Overview
The Sixth Circuit recently granted mandamus relief, a court order compelling a lower court to fulfill a mandatory legal duty or correct an abuse of discretion, to FirstEnergy, overturning a lower court order that had compelled disclosure of internal investigation materials in connection with the HB 6 bribery scandal. The decision reaffirms the strength of the attorney‑client privilege and the work‑product doctrine for corporate internal investigations, even when findings are later used for business purposes.
Background
In 2020, FirstEnergy retained Jones Day and Squire Patton Boggs to conduct separate internal investigations into allegations of bribery related to Ohio’s House Bill 6 that provided a bailout for failing nuclear and coal-fired power plants. Plaintiffs in related derivative and securities litigation sought access to the internal investigation reports, arguing that they were conducted primarily for business, not legal, purposes. The district court initially ordered production, but the Sixth Circuit reversed, holding that the predominant purpose was to obtain legal advice and that privilege is not defeated merely because the results are later used in management or business decisions.
The court also confirmed work-product protection, reasoning that the investigations were undertaken in anticipation of litigation and regulatory scrutiny. This decision highlights that communications and documents generated by counsel in the course of a legally motivated investigation remain protected, even when multiple business objectives exist.
Attorney-Client Privilege and Work-Product Protection in Internal Investigations
In In re FirstEnergy, the Sixth Circuit reaffirmed that both attorney-client privilege and work-product protection can extend to materials generated during internal investigations, so long as those investigations are structured as legal exercises, not routine business reviews. The court emphasized that FirstEnergy’s internal probes arose amid active regulatory inquiries and litigation threats, satisfying the “because of litigation” standard. As a result, interview notes, memoranda and related materials qualified as protected work product, even though they informed business decisions.
The appellate court rejected the lower court’s view that the documents would have been created regardless of litigation. It found instead that legal pressures made the investigations inherently legal in nature. The court also criticized the district court for dismissing a board member’s sworn declaration explaining that counsel conducted the reviews for legal purposes, holding that such testimony, made under penalty of perjury, sufficiently established both privilege and work-product intent.
By granting mandamus relief, the Sixth Circuit underscored the seriousness of protecting privileged communications. It held that forcing disclosure would cause irreparable harm and chill the ability of companies to seek candid legal advice. The opinion reinforces that courts must give due weight to evidence demonstrating that counsel’s communications and analyses were made to obtain or provide legal guidance in anticipation of litigation.
Key Takeaways
For corporate counsel, FirstEnergy offers a clear reminder: privilege is preserved through intentional structure and documentation. Legal engagement letters, clear scoping of counsel’s role, separation of legal and business communications and contemporaneous records of legal purpose are key. When investigations are directed by or for attorneys to provide legal advice and address concrete legal risks, both the attorney-client privilege and work-product doctrine remain robust defenses against compelled disclosure.
Contact
KJK’s Corporate & Securities practice group regularly advises clients on structuring internal reviews to preserve attorney-client privilege and work-product protection. If you have questions about how this ruling may affect your organization’s investigation protocols or disclosure obligations, please contact our office at 216.696.8700.