A district judge ruled that Kellogg Brown & Root could not withhold the results of a probe that it had conducted, with the help of lawyers, into allegations that it defrauded the U.S. Military in Iraq by inflating costs and paying kickbacks. The judge reasoned that KBR made inquiry and put together a report of its findings not for the purpose of getting legal advice — in which case the attorney-client privilege would apply — but “to try to comply with KBR’s obligation to report improper conduct to the Department of Defense” — in which case the privilege would not apply. “Firms Can Hide Routine Probe Details by Using Lawyers, D.C. Circuit Holds“, July 27, 2014.
On KBR’s petition for a writ of mandamus, the District of Columbia Circuit held that the attorney-client privilege protected the materials so long as obtaining legal advice constituted “a significant purpose” of the inquiry. Because the KBR materials met that test, the panel determined, the district court erred in ordering KBR to turn them over to the plaintiff, a False Claims Act relator. Id.
How about waiver, then?
On remand of the case, the district judge reached the same conclusion — KBR had to produce the documents — but based his ruling on KBR’s implicit waiver of privilege. KBR had urged in a motion for summary judgment (a) that it had done an investigation, (b) that it had a duty to disclose any wrongdoing it had found, but (c) that it had in fact reported no wrongdoing. The judge decided that KBR’s invitation to draw an inference in its favor put the contents of the investigative file “at issue”.
But the court of appeals again granted mandamus relief to KBR. In re Kellogg Brown & Root, Inc., No. 14-5319 (D.C. Cir. Aug. 11, 2015). Yes, the panel note, KBR did assert both that its report did not disclose any wrongdoing and that when its investigations uncover bad acts “KBR makes such disclosures”. Id. at 6. But the district court could not, in the context of a summary judgment motion, make the inference that KBR apparently intended it to draw. Therefore, the panel held, KBR did not waive privilege by putting he contents of its report at issue.
The panel also ruled that KBR did not waive privilege by having its corporate representative review the confidential report in preparation for his deposition.
The second round of proceedings reminded me of a couplet that I heard about a year ago. It goes like this:
A man convinced against his will
Is of the same opinion still.
See also, e.g., Puricelli v. Republic of Argentina, No. 14-2104-cv(L), slip op. at (2d Cir. Aug. 10, 2015) (vacating class certification order that violated Second Circuit’s mandate in earlier appeal).