Bloomberg BNA’s Corporate Law & Accountability Report is available on the Corporate Law Resource Center. This news service keeps corporate practitioners informed of legal developments of...
Sept. 2 — The U.S. Court of Appeals for the District of Columbia denied a petition for an en banc rehearing of a panel ruling that found that Kellogg Brown & Root was not required to disclose certain documents to a whistle-blower.
In a one-page order, the D.C. Circuit stated simply that not a single member of the court requested a vote on the petition. According to court rules, the court will not vote on whether to rehear the case “en banc unless a judge calls for a vote.”
Stephen M. Kohn, of Kohn, Kohn & Colapinto, LLP, who represents petitioner Harry Barko, said his client plans to appeal to the Supreme Court. Kohn called the decision a “major setback for independent compliance.” He added that it “poses a threat” to employees like Barko who contact compliance departments at companies with “inherent conflicts of interest.”
On June 27, resolving a question about the confidentiality of communications with in-house attorneys, a three judge panel of the D.C. Circuit determined that KBR could withhold 89 documents relating to an internal KBR probe because they were protected by attorney-client privilege.
In the July 28 petition for en banc rehearing, Barko contended that the panel invented a new legal test for determining privileges in the corporate setting that conflicts with a long line of precedent. Specifically, he claimed that the panel “jettisoned the 30-year old ‘primary purpose' test in favor of its newly minted ‘one of the significant purposes' standard”.
D.C. Circuit judges Thomas Griffith, Brett Kavanaugh and Sri Srinivasan vacated an order by U.S. District Court for the District of Columbia Judge James Gwin, who ruled in March that attorney-client privilege did not apply because KBR had not conducted its investigation for the “primary purpose” of securing legal advice (12 CARE 353, 3/28/14).
“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 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.
To contact the reporter on this story: Michael Greene in Washington at email@example.com
To contact the editor responsible for this story: Ryan Tuck at firstname.lastname@example.org
The order denying the petition for a rehearing is available at http://www.bloomberglaw.com/public/document/In_re_Kellogg_Brown__Root_Inc_et_al_Docket_No_1405055_DC_Cir_Mar_/11.
Barko's petition is available at http://www.bloomberglaw.com/public/document/In_re_Kellogg_Brown__Root_Inc_et_al_Docket_No_1405055_DC_Cir_Mar_/12.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)