In In re Kellogg Brown & Root, Inc., 796 F.3d 137 (D.C. Cir. 2015) (No. 14-5319), the D.C. Circuit granted a second petition for a writ of mandamus regarding an adverse privilege ruling relating to a corporate internal investigation. In June 2014, the appellate court held that the district court had committed error by ruling that an internal investigation was not privileged, because it was conducted for the business purpose of complying with its internal compliance program and with federal defense acquisition regulations. The appellate court held there that the investigation and related interview materials were legal in nature, and therefore privileged pursuant to the Supreme Court’s ruling in Upjohn, because a primary purpose of the investigation was legal, even if there was also a significant business purpose for the investigation. In re Kellogg Brown & Root, Inc., 756 F.3d 754 (D.C. Cir. 2014). On remand, the district court ruled that KBR waived the privilege during a subsequent Rule 30(b)(6) deposition and by citing the deposition testimony in summary judgment papers. The Relator demanded that KBR produce a Fed. R. Civ. P. 30(b)(6) witness who would testify about the investigation in order to test whether there were any bases to challenge the assertion of privilege. In preparation for the deposition, the corporate representative reviewed the investigation report. KBR’s counsel asserted privilege throughout the deposition, instructing the witness not to testify as to the contents of the investigation. On cross-examination, KBR’s counsel elicited testimony that the company’s contracts imposed a duty pursuant to the Anti-Kickback Act to report when it had reason to believe that a violation of the Act had occurred; that KBR adhered to that obligation and made disclosures in other instances; and that even in those instances the company asserted privilege and did not provide the investigation report itself to the government. KBR cited this testimony in a footnote in its summary judgment papers. Relator argued, and the district court held, that KBR had waived privilege over the investigation in two ways: (1) by allowing the corporate representative to review the investigation report in preparation for the deposition, thereby allowing discovery through Fed. R. Evid. 612; and (2) by putting the investigation at issue by suggesting indirectly that the investigation did not find any wrongdoing because (a) KBR purportedly reported known violations to the government, (b) KBR had not made a report regarding the investigation at issue, and therefore, although not expressly stated, (c) the investigation must not have found wrongdoing. The appellate court found both bases to be incompatible with Upjohn. Rule 612 applies where a writing refreshes a witness’s memory. Here, the review was to confirm that there was a basis for privilege, not to testify regarding its contents. The appellate court characterized as “absurd” Relator’s argument that KBR made the mistake of having the deponent personally review the investigation documents rather than have someone give him a summary, which would have resulted in the deponent having “ only second- or third-hand knowledge of the investigation rather than first-hand knowledge.” As to placing the investigation at issue, the appellate court held that KBR’s citation to the testimony did not lead to an “unavoidable inference” that KBR was citing the testimony as evidence that the investigation concluded there was no wrongdoing. “Where KBR neither directly stated that the [investigation] had revealed no wrongdoing nor sought any specific relief because of the results of the investigation, KBR has not ‘based a claim or defense on the attorney’s advice.’”
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D.C. Circuit Again Grants Petition For Writ Of Mandamus As To Internal Investigation
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