Federal Appeals Court Rules for KBR, Whistle-Blower Not Entitled to Internal Docs

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June 27 — Resolving a question about the confidentiality of communications with in-house attorneys, the U.S. Court of Appeals for the District of Columbia ruled June 27 that the Houston-based engineering firm Kellogg Brown & Root Services Inc. (KBR) is not required to disclose certain documents to a whistle-blower.

The ruling covers documents related to an internal KBR probe, which the company had withheld from the plaintiff whistle-blower on the basis of attorney-client privilege or attorney work-product protection grounds.

The decision by Judge Brett Kavanaugh overturns U.S. District Court for the District of Columbia Judge James Gwin, who ruled in March that the attorney-client privilege did not apply because KBR had not conducted its investigation for “the primary purpose” of securing legal advice.

Gwin's decision would have forced KBR to turn over 89 documents.

“We are aware of no Supreme Court or court of appeals decision that has adopted a test of this kind in this context,” Kavanaugh wrote. “The District Court's novel approach to the attorney-client privilege would eliminate the attorney-client privilege for numerous communications that are made for both legal and business purpose and that heretofore have been covered by the attorney-client privilege.”

Instead of using the primary purpose test, Gwin should have determined whether obtaining or giving legal advice was “one of the significant purposes” of the internal probe, Kavanaugh wrote. The case offers “no serious dispute” that the transmission of legal advice was a significant purpose of the investigation, he concluded.

Whistle-blower Harry Barko, who brought a False Claims Act lawsuit against KBR, had sought access to information concerning KBR's investigation into whether it and certain subcontractors maintained an inappropriate relationship that involved kickbacks while administering military contracts in Iraq.

Kohn, Kohn & Colapinto, LLP represented Barko. Vinson & Elkins LLP represented KBR.

The opinion is available at http://www.bloomberglaw.com/public/document/IN_RE_KELLOGG_BROWN_ROOT_INC_ET_AL_PETITIONERS_No_145055_2014_BL_.