In Re: Kellogg Brown & Root, Inc., 410 U.S. App. D.C. 382

Background

KBR conducted an internal investigation into alleged fraud on U.S. government contracts, overseen by its in-house Law Department and partly carried out by non‑attorney agents, as required by contractual/regulatory compliance obligations.
Relator Harry Barko sued KBR under the False Claims Act and sought discovery of KBR’s internal investigation documents.
KBR claimed those documents were protected by the attorney‑client privilege (and potentially work product); the District Court reviewed the documents in camera and ordered production, finding KBR had not shown the communications were made “but for” a need for legal advice and emphasizing regulatory/compliance motives.
KBR sought interlocutory relief; the District Court refused certification and ordered immediate production, prompting KBR to petition this Court for a writ of mandamus and obtain a stay.
The D.C. Circuit held the District Court erred by applying a but‑for/sole‑purpose test and instead reaffirmed that the privilege protects corporate internal investigation communications when obtaining or providing legal advice was one of the significant purposes.
The court granted mandamus, vacated the District Court’s production order, and remanded for consideration of any other timely non‑privilege arguments (e.g., work product).

Issues

Issue	Plaintiff's Argument (Barko)	Defendant's Argument (KBR)	Held
Applicability of attorney‑client privilege to corporate internal investigation materials	Investigation records were business/regulatory files, not privileged; KBR conducted inquiry to comply with regulations	Investigation was carried out by in‑house counsel to obtain legal advice; communications were confidential and privileged	Privilege applies when obtaining/providing legal advice was one of the significant purposes of the investigation; District Court erred by applying a but‑for/sole‑purpose test
Relevance of involvement of outside counsel or attorney interviewers	Emphasized Upjohn involved outside counsel and attorney‑led interviews, so distinction warranted here	In‑house counsel may create privileged communications; agents acting at counsel’s direction are protected	In‑house counsel status does not dilute privilege; agents acting for attorneys can be covered
Need for express confidentiality advisals to employees	Employees were not expressly told interviews were for legal advice; confidentiality forms omitted explicit legal purpose	Upjohn does not require magic words; employees knew matter was highly confidential and overseen by legal department	No requirement of specific wording; knowledge of legal department control and confidentiality suffices
Whether mandamus relief is appropriate	Post‑judgment appeal adequate; mandamus not warranted	Disclosure would irreparably waive privilege; interlocutory appeal unavailable and mandamus is appropriate	Mandamus appropriate: (1) no adequate alternative, (2) error was clear, (3) circumstances (broad impact/uncertainty) justify writ

Key Cases Cited

Upjohn Co. v. United States, 449 U.S. 383 (1981) (corporate internal investigations and employee communications can be privileged)
Mohawk Industries, Inc. v. Carpenter, 558 U.S. 100 (2009) (interlocutory collateral‑order appeals generally unavailable for privilege rulings but mandamus may remain in extraordinary cases)
Cheney v. U.S. District Court for the District of Columbia, 542 U.S. 367 (2004) (three‑part mandamus standard)
In re Sealed Case, 737 F.2d 94 (D.C. Cir. 1984) (in‑house counsel status does not dilute privilege)
Fisher v. United States, 425 U.S. 391 (1976) (privilege protects confidential attorney‑client communications made to obtain legal assistance)
Swidler & Berlin v. United States, 524 U.S. 399 (1998) (privilege promotes full and frank communication between attorneys and clients)
FTC v. TRW, Inc., 628 F.2d 207 (D.C. Cir. 1980) (communications to agents of attorneys in internal investigations may be privileged)