Amicus Curiae Brief — In Re Grand Jury

Supreme Court briefNov 23, 2022

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No. 21-1397

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In The

Supreme Court of the United States

---------------------------------♦--------------------------------IN RE GRAND JURY

---------------------------------♦--------------------------------On Writ Of Certiorari To The

United States Court Of Appeals

For The Ninth Circuit

---------------------------------♦--------------------------------BRIEF OF ATLANTIC LEGAL FOUNDATION AS

AMICUS CURIAE IN SUPPORT OF PETITIONER

---------------------------------♦--------------------------------ANA TAGVORYAN

ARASH BERAL

PAUL H. TZUR

SHAWNA J. HENRY

BLANK ROME LLP

2029 Century Park East

Los Angeles, CA 90067

(424) 239-3400

LAWRENCE S. EBNER

Counsel of Record

ATLANTIC LEGAL FOUNDATION

1701 Pennsylvania Ave., NW

Washington, DC 20006

(202) 729-6337

lawrence.ebner@

atlanticlegal.org

Counsel for Amicus Curiae

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TABLE OF CONTENTS

Page

INTEREST OF THE AMICUS CURIAE ................... 1

SUMMARY OF ARGUMENT ..................................... 2

ARGUMENT ................................................................ 4

The significant purpose test, as articulated by

the D.C. Circuit in Kellogg, is consistent with

Upjohn and fulfills the fundamental objectives

of the attorney-client privilege. ........................ 4

The significant purpose test furthers the

objectives of the attorney-client privilege in

common corporate settings. .............................. 8

The significant purpose test also works in the

tax advice context. .......................................... 11

CONCLUSION .......................................................... 14

TABLE OF AUTHORITIES

Page(s)

Cases

Faragher v. City of Boca Raton,

524 U.S. 775 (1998) ............................................ 9

Fisher v. United States,

425 U.S. 391 (1976) .......................................... 13

Hunt v. Blackburn,

128 U.S. 464 (1888) ............................................ 4

In re County of Erie,

473 F.3d 413 (2d Cir. 2007)................................ 6

In re Gen. Motors LLC Ignition Switch Litig.,

80 F. Supp. 3d 521 (S.D.N.Y. 2015) ............... 5, 6

In re Kellogg Brown & Root, Inc.,

756 F.3d 754 (2014) ............................ 2, 3, 4, 5, 6

Johnston v. Comm’r of Internal Revenue,

119 T.C. 27, 34 (2002), supplemented sub nom.

Johnston v. Comm’r, 122 T.C. 124 (2004), aff’d,

461 F.3d 1162 (9th Cir. 2006) .......................... 12

Ross v. City of Memphis,

423 F.3d 596 (6th Cir. 2005) .............................. 7

Swidler & Berlin v. United States,

524 U.S. 399 (1998) ........................................... 13

iii

United States v. Bauer,

132 F.3d 504 (9th Cir. 1997) ............................. 13

United States v. Reynolds,

345 U.S. 1 (1953) ............................................... 12

United States v. Sanmina Corp.,

968 F.3d 1107 (9th Cir. 2020) ..................... 11, 13

United States v. Zolin,

491 U.S. 554 (1989) ..................................... 10, 12

Upjohn Co. v. United States,

449 U.S. 383 (1981) ..................... 4, 5, 7, 8, 11, 12

INTEREST OF THE AMICUS CURIAE 1

Established in 1977, the Atlantic Legal Foundation

(ALF) is a national, nonprofit, nonpartisan, public

interest law firm whose mission is to advance the rule

of law and civil justice by advocating for individual

liberty, free enterprise, property rights, limited and

responsible government, sound science in judicial and

regulatory proceedings, and effective education,

including parental rights and school choice. With the

benefit of guidance from the distinguished legal

scholars, corporate legal officers, private practitioners,

business executives, and prominent scientists who

serve on its Board of Directors and Advisory Council,

the Foundation pursues its mission by participating as

amicus curiae in carefully selected appeals before the

Supreme Court, federal courts of appeals, and state

supreme courts. See atlanticlegal.org.

***

The question presented—the extent to which the

attorney-client privilege applies to a communication

involving both legal and non-legal advice—is

enormously important to in-house as well as outside

counsel in countless circumstances. This amicus brief

focuses on the reasons why the Court should adopt a

reasonable, workable rule that enables both in-house

1 All parties have consented to the filing of this brief.

No counsel

for a party authored this brief in whole or part, and no party or

counsel other than the amicus curiae and its counsel made a

monetary contribution intended to fund preparation or

submission of this brief.

and outside counsel to perform their multifarious legal

duties in today’s corporate climate.

ALF long has had an interest in protecting the

attorney-client privilege, which is critical to free

enterprise, civil justice, the public interest, and the

practice of law. For example, in 2005 ALF organized

a conference, “The Erosion of the Attorney-Client

Privilege,” which featured as speakers then-Circuit

Judge Samuel Alito, former Solicitor General

Theodore Olson, and Professor Geoffrey Hazard. Mr.

Olson’s insightful remarks about safeguarding the

attorney-client privilege are reproduced on pages 6

through 14 of ALF’s 2017 Annual Report.2

SUMMARY OF ARGUMENT

The Ninth Circuit’s opinion below creates an

unworkable standard concerning when the attorneyclient privilege applies to dual-purpose or

multipurpose communications.

Unlike the Ninth Circuit’s opinion, the D.C.

Circuit’s opinion, In re Kellogg Brown & Root, Inc., 756

F.3d 754 (D.C. Cir. 2014), authored by then-Circuit

Judge Kavanaugh, establishes a practical test that

provides clear, predicable guidance on how to identify

the outer bounds of the attorney-client privilege in

connection with dual-purpose or multipurpose

communications. The Kellogg test properly balances

the competing interests between allowing the free flow

2 Available at https://atlanticlegal.org/wp-

content/uploads/2018/07/20180607-med-res-2017-ALF-AnnualReport.pdf.

of information between legal counsel and client, while

not cloaking every attorney-client communication

with the privilege. To achieve this balance, the D.C.

Circuit articulated the following test: “Was obtaining

or providing legal advice a primary purpose of the

communication, meaning one of the significant

purposes of the communication?” Id. at 760.

By contrast, the Ninth Circuit’s opinion in this case

leaves unanswered whether the attorney-client

privilege applies to communications in myriad

contexts where dual or multipurpose communications

take place between lawyers and their clients. The

court of appeals rejected adapting the broader

“because-of” test (which considers, in the workproduct context, whether a document was created for

protection because of anticipated litigation), and

concluded instead that a “primary purpose” attorneyclient privilege test should apply to all dual-purpose

communications. Pet. App. 10a. The court failed,

however, to provide clear guidance on the meaning of

primary purpose, e.g., how its test, which requires that

a communication’s primary purpose was to obtain

legal advice, is functionally or practically different

from the “because-of” test that the court rejected. The

court, declining (with little explanation) to apply

Kellogg’s reasoning, left open the question of whether

legal advice needs to be the sole primary purpose of a

communication, or just one of the primary or

significant purposes, to receive attorney-client

privilege protection.

ALF urges this Court to hold that in all attorneyclient communications, regardless of context, and

consistent with Kellogg, the attorney-client privilege

should apply if legal advice is “a primary purpose”—

that is, a “significant” purpose for the communication.

Such a significant purpose test eliminates concerns

about executives and employees including in-house or

outside counsel in all communications simply to obtain

a privilege imprimatur. At the same time, the

significant purpose test provides clear guidance to the

business community that, whenever a communication

is sent to a lawyer because real legal advice is sought,

that communication will be privileged.

ARGUMENT

A. The

significant

purpose

test,

articulated by the D.C. Circuit in Kellogg,

is consistent with Upjohn and fulfills the

fundamental objectives of the attorneyclient privilege

The attorney-client privilege is one of the oldest

recognized privileges for confidential communications.

Upjohn Co. v. United States, 449 U.S. 383, 389 (1981);

Hunt v. Blackburn, 128 U.S. 464, 470 (1888). The

privilege is intended to encourage “full and frank

communication between attorneys and their clients

and thereby promote broader public interests in the

observance of law and the administration of justice.”

Upjohn, 449 U.S. at 389.

To serve the objectives of the privilege, “the

attorney and client must be able to predict with some

degree of certainty whether particular discussions will

be protected.” Id. at 393. “An uncertain privilege, or

one which purports to be certain but results in widely

varying applications by the courts, is little better than

no privilege at all.” Id.

Despite purporting to utilize the “primary” or

“predominant” purpose test for dual or multipurpose

communications, circuit courts, prior to the D.C.

Circuit’s decision in Kellogg, failed to articulate

exactly how a court should determine what is the

“primary purpose” or “predominant purpose” of a

communication between an attorney and client. The

court of appeals held in Kellogg that it is “not correct

for a court to try to find the one primary purpose in

cases where a given communication plainly has

multiple purposes.” 756 F.3d at 760. Accordingly, the

D.C. Circuit adopted the following formulation of the

“primary purpose” test: “Was obtaining or providing

legal advice a primary purpose of the communication,

meaning one of the significant purposes of the

communication?” Id.

The D.C. Circuit’s articulation of the “primary

purpose” test—also known as the “significant purpose”

test—fulfills the objectives of the attorney-client

privilege and is “consistent with—if not compelled

by—the Supreme Court’s logic in Upjohn.” In re Gen.

Motors LLC Ignition Switch Litig., 80 F. Supp. 3d 521,

530 (S.D.N.Y. 2015). In Upjohn, this Court recognized

that mid-level and even lower-level employees may

have relevant information needed by corporate

counsel to properly advise a corporate client, and

therefore rejected the lower court’s “control group

test,” which restricted availability of the attorneyclient privilege to officers who played a “substantial

role” in deciding and directing a corporation’s legal

response. 449 U.S. at 391-93. In so doing, this Court

noted the test’s unpredictability and held that it

frustrated the “very purpose of the privilege by

discouraging the communication of relevant

information by employees of the client to attorneys

seeking to render legal advice to the client

corporation.” Id., at 392-93.

The test for dual or multipurpose communications

must be predictable, and reflect the true nature of how

corporations operate, in order to fulfill the goals of the

attorney-client privilege.

The D.C. Circuit’s

articulation of the “significant purpose” test

accomplishes these requirements. The Kellogg test

takes into account the fact that the “very prospect of

legal action against a company necessarily implicates

larger concerns about the company’s internal

procedures and controls, not to mention its bottom

line.” In re Gen. Motors, LLC, 80 F. Supp. 3d at 530

(adopting the D.C. Circuit’s analysis of the “significant

purpose” as consistent with the Second Circuit’s

analysis in In re County of Erie, 473 F.3d 413, 420 (2d

Cir. 2007)). Therefore, “trying to find the one primary

purpose for a communication motivated by two

sometimes overlapping purposes (one legal and one

business, for example) can be an inherently impossible

task” and “often not useful or even feasible.” Kellogg,

756 F.3d at 759.

The Ninth Circuit’s opinion here is a glaring

example of how the “primary purpose” test, without

further clarity, undermines any certainty regarding

the attorney-client privilege in dual-purpose or

multipurpose communications.

While the Ninth

Circuit specifically held that “the ‘primary purpose’

test applies to dual-purpose communications,” it

nonetheless saw no need to adopt the D.C. Circuit’s

reasoning because “the district court did not clearly

err in finding that the predominate purpose of the

disputed communications was not to obtain legal

advice.” Pet. App. 12a.

Indeed, federal courts of appeals have consistently

rejected, as contrary to Upjohn, tests for attorneyclient privilege that are “intolerably uncertain.” Ross

v. City of Memphis, 423 F.3d 596, 604 (6th Cir. 2005).

In Ross, for example, the Sixth Circuit examined

whether a municipal official’s assertion of the adviceof-counsel defense required the defendant to

relinquish its attorney-client privilege. In that case,

the City asserted attorney-client privilege as to the

content of conversations between its former police

director and various employees. Id. at 597. The

former police director, however, who was sued in his

individual capacity, raised the advice of counsel as the

basis for his qualified immunity defense.

Id.

Accordingly, the court was required to determine

whether the police director’s invocation of the advice

of counsel impliedly waived the City’s attorney-client

privilege. Id. at 597-98.

The Sixth Circuit reasoned that the district court’s

balance of the competing interests of the former police

director and the City was improper, as it rendered the

City’s ability to invoke attorney-client privilege

contingent on litigation choices made by one of its

former employees, and thus was intolerably uncertain.

Id. at 603-04 (citing Upjohn, 449 U.S. at 393).

For all of these reasons, the D.C. Circuit’s

articulation of the “significant purpose” test for dual

or multipurpose communications provides the

certainty needed to serve the objectives of the

attorney-client privilege, as set forth in Upjohn.

B. The significant purpose test furthers the

objectives of the attorney-client privilege

in common corporate settings

Without a doubt, non-legal considerations and

interests frequently are embedded in attorney-client

communications. But as the Ninth Circuit correctly

observed, an attorney is increasingly seen as a

business counselor or advocate in the legal landscape.

See Pet. App. 1a. Today, most communications

between a business and a lawyer have two or more

purposes. The test for whether such communications

are privileged should not change depending on the

subject being discussed.

Rather, whether the

communication is privileged simply should turn on

whether a significant reason for the communication

was to solicit or receive legal advice.

One role of in-house and, sometimes, outside

counsel is to police a corporation.

Like law

enforcement, counsel is tasked with enforcing and

ensuring compliance with the law and also with

helping to prevent future misconduct. Within that

role, counsel’s actions and communications vis-à-vis

the corporation would sometimes fall within the

constructs of a defined legal purpose. But at other

times, it is not so clear.

In the employment law context, lawyers (both

outside and in-house counsel) get involved to review

operative agreements and policies, and to assist with

defining appropriate punitive measures that a

company could administer within the confines of

employment rules as well as business justifications. A

lawyer’s role, therefore, is not only that of a document

interpreter, but also that of a thought leader who will

help effectuate improvements within the organization.

That very lawyer, for instance, may help implement

policies, such as mandatory sensitivity training for all

employees, that will not only mitigate the public

relations crisis but also protect the organization for

the future legal risks.

Lawyers across organizations in the United States

undertake such tasks every day, particularly in the

employment arena. Allegations of a hostile work

environment, for example, will not only lead to a series

of private investigations but also to the adoption of

improved internal policies to help prevent similar

future allegations. In Faragher v. City of Boca Raton,

524 U.S. 775, 806 (1998), this Court even held that an

employer has an affirmative defense to a hostile-workenvironment claim where the employer has “provided

a proven, effective mechanism for reporting and

resolving complaints of sexual harassment, available

to the employee without undue risk or expense.” The

umbrella of an “affirmative defense” would

undoubtedly cloak the lawyer’s advice into a clearly

defined legal purpose. But what about other contexts

involving like-kind policies designed to address other

like-kind issues? Would a lawyer’s advice regarding

implementing mandatory sensitivity training, for

example, be a protected communication? Under the

D.C. Circuit’s test, it may be protected as a “significant

purpose.” Under the Ninth Circuit rule, it may not be.

Indeed, the D.C. Circuit’s significant purpose test

would help promote effective legal corporate controls

and policing. It would allow lawyers to provide sound

and sensible advice to clients without the chilling

effect of the Ninth Circuit’s interpretation of the

primary purpose rule. If counsel for an organization

must risk waiving privilege in order to help implement

controls and improved policies, counsel may rather not

bother. A lawyer must think prospectively, not

retrospectively; to be proactive, not reactive. That

lawyer’s advice may keep the organization out of

litigation in the future, and it may also have the

consequence of improving the work environment

generally. Either way, a significant purpose test will

better help avoid the implications of the inferior rule

adopted by the Ninth Circuit.

Finally, the D.C. Circuit’s test does not in any way

disturb the crime-fraud exception to the attorneyclient privilege. As always, the privilege simply will

not apply when a client consults an attorney for advice

in carrying on a contemplated or ongoing crime or

fraud, regardless of whether that was the significant

or an ancillary purpose of the communication. “In

such a case, the communication is not designed to

promote ‘the observance of law and administration of

justice’.” See United States v. Zolin, 491 U.S. 554, 562

(1989). (Likely, when a client communicates with an

attorney for purposes of carrying out a fraud or other

crime, that purpose is not an ancillary one.

Nevertheless, the exception will hold.)

Accordingly, in camera review may be used to

determine whether allegedly privileged attorneyclient communications [including ones made for a

significant legal purpose] fall within the crime-fraud

exception. Id. at 574.

C. The significant purpose test also works in

the tax advice context

As argued by Petitioner, “there is a vast and

complicated

array

regulatory

legislation

confronting the modern . . . [taxpayer].” Pet. at 24

(internal

quotations

and

citation

omitted).

“Communications made for such a ‘dual purpose’ are

not uncommon in the tax law context, where an

attorney’s advice may integrally involve both legal and

non-legal analyses.” United States v. Sanmina Corp.,

968 F.3d 1107, 1118 (9th Cir. 2020).

Taxpayers need legal advice not only in the context

of amending tax returns, responding to IRS inquiries,

and understanding foreign tax exemptions, but also,

for example, as to tax implications for stock issuance

or divestitures. The latter context itself presents the

fundamental challenge that this Court addressed in

Upjohn; namely: “The narrow scope given the

attorney–client privilege by the Court of Appeals not

only makes it difficult for corporate attorneys to

formulate sound advice when their client is faced with

a specific legal problem but also threatens to limit the

valuable efforts of corporate counsel to ensure their

client’s compliance with the law.” 449 U.S. at 392.

Indeed, the Tax Court regularly applies the guidance

from Upjohn in evaluating the application of the

privilege in the tax context. See, e.g., Johnston v.

Comm’r of Internal Revenue, 119 T.C. 27, 34 (2002),

supplemented sub nom. Johnston v. Comm’r, 122 T.C.

124 (2004), aff’d, 461 F.3d 1162 (9th Cir. 2006).

As discussed above, the attorney-client privilege

must be predictable to be effective. In addition, the

test for application of the privilege should not create

an intolerable risk of loss of the privilege. As this

Court held in Zolin, “‘examination of the evidence,

even by the judge alone, in chambers’ might in some

cases ‘jeopardize the security which the privilege is

meant to protect.’” 491 U.S. at 570 (quoting United

States v. Reynolds, 345 U.S. 1 (1953)). “Too much

judicial inquiry into the claim of privilege would force

disclosure of the thing the privilege was meant to

protect.” Id. This is precisely the same risk presented

by the “single primary purpose” test, including in the

tax context.

In addition, to rule that courts should employ a

different, more stringent privilege analysis in the tax

context gives the government and other similar

parties in interest an unfair advantage in the court

system that (i) creates an implied presumption

against the application of the privilege even where the

attorney “actually delivered legal advice,” United

States v. Bauer, 132 F.3d 504, 508 (9th Cir. 1997),3 and

(ii) creates an inherent conflict or otherwise turns the

privilege’s relationship with the Fifth Amendment on

its head, see Fisher v. United States, 425 U.S. 391,

(1976).4

3 This outcome flies squarely in the face of the Ninth Circuit’s

recent holding that “[i]n general . . . [i]f a person hires a lawyer

for advice, there is a rebuttable presumption that the lawyer is

hired as such to give legal advice, whether the subject of the

advice is criminal or civil, business, tort, domestic relations, or

anything else.” Sanmina, 968 F.3d at 1116 (internal quotation

marks omitted) (emphasis added). The fact another purpose is

embedded in a communication does not change the ultimate fact

that the lawyer actually delivered legal advice.

The attorney-client privilege is broader than the Fifth

Amendment’s protection against self-incrimination. See Swidler

& Berlin v. United States, 524 U.S. 399 (1998).

CONCLUSION

The Court should adopt the D.C. Circuit’s

significant purpose test.

Respectfully submitted,