The United States Supreme Court on Monday dismissed as “improvidently granted” a law firm’s petition to review a Ninth Circuit order requiring it to disclose communications with its tax preparation clients, where those communications reflect legal advice alongside other subjects. In so doing, the High Court left in place the Ninth Circuit’s “primary purpose” test for the attorney-client privilege under federal law, rather than expanding protections to cover communications in which legal advice is but one “significant purpose” among others.

In In re Grand Jury, an unnamed law firm seeking to withhold documents from production pursuant to subpoena argued that, in the case of dual-purpose communications, if a significant purpose of the communication is legal advice, the entire communication should be privileged and shielded from discovery. Businesses and trade groups joined in the law firm’s petition as friends of the court, advocating for broader protections to lend “clarity” to privilege determinations and eliminate the need for parties and courts to parse through communications to reveal their function and weigh their motivation. Opponents argued that such expansion would subvert the fact-finding process in the search for truth and justice, and unnecessarily so. The Supreme Court’s summary dismissal of In re Grand Jury leaves in place the status quo, making clear that considerable care must be taken to ensure legal communications between companies and their in-house and outside counsel satisfy criteria to establish privilege protections and prevent disclosure.

What this Means for California Employers

California businesses may wish to take this opportunity to revisit their practices to ensure appropriate, reliable protections for attorney-client communications and understand privilege’s limits. In general, under both California and federal law, a communication between a client and its lawyers may be privileged only if the primary purpose of the communication is to seek or provide legal advice, the communication is made in confidence, and it is not shared beyond those to whom disclosure is reasonably necessary.

Businesses may also consider segregating legal topics from fact-finding and business topics to make privilege determinations more straightforward, to insulate bona fide attorney-client communications involving legal advice, and to eliminate the risk of inadvertent disclosure or the same kind of line-by-line parsing, examination, and redaction of content the law firm who sought the U.S. Supreme Court’s review of In re Grand Jury was seeking to avoid.

If you have questions about these issues or how they affect your business or litigation practices, please contact us.

• Aimee Axelrod Parker (aparker@wilsonturnerkosmo.com)
• Katie M. McCray (kmccray@wilsonturnerkosmo.com)

Wilson Turner Kosmo’s Special Alerts are intended to update our valued clients on significant employment law developments as they occur. This should not be considered legal advice.