Sixth Circuit restores privilege protections in In re FirstEnergy Corp. mandamus decision

The U.S. Court of Appeals for the Sixth Circuit recently issued a significant decision in In re FirstEnergy Corp., granting mandamus relief and vacating a district court order that compelled production of documents from internal investigations conducted by outside counsel. The ruling reinforces critical protections under the attorney-client privilege and work-product doctrine for corporations engaging counsel during crises, and provides clarity for companies navigating internal investigations under regulatory and litigation pressure. 

Background

Following a high-profile bribery scandal, FirstEnergy retained outside counsel to conduct internal investigations amid mounting civil litigation and regulatory scrutiny. The district court ordered production of investigative materials, reasoning that:

• Attorney-client privilege did not apply because the investigations’ “predominant purpose” was tied to business decisions.
• Work-product protection did not apply because the investigations were driven by “employment decisions and business concerns,” rather than litigation.

FirstEnergy petitioned for a writ of mandamus, and the Sixth Circuit granted relief. (See our New York Law Journal article concerning the district court ruling here). 

Key Holdings

• Attorney-Client Privilege: The Sixth Circuit held that communications with outside counsel were privileged because FirstEnergy sought and received legal advice. The court rejected the district court’s focus on subsequent business use, emphasizing that “[W]hat matters under the attorney-client privilege is whether a company seeks legal advice, not what it later does with that advice.”

• Work-Product Doctrine: The court found the investigation materials were prepared in reasonable anticipation of litigation, noting that “[w]ithin weeks, FirstEnergy directors and officers faced eight shareholder lawsuits, as well as multiple investigations by the SEC, the Ohio Attorney General, and the Public Utilities Commission of Ohio.”
• No Waiver: FirstEnergy’s disclosure of documents to an auditor did not constitute a waiver of work product protection, as the auditor was not considered an adversary, a typical prerequisite for triggering work product waiver.  
• Mandamus Relief: The court deemed mandamus “eminently appropriate” to preserve the “‘predictable and certain’ privilege and work-product standards” essential to litigation. It warned that affirming the district court’s ruling would chill “full and frank communication” between companies and counsel during internal investigations, a principle rooted in Upjohn.

The appellate court recently denied a request for rehearing en banc.

Practical Guidance 

To safeguard privilege and work-product protections:

• Engagement letters and internal communications should clearly state that investigations are for legal advice and in anticipation of litigation.
• Appropriately label documents as privileged or as work product.
• Restrict access to privileged materials to legal and core decision-makers.

For more information or to discuss implications for your organization’s internal investigation protocols, please contact Christopher LaVigne, Kimberly Pallen, Jordan Garman or Vahe Mesropyan.