The University of Texas System v. the Franklin Center for Government and Public Integrity and Jon Cassidy

Supreme Court of Texas

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No. 21-0534

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The University of Texas System,

Petitioner,

v.

The Franklin Center for Government and Public Integrity

and Jon Cassidy,

Respondents

═══════════════════════════════════════

On Petition for Review from the

Court of Appeals for the Third District of Texas

═══════════════════════════════════════

JUSTICE DEVINE, joined by Justice Boyd, dissenting.

“Privileges ‘represent society’s desire to protect certain

relationships.’”1 “[T]he oldest,” “most venerated,” and “most sacred of

all legally recognized privileges” is the attorney–client privilege.2 By

promoting open dialogue between legal counsel and client, the privilege

“promote[s] broader public interests in the observance of law and

1 Paxton v. City of Dallas, 509 S.W.3d 247, 259 (Tex. 2017) (quoting

Republic Ins. Co. v. Davis, 856 S.W.2d 158, 163 (Tex. 1993)).

2 Id. (quoting United States v. Edwards, 303 F.3d 606, 618 (5th Cir.

2002), and United States v. Bauer, 132 F.3d 504, 510 (9th Cir. 1997)).

administration of justice.”3 But because the privilege conceals the truth,

it carries a significant cost. To balance these conflicting interests, the

attorney–client privilege is limited to a defined set of circumstances and

construed “narrowly.”4

Our evidentiary rules extend the privilege only to confidential

communications between lawyer and client—or their respective

representatives—“made to facilitate the rendition of professional legal

services.”5 Merely communicating with a licensed attorney does not

suffice because lawyers, especially in-house lawyers, can wear both legal

and nonlegal hats.6 For that reason, even when a client employs a

licensed attorney, questions about what communications fall under the

privilege’s umbrella can be murky.7 When a client contracts with a

3 Id. at 260 (quoting Upjohn Co. v. United States, 449 U.S. 383, 389

(1981)).

4 In re XL Specialty Ins. Co., 373 S.W.3d 46, 49, 56 & n.20 (Tex. 2012)

(citing and quoting Hyman v. Grant, 112 S.W. 1042, 1044 (Tex. 1908), for the

proposition that, “[a]s the rule of privilege has a tendency to prevent the full

disclosure of the truth, it should be limited to cases which are strictly within

the principle of the policy that gave it birth”).

5 TEX. R. EVID. 503(b)(1); see generally TEX. R. EVID. 503 (setting the

general rule, providing exceptions, and defining the key terms “client,” “client’s

representative,” “lawyer,” “lawyer’s representative,” and “confidential”).

6 RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 73 cmt. i

(Am. L. Inst. 2000) (while the privilege applies “without distinction to lawyers

who are inside legal counsel or outside legal counsel for an organization,”

“[c]ommunications predominantly for a purpose other than obtaining or

providing legal services for the organization are not within the privilege”).

7Id. § 72 cmt. c (“A client must consult the lawyer for the purpose of

obtaining legal assistance and not predominantly for another purpose. . . .

Whether a purpose is significantly that of obtaining legal assistance or is for a

nonlegal purpose depends upon the circumstances . . . . If a lawyer’s services

2

nonlawyer to provide services—as in this case8—concerns about the

privilege’s application are at an apex. Due to the increasingly complex

legal landscape, nonlawyer consultants can certainly play a critical and

significant role in a lawyer’s rendition of professional legal services,9 but

the potential for misusing the privilege exists absent a clear nexus

between the consultant’s services and a lawyer’s provision of legal

services to the client. Because a nonlawyer cannot provide legal advice,

a “significant purpose” for the engagement must be to assist a lawyer in

rendering professional legal services, and that purpose must exist

contemporaneously with the communications.10

Applying that understanding of what it means to be “employed

. . . to assist in the rendition of professional legal services,”11 I would

hold that the attorney–client privilege did not attach to Kroll’s

investigation or was waived due to insufficient contemporaneous

substantiation that Kroll’s audit of UT’s admissions practices was

initiated or conducted to assist UT’s attorneys or its general counsel,

Daniel Sharphorn, in providing legal advice to UT. At best, the record

are of a kind performed commonly by both lawyers and nonlawyers or that

otherwise include both legal and nonlegal elements, difficult questions of fact

may be presented.”).

8 See infra note 22.

9 RESTATEMENT, supra note 6, at § 70 cmt. g (“The privilege also extends

to communications to and from the client that are disclosed to independent

contractors retained by a lawyer, such as an accountant or physician retained

by the lawyer to assist in providing legal services to the client and not for the

purpose of testifying.”).

10See id. §§ 70 cmt. g, 72 cmt. c, 73 cmt. i; see also TEX. GOV’T CODE

§§ 81.101(a), .102(a) (prohibiting nonlawyers from providing legal advice).

11 See TEX. R. EVID. 503(a)(4)(A), (b)(1).

3

supports the conclusion that UT sought advice and guidance from Kroll,

which was acting independently in advising UT about its admissions

practices and policies. The Court’s contrary conclusion turns on

equivocal contractual clues and post hoc affidavits that are self-serving,

conclusory, and—most importantly—provide no factual basis for

concluding Kroll was engaged to assist UT’s lawyers in the provision of

legal services. While the Court adopts the “significant purpose”

standard,12 as I would, the overly generous application here erroneously

denies public access to public information. I respectfully dissent because

the paltry evidentiary record does not support the conclusion that Kroll

was engaged to assist UT’s lawyers in providing legal services.

A

Under our representative form of government, the people’s

delegation of authority to public servants does not include “the right to

decide what is good for the people to know and what is not good for them

to know.”13 This fundamental principle of open government is embodied

in the Public Information Act (PIA), which declares “as the policy of this

state,” that “each person is entitled . . . to complete information about

the affairs of government and the official acts of public officials and

employees” “at all times” “unless otherwise expressly provided by law.”14

But while the PIA comprehensively “promotes and advances the

public’s interest in governmental transparency and openness,” the

statute simultaneously recognizes the public’s compelling interest in

12 Ante at 10.

13 TEX. GOV’T CODE § 552.001(a).

14 Id.

4

“shielding some information from public disclosure.”15 Within the

statute’s balancing framework, a “completed report, audit, evaluation,

or investigation” made for “a governmental body” is a category of “public

information” that may not be secreted from the public unless the

information is “made confidential under [the PIA] or other law.”16

“Other law” includes the common-law attorney–client privilege, as

memorialized in the Texas Rules of Evidence.17 When the privilege

applies, the right of public access to public information must yield to “the

public’s equally significant interest in ensuring public officials pursue

and obtain legal advice and representation in affairs of governance.”18

The inherent—and irreconcilable—tension between public access

and the need for confidentiality is amplified in open-government

disputes because “[f]ull and frank legal discourse” between attorneys

and their governmental clients “directly and significantly serves the

public interest,”19 but at the same time, the information being withheld

from the public belongs to the public. The “conflict between the desire

for openness and the need for confidentiality in attorney–client

15 Paxton v. City of Dallas, 509 S.W.3d 247, 249-50, 270 (Tex. 2017).

16 TEX. GOV’T CODE § 552.022(a)(1). The final investigative report in

this case has already been released to the public, but section 552.022(a)(1) is

not limited to a “report,” and there appears to be no dispute that the

communications Kroll reviewed or drafted in connection with the completed

“investigation” or “audit” are “public information.”

17TEX. R. EVID. 503 (attorney–client privilege); In re City of Georgetown,

53 S.W.3d 328, 336 (Tex. 2001) (holding that the Texas Rules of Evidence are

“other law” for purposes of determining whether public information is

confidential and exempted from disclosure under PIA section 552.022(a)).

18 Paxton, 509 S.W.3d at 270.

19 Id. at 250, 260.

5

relations” requires courts to “restrict[] the scope of the attorney–client

privilege”20 by construing the privilege “narrowly.”21

The issue here is the proper scope of the attorney–client privilege

in a nonlitigation case that does not involve communications with a

lawyer, an employee of a lawyer, or even someone working under a

lawyer’s supervision and control.22 The nub of this dispute is whether

the attorney–client privilege applies to communications UT officials,

20In re XL Specialty Ins. Co., 373 S.W.3d 46, 49 (Tex. 2012) (quoting

Republic Ins. Co. v. Davis, 856 S.W.2d 158, 160 (Tex. 1993)).

21 Id. at 56; see Hyman v. Grant, 112 S.W. 1042, 1044 (Tex. 1908).

22 The contract is between “The University of Texas System” as the

“Client” and “Kroll Associates, Inc.” as the “Contractor.” No attorney is named

or identified as a party or signatory to either the contract or Kroll’s final report.

UT has never asserted that Kroll, an incorporated entity, is “authorized . . . to

practice law in any state or nation” or that Kroll employed lawyers to provide

legal services to UT. See TEX. R. EVID. 503(a)(3) (defining “lawyer” for the

attorney–client privilege). If Kroll were actually engaged to provide services

as an attorney, the contract would be unlawful. By law, state agencies

(including university systems) “may not retain or select any Outside Counsel

without first receiving authorization and approval from the Office of the

Attorney General,” which will sign the contract and “indicate [its] approval on

the contract.” 1 TEX. ADMIN. CODE §§ 57.1(1), .3(a), .5(a), (g); see TEX. GOV’T

CODE § 402.0212(a). Kroll’s engagement contract does not meet these

requirements.

In addition, the consulting agreement between UT and Kroll expressly

states that “[Kroll] is an independent contractor” and “not a state employee,

partner, joint venturer, or agent of University.” These circumstances

distinguish the facts here from UT’s primary authority, Upjohn Co. v. United

States, in which communications were made by company employees to

company attorneys during an attorney-led internal investigation that was

undertaken to ensure the company’s “compliance with the law,” 449 U.S. 383,

386-87, 392, 394 (1981), and In re Kellogg Brown & Root, Inc., 756 F.3d 754,

757 (D.C. Cir. 2014), in which a business client initiated an internal

investigation by its in-house legal department, acting in its legal capacity, after

being informed of potential misconduct.

6

employees, and legal counsel shared with a nonlawyer consultant that

UT itself retained to conduct an “independent” audit or investigation of

UT’s admission practices. The question is not whether the

communications themselves were intended to be confidential or were

made to “facilitate the rendition of legal services,” but whether Kroll was

a privileged person when the communications were made or shared. If

not, Kroll’s interview questions and notes are not privileged from

disclosure in the first instance, and any privilege otherwise attaching to

documents shared with Kroll during its investigation has been waived

by voluntary disclosure to a third party.23

Because UT does not contend Kroll or its investigators were

lawyers performing legal services,24 the critical inquiry is whether Kroll

qualifies as “a lawyer’s representative” under Rule 503, which sets out

the basic parameters of the attorney–client privilege. Rule 503 defines

“lawyer’s representative” as “one employed by the lawyer to assist in the

rendition of professional legal services.”25 As the party claiming the

23 See In re Grand Jury Proceedings, 727 F.2d 1352, 1357 (4th Cir. 1984)

(“It is [] the essence of the attorney–client privilege that it is limited to those

communications which are intended to be confidential. ‘The moment

confidence ceases, . . . privilege ceases.’” (quoting United States v. Tellier, 255

F.2d 441, 447 (2d Cir. 1958))).

24 See TEX. R. EVID. 503(a)(3) (“A ‘lawyer’ is a person authorized, or who

the client reasonably believes is authorized, to practice law in any state or

nation.”).

25 TEX. R. EVID. 503(a)(4)(A). A different standard applies to

accountants, who will qualify as a “lawyer’s representative” if their services

are “reasonably necessary for the lawyer’s rendition of professional legal

services.” TEX. R. EVID. 503(a)(4)(B).

7

privilege, UT bears the burden of proving Kroll satisfies Rule 503’s

requirements.26

The contract here was between two nonlawyers: UT and Kroll.27

But even if Kroll had been directly employed by or on behalf of a lawyer,

mere employment by a lawyer is not enough to qualify as a “lawyer’s

representative”; rather the engagement must be to assist a lawyer in

acting as a lawyer. But how does one determine if the employment

meets that standard? As all seem to agree, being “employed” “to assist”

means the engagement serves the purpose of helping the lawyer provide

professional legal services to the client. A “purpose” is “something set

up as an object or end to be attained.”28 Here, the parties agree that, to

qualify as a “lawyer’s representative” under Rule 503, rendition of legal

services by a lawyer to a client must be an objective of Kroll’s

engagement; however, they disagree about whether it must be the

“primary” end game or merely one objective. In my book, one could not

actually be “employed” “to assist” a lawyer in the relevant way unless

helping a lawyer to provide legal services to a client is, at minimum, a

26 In re E.I. DuPont de Nemours & Co., 136 S.W.3d 218, 223 (Tex. 2004);

see City of Garland v. Dall. Morning News, 22 S.W.3d 351, 364 (Tex. 2000) (the

governmental entity seeking to avoid a request for disclosure bears the burden

of proving the requested information is not subject to the PIA or is exempt from

its disclosure requirements).

27 See supra note 22.

28 MERRIAM-WEBSTER’S COLLEGIATE DICTIONARY, at 947 (10th edition

2000); see WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY, at 1847 (2002)

(defining “purpose” as “something that one sets before himself as an object to

be attained: an end or aim to be kept in view in any plan, measure, exertion,

or operation”).

8

significant purpose for the consulting engagement.29 It also seems

inarguable that “employed . . . to assist” requires something more than

being incidentally helpful to legal counsel or useful in rendering legal

services as a matter of fact or after the fact. Were it otherwise, Rule 503’s

lawyer-representative definition would be impossibly broad.30 By

holding that “assisting in the rendition of professional legal services

must be a significant purpose for which the representative was hired in

the first instance,” the Court construes the rule as encompassing an

appropriate constraint on its potential breadth.31 The problem, as I see

it, is not the standard, but the Court’s loose application of it to the record

on appeal, which renders the narrow-construction mandate essentially

tokenistic.

29 Accord In re Kellogg Brown & Root, Inc., 756 F.3d 754, 758-60 (D.C.

Cir. 2014) (holding in-house counsel’s internal investigation was covered by the

attorney–client privilege “[s]o long as obtaining or providing legal advice was

one of the significant purposes of the internal investigation . . . even if there

were also other purposes for the investigation” and observing that this

standard is essentially a “primary purpose test” without “draw[ing] a rigid

distinction between a legal purpose on the one hand and a business purpose on

the other”); RESTATEMENT, supra note 6, at § 72 cmt. c & illus. 2 (“A client must

consult the lawyer for the purpose of obtaining legal assistance and not

predominantly for another purpose. . . . Whether a purpose is significantly that

of obtaining legal assistance or is for a nonlegal purpose depends upon the

circumstances[.]”), Rptrs. note on cmt. c (“In general, American decisions agree

that the privilege applies if one of the significant purposes of a client in

communicating with a lawyer is that of obtaining legal assistance.”).

30Surely the Uber driver who takes counsel from office to courthouse

every day of a jury trial is—in the literal words of Rule 503—“employed by the

lawyer to assist in the rendition of professional legal services.” See TEX. R.

EVID. 503(4)(a). Just as surely, however, confidential communications in the

presence of said driver would waive the privilege because provision of

professional legal services is not a significant purpose of transportation.

31 Ante at 10.

9

What is most concerning about the Court’s analysis is (1) the

reliance on backward-looking, conclusory, and nonprobative affidavits

from Sharphorn, former UT Chancellor William H. McRaven, and

Assistant General Counsel Ana Vieira Ayala; and (2) the need to

scavenge for clues in Kroll’s 20-page engagement contract and 101-page

final report to justify applying the privilege. The Court is forced to

elevate unremarkable contract provisions to more significant status

because the party claiming the privilege on the back-end failed to clarify

on the front-end that assisting a lawyer in the rendition of professional

legal services was an objective of the consultant’s services, let alone a

significant one.

When a client hires a lawyer or a lawyer hires a consultant, one

could argue that at least a patina of privilege arises. But to extend the

attorney–client privilege to an independent investigation by a

nonlawyer independent contractor under a contract made directly with

the client rather than with legal counsel, I would require much more

clarity and certainty at the engagement level than the Court does.

B

As an independent contractor, Kroll was not an employee or agent

of UT’s general counsel nor under his control, so to invoke the privilege,

some sort of contemporaneous substantiation of Kroll’s role in the

attorney–client relationship is vital. Requiring reasonably clear

evidence that a nonlawyer consultant is conducting an internal audit or

investigation to enable a legal professional to provide legal advice to a

client is not an onerous standard. But here, there is neither competent

10

nor contemporaneous evidence that assisting UT’s lawyers in the

rendition of legal services was a purpose for Kroll’s audit at all.

From my perspective, the minimum evidence that should be

required to cloak such an internal investigation with attorney–client

privilege is akin to the circumstances in Harlandale Independent School

District v. Cornyn, a PIA case involving an attorney hired by a school

district’s general counsel to independently investigate a campus police

officer’s grievance.32 The question was whether the attorney was acting

as an attorney or in a different, nonlegal capacity.33 In concluding that

the attorney–client privilege applied to the investigation, the court of

appeals noted that (1) the school district’s general counsel informed the

attorney at the time of hiring that she had been selected to analyze legal

liability related to the grievance; (2) the attorney’s retention letter not

only charged her with a fact-finding mission but also specifically asked

her to provide “legal analysis of the matters investigated,” including “the

legal liabilities and consequences facing the School District and Board

of Trustees”; (3) the school district’s superintendent testified that, at the

time of hiring, both the attorney and the district’s general counsel

informed the superintendent that the attorney would be representing

the school district “as an attorney”; and (4) consistent with what the

engagement letter required, the attorney informed witnesses that she

was acting as the school district’s attorney.34

32 25 S.W.3d 328, 330, 333-34 (Tex. App.—Austin 2000, pet. denied).

33 Id. at 332. UT’s main cases—Upjohn Co. v. United States, 449 U.S.

383, 386-87 (1981), and Kellogg Brown & Root, 756 F.3d at 756—similarly

involve attorney-led internal investigations.

34 Harlandale Indep. Sch. Dist., 25 S.W.3d at 333.

11

In stark contrast, UT’s lengthy contract with Kroll doesn’t even

make a pretense of connecting Kroll’s services with assisting with the

rendition of professional legal services. The contract does not mention

legal services, let alone require Kroll to provide or assist with the

rendition of such services. The contract does not identify any lawyers

who would be rendering legal services to UT nor any laws or regulations

to help Kroll identify the facts relevant to the rendition of legal

services.35 The contract also does not mention the attorney–client or

work-product confidentiality privileges nor advise or require Kroll to

inform witnesses that it would be working for, with, or on behalf of UT’s

legal counsel. And there is no evidence that witnesses Kroll interviewed

were ever informed that the external investigators were representing or

assisting UT’s legal department.36 Likewise, although the “Scope of

35 No competent lawyer would interview a witness or conduct a

deposition without first determining what law governs compliance issues or

the elements of a claim or defense. The only way to ensure that the facts

necessary to formulate fruitful legal advice are developed by a nonlawyer

consultant is to identify the facts that have to be proved or disproved.

36Cf. Upjohn, 449 U.S. at 394 (the Chairman of the Board gave “explicit

instructions” that the “communications were ‘highly confidential,’” and the

employee questionnaire identified the investigator as “the company’s General

Counsel,” “referred in its opening sentence to the possible illegality of

payments such as the ones on which information was sought,” and included a

“statement of policy” that “clearly indicated the legal implications of the

investigation”); Kellogg Brown & Root, 756 F.3d at 758 (“[H]ere as in Upjohn

employees knew that the company’s legal department was conducting an

investigation of a sensitive nature and that the information they disclosed

would be protected . . . [and were] told not to discuss their interviews ‘without

the specific advance authorization of KBR General Counsel.’”).

12

Work” mentions protecting student privacy,37 the immediately following

paragraph discussing witness interviews says nothing about

confidentiality.38 The contract doesn’t even take the simple step of

parroting Rule 503’s definition of a lawyer’s representative. Nor has UT

taken the basic step of producing evidence from the contract

signatories—UT’s Executive Vice Chancellor for Business Affairs (Dr.

Scott C. Kelley) and a Senior Managing Director for Kroll (William C.

Nugent)—about the contracting parties’ understanding of Kroll’s role.39

Kroll’s final report is no better on these fronts.

It’s not enough that UT’s legal counsel was tapped to help

facilitate the investigation because in-house lawyers are routinely

designated as contact persons for myriad nonlegal business activities

and are routinely looped into or copied on nonlegal communications,

37 “Student privacy must be fully protected. . . . Information provided

to investigators in the course of the Work that could be used to identify a

student and derived from FERPA Records will be protected accordingly, and

will not be disclosed as part of the investigators’ Final Report without the

consent of the U.T. Austin General Counsel.”

“Interviews are to be conducted with relevant officials and staff from

38

U.T. Austin, U.T. System Administration, the Board of Regents and others as

deemed necessary. Current and former admissions staff who participated in

the admissions process for the 2004 to 2013 entering classes will be included.”

39 No lawyer for UT signed the original engagement agreement. The

agreement was later amended, in limited (and nonrelevant) part, four times

during the course of the investigation. The original signatories, Dr. Kelley and

Mr. Nugent signed each amendment. Three out of four of the amendments also

bear the signature of a UT lawyer approving the particular amendment “as to

content.” The first amendment did not bear any UT lawyer’s signature or

include any such notation.

13

contracts, and notices.40 Nor is it sufficient that Kroll was generally

admonished to keep all “Work Material” and “University Records”

“confidential.” Both legal and nonlegal reasons exist for maintaining

confidentiality during an audit—especially when the information is

subject to the Family Educational Rights and Privacy Act (FERPA).41

Notably, the only confidentiality concerns specifically mentioned in

Kroll’s engagement contract had nothing whatsoever to do with the

rendition of legal services.42

While the Court finds the contract’s standard confidentiality

provisions revelatory of Kroll’s supposed role in assisting UT’s lawyers,43

I do not. Paragraph 7 of the contract simply admonishes the contractor

to “treat all Work Material as confidential.”44 Paragraph 12.11, which

40 See United States v. Ruehle, 583 F.3d 600, 608 n.8 (9th Cir. 2009)

(noting that business advice does not fall within the purview of attorney–client

privilege even if the advisor is a lawyer); cf. Tex. Att’y Gen. Op. No. JC-0233,

at 3, 6 (2000) (opining that a closed-door executive session of a governmental

body to discuss policy unrelated to legal matters was not permitted under the

open-meetings statute’s language merely because an attorney was present); see

also Peter Tipps, Confidentiality and Nondisclosure Agreements, Practical Law

Commercial Transactions: Practice Note at 4 (June 24, 2022) (noting that a

company’s legal department often plays a critical role in securing

company-wide information and data protection).

41 20 U.S.C. § 1232g.

42 See infra note 45.

43 See ante at 11-12 & 19-20 n.10.

44 Paragraph 7, titled “Ownership and Use of Work Materials,”

provides:

All data, tapes, publications, statements, accounts, reports,

studies, and other materials prepared by Contractor [Kroll] in

connection with the Work (collectively, “Work Material”),

14

the Court seems to find particularly compelling, is relegated to the

“Miscellaneous” provisions section of the contract and is equally banal

in its imposition of confidentiality requirements.45 I doubt anyone would

whether or not accepted or rejected by University, will be

maintained as Confidential by Contractor. . . . The Work

Material will not be used or published by Contractor or any other

party unless expressly authorized by University in writing.

Contractor [Kroll] will treat all Work Material as confidential.

45Paragraph 12.11, entitled “Confidentiality and Safeguarding of

University Records; Press Releases; Public Information,” states:

Under this Agreement, Contractor [Kroll] may (1) create,

(2) receive from or on behalf of University, or (3) have access to,

records or record systems (collectively, ‘University Records’).

Among other things, University Records may contain social

security numbers, credit card numbers, or data protected or

made confidential or sensitive by Applicable Laws. Contractor

. . . will use reasonable and appropriate measures to: (1) hold

University Records in confidence and will not use or disclose

University Records except as (a) permitted or required by this

Agreement, (b) required by Applicable Laws, or (c) otherwise

authorized by the University in writing; (2) safeguard

University Records according to reasonable administrative,

physical and technical standards that comply with each of the

following requirements:

12.11.1 Notice of Impermissible Use. [Requiring

Contractor to give “prompt and reasonable” notice if an

impermissible use or disclosure of University Records

occurs].

12.11.2 Return of University Records. [Generally

requiring Contractor to return University Records if

requested by the University].

12.11.3 Disclosure. [Requiring Contractor to “require

any subcontractor or agent to comply with the same

restrictions” and prohibiting disclosure of University

Records to a subcontractor without the University’s

permission].

15

genuinely view these provisions as anything other than ordinary

confidentiality provisions typical of consulting contracts of any nature.

As a matter of fact, even UT’s “Contract Management Handbook”

describes the contract terms in Paragraphs 7 and 12.11 to be “routine,”

“standard,” “generally accepted,” “recommended,” and “essential.”46 The

question here is not whether the parties expected information to be kept

confidential, but whether Kroll was a privileged person under the Texas

Rules of Evidence when confidences were shared. Nothing in the

confidentiality provisions speaks to that matter one way or the other.

But not a single word in these provisions speaks to the performance of

12.11.4 Press Releases. [Prohibiting Contractor from

making any public statements about the project or

engagement without the University’s prior written

approval].

12.11.5 Public Information. [Requiring Contractor to

make any information created or exchanged with the

University available to the University on request and as

needed to enable the University to comply with the PIA].

12.11.6 Termination. [Authorizing the University to

terminate the Contract if this paragraph is breached].

12.11.7 Duration. [Stating Paragraph 12 survives

expiration or termination of the Agreement].

Unlike Paragraph 7, this provision specifies certain categories of information

as implicating confidentiality concerns. Given that specificity, the failure to

include any reference to attorney–client confidences or privileges is edifying.

46The University of Texas at Austin, Contract Management Handbook,

at 62-63 (October 13, 2017), https://utexas.app.box.com/v/ut-austin-cont-

mgmt-hdbk (last visited June 21, 2023) (including provisions governing

“Ownership and Use of Work Material” and “Confidentiality and Safeguarding

of University Records; Press Releases; Public Information” as among those that

are “routine,” “standard,” and may be “essential” depending on the contract’s

subject matter).

16

legal services, attorney–client confidences, or privileges as one might

expect if assisting in the rendition of legal services was a significant

purpose of the engagement.

The Court also highlights a contract provision requiring Kroll “to

promptly inform the University of any requests or subpoenas related to

project information ‘so that [UT] may seek from a court of competent

jurisdiction a protective order or other appropriate remedy to limit the

disclosure.’”47 Again, this is a typical contract provision one might find

when a consultant has access to or possession of information belonging

to either the client or to someone to whom the client owes a duty of

confidentiality. Given Kroll’s access to FERPA-protected information,

it’s unsurprising that this provision imposes a notification obligation on

UT’s contractor that enables UT to comply with its corresponding

notification obligation under the university’s FERPA policy.48 Such

provisions are so typical that similar notification provisions are also

found in other UT contract templates that have nothing to do with legal

services.49

Ante at 19-20 n.10 (quoting Paragraph 9 of the Kroll Contract, titled

47

“Information Requests or Subpoenas”).

48 UT’s FERPA policy states that “[i]nformation concerning a Student

shall be released in response to a judicial order or lawfully issued subpoena”

but UT must “make reasonable efforts to notify the Student of an order or

subpoena before complying with it[.]” The University of Texas System, General

Counsel Documents, https://www.utsystem.edu/offices/general-

counsel/document-library (FERPA Policy, at paragraph C(2)(b)(x)) (last visited

June 21, 2023).

49See, e.g., id. (various nondisclosure agreements); see also Tipps, supra

note 40 (“Confidentiality agreements usually allow the recipient to disclose

confidential information if required by court order or other legal process. The

recipient usually has to notify the disclosing party of this order (if legally

17

Vaguely charging Kroll with ascertaining whether UT’s

admission’s process is “beyond reproach” is no better because that is an

ideal, not a legal standard.50 The Court does a deep dive into dictionary

definitions to assure us that legal compliance falls within the broad

ambit of actions that are “beyond reproach.”51 But if assisting a lawyer

in the rendition of legal services were actually a significant purpose of a

nonlawyer’s consulting agreement, a “greater includes the lesser”

analysis would not be required to make that deduction. Such important

objectives are rarely accomplished through vague terms and subtle

permitted to do so) and cooperate with the disclosing party to obtain a

protective order.”).

50 In defining “beyond reproach,” Kroll’s contract says: “Specifically, the

investigation should determine if U.T. Austin admissions decisions are made

for any reason other than an applicant’s individual merit as measured by

academic achievement and officially established personal holistic attributes,

and if not, why not.” No legal authority was identified as bearing on this

inquiry. To the contrary, “[t]his charge” was based solely on the aspirational

“premise that applicants should only be admitted to a public university based

on their individual merit, i.e., academic achievement and officially established

personal holistic factors” and “should not gain advantage only because they are

recommended outside the prescribed admissions process by an influential

individual.” Kroll was asked to “identif[y]” “[a]ny competing evidence or

premise as to the basis for admissions,” not so that UT’s legal counsel could

provide legal advice, but “so it can be openly debated.”

The “Scope of Work” appended to the engagement contract further

advised that Kroll “should” “promptly convey[] to the U.T. System General

Counsel” any “serious concern” “about a particular recommendation or other

conduct of an individual outside U.T. [that] is brought to light . . . such as

evidence of a quid pro quo or a threat from a recommender[.]” While the Court

finds this statement particularly illuminating, see ante at 18, I do not. This is

a run-of-the-mill request to an auditor to alert the client’s legal representative

of any concerns; it can hardly be characterized as supporting the conclusion

that assisting legal counsel was a significant, as opposed to incidental,

objective of the engagement.

51 Id. at 18-19 & n.8.

18

devices. In fact, lawyers and law firms engaging consultants to help

with legal matters routinely make the nature of such engagements

abundantly clear in letters of a few pages. It’s not that hard. But to

guard against abuse of the privilege, it is that important.

UT officials are sophisticated enough that they would have known

about the importance of safeguarding the privilege if that had been their

intent.52 This point is amply demonstrated by the “Outside Counsel

Contract” template the Attorney General mandates for state agencies,

including university systems. This template, which is readily available

on the UT General Counsel website, includes recitations like:

Whereas, Agency requires the assistance of outside legal

counsel in carrying out its responsibilities; and

Whereas, Agency has received prior approval from the

[Office of the Attorney General] to contract for outside legal

services; and

Whereas, Outside Counsel desires to provide legal

services to Agency . . . .53

52 Interestingly, a PowerPoint presentation prepared by UT’s Office of

General Counsel addressing “Scope of Work Issues” states that, in drafting the

scope of work for a contract, it should be made “absolutely clear what

contractor is supposed to provide or perform.” UT General Counsel

Documents, https://www.utsystem.edu/offices/general-counsel/document-

library (Scope of Work Issues) (emphasis in original) (last visited June 21,

2023).

53 UT General Counsel Documents,

https://www.utsystem.edu/offices/general-counsel/document-library (Outside

Counsel Contract Example FY22-FY23) (last visited June 21, 2023); accord

Memorandum from Off. of the Att’y Gen.–Gen. Couns. Div. to State Agencies,

at 20-21, Univ. Sys., & Insts. of Higher Educ., at 20 (April 2, 2012),

https://www2.texasattorneygeneral.gov/files/agency/agency_packet.pdf

(Outside Counsel Contract Template) (last visited June 21, 2023).

19

The template also goes beyond generalized “confidentiality” mandates

and specifically requires outside counsel to:

exercise professional judgment and care when creating

documents or other media intended to be confidential or

privileged attorney–client communications that may be

subject to disclosure under the [PIA] . . . [and] mark

confidential or privileged attorney–client communications

as confidential.

UT is required to include these provisions in its engagement

contract when hiring a lawyer. It should not be too much to ask for

something—anything—in a contract between a client and a nonlawyer

consultant that at least hints at a connection with the provision of legal

services. Indeed, one might expect that a lay person assisting legal

counsel would need to be contemporaneously advised about applicable

privileges, especially one as important as the attorney–client privilege.

While UT undoubtedly wanted to keep information about its admissions

practices confidential—and was legally obligated to keep its students’

information confidential—mere imposition of “confidentiality”

obligations on a nonlawyer consultant is, at best, equivocal with respect

to the nature of the consultant’s role.

By the same token, Kroll’s investigation may have been useful, or

subsequently used, in securing or facilitating legal advice from UT’s

lawyers. But because the requisite relationship must exist when the

communications are made or shared, the privilege inquiry cannot be

backward-looking. In that regard, the affidavits the Court views as

20

“confirming” Kroll’s status as a “lawyer’s representative” are facially

inadequate to support that conclusion.54

Ayala’s affidavit does not speak to the nature of Kroll’s

representation and is otherwise conclusory in all material respects.

With regard to Kroll, Ayala’s affidavit merely repeats what Kroll’s

contract and report say. The Court implies there is more substance to

the affidavit by charging this opinion with “downplay[ing] [its]

specificity and detail.”55 Yet the Court conspicuously fails to identify

anything at all in Ayala’s affidavit that substantiates UT’s claim that

Kroll was employed to assist UT’s legal counsel in providing professional

legal services. In lieu of doing so, the Court complains that it would

“undermine the very essence of the privilege” to expect the party with

the burden of proof to provide facts relevant to the nature of the

engagement. I beg to differ. As the Court concedes,56 the inquiry here

54 See ante at 16, 22.

55 See id. at 21-22 n.11. The Court finds sufficient specificity in Ayala’s

affidavit because it “discusses specific numbered documents in the privilege

log, including names of individuals involved and the purpose of those

documents.” Id. While it’s true that the privilege log names many individuals,

it does not identify a single Kroll employee by name, so it’s difficult to see how

the naming of individuals adds any material substance to Ayala’s affidavit.

Though the Court implies otherwise, “Kroll” barely even makes an appearance

in the privilege log. Indeed, there are only two categories of documents of

“[u]nknown” or “[v]arious” date that are broadly labeled as having been

authored by “Kroll”: one with documents described as “[t]yped and handwritten

notes of interviews by Kroll” and the other with documents described as

“[q]uestions asked of UT Austin clients during interviews.” Whether those

documents are, in fact, privileged is the ultimate legal issue in dispute.

56See id. at 9-10 (observing that the privilege is either waived or does

not attach to confidential information shared with Kroll unless Kroll qualifies

as a “lawyer’s representative”); id. at 16 (citing “the formation of the

21

is not whether confidential information was exchanged but whether

Kroll fell within the scope of the privilege when it was. I fail to see how

facts bearing on that inquiry would “undermine the very essence of the

privilege.” What undermines the privilege is sharing confidential

information with someone who is not covered by the privilege.

Sharphorn’s affidavit also adds nothing from an evidentiary

perspective because it merely quotes from and paraphrases the “Scope

of Work” appended to Kroll’s contract. More notable is the affidavit’s

utter silence about having retained Kroll “to assist” UT’s lawyers.57

Instead, the affidavit states that after Sharphorn’s own investigation

proved ineffective, Kroll was hired “to conduct an independent

investigation.” The absence of any evidence that Kroll ever provided its

report to Sharphorn or to the UT Office of General Counsel is just as

noteworthy.

relationship and the purpose of Kroll’s engagement at the time of employment”

as the focus of the inquiry into the relationship between UT and Kroll).

57 Sharphorn’s affidavit was prepared in connection with other

litigation that arose after Kroll issued its report. That dispute did not concern

the nature of Kroll’s engagement, so it’s unsurprising that Sharphorn’s

affidavit was not focused on the material inquiry here: whether Kroll was

employed to assist UT lawyers in the rendition of professional legal services.

The affidavit regurgitates some of the engagement-contract provisions but

provides no facts to corroborate that Kroll was employed as a lawyer’s

representative when the communications at issue were made. Sharphorn’s

affidavit shows that legal counsel found the report useful in other litigation,

but hindsight is not the relevant inquiry. In erroneously describing this

opinion as “criticiz[ing] Sharphorn’s affidavit because it ‘was prepared in

connection with other litigation,’” id. at 22 n.12, the Court misses the point.

It’s true, as the Court says, that affidavits are often prepared after the fact for

purposes of litigation, and it’s true that affidavit testimony is still testimony

even if given in other litigation. But it’s not the source of the testimony that’s

problematic here; it’s that Sharphorn’s affidavit lacks probative value beyond

reciting portions of Kroll’s contract.

22

Most puzzling is the Court’s suggestion that McRaven’s affidavit

is probative of the relevant inquiry.58 McRaven’s affidavit doesn’t attest

to any facts that corroborate the purpose of Kroll’s independent audit

contemporaneous with the communications at issue. And it couldn’t

because, as the affidavit affirmatively establishes, McRaven was not

employed at UT until long after Kroll was hired and mere weeks before

Kroll submitted its final report to him. If McRaven’s affidavit is

probative of anything, it’s that Kroll was assisting and advising UT, not

Sharphorn. To that point, McRaven’s affidavit states that (1) Kroll

presented its report to McRaven, not Sharphorn; (2) after reading the

report several times, McRaven contacted Sharphorn for legal advice, not

the other way around; and (3) McRaven acted on Kroll’s conclusions and

advice, not Sharphorn’s.59

Sharphorn’s affidavit confirms the same:

On February 6, 2015, Kroll presented its Final Report to

the Office of the Chancellor of the University of Texas[.] . . .

William H. McRaven, who began his service as Chancellor

of the UT System in January 2015[,] received and reviewed

the results of the Kroll Report. On February 9, 2015,

58 Id. at 15-16 & 22.

59 McRaven averred:

On February 6, 2015, Kroll presented me its final report . . . .

After receiving it, I read the Kroll report several times. In

addition, I spoke with Vice Chancellor and General Counsel Dan

Sharphorn, from whom I sought legal advice. . . . After careful

review and consideration, on February 9, 2015, I sent a letter to

the Board of Regents rendering my decision that then-UT Austin

President Bill Powers would not be subject to disciplinary action

because Kroll reported that there was no violation of law, rule, or

policy, and I, therefore, determined that his conduct did not rise

to the level of willful misconduct or criminal activity.

23

Chancellor McRaven sent a letter to the Board of Regents

for the UT System rendering his decision that then-UT

Austin President Bill Powers would not be subject to

disciplinary action because Kroll reported there was no

violation of law, rule, or policy, and the Chancellor

determined that his conduct did not rise to the level of

willful misconduct or criminal activity.

None of these affidavits sheds any light on the issue presented: whether

Kroll was employed to assist UT’s lawyers in the rendition of legal

advice.

Indeed, nothing in the Kroll Report, the engagement contract, or

the affidavits supports the Court’s conclusion that Kroll was engaged to

provide information to Sharphorn or any other UT lawyer so that those

lawyers could provide legal advice to UT. To the contrary, the Kroll

Report on its face—and as it was actually used—shows it to be an end

in itself, not a means to an end.

Even aggregating the equivocal clues the Court finds sufficient,

the connection between Kroll’s audit and the rendition of legal services

by UT’s legal counsel is too tenuous to be rationally inferable.60 None of

the language in Kroll’s engagement contract with UT even remotely

distinguishes it from any other that a client might make with a

60 See In re E.I. DuPont de Nemours & Co., 136 S.W.3d 218, 223 (Tex.

2004) (holding that if a party asserting privilege tenders documents to the trial

court and makes a prima facie showing of privilege—meaning “the minimum

quantum of evidence necessary to support a rational inference that the

allegation of fact is true”—the trial court must conduct an in camera inspection

of those documents to determine whether that party has met its burden of proof

(quoting Tex. Tech Univ. Health Scis. Ctr. v. Apodaca, 876 S.W.2d 402, 407

(Tex. App.—El Paso 1994, writ denied))).

24

nonlawyer consultant.61 While magic words aren’t required, the absence

of any that might reasonably be expected if assisting the rendition of

legal services was a significant purpose of the audit is telling.62

* * * * * *

A proper constraint on the scope of the attorney–client privilege

requires courts to distinguish between a consultant engaged to assist a

lawyer and a consultant engaged to assist the client. From my

perspective, the Court’s application of the attorney–client privilege

overextends the privilege and, in doing so, practically invites misuse.

Bearing in mind the opposing—but equally compelling—interests at

stake, I would take a more restricted view of what it means to be

61 One could easily envision a contract between UT and an

information-technology consultant auditing the university’s data-processing

systems that:

 admonishes the consultant to maintain its Work Materials as

confidential;

 admonishes the consultant to maintain University Records as

confidential;

 requires the consultant to notify the university if it receives a

subpoena or other judicial process seeking information belonging to

the University or its students;

 charges the consultant with determining if university systems are

operating “beyond reproach”; and

 asking the consultant to notify counsel if it has any “serious

concerns.”

The Court’s insistence on imbuing such common contract provisions with more

significant meaning sets a troubling precedent.

62 By selectively quoting from this opinion, the Court incorrectly

portrays it as requiring consulting agreements to use certain language or

“magic words.” See ante at 19-20 n.10.

25

“employed . . . to assist in the rendition of professional legal services.”63

While I fully appreciate that the complexities of modern business and

legal practices often necessitate consulting with third-party experts to

properly advise a legal client or prepare for litigation, when an

engagement contract is between the client and an independent

nonlawyer consultant, the connection between the consultant’s services

and the rendition of legal advice should not be left to the imagination or

open to debate.

Placing the burden of proof where it properly lies, I would hold

that the attorney–client privilege does not apply to documents Kroll

created or reviewed in connection with its audit of UT’s admission

processes because UT failed to show that Kroll—a nonlawyer

independent contractor—was “employed . . . to assist [UT’s attorneys] in

the rendition of professional legal services.”64 Because the Court allows

UT to conceal documents that must be disclosed under the PIA, I

respectfully dissent.

John P. Devine

Justice

OPINION FILED: June 30, 2023

63 See TEX. R. EVID. 503(a)(4)(A).

64 See id.

26