In Re Kellogg Brown & Root, Inc. , 796 F.3d 137 ( 2015 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 11, 2015 Decided August 11, 2015
No. 14-5319
IN RE: KELLOGG BROWN & ROOT, INC., ET AL.,
PETITIONERS
On Petition for Writ of Mandamus
(1:05-cv-1276)
John P. Elwood argued the cause for petitioners. With
him on the petition for writ of mandamus and the reply were
John M. Faust, Craig D. Margolis, Jeremy C. Marwell, and
Joshua S. Johnson.
Michael D. Kohn argued the cause for respondent. With
him on the brief were Stephen M. Kohn and David K.
Colapinto.
Before: TATEL and WILKINS, Circuit Judges, and
SENTELLE, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge WILKINS.
WILKINS, Circuit Judge: In a prior petition for writ of
mandamus on this case, we noted that “[m]ore than three
decades ago, the Supreme Court held that the attorney-client
privilege protects confidential employee communications
made during a business’s internal investigation led by
company lawyers.” In re Kellogg Brown & Root, Inc., 756
2
F.3d 754, 756 (D.C. Cir. 2014) (“In re KBR”) (citing Upjohn
Co. v. United States, 449 U.S. 383 (1981)). Accordingly, we
granted the writ and vacated the District Court’s order to
produce key documents from such an investigation. Id. We
allowed, however, that the District Court might consider
“timely asserted other arguments for why these documents are
not covered by either the attorney-client privilege or the
work-product protection.” Id. at 764.
In a series of orders on which Petitioner Kellogg Brown
& Root (“KBR”) now seeks a second writ of mandamus, the
District Court found that the same contested documents
should be turned over in discovery. We agree that these
challenged decisions suffer from the same fundamental flaw:
They run contrary to precedent by injecting uncertainty into
application of attorney-client privilege and work product
protection to internal investigations. See Swidler & Berlin v.
United States, 524 U.S. 399, 409 (1998); Upjohn, 449 U.S. at
393; In re KBR, 756 F.3d at 763. Because we find the District
Court’s orders irreconcilable with binding precedent, we grant
the writ and vacate the orders.
I.
We previously have recounted the essential background
of this case as follows:
Harry Barko worked for KBR, a defense contractor.
In 2005, he filed a False Claims Act complaint against
KBR and KBR-related corporate entities, whom we will
collectively refer to as KBR. In essence, Barko alleged
that KBR and certain subcontractors defrauded the U.S.
Government by inflating costs and accepting kickbacks
while administering military contracts in wartime Iraq.
During discovery, Barko sought documents related to
3
KBR’s prior internal investigation into the alleged fraud.
KBR had conducted that internal investigation pursuant
to its Code of Business Conduct, which is overseen by
the company’s Law Department.
KBR argued that the internal investigation had been
conducted for the purpose of obtaining legal advice and
that the internal investigation documents therefore were
protected by the attorney-client privilege. Barko
responded that the internal investigation documents were
unprivileged business records that he was entitled to
discover. See generally FED. R. CIV. P. 26(b)(1).
After reviewing the disputed documents in camera,
the District Court determined that the attorney-client
privilege protection did not apply because, among other
reasons, KBR had not shown that “the communication
would not have been made ‘but for’ the fact that legal
advice was sought.” United States ex rel. Barko v.
Halliburton Co., 37 F. Supp. 3d 1, 5 (D.D.C. 2014)
(quoting United States v. ISS Marine Services, Inc., 905
F. Supp. 2d 121, 128 (D.D.C. 2012)). KBR’s internal
investigation, the court concluded, was “undertaken
pursuant to regulatory law and corporate policy rather
than for the purpose of obtaining legal advice.” Id.
In re KBR, 756 F.3d at 756.
KBR petitioned for and we granted a writ of mandamus,
holding that the privilege ruling was “materially
indistinguishable” from the Supreme Court’s contrary holding
in Upjohn. Id. at 757. We declined a request to reassign the
case to a different district judge. Id. at 764. And we
expressly allowed that the District Court might entertain
timely arguments for why the privilege should not attach to
4
these documents (that is, arguments other than that they were
not prepared primarily for the purposes of seeking legal
advice). Id. at 764. KBR now seeks our intervention on the
District Court’s determinations that the attorney-client
privilege and work product protection were impliedly waived
for these same documents.
KBR’s purported implied waiver runs to a February 2014
deposition of Christopher Heinrich, KBR Vice President
(Legal), on behalf of KBR. See FED. R. CIV. P. 30(b)(6)
(requiring a corporation to “designate one or more officers” or
other persons to testify “about information known or
reasonably available to the organization.”). Among the
subjects that Barko directed KBR to produce a representative
to testify on was “Topic Q,” defined as:
Any investigation or inquiry, internal or external, formal
or informal, of [the KBR employee and subcontractor at
the center of the alleged fraud] or any of the matters
identified in [above-listed topics]. The scope shall
include knowledge of everyone who participated in the
investigation.
J.A. 257.
KBR’s litigation counsel offered a “preliminary
statement” at the outset of the deposition that KBR was
producing Heinrich as the company’s representative on four
noticed topics, including Topic Q, but was doing so “subject
to the company’s claims of attorney-client privilege” and
work product protection. J.A. 118. In answer to a question
from Barko’s attorney, Heinrich testified he had in
preparation for the deposition reviewed the now-disputed
documents related to KBR’s internal investigation (the Code
of Business Conduct documents or “COBC documents”).
5
J.A. 120. Throughout the examination, KBR’s attorney
instructed Heinrich not to answer questions about the contents
of the internal investigation on the basis of attorney-client
privilege and work product protection. See, e.g., J.A. 146.
After Barko’s lawyer completed his examination of
Heinrich, KBR’s litigation counsel conducted a cross-
examination. He explained that Heinrich had been asked
“several questions designed to try to determine whether or not
the Code of Business Conduct investigation is privileged, and
I am going to ask questions establishing that they are.” J.A.
147. Responding to the questions that followed, Heinrich
testified that KBR had a contractual reporting duty pursuant
to the Anti-Kickback Act to notify the Department of Defense
if it had reason to believe that a violation of the Act had
occurred. J.A. 149. Heinrich testified that KBR adhered to
that obligation and had made disclosures pursuant to the same
duty in other instances. J.A. 150. And Heinrich explained
that even when KBR has made a notification to the
Department as required by a contract, it has never provided an
internal investigation itself to the Department because it has
always treated the investigation as subject to attorney-client
privilege. Id.
Five days after Heinrich’s deposition, KBR moved for
summary judgment. In a footnote to the introduction of its
brief, KBR stated:
KBR has an internal Code of Business Conduct
(“COBC”) investigative mechanism that provides a
means of identifying any potentially illegal activities
within the company. When a COBC investigation
reveals reasonable grounds to believe that a violation of
41 U.S.C. §§ 51-58 (the “Anti-Kickback Act”) may have
occurred requiring disclosure to the government under
6
FAR 52.203-7, KBR makes such disclosures. Stmt. ¶ 27.
KBR has made reports to the Government when it had
reasonable grounds to believe that a violation of the Anti-
Kickback Act occurred. Id. KBR intends for these
investigations to be protected by the attorney-client
privilege and attorney work product privilege (indeed,
they are not even given to the Government as part of
disclosures), but has not asserted privilege over the fact
that such investigations occurred, or the fact of whether
KBR made a disclosure to the Government based on the
investigation. Therefore, with respect to the allegations
raised by Mr. Barko, KBR represents that KBR did
perform COBC investigations related to [the KBR
subcontractor and employee at the center of the fraud
alleged by Barko], and made no reports to the
Government following those investigations. Id.
KBR Defendants’ Motion for Summary Judgment at 4 n.5,
United States ex rel. Barko v. Halliburton Co., No. 05-cv-
1276 (D.D.C. Feb. 10, 2014), ECF No. 136.
On November 20, 2014, the District Court issued an
opinion and order determining that “KBR’s filings
affirmatively use the COBC contents and create an implied
waiver” because “KBR has actively sought a positive
inference in its favor based on what KBR claims the
documents show.” J.A. 24. The opinion explained:
KBR carefully used the inference that the COBC
documents do not support any reasonable belief that
fraud or kickbacks may have occurred. KBR has, on
multiple occasions, advanced a chain of reasoning. First,
whenever KBR has reasonable grounds to believe that a
kickback or fraud had occurred, its contracts and federal
regulation required it to report the possible violation.
7
Second, KBR abides by this obligation and reports
possible violations. Third, KBR investigated the alleged
kickbacks that are part of Barko’s complaint. Fourth,
after the investigation of the allegations in this case, KBR
made no report to the Government about an alleged
kickback or fraud.
J.A. 18. Although KBR argued that it should be permitted to
amend its pleadings to strike the sections the District Court
found created a waiver, the District Court rejected the request
to vacate its production order unless KBR elected to default
on the entire suit. J.A. 23-24.
On December 17, 2014, the District Court issued a
separate opinion and order compelling production of parts of
the COBC documents on the alternative basis that they “are
discoverable fact work product and Barko shows substantial
need.” United States ex rel. Barko v. Halliburton Co., No.
05-cv-1276, 2014 WL 7212881, at *2 (D.D.C. Dec. 17,
2014). 1
KBR filed this Petition for Writ of Mandamus with our
Court on December 19, 2014. We granted KBR’s motions
1
The District Court issued multiple opinions and orders on each of
November 20 and December 17, 2014. To avoid confusion, the
November 20 order challenged by KBR and to which we refer in
this Opinion is #204 on the District Court docket. A separate
opinion and order, #205, issued the same day granting in part and
denying in part KBR’s motion for a protective order. The
December 17 order challenged by KBR and to which we refer in
this Opinion is #228 on the District Court docket (reported as
United States ex rel. Barko v. Halliburton Co., No. 05-cv-1276,
2014 WL 7212881 (D.D.C. Dec. 17, 2014)). A separate opinion
and order, #227, which denied reconsideration of the November 20
order, issued the same day and is also challenged in this Petition.
8
first for an administrative stay and then for an emergency
stay, and we now consider whether to grant the Petition.
Because mandamus is an extraordinary remedy, we ask
first if the challenged District Court orders constituted error
and then, where the answer is affirmative, “whether that error
is the kind that justifies mandamus.” In re KBR, 756 F.3d at
757 (citing Cheney v. U.S. District Court, 542 U.S. 367, 380-
81 (2004)); see also 28 U.S.C. § 1651 (All Writs Act)
(providing statutory basis for writ of mandamus).
II.
The District Court’s November 20 opinion contained two
rulings at issue in this Petition.
First, the District Court concluded that the COBC
documents must be produced under Federal Rule of Evidence
612 on the theory that KBR waived attorney-client privilege
and work product protection when Heinrich reviewed the
documents in preparation for his deposition.
Second, the District Court concluded that KBR waived
attorney-client privilege and work product protection for the
COBC documents under the doctrine of “at issue” waiver.
Both rulings were in error for the reasons that follow.
A.
The Federal Rules of Civil Procedure provide for a party
to name an organization as a deponent for oral examination.
FED. R. CIV. P. 30(b)(6). The party seeking testimony must
“describe with reasonable particularity the matters for
examination,” and the named organization is then required to
9
designate a representative, who “must testify about
information known or reasonably available to the
organization.” Id. Pursuant to this provision, Barko
demanded that KBR produce a representative prepared to
testify about, among other subjects, Topic Q – that is, any
internal investigation relating to his allegations. KBR
designated Heinrich as its representative on this topic.
At Heinrich’s deposition, he stated that he had reviewed
the COBC documents in preparation for his testimony. J.A.
120. Barko thereafter sought disclosure of the COBC
documents under Federal Rule of Evidence 612, which
provides that where a witness has used a writing to refresh
memory before testifying, the adverse party is entitled to have
it produced and to introduce into evidence any portion that
relates to the witness’s testimony, “if the court decides that
justice requires the party to have those options.” FED. R.
EVID. 612(a)(2).
To make its decision, the District Court engaged in a
balancing test. J.A. 25. It identified several factors
supporting disclosure and several factors running against
disclosure. 2 And it concluded that “fairness considerations
2
The District Court explained its balancing as follows:
[S]everal [factors] support disclosure. The majority of the
COBC documents are investigatory statements and
summaries of those statements. Also, major discrepancies
exist between Heinrich’s testimony and the contents of the
writings Heinrich had reviewed. Third, Heinrich
necessarily relied upon the COBC documents for his
testimony because he had no personal, first-hand
knowledge of whether fraud or kickbacks occurred, even
though he supervised KBR’s COBC investigations and
reporting.
10
support disclosure” based on this “context-specific
determination about the fairness of the proceedings and
whether withholding the documents is consistent with the
purposes of attorney-client privilege.” Id.
The balancing test was inappropriate in the first instance.
Rule 612 applies only where a witness “uses a writing to
refresh memory.” FED. R. EVID. 612(a). Thus, “even if the
witness consults a writing while testifying, the adverse party is
not entitled to see it unless the writing influenced the
witness’s testimony.” 4 JACK B. WEINSTEIN & MARGARET A.
BERGER, WEINSTEIN’S FEDERAL EVIDENCE § 612.04(2)(b)(i)
(2d ed. 1997) (emphasis added); see, e.g., Sporck. v. Peil, 759
F.2d 312, 318-19 (3d Cir. 1985) (granting mandamus to
vacate a Rule 612(a)(2) production order where there had
been no witness admission that his answers to “specific areas
of questioning were informed by documents he had
reviewed”). It cannot be the case that just stating the
documents were privileged constitutes a testimonial reliance
on their contents; else, attorney-client privilege and work
product production would mean nothing at all in that their
mere invocation would entitle an adversary to production of
the privileged or protected materials.
Further, even if the balancing test had been appropriate,
the District Court’s conclusions were precluded by Upjohn.
Courts have divided on how to reconcile Rule 612 balancing
with attorney-client privilege and work product protection.
See generally Barrer v. Women’s Nat’l Bank, 96 F.R.D. 202,
204 (D.D.C. 1982) (describing conflicting authority on
Several factors do not support disclosure under Rule 612.
Heinrich examined the COBC documents before, but not
at[,] the Rule 30(b)(6) deposition. And, Barko arguably has
some ability to otherwise discover the evidence.
J.A. 26.
11
interaction of Rule 612 and claims of attorney-client privilege
or work product protection); cf. H.R. REP. NO. 93-650, at 13
(1973) (“The Committee intends that nothing in [Rule 612] be
construed as barring the assertion of a privilege with respect
to writings used by a witness to refresh his memory.”). But
the District Court’s balancing would allow the attorney-client
privilege and work product protection covering internal
investigations to be defeated routinely by a counter-party
noticing a deposition on the topic of the privileged nature of
the internal investigation. Upjohn teaches that “[a]n uncertain
privilege, or one which purports to be certain but results in
widely varying application by the courts, is little better than
no privilege at all.” 449 U.S. at 393. The District Court’s
ruling, therefore, runs counter to Upjohn.
In this case, Barko noticed the deposition to cover the
topic of the COBC investigation itself, as distinguished from
the events that were the subject of the investigation. Both
parties told us that their understanding at the time of the
deposition was that Barko intended to examine whether and to
what extent the COBC investigation was privileged. To
prepare adequately for the deposition, Heinrich had no choice
but to review documents related to the COBC investigation.
At oral argument on this Petition, Barko took the absurd
position that KBR’s mistake was having Heinrich personally
review the COBC documents rather than having someone
give him a summary. Barko asserted that in order to avoid
privilege waiver KBR should have produced a Rule 30(b)(6)
representative with only second- or third-hand knowledge of
the investigation rather than first-hand knowledge. This
makes no sense. Such a rule would encourage entities to
provide less knowledgeable corporate representatives for
deposition, thus defeating the purpose of civil discovery to
establish “the fullest possible knowledge of the issues and
12
facts before trial.” Societe Internationale Pour Participations
Industrielles et Commerciales S.A. v. Brownell, 225 F.2d 532,
541 (D.C. Cir. 1955) (internal quotation marks omitted).
Barko cannot “overcome the privilege by putting [the
COBC investigation] in issue” at the deposition, Koch v. Cox,
489 F.3d 384, 391 (D.C. Cir. 2007), and then demanding
under Rule 612 to see the investigatory documents the witness
used to prepare. Allowing privilege and protection to be so
easily defeated would defy “reason and experience,” FED. R.
EVID. 501, and “potentially upend certain settled
understandings and practices” about the protections for such
investigations, In re KBR, 756 F.3d at 762.
In sum, the District Court’s Rule 612 ground for its
production order was clear error because there was no basis
for the fairness balancing test it conducted and, even had there
been, the test failed to give due weight to the privilege and
protection attached to the internal investigation materials.
B.
The District Court also found that KBR had waived
attorney-client privilege and work product protection by
placing the COBC documents “at issue.” Such waivers are
certainly possible: “Under the common-law doctrine of
implied waiver, the attorney-client privilege is waived when
the client places otherwise privileged matters in controversy.”
Ideal Elec. Sec. Co. v. Int’l Fid. Ins. Co., 129 F.3d 143, 151
(D.C. Cir. 1997) (citing 6 JAMES W. MOORE ET AL., MOORE’S
FEDERAL PRACTICE § 26.49(5) (3d ed. 1997)).
First, a prefatory note: It is hornbook law that “[w]aiver
of the [attorney-client] privilege should always be analyzed
distinctly from waiver of work product.” 2 EDNA SELAN
13
EPSTEIN, THE ATTORNEY-CLIENT PRIVILEGE AND THE WORK
PRODUCT DOCTRINE 1027 (5th ed. 2007) (emphasis added);
see also United States v. Deloitte LLP, 610 F.3d 129, 139-40
(D.C. Cir. 2010) (explaining that different waiver rules follow
from different purposes of attorney-client privilege and work
product protection). But the District Court proceeded based
on KBR’s position that, “[a]s relevant here, the waiver
analysis for both [attorney-client privilege and work product
protection] is the same.” J.A. 9 n.20. So must we. Without
accepting KBR’s position as a statement of the law, we treat it
as a boundary for the arguments we consider in this Petition.
See Cheney, 542 U.S. at 381 (stating that Petitioner has “the
burden of showing that [its] right to issuance of the writ is
clear and indisputable”) (internal quotation marks omitted).
But see 2 THOMAS E. SPAHN, THE ATTORNEY-CLIENT
PRIVILEGE AND THE WORK PRODUCT DOCTRINE: A
PRACTITIONER’S GUIDE 434 (2007) (“[L]ooking at only one or
the other protection is short-sighted and might result in
litigation disaster.”).
We have explained – and the District Court noted our
precedent – that a party may not use privilege “as a tool for
manipulation of the truth-seeking process.” In re Sealed
Case, 676 F.2d 793, 807 (D.C. Cir. 1982) (“Sealed Case
(general counsel’s files)”). As such, a party asserting
attorney-client privilege “‘cannot be allowed, after disclosing
as much as he pleases, to withhold the remainder.’” Id.
(quoting 8 JOHN H. WIGMORE & JOHN T. MCNAUGHTON,
EVIDENCE IN TRIALS AT COMMON LAW § 2327 (1961); see
also Clark v. United States, 289 U.S. 1, 13 (1933) (“The
privilege takes flight if the relation is abused.”); United States
v. Bilzerian, 926 F.2d 1285, 1292 (2d Cir. 1991) (“[T]he
attorney-client privilege cannot at once be used as a shield
and a sword.”). At the same time, we have held that a
“general assertion lacking substantive content that one’s
14
attorney has examined a certain matter is not sufficient to
waive the attorney-client privilege.” United States v. White,
887 F.2d 267, 271 (D.C. Cir. 1989).
The District Court found that “KBR injected the COBC
contents into the litigation by itself soliciting Heinrich’s Rule
30(b)(6) testimony.” J.A. 22. It noted that excerpts from this
testimony disclosing the fact of the COBC investigations and
KBR’s reporting duties under Defense Department contracts
were attached to KBR’s motion for summary judgment and
that KBR referenced deposition language in its Statement of
Material Facts as to Which There Is No Genuine Dispute,
required by Local Civil Rule of Procedure 7(h)(1). J.A. 12,
16. And, KBR discussed the COBC “investigative
mechanism” in its memorandum in support of summary
judgment (in a footnote quoted in full in Part I of the body of
this Opinion). J.A. 16-17. All this, in the view of the District
Court, added up to a “message” that the COBC reports
“contain no reasonable grounds to believe a kickback
occurred.” J.A. 18. Thus, it concluded that KBR created an
implied waiver by “actively” seeking “a positive inference in
its favor based on what KBR claims the documents show.”
J.A. 24. The District Court also denied KBR leave to amend
its pleadings to strike the sections that the District Court
interpreted as waiving the privilege and protection. J.A. 23.
To the extent the District Court relied on Heinrich’s
deposition testimony or the statement of undisputed material
facts, we think that – as a matter of logic – neither could
possibly give rise to an inference that places the contents of
the deposition at issue. The deposition transcript is simply a
record of what was said, not itself an argument. The Rule
7(h)(1) statement is a required companion filing to a summary
judgment motion submitting “material facts as to which the
moving party contends there is no genuine issue.” LOCAL
15
CIV. R. 7(h)(1). The opposing party has the opportunity to
respond to each asserted fact with a contention that there is a
“genuine issue necessary to be litigated,” but there are no
inferences to be made and none to be contested in these
statements alone. Id. This is not to say that deposition
testimony or a Rule 7(h)(1) statement can never create a
waiver of attorney-client privilege or work product protection.
By making partial disclosures of privileged information, they
surely can. But the deposition transcript and Rule 7(h)(1)
statements cannot themselves give rise to inferences that place
privileged materials “at issue.” See In re Sims, 534 F.3d 117,
137 (2d Cir. 2008) (holding that privilege waiver analysis
based on deposition testimony in civil action must recognize
that the testimony “might never come to the attention of any
decisionmaker”).
The reference to the COBC investigation in the
memorandum in support of summary judgment presents what
is at first glance a more difficult question. By stating that
KBR performed a COBC investigation and that, afterward,
KBR did not report any wrongdoing to the Department of
Defense, a factfinder could infer that the investigation found
no wrongdoing. The District Court concluded that KBR had
asked it to draw an “unavoidable” inference, J.A. 18, by
placing the footnote at the end of a sentence calling Barko’s
claims “baseless.” We disagree that such an inference was
unavoidable, because an alternative inference – presumably,
the one Barko would ask a fact-finder to draw – is that the
investigation showed wrongdoing but KBR nonetheless made
no report to the government.
Pursuant to the acquisition regulations under which it
contracted, KBR was required to “have in place and follow
reasonable procedures designed to prevent and detect possible
violations [of the Anti-Kickback statute],” to make a written
16
report when it “ha[d] reasonable grounds to believe that a
violation . . . may have occurred,” and to “cooperate fully
with any Federal agency investigating a possible violation.”
48 CFR §52.203-7(c)(1)-(3). KBR has represented without
dispute that it was expressly permitted to retain privilege as to
the contents of its investigations, which is not unusual in
federal government compliance programs. Department of
Justice policy, for instance, provides that “waiving the
attorney-client and work product protections has never been a
prerequisite under the Department's prosecution guidelines for
a corporation to be viewed as cooperative,” U.S. Attorney’s
Manual § 9-28.710, and that, with respect to internal
investigations, “[a] corporation need not disclose, and
prosecutors may not request, the disclosure of such attorney
work product as a condition for the corporation’s eligibility to
receive cooperation credit,” id. § 9-28.720(b). Under such
compliance programs, companies know that their disclosures
may receive greater credence if they choose to buttress them
with otherwise-privileged information. But companies and
the government can, and often do, structure legitimate
compliance and reporting programs that do not involve
waiving privilege. Where companies choose not to waive
privilege, “[t]hey will, of course, bear the risk that their
reports will not be accepted as full disclosures.” Sealed Case
(general counsel’s files), 676 F.2d at 823.
Read in this context, footnote 5 in KBR’s summary
judgment motion is essentially a recitation of the terms of its
deal with the government, including the express reservation of
attorney-client privilege and work product protection. There
was certainly no actual disclosure of opinion work product
(the conclusions of the COBC investigation) in the footnote.
Instead, the District Court found that KBR impliedly disclosed
opinion work product, that is, “the substantive conclusion of
its COBC investigations.” J.A. 21. In Sealed Case (general
17
counsel’s files), we found implied waiver primarily because
waiver was consistent with holding the company to the terms
of its bargain. Here, holding KBR to the terms of its bargain
would mean deciding that “[KBR’s] reports will not be
accepted as full disclosures,” 676 F.2d at 823, rather than
inferring that KBR was intending to say that its non-report to
the government should be given weight and credibility as a
finding of no wrongdoing.
There’s the rub: Where KBR neither directly stated that
the COBC investigation had revealed no wrongdoing nor
sought any specific relief because of the results of the
investigation, KBR has not “based a claim or defense upon
the attorney’s advice.” Koch, 489 F.3d at 390; see also White,
887 F.2d at 271. As we explained in Sealed Case (general
counsel’s files):
Corporations may protect their privileges without
manipulation simply by being forthright with their
regulators and identifying material as to which they claim
privilege at the time they submit their voluntary
disclosure reports. They will, of course, bear the risk that
their reports will not be accepted as full disclosures. But
if they choose to make a pretense of unconditional
disclosure, they bear another risk – that we will imply a
waiver of privilege with respect to any material necessary
for a fair evaluation of their disclosures.
676 F.2d at 823 (emphasis added). Here, there was no
pretense of unconditional disclosure.
Notwithstanding all this, KBR’s summary judgment
motion footnote said not only that it conducted a COBC
investigation relating to Barko’s claims and did not report any
wrongdoing to the government, but also that when it discovers
18
wrongdoing during investigations, “KBR makes such
disclosures.” KBR Defendants’ Motion for Summary
Judgment at 4 n.5, ECF No. 136. The District Court’s order
turned on this point and it is undoubtedly the highest hurdle to
our conclusion that KBR did not waive the privilege.
But we think the context of the whole passage is essential
to our clear error conclusion. First, the footnote constitutes a
recitation of facts that appears only in the motion’s
introduction, not in an argument or claim concerning the
privileged documents’ contents. We previously have rejected
the idea that we must treat recitations of facts as making
arguments, and KBR benefits from the application of that
principle here. See Am. Wildlands v. Kempthorne, 530 F.3d
991, 1001 (D.C. Cir. 2008) (explaining that appellant forfeited
argument by explaining only its underlying facts in “the
statement of the facts section of its opening brief.”). Second,
and in any event, “[i]t is not our practice . . . to indulge
cursory arguments made only in a footnote,” C.I.R. v.
Simmons, 646 F.3d 6, 12 (D.C. Cir. 2011) (internal quotation
marks omitted); see also Hutchins v. District of Columbia,
188 F.3d 531, 539 n.3 (D.C. Cir. 1999) (en banc) (same).
Furthermore, even though KBR did not affirmatively argue
that the court should find no wrongdoing because KBR’s
investigation had found no wrongdoing, the District Court
reasoned that such an “argument” could be inferred from the
footnote. But KBR was the movant for summary judgment,
and it is beyond peradventure that all inferences were to be
drawn against KBR at this stage of the litigation, Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986), and “it was
error for the district court not to view [KBR]’s statements in
the light most favorable to [Barko],” Carr v. District of
Columbia, 587 F.3d 401, 414 (D.C. Cir. 2009). In sum, the
District Court may not, in resolving the motion for summary
19
judgment, make any inference in KBR’s favor based on the
contents of the privileged documents.
III.
One month after the order finding “at issue” waiver, the
District Court considered “whether portions of the COBC
documents are non-privileged fact work product that is
discoverable based on substantial need.” S.A. 49. It
concluded, as an alternative to its November 20 order, that
“substantial portions of the COBC reports constitute fact work
product, and that Barko has made an adequate showing to
overcome the protection afforded to the documents.” S.A. 64.
Despite KBR’s arguments, we think the District Court got the
law right. We also conclude, however, that the District Court
misapplied that law to the documents it ordered disclosed.
KBR would have us draw from the case law that
everything in an internal investigation is attorney-client
privileged. KBR argues that a “rigid rule requiring a client
and a lawyer on each end of a privileged communication
threatens disclosure of communications long considered
privileged, including those between attorneys within a law
firm, and between attorneys and their investigators.” Petition
20-21. The District Court rejected this view, observing that
“under KBR’s logic, any communication between a company
attorney and his agent is automatically attorney-client
privileged, because both are employees of the company and
part of the client itself.” S.A. 54.
Indeed, controlling precedent runs counter to KBR’s
argument and supports the District Court’s statement of the
law. In Sealed Case (general counsel’s files), we explained
that “communications that do not involve both attorney and
client, are unprotected.” 656 F.2d at 809. In Upjohn, the
20
Supreme Court addressed the question of what protection
attached to the notes of the general counsel of a corporation
that went “beyond recording [employee] responses to his
questions” as part of an internal investigation. 449 U.S. 397.
It concluded that where the notes “reveal communications,
they are . . . protected by the attorney-client privilege.” Id. at
401. And “[t]o the extent they do not reveal communications,
they reveal the attorneys’ mental processes in evaluating the
communications” and thereby constitute opinion work
product. Id.
Some of the COBC documents in this case involve
communications from an investigator, acting at the direction
of in-house counsel, to an attorney who is in-house counsel.
In such a circumstance, the investigator effectively steps into
the shoes of the attorney. See In re KBR, 756 F.3d at 758;
Linde Thomson Langworthy Kohn & Van Dyke, P.C. v.
Resolution Trust Corp., 5 F.3d 1508, 1514 (D.C. Cir. 1993)
(“The attorney-client privilege undeniably extends to
communications with one employed to assist the lawyer in the
rendition of professional legal services.”) (internal quotation
marks omitted); see also United States v. Kovel, 296 F.2d 918,
921 (2d Cir. 1961) (holding that the attorney-client privilege
covers communications from a client to an attorney’s non-
lawyer employee); 1 EPSTEIN, at 211 (“In general, agents and
subordinates working under the direct supervision and control
of the attorney are included within the scope of the attorney-
client privilege.”).
KBR seemingly would have it both ways and argues that
the investigator should also count as its employee for
purposes of creating attorney-client privilege when the
investigator communicates something to the lawyer. See
Opposition Br. 19-20; Reply Br. 14 n.12. That is simply
incorrect. Instead, such material is inherently work product
21
protected so long as it is prepared in anticipation of litigation.
The attorney-client privilege and opinion work product
protection separately operate as barriers to compelled
disclosure, and there is nothing to be gained by sloppily
insisting on both or by failing to distinguish between them.
Cf. 1 EPSTEIN, at 132 (“[T]here rarely seems much point in
claiming both an attorney-client privilege and a work-product
protection for . . . [in-house counsel’s attorney notes] – unless
of course one’s purpose is to annoy the judge and demonstrate
that one has not thought with any care about what each
covers.”). The District Court correctly stated that materials
produced by an attorney’s agent are attorney-client privileged
only to the extent they contain information obtained from the
client including “where the purpose of the report was to put in
usable form the information obtained from the client.” FTC v.
TRW, Inc., 628 F.2d 207, 212 (D.C. Cir. 1980). So far, so
good, as to the District Court’s legal analysis on this point.
But the fault lies in the application. Notwithstanding its
statement of the law, the District Court compelled disclosure
of numerous portions of the COBC report that summarize
statements of KBR employees. Even a cursory review of the
compelled documents (factoring in the redactions directed by
the District Court) shows that the December 17 order would
require KBR to produce materials that are attorney-client
privileged. In addition, the order compelled disclosure of
numerous mental impressions of the investigators, based on a
clearly erroneous finding that such conclusions were only
“background materials” and therefore fact work product. For
example, the synopses in the two disputed reports constitute a
combination of attorney-client privileged materials and work
product protected materials almost by definition. And, as
another example, a critical mental impression capturing the
investigator’s assessment of the subcontractor’s performance
appears in a since-redacted footnote 55 to the December 17
22
order itself. 3 Accordingly, we conclude that the December 17
compelled production rulings constituted error.
Given the District Court’s failure to distinguish between
fact and opinion work product in the COBC documents, we
do not reach the question of whether the District Court erred
in finding the “substantial need” and “undue hardship”
necessary for the disclosure of fact work product. See FED. R.
CIV. P. 26(b)(3)(A)(ii).
IV.
Although we find error in the challenged District Court
rulings, error alone is insufficient to justify the “‘drastic and
extraordinary’” remedy afforded by a writ of mandamus.
Cheney, 542 U.S. at 380 (quoting Ex parte Fahey, 332 U.S.
258, 259 (1947)); see also In re KBR, 756 F.3d at 760. A writ
of mandamus requires that: (1) the mandamus petitioner have
“no other adequate means to attain the relief he desires;”
(2) the mandamus petitioner show that its right to the writ is
“clear and indisputable;” and (3) the court, “in the exercise of
its discretion, must be satisfied that the writ is appropriate
under the circumstances.” Cheney, 542 U.S. at 380-81
(internal quotation marks omitted).
A.
The first prong is satisfied – as is often the case in
attorney-client privilege cases – for the same reasons as stated
3
KBR filed an emergency motion on December 18 to seal this
footnote and the accompanying page of text. Emergency Motion to
Seal, United States ex rel. Barko v. Halliburton Co., No. 05-cv-
1276 (D.D.C. Dec. 18, 2014), ECF No. 229. The District Court
partially granted the motion that same date by memo endorsement
and sealed the footnote. Marginal Entry Order, id., ECF No. 230.
23
in our decision granting the previous writ of mandamus in this
case. See In re KBR, 756 F.3d at 760-61. The analysis on the
“no other means to attain the relief” point essentially remains
the same in that appeal after final judgment will come too late
because the privileged documents will have been disclosed.
Id. at 761. Our previous reasoning stands on its own feet and
is also binding as law of the case and of the Circuit. See
LaShawn A. v. Barry, 87 F.3d 1389, 1393 (D.C. Cir. 1996)
(en banc). Accordingly, we adopt it as part of our analysis of
this Petition.
B.
For the reasons described in Parts II and III above, we
find error in both the November 20 and December 17
opinions and orders of the District Court. But for a writ of
mandamus to issue, the challenged decision or decisions must
represent not merely error, but “clear and indisputable” error.
Cheney, 542 U.S. at 381.
The error here was “clear and indisputable” because the
outcomes arrived at by the District Court would erode the
confidentiality of an internal investigation in a manner
squarely contrary to the Supreme Court’s guidance in Upjohn
and our own recent prior decision in this case. See Upjohn,
449 U.S. at 393; In re KBR, 756 F.3d at 763. The Supreme
Court has “rejected use of a balancing test in defining the
contours of [attorney-client] privilege” because it would
defeat the purpose of the privilege to promote candid
communications with counsel in the first instance. Swidler &
Berlin, 524 U.S. at 408. The District Court’s December 17
order compelled production of notes and memoranda based on
oral statements that, Upjohn itself teaches, “cannot be
disclosed simply on a showing of substantial need and
24
inability to obtain the equivalent without undue hardship.”
449 U.S. at 401.
C.
That brings us to the third prong of the Cheney standard,
requiring that we must be “satisfied that the writ is
appropriate under the circumstances.” Cheney, 542 U.S. at
381. Here, too, we can adopt our own analysis from the prior
petition. See In re KBR, 756 F.3d at 762-63.
Just as in the first petition, the District Court’s November
20 and December 17 orders would generate “substantial
uncertainty about the scope of the attorney-client privilege in
the business setting.” In re KBR, 756 F.3d at 756. If allowed
to stand, the District Court’s rulings would ring alarm bells in
corporate general counsel offices throughout the country
about what kinds of descriptions of investigatory and
disclosure practices could be used by an adversary to defeat
all claims of privilege and protection of an internal
investigation. See. id. at 762-63 (“[P]rudent counsel monitor
court decisions closely and adapt their practices in
response.”).
These alarm bells would be well founded. If all it took to
defeat the privilege and protection attaching to an internal
investigation was to notice a deposition regarding the
investigations (and the privilege and protection attaching
them), we would expect to see such attempts to end-run these
barriers to discovery in every lawsuit in which a prior internal
investigation was conducted relating to the claims.
Accordingly, we think it is essential to act on this Petition in
order to protect our privilege waiver jurisprudence.
25
We therefore grant KBR’s petition for a writ of
mandamus vacating the November 20 and December 17
opinions and orders.
V.
KBR asks not only for a writ of mandamus, but also that
we direct reassignment of the case to a new district judge. It
has made the serious allegation that the District Court
“assumed the mantle of a prosecutor” such that reassignment
is required to avoid the appearance of partiality. Petition 30.
In Cobell v. Kempthorne, our most recent opinion
directing reassignment, we stated that reassignment is
“necessary if reasonable observers could believe that a
judicial decision flowed from the judge’s animus toward a
party rather than from the judge’s application of law to fact.”
Cobell v. Kempthorne, 455 F.3d 317, 332 (D.C. Cir. 2006). 4
But we cautioned that “[b]ecause unfavorable rulings are
‘[a]lmost invariably . . . proper grounds for appeal, not for
recusal,’ we exercise this authority only in extraordinary
cases.” Id. at 331 (quoting Liteky v. United States, 510 U.S.
540, 555 (1994)) (alteration in original).
It is indeed unusual that a second petition for mandamus
is sought from a court of appeals regarding the same
proceeding in the district court. A petition such as this one on
a closely related issue controlled by the same precedent must
be rarer yet. On the other hand, “except in the most unusual
circumstances we trust judges to put their personal feelings
4
As we noted in Cobell, “[r]eassignment requests usually arise
from accusations that a judge engaged in improper outside
communications.” 455 F.3d at 331; see, e.g., United States v.
Microsoft Corp., 253 F.3d 34, 46 (D.C. Cir. 2001) (en banc) (per
curiam). No such allegation has been made in this case.
26
aside.” Cobell, 455 F.3d at 332. So “recusal must be limited
to truly extraordinary cases where “the judge’s views have
become ‘so extreme as to display clear inability to render fair
judgment.’” Id. (quoting Liteky, 510 U.S. at 551).
Cobell puts this case in perspective. It was “the ninth
time in six years we [had] consider[ed] an appeal in th[at]
longstanding dispute.” Cobell, 455 F.3d at 319. We
catalogued a litany of errors including three grants of
mandamus. Id. at 334. Our decision specifically noted that
even “repeated reversals, without more, are unlikely to justify
reassignment.” Id. at 335. And we found that “on several
occasions the district court or its appointees exceeded the role
of impartial arbiter by issuing orders without hearing and by
actively participating in evidence-gathering.” Id.
KBR tells us that the District Court in this case has
morphed from umpire to designated hitter (or, for the
classically oriented, from summa rudis to gladiator). But we
see the District Court as duly determined to drive this case to
resolution, not to a specific outcome. Responding to KBR’s
request for a stay pending appellate review of its November
20 order, the District Court rejected the argument that
“another” four-month stay would not irreparably harm the
Relator and it granted only a one-week stay to allow KBR
time to file an emergency motion with this Court. J.A. 45.
The District Court explained that “at some point, a case over a
decade old must be directed toward resolution” and noted that
“the public [also] has an interest in the prompt and final
determination of this litigation.” Id. It is not just proper but
every district court’s obligation to manage proceedings so as
“to secure the just, speedy, and inexpensive determination of
every action and proceeding.” FED. R. CIV. P. 1.
27
The writ of mandamus we grant will correct the legal
error in this case and resolve the dispute over production of
the COBC documents in favor of KBR.
On KBR’s request for reassignment made during
argument on the prior mandamus petition, we held that
“[b]ased on the record before us, we have no reason to doubt
that that District Court will render fair judgment in further
proceedings.” In re KBR, 756 F.3d at 763-64. Because this
remains true – and because we trust that this opinion will
conclusively resolve the issue on which this case has seemed
stuck as with a scratch on a broken record – we deny KBR’s
request for reassignment.
VI.
For the foregoing reasons, the Petition for a Writ of
Mandamus is GRANTED. The District Court’s orders of
November 20, 2014 (Doc. 205), and December 17, 2014
(Docs. 227, 228) are VACATED. The request to direct
reassignment is DENIED. It is
So ordered.