{"id":97558,"date":"2025-11-13T12:43:21","date_gmt":"2025-11-13T17:43:21","guid":{"rendered":"https:\/\/www.mcguirewoods.com\/?post_type=insight&p=97558"},"modified":"2025-11-13T12:43:24","modified_gmt":"2025-11-13T17:43:24","slug":"sixth-circuit-reaffirms-privilege-and-work-product-principles-for-high-stakes-internal-investigations","status":"publish","type":"insight","link":"https:\/\/www.mcguirewoods.com\/client-resources\/alerts\/2025\/11\/sixth-circuit-reaffirms-privilege-and-work-product-principles-for-high-stakes-internal-investigations\/","title":{"rendered":"Sixth Circuit Reaffirms Privilege and Work Product Principles for High-Stakes Internal Investigations"},"content":{"rendered":"\n

On Oct. 3, 2025, the U.S. Court of Appeals for the Sixth Circuit granted a writ of mandamus<\/em>, vacating a district court order compelling FirstEnergy Corp. to produce internal investigation documents protected by attorney-client privilege and the work product doctrine. The court\u2019s opinion in In re FirstEnergy Corp.<\/a><\/em> reaffirms longstanding protections for attorney-client communications and work product in corporate investigations, clarifies that subsequent business uses do not defeat privilege and rejects broad waiver claims. The ruling offers clear guidance for corporations conducting internal investigations in response to legal and regulatory threats.<\/p>\n\n\n\n

Background<\/strong><\/p>\n\n\n\n

The dispute stemmed from a bribery scheme involving FirstEnergy, an Ohio-based public utility, and the passage of Ohio House Bill 6, which promised FirstEnergy a bailout and fixed revenue stream. The scheme led to a federal criminal complaint against a state legislator implicating FirstEnergy\u2019s involvement and Department of Justice subpoenas issued to FirstEnergy. Within a week of receiving the subpoenas, FirstEnergy and its board retained separate outside counsel to conduct internal investigations regarding the allegations in the criminal complaint and to advise on the subpoenas.<\/p>\n\n\n\n

Within weeks, FirstEnergy and its directors and officers faced civil lawsuits, including a securities class action that was the subject of the court\u2019s decision. During discovery, the shareholder plaintiffs sought production of \u201call previously withheld documents\u201d related to both internal investigations. The district court, adopting a special master\u2019s recommendation, ordered FirstEnergy to produce the withheld materials and denied FirstEnergy\u2019s motion to certify the order for interlocutory review. FirstEnergy sought mandamus relief from the Sixth Circuit.<\/p>\n\n\n\n

Key Holdings and Analysis<\/strong><\/p>\n\n\n\n

The Sixth Circuit\u2019s per curiam<\/em> opinion addressed two central questions: (1) whether the district court\u2019s privilege and work product rulings constituted legal error and (2) whether those errors warranted the extraordinary remedy of mandamus<\/em>. Upholding long-standing privilege and work product principles, the court answered in the affirmative for both.<\/p>\n\n\n\n

First, applying the principle laid out in Upjohn Co. v. United States<\/em>, the court reaffirmed that the attorney-client privilege applies to confidential communications between a company and its counsel made for the purpose of obtaining legal advice, particularly in internal investigations responding to potential criminal or civil liability. The court found that FirstEnergy and its board clearly sought legal advice from outside counsel in the face of significant legal risk and held that the resulting communications \u2014 including legal analyses and assessments of potential liability \u2014 were privileged. To illustrate the legal nature of those communications, the court noted evidence that the board\u2019s outside counsel \u201cmet frequently\u201d with directors and provided \u201clegal updates\u201d on investigation findings, and that the company\u2019s outside counsel likewise conducted its investigation \u201cin connection with\u201d serving as counsel and responding to the DOJ\u2019s investigation.<\/p>\n\n\n\n

The court rejected the district court\u2019s reasoning that the investigations were conducted for business rather than legal purposes. It emphasized that the privilege is not lost merely because legal advice informs subsequent business decisions and that companies routinely seek legal counsel on matters with both legal and business implications. The court explained: \u201cWhat matters under the attorney-client privilege is whether a company seeks legal advice, not what it later does with that advice.\u201d<\/p>\n\n\n\n

The court held that the work product doctrine protected the internal investigation materials as well, as they were prepared \u201cbecause of\u201d anticipated and actual litigation and regulatory action. The court noted the \u201ctsunami\u201d of legal and regulatory proceedings facing FirstEnergy at the time the investigations were initiated along with the \u201crealities of litigation.\u201d It found that the internal investigation materials were created in direct response to these threats and legal actions, not for ordinary employment decisions and business concerns, as the district court had found.<\/p>\n\n\n\n

The court also addressed and rejected the claimants\u2019 waiver arguments. It clarified that divulging \u201cbare conclusions\u201d from an internal investigation (as opposed to substantive legal advice) does not waive the attorney-client privilege. The court also held that sharing privileged or work product materials with an independent auditor does not automatically waive either protection. The court distinguished disclosures to auditors from those to an adversary, as auditors are bound by ethical rules precluding them from being adversaries. Therefore, the court found, any information divulged to auditors would at minimum remain protected as work product.<\/p>\n\n\n\n

The court also corrected a procedural misstep, holding that the district court erred in excluding a FirstEnergy director\u2019s declaration supporting the company\u2019s privilege position. It found that the omission of two words (\u201cas true\u201d) was akin to a scrivener\u2019s error, and that the declaration substantially complied with 28 U.S.C. \u00a7 1746 statutory requirements. Even without that declaration, the court held that privilege and work product protections shielded the withheld investigation materials.<\/p>\n\n\n\n

Lastly, recognizing that mandamus<\/em> is a \u201cdrastic and extraordinary remedy,\u201d the court concluded that FirstEnergy met the \u201clofty standard\u201d for such relief. The court found that FirstEnergy had no adequate alternative means to protect its privileged materials (\u201cThere is no way to unring these disclosure bells\u201d), that its right to relief was \u201cclear and indisputable\u201d and thus, mandamus<\/em> was appropriate in the circumstance of these high-stakes internal investigations to prevent irreparable harm from compelled disclosure. Beyond FirstEnergy<\/em>, the court noted the \u201csubstantial uncertainty\u201d the district court\u2019s departure from nearly a half century of privilege and work product principles would create absent mandamus<\/em> relief.<\/p>\n\n\n\n

Takeaways<\/strong><\/p>\n\n\n\n

The Sixth Circuit\u2019s decision reaffirms the foundational principles of attorney-client privilege and work product doctrine in the corporate context, particularly during high-stakes internal investigations. The decision affirms predictable, durable guardrails: privilege and work product protections apply when investigations are driven by legal risk and structured for legal advice and litigation readiness. This ruling underscores that:<\/p>\n\n\n\n