In United States ex rel. Barko v. Halliburton Co., Case No: 05-cv-1276-RCL (D.D.C. Mar. 14, 2017), the district court held that a party’s proper assertion of the attorney-client privilege cannot result in an adverse inference against that party.  This qui tam case had twice been before the D.C. Circuit Court of Appeals, which overturned the district court’s rulings that: (a) an internal investigation conducted pursuant to a company’s Code of Business Conduct or in accordance with government regulations is not privileged even if conducted at the direction of counsel (KBR I); and (b) that KBR had waived privilege because its in-house attorney reviewed internal investigation documents in preparation for his deposition (KBR II).  In KBR I, the appellate court held that the investigation conducted by KBR was protected just as the investigation at issue in U.S. v. Upjohn was within the privilege.  So long as a significant purpose of an investigation is legal, the fact that it also serves business interests does not preclude a party from asserting attorney-client privilege.  In March 2017, the district court granted KBR’s motion for summary judgment.  In response to KBR’s MSJ, relator Barko argued, among other things, that the court should apply an adverse interest against KBR for refusing to produce its investigation findings.  The court rejected Barko’s argument and held that no adverse interest can result from a valid assertion of attorney-client privilege.  The court explained that allowing such an inference would undermine the privilege, discouraging persons from seeking legal advice, or discouraging lawyers from giving honest opinions.  “Such a penalty for invocation of the privilege would have seriously harmful consequences.”