On January 9, 2023, the Supreme Court held oral arguments on a significant issue regarding the application of the attorney-client privilege in a case called In re Grand Jury, Docket No. 21-1397, 598 U.S. ___ (2023). In re Grand Jury was appealed to the Supreme Court from the Ninth Circuit. The issue before the Supreme Court was which test should apply to a “dual-purpose” communication. A dual-purpose communication occurs when a communication may have a business purpose, but also asks for legal advice. This type of communication is typical between lawyers providing both legal and business advice to employers, and it is very common for lawyers in an in-house counsel role to frequently have dual-purpose communications with their employers. Although the Supreme Court decided to dismiss the writ of certiorari after oral arguments occurred in this case, it is important to understand why this test would have been significant to all different types of attorneys, especially because it is becoming increasingly more common for attorneys to wear “two hats” by providing both business advice and legal advice regularly to clients.

Different circuits apply different standards when they decide whether a dual-purpose communication is privileged. There are three prominent tests courts have applied when analyzing whether a dual-purpose communication should be privileged: (1) the “because of” test, (2) “the primary purpose” test, and (3) the “significant purpose” test (the “significant purpose” test is also sometimes referred to as “a primary purpose” test, not to be confused with “the primary purpose” test noted above). (See Note).

Under the “because of” test, the court can find the document is privileged if it was created “because of” anticipated litigation. See In re Grand Jury, 23 F.4th at 1091. For example, “but for” anticipated litigation, the communication would not exist.  See id. When courts use “the primary purpose” test, the court analyzes whether the primary purpose was legal advice as opposed to business advice. See id. This is a narrow test, and it was applied by the Ninth Circuit in In re Grand Jury, 23 F.4th 1088. The broadest test is the “significant purpose” or “a primary purpose” test, where if the court can find that at least one of the significant purposes of the communication was legal advice, the communication can be found to be privileged. See In re Kellogg Brown & Root, Inc., 756 F.3d 754, 760 (D.C. Cir. 2014).

In In re Kellogg Brown & Root, Inc., the court criticized “the primary purpose” test by explaining there are muddled waters as to how a court can find what the primary purpose of a communication is. Instead, the Court adopted “a primary purpose” test, after finding “the primary purpose test, sensibly and properly applied, cannot and does not draw a rigid distinction between a legal purpose on the one hand and a business purpose on the other.” Id. at 759. Even the Ninth Circuit noted that “[a] test that focuses on a primary purpose instead of the primary purpose would save courts the trouble of having to identify a predominate purpose among two (or more) potentially equal purposes.” In re Grand Jury, 1088 F.4th at 1098. (emphasis in original). While the Ninth Circuit saw the merits of Kellogg, the Grand Jury court distinguished from the facts in Kellogg, and did not believe other circuits had “openly embraced” the decision. See id. at 1094.

After hearing oral arguments in In re Grand Jury, the Supreme Court dismissed the writ of certiorari. Therefore, each circuit will continue using its own adopted test until the Supreme Court decides to hear this issue in another case.

In practice, in-house counsel and other lawyers should be thoughtful about what kind of advice is contained in each communication, especially in districts that have adopted “the primary purpose” test. For example, in-house counsel should separate business advice and legal advice in different emails, letters, or other communications whenever possible. Further, attorneys should consider labeling certain emails as an “Attorney Client Communication” or use the label “For the purpose of legal advice.” Until the Supreme Court resolves this split in authority, attorneys should realize that any of these tests could apply in future litigation.


NOTE: While In re Grand Jury decided between the “because of” test and “the primary purpose” test, they note other circuits have adopts the “significant purpose” test in addition to the two tests analyzed by the Ninth Circuit. In re Grand Jury, 23 F.4th 1088, 1095, n. 4 (9th Cir. 2021).

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