SCOTUS Sidesteps Decision on Scope of Attorney-Client Privilege for Dual-Purpose Communications
Practitioners eagerly anticipating clarity from the U.S. Supreme Court on an age-old attorney-client privilege question will not be getting answers.
After hearing arguments earlier this month in In re Grand Jury, a case addressing the extent to which “dual-purpose” communications implicating both legal and business concerns should be subject to attorney-client privilege, the Supreme Court has dismissed the case without issuing a ruling. In a brief per curiam opinion, the Court characterized the appeal as having been “improvidently granted.” While the Court offered no explanation for the disposition of the case without a substantive ruling, a dismissal on this basis occurs on occasions such as when the Court finds the facts of the case do not present the question it intended to answer, or a petitioner presents different arguments on the merits than had been advanced in obtaining certiorari.
The dismissal leaves standing a decision of the Ninth Circuit affirming a district court’s finding of contempt against a business and its counsel for failing to comply with a grand jury subpoena. Applying the “primary purpose” test, the district court found the communications at issue were for the primary purpose of seeking tax advice, not legal advice, and were therefore not subject to attorney-client privilege.
Significantly, the Ninth Circuit left open the question of whether the privilege should extend to communications that have “a” primary purpose of seeking legal advice, even if this was not “the” primary purpose. It noted, but did not go so far as to adopt, the reasoning of a D.C. Circuit case, In re Kellogg Brown & Root, Inc., 756 F.3d 754 (D.C. Cir. 2014), which held a communication could be subject to privilege under the primary-purpose test so long as obtaining or providing legal advice was one of “the significant purposes” of communication. The Ninth Circuit distinguished Kellogg as limited to the “specific context of corporate internal investigations,” and found its reasoning not as persuasive in the context of tax advice.
So why did the Supreme Court back off on reaching a decision after the case had been fully briefed and argued? It’s impossible to know, but oral argument could offer some clues. Justice Elena Kagan asked petitioners’ counsel to comment on “the ancient legal principle, if it ain't broke, don't fix it,” a quip representative of some justices’ apparent skepticism that courts were not already providing the kind of protection petitioners were seeking in cases where the purposes of the communications were closely intertwined. Concessions from the government also suggested the parties were not as far apart in their positions as may have been initially thought. The government acknowledged, for instance, that the approach in Kellogg was appropriate “in the difficult cases where the purposes are in equipoise or cannot be disentangled.” Justice Amy Coney Barrett posited an opinion in the government’s favor would say the primary-purpose test remained applicable, but “we’re not going to say really anything about what it means because we’re just going to let courts continue to do what they do … So maybe it’s best to say nothing?” A few justices also noted an apparent shift in the petitioners’ arguments between their principal brief, which advocated for a “significant purpose” test, and their reply brief, which defined that test to be tied not to the amount or importance of the legal purpose, but could instead be satisfied by any legal purpose that is legitimate or bona fide.