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Ninth Circuit Applies “Primary Purpose” Test to Dual-Use Communications to Determine Whether Attorney-Client Privilege Applies – Litigation, Mediation, and Arbitration


United States: Ninth Circuit applies ‘primary purpose’ test to dual-use communications to determine whether attorney-client privilege applies

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Traditionally, only communications made for the purpose of giving or receiving legal advice have received the protection of solicitor-client privilege. Lawyers, however, often wear many hats and serve as both advocates and business advisors for their clients. Questions about the applicability of solicitor-client privilege therefore often arise in so-called “dual purpose” communications that include both legal and business matters.

Joining the United States Courts of Appeals for the Second, Fifth, Sixth, and DC Circuits, the United States Court of Appeals for the Ninth Circuit in In re Grand Jury, 23 F.4th 1088, 1091 (9th Cir. Jan. 27, 2022) held that, in assessing whether dual-use communications that involve both legal and commercial concerns are protected by solicitor-client privilege, courts should apply the “objective principle”, which examines “whether the primary purpose of the communication is to give or receive legal advice, as opposed to business or tax advice”. The Ninth Circuit expressly rejected the application of the broader “by reason of” test, whereby the privilege applies to dual-use communications that would not have been made but for the necessity of giving or receiving legal advice.

  1. Factual and Procedural Context

As part of a criminal investigation into the owner of a public company, a grand jury issued subpoenas to the company and the company’s law firm, requesting documents and communications. In response, the company and the law firm each produced some documents, but withheld others for reasons of attorney-client confidentiality and protection of work product.

The government decided to compel production of the withheld documents, and the United States District Court for the Central District of California granted the motion in part. The district court explained that the documents were not privileged or could be discovered under the criminal fraud exception, finding that certain documents identified as dual-use communications were not privileged because the “primary purpose of the documents was to obtain tax advice, not legal advice.

In ordering production of the documents, the district court denied the company and law firm’s request to apply a “due to” test that would protect dual-use communications made “due to” the need to give or receive legal advice.

The company and the law firm disagreed with the district court’s decision and continued to withhold the disputed documents. At the government’s request, the district court found the company and the law firm in contempt. The company and law firm appealed the orders, arguing that the district court erred in relying on the “primary purpose” test, instead of the broader “due to” test for dual-use communications.

CGR memo – Ninth Circuit applies “primary purpose” test to dual-use communications to determine whether attorney-client privilege applies (pdf | 235.58 KB)

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The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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