75 F. Supp. 3d 532
D.D.C.2014Background
- Relator Harry Barko sued KBR and others under the False Claims Act alleging KBR steered subcontracts to Daoud & Partners despite poor performance and possible kickbacks; Daoud later settled.
- KBR’s Code of Business Conduct (COBC) investigation produced two long investigator (Richard Ervin) reports containing witness statements, summaries of subcontract terms and Daoud’s performance; those reports were provided to in-house counsel.
- The D.C. Circuit held COBC documents could be privileged where securing legal advice was a significant purpose and remanded for further consideration; this Court previously found KBR waived privilege on other grounds and separately assesses disclosure independent of that waiver.
- The Court finds the embedded witness statements to investigators (signed employee statements) are attorney-client privileged, but the investigators’ factual summaries of contracts and performance are not automatically privileged merely because they were sent to counsel.
- The Court concludes the Ervin reports qualify as work product prepared in anticipation of litigation, that large portions are fact (not opinion) work product, and that Barko has shown substantial need and undue hardship for certain factual portions given passage of time and scope of potential witnesses.
Issues
| Issue | Barko's Argument | KBR's Argument | Held |
|---|---|---|---|
| Whether investigator-generated witness statements in COBC reports are attorney-client privileged | Statements to investigators are not privileged or are producible | Statements to investigators are confidential communications protected by privilege | Witness statements attached to reports are attorney-client privileged (protected) |
| Whether Ervin’s summary reports are attorney-client privileged in full | Factual summaries are not privileged even if sent to counsel | Entire reports (including factual summaries) are attorney-client privileged because prepared for counsel | Reports are not entirely attorney-client privileged; factual summaries are not protected by privilege |
| Whether the reports qualify as work product and, if so, whether they are opinion or fact work product | Portions are factual and not entitled to opinion-level protection | Reports reveal investigators’ impressions and thus merit opinion work product protection in full | Reports were prepared in anticipation of litigation (work product); substantial portions are fact work product, not opinion work product |
| Whether Barko can overcome work product protection under Rule 26(b)(3) | Substantial need and undue hardship exist due to passage of time, many potential witnesses, limited discovery opportunity | Barko already has non-privileged documents and KBR’s disclosures; production would be cumulative | Barko demonstrated substantial need and undue hardship for many factual portions; Court orders production of specified excerpts with redactions and under sealing/non-disclosure limits |
Key Cases Cited
- In re Kellogg Brown & Root, Inc., 756 F.3d 754 (D.C. Cir. 2014) (privilege may apply where significant purpose of internal investigation is to obtain legal advice)
- Upjohn Co. v. United States, 449 U.S. 383 (U.S. 1981) (corporate communications to counsel are protected but attorney notes may be divisible between privilege and work product)
- Hickman v. Taylor, 329 U.S. 495 (U.S. 1947) (work product doctrine balancing protection of counsel’s preparation and parties’ need for discovery)
- United States v. Deloitte LLP, 610 F.3d 129 (D.C. Cir. 2010) (documents may contain mixed fact and opinion work product; district court should assess possibility of partial disclosure)
- In re Sealed Case, 676 F.2d 793 (D.C. Cir. 1982) (communications not involving both attorney and client are unprotected)
- Dir., Office of Thrift Supervision v. Vinson & Elkins, LLP, 124 F.3d 1304 (D.C. Cir. 1997) (distinguishing fact and opinion work product and noting opinion work product is nearly absolute)