Featured Expert Contributor, White Collar Crime & Corporate Compliance

Brower_GregGregory A. Brower, a Shareholder with Brownstein Hyatt Farber Schreck, LLP in Las Vegas, NV and Washington, DC.

In an unusually short, but to-the-point opinion, the U.S. Court of Appeals for the D.C. Circuit recently reaffirmed that the attorney-client privilege applies to a communication between attorney and client if at “one of the significant purposes” of the communication was to obtain or provide legal advice.  The case is Federal Trade Commission v. Boehringer Ingelheim Pharmaceuticals, Inc.  Judge Kavanaugh authored the unanimous opinion for the three-judge panel, which also included Judges Pillard and Randolph.

In the context of the FTC’s investigation of a “reverse payment settlement” between drug patent holder Boehringer and a generic challenger, the Commission subpoenaed certain documents from Boehringer that Boehringer claimed were protected from discovery by the attorney-client privilege because they were created by Boehringer employees at the request of the company’s general counsel.   The documents related to the general counsel’s antitrust analysis of the subject settlement and, in part, reflected communications between the general counsel and other company executives concerning the settlement.  In what Judge Kavanaugh described as a “thorough and careful opinion,” the District Court agreed with Boehringer and the circuit court affirmed.

The court first reiterated the well-established holdings of both the U.S. Supreme Court in Upjohn v. United States and the D.C. Circuit in In re Kellogg Brown & Root, to wit, that the attorney-client privilege applies to a confidential commination between attorney and client if the communications was made for the purpose of obtaining or providing legal advice, and that the privilege covers both communications in which an attorney gives legal advice and communications in which the client informs the attorney that the attorney needs to understand the problem and proved legal advice.

The court then acknowledged that the application of this rule “can become more complicated when a communication has multiple purposes”—in particular, a legal purpose and a business purpose, and cited its holding in Kellogg for the proposition that where a communication has multiple purposes, the “primary purpose” test is applied to determine whether the communication is privileged.  The court further explained that under Kellogg, in applying the primary purpose test, courts should not try to find a single primary purpose of a communication, but should simply determine whether obtaining or providing legal advice was one of the significant purposes of the communication.

This approach makes sense in light of the court’s observation that attempting to discern a single primary purpose “can be an inherently impossible task” when communications have overlapping purposes, e.g. legal and business. This observation certainly rings true with anyone who has litigated this issue.