United States: D.C. Circuit Upholds Attorney-Client Privilege Again In In re Kellogg Brown & Root, Inc.

Last Updated: August 19 2015
Article by Jodi L. Avergun and Katy Preston

On August 11, 2015, the U.S. Court of Appeals for the D.C. Circuit granted a petition by Kellogg Brown & Root, Inc. (“KBR”) for a writ of mandamus in order to protect KBR’s assertion of attorney-client privilege over its prior internal investigation of alleged violations of the False Claims Act.  In re Kellogg Brown & Root, Inc., No. 14-5319, slip op. (D.C. Cir. Aug. 11, 2015) [hereinafter KBR II].  The opinion was actually the second writ of mandamus granted in this closely watched case over the course of only 14 months.  Whereas the earlier opinion in the case broadly addressed the scope of attorney-client privilege in internal investigations, this week’s decision greatly reduces the potential for opposing parties to argue that any mention of an internal investigation in litigation will result in waiver.


The D.C. Circuit issued its first writ of mandamus in the KBR litigation on June 27, 2014.  In re Kellogg Brown & Root, Inc., 756 F.3d 754 (D.C. Cir. 2014) [hereinafter KBR I].  As the court explained, the case involves alleged violations of the False Claims Act in connection with government contracts.  The complaint was filed by a former employee, Harry Barko, who alleges that KBR inflated costs and received kickbacks in connection with defense contracts in Iraq.  The principal dispute in KBR I was over the scope of attorney-client privilege in connection with the internal investigation performed by KBR into the allegations listed in Barko’s complaint.  Although Barko sought access to the substance of that investigation, KBR maintained that the material was protected by attorney-client privilege.

The district court held in Barko’s favor.  It had proposed a stringent test for privilege, protecting only attorney-client communications that “would not have been made ‘but for’ the fact that legal advice was sought.”  United States ex rel. Barko v. Halliburton Co., 37 F. Supp. 3d 1, 5 (D.D.C. 2014).  The district court held that KBR’s investigation failed this test, because it was “undertaken pursuant to regulatory law and corporate policy rather than for the purpose of obtaining legal advice.”  Id.

The D.C. Circuit rejected the district court’s conclusions on both the law and the facts.  According to the D.C. Circuit, an attorney-client communication receives the protection of privilege as long as “obtaining or providing legal advice was one of the significant purposes” of the communication.  KBR I at 760.  Moreover, because KBR had conducted its investigation both to comply with regulatory requirements and corporate policy and to obtain legal advice, attorney-client privilege applied in this case.  Id.


Although KBR I firmly established that KBR’s internal investigation was protected by attorney-client privilege, Barko’s attempts to obtain copies of the privileged materials continued after the case returned to district court.  Specifically, Barko argued, and the district court agreed, that KBR had impliedly waived its attorney-client privilege on two separate occasions: first, in the deposition of KBR’s Vice President (Legal), and second, in arguments put forth by KBR in a motion for summary judgment.

Barko’s first argument was that KBR had waived privilege in its deposition of Christopher Heinrich, KBR’s Vice President (Legal).  KBR designated Heinrich to testify on its behalf on selected topics—including the internal investigation—in accordance with Federal Rule of Civil Procedure 30(b)(6).  As the D.C. Circuit emphasized, the deposition was noticed and the topics selected by Barko himself.  To prepare for the deposition, Heinrich reviewed the privileged material sought by Barko.  Although counsel for KBR stated at the beginning of the deposition that Heinrich was giving his testimony subject to privilege and work product protection, Barko requested the materials reviewed by Heinrich under Federal Rule of Evidence 612, which allows adverse parties to obtain a writing used by a witness to refresh his or her memory.

The district court applied a balancing test with mixed results, but ultimately concluded that “fairness considerations” weighed in favor of disclosure to Barko.  However, the D.C. Circuit disagreed with the district court’s decision to apply that test, which is generally used for “a witness who consults a writing while testifying.”  KBR II at 10.  More broadly, the D.C. Circuit reasoned, “It cannot be the case that just stating the documents were privileged constitutes a testimonial reliance on their contents.”  Id.  Otherwise, the “mere invocation” of attorney-client privilege and work product protection would entitle the opposing party to any protected materials.  Id.

The panel also concluded that the district court’s conclusions were precluded by Upjohn, since the lower court’s application of the balancing test “would allow the attorney-client privilege and work product protection covering internal investigations to be defeated routinely by a counter-party noticing a deposition on the topic of the privileged nature of the internal investigation.”  Id. at 10-11.1  As the circuit court explained later in its opinion, the decision to issue a writ of mandamus in this case was motived by this important concern:

If allowed to stand, the District Court’s rulings would ring alarm bells in corporate general counsel offices throughout the country. . . .  These alarm bells would be well founded.  If all it took to defeat the privilege and protection attaching to an internal investigation was to notice a deposition regarding the investigations (and the privilege and protection attaching them), we would expect to see such attempts to end-run these barriers to discover in every lawsuit in which a prior internal investigation was conducted relating to the claims.

Id. at 24.

Barko’s second argument stemmed from a footnote in a motion for summary judgment submitted by KBR shortly after Heinrich’s deposition.  This footnote stated, in significant part:

KBR has an internal code of business conduct (“COBC”) investigative mechanism that provides a means of identifying any potentially illegal activities within the company.  When a COBC investigation reveals reasonable grounds to believe that a violation . . . may have occurred requiring disclosure to the government . . . KBR makes such disclosures. . . .  KBR intends for these investigations to be protected by the attorney client privilege and attorney work product privilege . . . .  [W]ith respect to the allegations raised by Mr. Barko, KBR represents that KBR did perform COBC investigations related to [the KBR subcontractor and employee at the center of the fraud alleged by Barko], and made no reports to the Government following those investigations.

In re KBR II at 6 (quoting KBR Defendants’ Motion for Summary Judgment).

The district court held that by including this footnote in its motion, KBR had placed the privileged materials “at issue” and therefore waived privilege.  In particular, the district court felt that KBR was putting the privileged content at issue in its statement that “when [KBR] discovers wrongdoing during investigations, ‘KBR makes such disclosures.’”  Id. at 17-18.  The district court claimed that KBR was seeking an “unavoidable” inference from the district court that no wrongdoing was found during the internal investigation.  Id. at 15.

The D.C. Circuit disagreed with the district court’s holding for multiple reasons.  First, the panel disagreed that the inference described by the district court was “unavoidable,” noting that “an alternative inference—presumably, the one that Barko would ask a fact-finder to draw—is that the investigation showed wrongdoing but KBR nonetheless showed no report to the government.”  Id. at 15.  The D.C. Circuit acknowledged that the “highest hurdle” to its holding was the statement cited by the district court that “when [KBR] discovers wrongdoing during investigations, ‘KBR makes such disclosures.’”  Id. at 17-18.  Nonetheless, the court maintained that KBR’s statement had to be read in context—it appeared only in the factual section (not the argument section) of KBR’s motion, and only in a footnote.  More importantly, the panel explained that KBR had not actually argued that the district court should find no wrongdoing because KBR’s investigation had found none.  The D.C. Circuit stated that the district court committed error when it inferred this argument from KBR’s footnote; since KBR was the summary judgment movant, the district court was required to draw inferences in Barko’s favor, not in KBR’s.  As a result, the D.C. Circuit concluded that attorney-client privilege had not been waived.2


The D.C. Circuit’s opinion in KBR II contains both notes of encouragement and points of caution for company counsel seeking to maintain attorney-client privilege following an internal investigation.  The panel’s reversal of the district court in KBR II suggests that the court is committing fully to the protection of attorney-client privilege set forth in KBR I, and will not easily allow opposing parties to create end-runs around that protection.  However, KBR II also suggests that counsel should be wary of making arguments based on the contents of privileged documents—especially the conclusions of an internal investigation—as such arguments may lead to a finding of waiver.3

1 The panel also rejected as "absurd" Barko's argument that KBR should have provided Heinrich with a summary of the privileged documents, rather than allowing Heinrich to review them himself. As the panel explained, such a rule would create unhelpful incentives for entities to designate "less knowledgeable" representatives for depositions, leading to poorer factual discovery.

2 The D.C. Circuit also addressed the issue of whether communications between KBR's in-house counsel and an investigator acting at the direction of counsel were covered by attorney-client privilege. The panel agreed with the district court that communications between counsel and the investigator were protected as work product, rather than under attorney-client privilege. However, the D.C. Circuit found error in the district court's order compelling disclosure of the report summarizing statements of KBR employees to the investigator, because (1) those statements were subject to attorney-client privilege, and (2) they included mental impressions constituting opinion work product. KBR II at 19-22.

3 Cf. In re General Motors LLC Ignition Switch Litig., No. 14-MD-2543 (JMF), slip op. at 6-7 (S.D.N.Y. Aug. 11, 2015) (holding that outside counsel would not be required to testify regarding privileged information from an internal investigation of GM, due in part to GM's prior commitment not to use the investigative report as evidence in the instant litigation).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions