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A Fresh Take

Insights on M&A, litigation, and corporate governance in the US.

| 2 minutes read

Privilege Rules Will Remain the Same for Now

On Monday, the Supreme Court dismissed as improvidently granted the writ of certiorari of In re Grand Jury, a case about the scope of attorney-client privilege, which we wrote about earlier this month. As we previewed, In re Grand Jury had the potential to change privilege rules for attorneys nationwide; but given the dismissal, the Court will leave for another day the resolution of any conflict among the Circuits on the correct legal test for determining whether “dual purpose” communications are protected by the attorney-client privilege.

At issue in In re Grand Jury was what test courts should apply when considering whether “dual-purpose” communications—those containing both legal and business advice—are privileged. The petitioner had asked the Supreme Court to consider whether the prevailing and well-established “primary-purpose” test was the correct framework for evaluating dual-purpose communications. That test treats as privileged only those communications where the primary purpose is to seek or render legal advice. The petitioner had argued that the primary-purpose test (applied in the Ninth Circuit and elsewhere) was at odds with the D.C. Circuit’s “significant-purpose” test, which treats as privileged communications for which legal advice was a significant, even if not the primary purpose.

But as oral argument made clear, the circuit split was not quite as sharp as the petitioner had claimed. When discussing what the threshold should be for communications to have a primarily legal purpose, both the Justices and the advocates struggled to articulate the difference between the two tests. The Justices and the Government seemed to agree that the difference between both tests would apply only in truly hard cases—where it is impossible to disentangle legal from nonlegal advice. In fact, the Government conceded that the D.C. Circuit’s reasoning in In re Kellogg Brown & Root, which established the significant-purpose test, would generally control, since in most cases, the “significant” legal purpose for a communication would be the “predominant” purpose for making that communication. These statements eventually led Justice Gorsuch to remark that the two proposed tests sounded the same and ask the Government, “What is the disagreement?” In response, the Government went so far as to say that it would be “entirely happy with adopting a lot of what the Kellogg opinion said,” further indicating a lack of a true circuit split.

This dismissal means that the primary-purpose test remains the dominant—and perhaps only—test under federal common law. So even though courts applying federal law will do so just as they have in the past, the case serves as an important reminder to attorneys advising businesses that not all communications with their clients will be privileged. To help protect communications to the maximum extent, attorneys should consider whether those communications combine business and legal advice. If so, they should try to clearly demarcate them to help avoid confusion later. And while it’s not always possible or practical to draw such bright lines, remembering that dual-purpose communications may end up being disclosable in litigation should make attorneys more vigilant about the privilege.


litigation, white-collar defense