Supreme Court Wades Into Attorney-Client Privilege
Lawyers and clients, take note: on January 9, 2023, the Supreme Court heard oral argument on probably one of the most consequential cases on the scope of the attorney-client privilege in decades. In re Grand Jury, 23 F.4th1088 (9th Cir. 2021), cert granted, 143 S. Ct. 80 (2022), a tax case, addresses the application of the attorney-client privilege to “multipurpose” communications involving legal and non-legal topics. Many federal and state courts currently use the “primary purpose” test, under which a communication is privileged if the primary purpose of the communication was seeking legal advice. The Petitioner in In re Grand Jury argues the primary purpose test offers too little protection and advocates for a broader standard that protects communications where legal advice is a “significant” or “bona fide” purpose.
According to the Petitioner, the primary purpose test, used by many federal and state courts, is difficult to apply and does not adequately protect privileged materials. One drawback, he argues, to the primary purpose test is that it requires a judge to decide which of several purposes is the document’s primary purpose. That balancing act makes it difficult for parties to predict whether a communication is privileged.
As an alternative, the Petitioner argues a communication should be privileged if a “significant” or “bona fide” purpose is seeking legal advice. But this standard presents its own set of potential problems. The Petitioner asserts that the bona fide purpose test is simpler to apply and yields more predictable results. Even if nonlegal advice exceeded legal advice, an entire document or conversation could be privileged.
The Government in In re Grand Jury supports the primary purpose test. Challenging the premise that the primary purpose test is difficult to apply, the Government asserted at oral argument that decades of state and federal cases “powerfully rebu[t] Petitioner’s assertion that it’s too hard to apply the primary purpose test[.]” Justice Sotomayor expressed a similar view: “I don’t see a rounding number of courts in state or even federal courts saying, I can’t figure this out.” But Justice Roberts questioned the ease of finding a document’s primary purpose because it would require, for example, a judge to decide which of three different legal issues “is the big one.” The Government also criticized the bona fide purpose test on grounds that it would make it easier for a litigant to conceal potentially crucial evidence, such as sensitive business conversations or communications with engineers or technical advisors, by merely including a request for legal advice.
An item of note is that Justice Kavanaugh, while he was a circuit court judge, authored an opinion evaluating multipurpose communications for privilege. “[T]he primary purpose test sensibly and properly applied,” he wrote, “cannot and does not draw a rigid distinction between a legal purpose on the one hand and a business purpose on the other.” In Re: Kellogg Brown & Root Inc., 756 F.3d 754. 759 (D.C. Cir. 2014). Instead, “the test boils down to whether obtaining or providing legal advice was one of the significant purposes of the attorney-client communication.” In In re Grand Jury, the Government acknowledged that Kellogg could be used so that “a tie goes to the runner” in “difficult cases,” for communications that do not have a “clearly predominant” purpose. See also United States v. Frederick, 182 F.3d 496, 501 (7th Cir. 1999) (“a dual-purpose document—a document prepared for use in preparing tax returns and for use in litigation—is not privileged[.]”).
The parties (and anyone interested in the scope of the attorney-client privilege) will have to wait a few months before the Court addresses this situation. But no matter what the Court decides, future litigants should not expect a bright line rule. It will remain crucial that attorneys educate their clients about the scope of the attorney-client privilege.
If you have any questions about the information in this alert, please contact Jonathon S. Feld, Mark Chutkow, A. Joseph Duffy IV, or your Dykema relationship attorney.