/>iBusiness entities facing civil, criminal, or regulatory threats frequently turn to law firms to conduct internal investigations, which can be critical in formulating an appropriate response. A recent ruling from the Southern District of Ohio threatened to open the fruits of those internal investigations to discovery. In an opinion granting a stay of that ruling, the Sixth Circuit Court of Appeals has offered much-needed clarity regarding the application of the attorney-client privilege and the work product doctrine to internal investigations and explained that an internal investigation does not become discoverable merely because it serves a business purpose.
FirstEnergy Corporation undertook two internal investigations after an indictment of an Ohio public official allegedly implicated the company in a bribery scheme. Soon afterwards, FirstEnergy became the target of additional government investigations and civil lawsuits, including a class action. The class action plaintiffs sought information regarding FirstEnergy’s internal investigations in discovery. FirstEnergy refused to produce the investigation information, contending that such information is protected by the attorney-client privilege and the work-product doctrine. The district court sided with the plaintiffs and ordered production of the internal investigations’ results, reasoning that the attorney-client privilege and work-product doctrine did not apply because FirstEnergy underwent the internal investigations for “business purposes.” FirstEnergy moved to stay the district court’s decision in the Sixth Circuit.
In granting FirstEnergy’s stay request, the Sixth Circuit found the lower court’s approach to be “backwards,” given that there will almost always be some “business purpose” associated with an internal investigation. As the Sixth Circuit explained, “What matters for attorney-client privilege is not what a company does with its legal advice, but simply whether a company seeks legal advice.” In other words, when an individual or business seeks legal advice from an attorney, the privilege applies. That there may be some associated business purpose is not enough to remove the attorney-client privilege when legal advice is being sought as part of the internal investigation.
The Sixth Circuit also found that the requested information likely fell under the protection of the work product doctrine, given the “onslaught of civil and criminal investigations” FirstEnergy faced while pursuing these internal investigations.
Finally, the Sixth Circuit affirmed the strong public policy interest in preserving the attorney-client privilege and work product doctrine, noting that an uncertain privilege is little better than no privilege at all.
Ultimately, the Sixth Circuit must still resolve the mandamus petition on its merits. The Court’s opinion on the motion to stay, however, provides strong guidance for companies undertaking internal investigations.
In particular, companies should take appropriate steps to ensure that internal investigations are being conducted in such a manner so as to strengthen the argument that the investigation is subject to both the attorney-client privilege and the work product doctrine. These steps include involving counsel at the outset and allowing counsel to lead the investigation, as well as documenting, in writing, that the purpose of the investigation is to receive legal advice from counsel. If the investigation is in response to anticipated litigation, that should be documented in writing as well. Equally as important, companies must maintain the confidentiality of the investigation’s processes and results. Even if information would otherwise be privileged, if it is voluntarily disclosed, the privilege can be waived.
