Counsel

Click here for WLF’s brief.

WASHINGTON, DC— Washington Legal Foundation (WLF) today urged the U.S. Supreme Court to protect the attorney-client privilege. In an amicus brief, WLF argues that the U.S. Court of Appeals for the Ninth Circuit erred in limiting the scope of the privilege for dual-purpose communications.

The case arises from a grand jury investigation of a company’s taxes. The grand jury subpoenaed documents from the company’s law firm. When the firm asserted that some documents were protected by the attorney-client privilege, the District Court held that they were not protected because the primary purpose of the documents was to provide tax advice. The Ninth Circuit then affirmed that decision.

In its brief supporting the law firm, WLF argues that the Ninth Circuit’s rule would have a chilling effect on internal investigations. Rather than foster robust internal-investigation procedures, the Ninth Circuit’s rule would encourage companies to undertake perfunctory investigations to not risk waiving the attorney-client privilege. Companies would also be more hesitant to hire outside counsel. WLF’s brief therefore urges the court to adopt either the “because-of” test or the “a-primary-purpose” test. Both better protect the attorney-client privilege.

Even if the ruling applies only in tax cases, WLF’s brief shows why such “tax exceptionalism” is still problematic. The Court has recently rejected such tax exceptionalism—not to mention exceptionalism in other areas of the law. Finally, WLF’s brief argues that reversing the Ninth Circuit is the best way to further the goals for the Federal Rules of Civil Procedure.

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