Privilege

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When responding to document requests or a subpoena duces tecum, litigants in New York traditionally have been faced with the onerous privilege log requirements set forth in Section 3122 of the New York Civil Practice Law and Rules.  Section 3122 requires a litigant who withholds any responsive documents to provide to the requesting party a privilege log containing a separate entry for each withheld document.  Each entry must disclose the legal grounds on which the document is withheld, in addition to certain identifying information including the type of document, the general subject matter of the document, and the date of the document.  N.Y. CPLR § 3122(b).  In complex construction disputes, there is often a large volume of privileged documents, and thus preparing a privilege log that meets the requirements of Section 3122 can be time consuming and expensive.

In re Kellogg Brown & Root, Inc., 2014 U.S. App. LEXIS 12115 (D.C. Cir. June 27, 2014)

The United States Court of Appeals for the District of Columbia Circuit held that the attorney-client privilege applies to internal investigations performed at the direction of in-house counsel if “one of the significant purposes” of the investigation was to obtain or provide legal advice.

Kellogg Brown & Root, Inc. (“KBR”) was a defense contractor for the United States government. Harry Barko, a former employee of KBR, filed a False Claims Act complaint against KBR, alleging fraud against the government. During the ensuing litigation, Barko requested documents related to KBR’s prior internal investigation into the alleged fraud. The investigation had been conducted by KBR pursuant to Department of Defense regulations that require defense contractors to maintain compliance programs and conduct internal investigations, and was overseen by the company’s in-house legal department. KBR objected to the document request, arguing that the investigation was protected by the attorney-client privilege. In turn, Barko argued that the documents were discoverable business records not covered by the privilege.