The U.S. Supreme Court heard oral arguments on January 9, 2023, about how federal courts should decide when the attorney-client privilege applies to dual-purpose communications. . The main question in the case before the Court is whether the two-way communications are protected by the attorney-client privilege. The Court’s decision may affect the ability of attorneys to advise clients on their legal, business, and other related needs.
BELIEVE IT
The attorney-client privilege protects confidential communications between attorneys and their clients made for the purpose of providing legal advice. Inside To the Chief Justice again, the grand jury asked an unnamed company and law firm to make communications related to a criminal investigation. The company and the law firm withheld some of the requested documents, as they are protected by attorney-client privilege due to communications involving both the company’s tax law firm and its legal counsel. to the company.
The federal district court held that the withheld documents were either not protected by any privilege or were subject to criminal-forgery exceptions to special laws and therefore could compel production. On appeal, the U.S. Court of Appeals for the Ninth Circuit affirmed the district court’s decision, holding that the appropriate measure for benefit in dual-purpose communications is the primary purpose of the communications. .
Generally, the privilege does not extend to non-legal communications, including certain communications related to an attorney’s tax preparation. Determining whether attorney-client privilege is used in dual-purpose communications can be difficult—especially in the case before the Court, where it is recommended that the client’s attorney in general tax preparation and what the client should do with his tax return. As noted by many groups, parties, and the Court, and as described below, the effect of the Court’s decision can be greater than the tax advice.
THREE WAYS
Currently, there is a three-way split in the federal courts as to whether, and to what extent, a dual-purpose communication is protected by the attorney-client privilege. List Nine uses a “primary purpose” test, which qualifies a communication if its sole primary purpose is to receive or provide advice. legally. On the other hand, the DC Circuit has applied a “significant purpose” test, which favors a connection if one of its main purposes is to giving or receiving legal advice. Finally, the Seventh Circuit has held that dual-use communications for litigation and tax preparation cannot be recognized.
Courts usually use one of the three methods mentioned above. For example, many states such as New York and Pennsylvania use the “primary purpose” test, considering whether the main purpose of a communication was legal. Other state courts, such as Illinois, have taken an approach closer to the “significant purpose” test, finding dual-purpose communications to be successful if the giving or receiving of legal advice is not at least one important purpose of communication.
The company and the law firm in it To the Chief Justice again argued that the Supreme Court should apply the D.C. Circuit’s “significant purpose” test to determine whether attorney-client privilege protects the two parties. They argue that the position of the Ninth Circuit to make decisions on access is inappropriate, because the “fundamental purpose” requires judges to see the law and the lawlessness as a connection and measure their relative importance. . As a result, they argue, lawyers cannot provide full guidance to people who feel unable to fully share their business concerns for fear of not protecting such communications.
In contrast, the United States has argued that the “primary purpose” test is the appropriate test for dual-purpose communications. The “significant purpose” test, the United States argues, will protect most communications where the principle of access is irrelevant. Using the “significant purpose” test, the government argued, would question the current federal court model and expand access to non-judicial communications about matters such as taxes or planning. business value.
The United States further argues that attorney-client communications are not significantly affected by the Ninth Circuit’s approach because trials, as the district court below did, will only change frequently. a legal advice included in the communication.
INFORMATION WAS REPLACED ON A BASIC BASIS
During oral arguments, the justices focused on several issues in their questions, including:
- If the Court were to adopt the Ninth Circuit’s “principal purpose” test, how would a court evaluate a document that combines statutory and statutory purposes? The jurors carefully questioned how a court could be expected to scrutinize documents that have legal implications and expect to the illegal is the same. The government said that, in such close cases, the court should use a “tie goes to the runner” approach, which is wrong in favoring the lawyer-client privilege.
- How should a court determine whether a primary purpose for a communication is “important”? The majority of judges sought clarification as to what litmus test the courts should be expected to apply in determining the “value” of a purpose. The judges again asked whether the “important” test would create opportunities for lawyers and consumers to abuse the privilege by using legal considerations that are not limited to a network as a shield from the production.
- What effect does the Court’s decision have on state courts? The judges pointed out that state courts often use the “main purpose” test and questioned whether the use of the “important purpose” test would contribute to the lack of unity between the state and the federal court. In addition, Justice Sotomayor stated that there is no evidence in state courts that the “first intention” test is difficult to implement, as the petitioner argued.
- How can ownership of this issue affect situations beyond tax preparation and advice? Justice Kavanaugh asked whether holding this case could affect other communications, such as internal investigations. Both sides seemed to agree, generally, that the attorney-client privilege should protect internal investigations.
EDUCATION FOR LAWYERS AND THEIR PEOPLE
Depending on the Court’s decision, the outcome of this case could significantly affect how consumers feel about the disclosure of sensitive business information. to their lawyers. The Court’s decision appears to have consequences beyond the tax situation, as courts in the Ninth Circuit have also applied the “primary purpose” test in communications related to internal investigations and public concerns. In addition, since state courts often follow federal courts in this matter, the lack of unity in this area may lead to more confusion as to which communications are protected.
Amicus organizations representing businesses and employers, including the US Chamber of Commerce, have urged the Supreme Court to adopt the D.C. Circuit’s “important” test. . These organizations argue that the “importance of intent” test is more responsive to business needs because lawyers must consider all legal circumstances. and the client’s business conditions to provide accurate advice. The use of the Nine List system will ultimately frustrate the attorney-client relationship and reduce the quality of legal advice.
No amicus briefs were filed in support of the government’s position.
NEXT STEP
The Supreme Court may issue a decision on this matter between March and July 2023.
Since the Judges pointed out many differences between the oral arguments of the two sides and their briefs, the impact and effect of this issue will depend heavily on the Court’s written opinion.
(See source.)