ABA asks Supreme court for client privilege protection beyond what business groups want

Signage is seen outside of the American Bar Association (ABA) in Washington, D.C., U.S., May 10, 2021. REUTERS/Andrew Kelly

(Reuters) - Most of the groups that filed friend-of-the-court briefs last week in a crucial U.S. Supreme Court case about the scope of attorney-client privilege rallied around one limiting principle: Lawyers’ communications with their clients should be protected as long as a significant purpose of the interaction was to provide legal advice.

But for the American Bar Association, even that limit on the scope of privilege is too restrictive. The ABA's amicus brief urged the Supreme Court not to adopt any new test that would narrow privilege beyond a few long-established exceptions.

“There is no reason to carve out a new exception for communications that involve a genuine yet somehow ‘insignificant’ legal purpose,” wrote ABA counsel Deborah Enix-Ross. “Attorneys and clients should be able to have certainty that their communications are privileged so long as any purpose of those communications is to obtain or provide legal advice and no other well-established exception applies.”

The lawyers group agreed with many other amici — including the U.S. Chamber of Commerce and the Association of Corporate Counsel — that the Supreme Court should overturn the 9th U.S. Circuit Court of Appeals’ In re Grand Jury ruling, which held that attorney-client privilege does not shield communications whose primary purpose was to provide business advice, even if lawyers also provided legal advice. Unlike almost all of the other amici, however, the ABA insisted that any test requiring courts retrospectively to assess clients’ motivation for communicating with their lawyers would undermine the intent of attorney-client privilege.

That’s a more expansive view than that offered even by the petitioner in the Supreme Court case, an unnamed law firm that specializes in international tax issues. (Few of the details of the underlying grand jury investigation have been publicly revealed. We only know that a client of the law firm who is under investigation claimed privilege over communications that served a dual purpose of facilitating the preparation of tax returns and providing legal advice about taxes.)

The law firm’s Supreme Court counsel from Munger, Tolles & Olson argued in their Nov. 16 merits brief that the justices should adopt the privilege test laid out in a 2014 decision from the D.C. Circuit, In re Kellogg Brown & Root Inc., which involved communications generated in an internal investigation at the defense contractor.

The D.C. Circuit, in an opinion written by then-Judge Brett Kavanaugh, concluded that when communications serve a dual and overlapping purpose of providing both business and legal advice, it “can be an inherently impossible task,” for courts to discern a single “primary” purpose. Rather than forcing trial judges to figure out the prevailing motive underlying client communications, the D.C. Circuit concluded that attorney-client privilege applies as long as legal advice was one of the significant purposes of the interaction.

That so-called significant purpose test, according to the tax boutique's merits brief, “neither expands nor contracts the historical bounds of the attorney-client privilege.”

The U.S. Chamber (which submitted a joint brief with the corporate counsel association and the Securities Industry and Financial Markets Association) told the Supreme Court that courts weighing privilege claims have for decades considered whether communications had a significant legal purpose in order to be sure that clients were not asserting overly broad privilege claims. Enshrining a significant purpose test, argued the Chamber’s lawyers at Williams & Connolly, would simply ensure “that there is a bona fide legal purpose for the communication, and not a mere effort to shield communications between individuals for other reasons.”

Other amicus filers at the Supreme Court, including the defense attorneys’ groups Lawyers for Civil Justice and DRI Center for Law and Public Policy, similarly argued that, in practice, the D.C. Circuit’s significant purpose test would preclude unwarranted privilege claims.

The 9th Circuit panel in the Grand Jury case was worried about companies attempting to shield documents that would otherwise be subject to subpoena or civil discovery merely by adding lawyers’ names to business communications. But the defense lawyers’ groups argued that the D.C. Circuit's standard would still require judges to review purportedly privileged documents to ascertain their significant legal purpose.

Proponents of the D.C. Circuit’s standard told the Supreme Court that clients and their lawyers need more certainty about whether their communications are shielded, particularly because technology has made it easy for clients to consult lawyers on a vast range of issues. The significant purpose test, they argued, offers more of that certainty than the 9th Circuit’s primary purpose test because it’s easier for a judge to discern that legal advice was an important element of client communications rather than to determine whether legal counsel was the primary purpose of the interchange.

The ABA, on the other hand, is of the view that even the more straightforward inquiry leaves too much leeway for judicial discretion. That means clients and their lawyers can’t be sure, even under the significant purpose test, that their exchanges are shielded by privilege, the brief said.

The ABA said there’s no reason for the Supreme Court to “muddy the analysis of a time-honored privilege.” As long as a client is seeking legal advice or consulting with an attorney, the group said, communications are privileged unless they’re subject to exiting exceptions.

The U.S. Justice Department, which did not respond to my query on amicus calls for the Supreme Court to adopt a “significant purpose” test, previously told the justices that the 9th Circuit’s decision in the tax case was not inconsistent with the D.C. Circuit’s ruling in the Kellogg case but was rooted in the specific facts of the tax advice provided to the law firm client under investigation.

Given the ABA’s influence on matters of professional conduct, it will be interesting to see if the government addresses its argument that even a relatively lenient check on privilege assertions is too demanding.

Read more:

U.S. Supreme Court grants review in crucial attorney-client privilege case

9th Circuit rejects broad privilege test for legal and business advice

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Alison Frankel has covered high-stakes commercial litigation as a columnist for Reuters since 2011. A Dartmouth college graduate, she has worked as a journalist in New York covering the legal industry and the law for more than three decades. Before joining Reuters, she was a writer and editor at The American Lawyer. Frankel is the author of Double Eagle: The Epic Story of the World’s Most Valuable Coin.