This Report summarizes cases granted review on October 3, 2022
Case Granted Review: In re Grand Jury, 21-1397
In re Grand Jury, 21-1397. The question presented is “[w]hether a communication involving both legal and non-legal advice is protected by attorney-client privilege where obtaining or providing legal advice was one of the significant purposes behind the communication.” Petitioner, a law firm that specializes in international tax issues, received a grand jury subpoena seeking documents related to a criminal investigation of a client. The firm withheld certain documents as attorney-client privileged, including communications with a “dual purpose”: seeking legal advice about taxes and facilitating preparation of the client’s tax returns. The law firm acknowledged that communications regarding tax return preparation are not covered by attorney-client privilege, but reasoned that the dual-purpose communications were sufficiently motivated by the additional purpose of obtaining or providing legal advice that they were protected. The district court granted the government’s motion to compel as to some of the documents, applying a test that examines “the primary or predominant” purpose of the communication. The district court also instructed the law firm to redact the legal-advice portions of documents otherwise related to tax return preparation. The Ninth Circuit affirmed. 23 F.4th 1088.
After considering two potential tests for determining whether dual-purpose communications are entitled to attorney-client privilege, the Ninth Circuit adopted the “primary purpose” test, which looks to whether the primary purpose of the communication is to give or receive legal advice, as opposed to business or tax advice. The other test considered was the “because of” test, which considers whether the communication was made “because of” the need to give or receive legal advice, regardless of whether that was the primary purpose. The Ninth Circuit concluded that the primary purpose test more closely hewed to the common law, which protects only those communications made for the purpose of obtaining legal assistance “and not predominantly for another purpose.” The Ninth Circuit also declined to explicitly adopt or reject what it called a version of the primary-purpose test applied by the D.C. Circuit in In re Kellogg Brown & Root, Inc., 756 F.3d 754 (D.C. Cir. 2014), which considers whether seeking legal advice was “a” primary purpose, as opposed to “the” primary purpose. The Ninth Circuit questioned whether the Kellogg approach should be applied to the tax context, in which lawyers routinely provide non-legal tax preparation advice, and determined that Kellogg would be applicable only in close cases in which the legal purpose was just as significant as the non-legal purpose.
Petitioner argues that the “primary purpose” test is unworkable and inconsistent with the Court’s approach to privilege because it requires an after-the-fact weighing of subjective considerations to determine whether a legal or non-legal purpose predominated. Instead, petitioner urges the Court to adopt the Kellogg standard, which it describes as treating communications as protected by attorney-client privilege if “a significant purpose” was to obtain or provide legal advice. Petitioner maintains that unlike the Ninth Circuit rule, the Kellogg approach is “clearer, more precise, and more predictable.” Petitioner emphasizes the importance of predictability in this area, so that lawyers and clients will know what communications are protected; otherwise, lawyer-client communication will be chilled. Petitioner also argues that, contrary to the Ninth Circuit’s suggestion, there should not be different privilege tests for different areas of the law.