Sixth Circuit Backs Privilege in Internal Investigations

Picture this: your company just got hit with a subpoena, your board is asking for “a quick update” (always a lie),
and someone in accounting just emailed ALL STAFF with the subject line “URGENT: Possible Fraud???”
(two question marks, because one isn’t alarming enough). Naturally, you do what responsible organizations do:
you launch an internal investigation led by counsel so you can figure out what happened, fix it, andcruciallyget legal advice
without handing plaintiff’s lawyers a neatly bound “How to Sue Us” binder.

That’s the theory, anyway. In practice, internal investigations often become discovery magnets in follow-on civil litigation
especially securities class actionswhere plaintiffs push hard for investigation reports, interview memos, and “all documents
concerning” what counsel learned. The big question is: does attorney-client privilege (and work product protection) actually hold up
when an investigation also influences business decisions (like discipline, remediation, or disclosure)?

In a major win for corporate legal teams, the U.S. Court of Appeals for the Sixth Circuit gave a strong, practical answer:
yesprivilege and work product can protect internal investigation materials when the company is seeking legal advice in the shadow of litigation.
The case (and the court’s tone) is a reminder that “bedrock” protections still matter when things get messy.

What the Sixth Circuit Actually Did (and Why Everyone Noticed)

In In re FirstEnergy Corp., the Sixth Circuit granted extraordinary reliefa writ of mandamusto overturn a district court
order compelling production of internal investigation materials in a securities class action. The internal investigations were launched after
federal criminal charges related to an Ohio bribery scandal implicated the company, and shareholders later sought the “fruits” of counsel-led investigations
during discovery. The district court ordered production; the Sixth Circuit stepped in and said, essentially: nope.

Mandamus is not the court system’s “easy button.” It’s more like breaking the glass labeled “IN CASE OF EMERGENCY.”
The Sixth Circuit used it anyway because, once privileged material is produced, the damage can’t be undone.
You can’t unring a disclosure bellespecially when the bell is being rung by opposing counsel at full volume in a class action.

The Core Holding: Legal Advice Doesn’t Stop Being Legal Advice Because It’s Useful

One theme runs through the decision: internal investigations are often conducted for a legal purpose even when they also serve
business needs. That’s not a bug; it’s literally why companies pay lawyers.

1) Attorney-Client Privilege: Upjohn Still Has Teeth

The Sixth Circuit leaned on the Supreme Court’s classic internal-investigation case, Upjohn Co. v. United States.
The point of Upjohn is straightforward: when employees communicate with company counsel so the company can obtain legal advice,
those confidential communications can be privilegedprovided the usual requirements are met (confidentiality, legal purpose, etc.).

In the Sixth Circuit’s view, the internal investigation communications at issue involved counsel’s analysis of what occurred,
whether it was illegal, and what criminal and civil consequences might followsquarely within the “legal advice” lane,
not a generic business consulting lane.

Translation: if your investigation is aimed at assessing legal exposure and advising the client, it doesn’t lose privilege
just because the company later uses the advice to make business decisions (like terminating an executive, tightening controls,
updating disclosures, or deciding whether to self-report).

2) Work Product: “Because Of” Anticipated Litigation Still Matters

The court also reinforced that work product protection can apply when documents are prepared “in anticipation of litigation,”
using the familiar “because of” framework: would the materials have been created because of litigation risk,
as opposed to ordinary business reasons?

When a company is facing an “onslaught” of legal and regulatory actioncriminal inquiries, civil suits, regulatory proceedings
the “because of litigation” argument is usually not subtle. It’s more like a neon sign.

Why This Case Hit a Nerve: Securities Class Actions Love Internal Investigations

If you’ve spent any time in securities litigation, you know the rhythm:
(1) something bad happens; (2) the company investigates; (3) plaintiffs file a complaint; (4) discovery begins; (5) plaintiffs ask for the investigation
materials because they think the documents will contain admissions, timelines, credibility findings, andbest of allcounsel’s analysis.

Plaintiffs’ lawyers aren’t irrational here. Investigation materials can be powerful. But the privilege system exists for a reason:
companies need candid legal advice when assessing potential wrongdoing. If every counsel-led investigation turns into mandatory public sharing,
organizations will be incentivized to investigate less (or investigate in worse, less structured ways). That’s a compliance nightmare.

The Practical Takeaway: How to Make Your Investigation “Privilege-Ready”

Courts don’t protect labels; they protect substance. You can stamp “PRIVILEGED” on a document all day long,
but if your process looks like a business review dressed up in legal Halloween costume, you’ll have a harder time.
Here’s the playbook that aligns with how courts tend to analyze privilege and work product in high-stakes investigations.

1) Put Legal Purpose Front and Center (Without Being Weird About It)

• Engagement letters and board minutes should reflect that counsel is retained to provide legal advice and assess legal exposure.
• Define the client (the corporation, special committee, audit committee) and the scope of counsel’s role.
• Be consistent: don’t describe the same work as “business risk assessment” in one place and “legal advice” in another.

2) Let Counsel Direct the Fact-Gathering

• Counsel should shape the investigation plan, interview order, and key questions.
• If consultants are involved (forensics, compliance advisors), structure their work to support counsel’s legal analysis where appropriate.
• Avoid turning counsel into a notetaker for management’s “operational review.”

3) Use Upjohn Warnings Like You Mean It

• When interviewing employees, counsel should explain: I represent the company, not you; the conversation is confidential; the company controls privilege.
• Document that the warning was given (brieflyno need for a Broadway script).
• Train frequent interviewers so the message is consistent.

4) Separate Legal Advice From Business Deliverables

Sometimes the business needs a remediation plan, an HR outcome, or an operational fix. Greatjust don’t mash everything into a single
mega-document that reads like “Legal Advice + PR Strategy + HR Terminations + Board Politics: The Musical.”

• Keep legal analysis in counsel’s memos and communications.
• When needed, create a separate non-privileged remediation summary that focuses on actions, not counsel’s legal conclusions.
• Be careful with slide decks: they travel fast, get forwarded, and end up in places that make privilege cry quietly.

5) Control Distribution (Privilege Is Not a Group Chat)

• Limit investigation outputs to a need-to-know group (board, designated executives, in-house legal).
• Avoid casual forwarding. Create a controlled repository if possible.
• Mark documents appropriately, but remember: markings help; they don’t magically fix substance.

6) Handle Auditors and Regulators With a Waiver Plan

Real life is annoying: auditors ask questions; regulators request cooperation; insurers want details; lenders want comfort.
You can often provide facts without providing legal advice.

• Share factual findings and remediation steps where appropriate, while minimizing disclosure of counsel’s mental impressions and legal analysis.
• Consider oral briefings rather than handing over narrative memos.
• Coordinate carefully before providing investigation materials to any third partyeven “friendly” ones.

Common Misconceptions (and the Reality Check)

Misconception: “If we acted on the advice, privilege is gone.”

Reality: companies get legal advice because it informs action. The key question is whether the communication was for legal advice and kept confidential.
Acting on advice doesn’t automatically strip privilege.

Misconception: “If it’s an ‘internal investigation report,’ it’s automatically privileged.”

Reality: privilege depends on purpose and content. A report that’s mostly business recommendations with minimal legal analysis may be harder to protect,
especially if broadly distributed.

Misconception: “Work product only applies after a lawsuit is filed.”

Reality: work product can apply when litigation is reasonably anticipatednot only when it’s already on the docket.

What This Means for Companies in the Sixth Circuit (and Beyond)

The Sixth Circuit’s stance is reassuring for companies navigating government inquiries, shareholder suits, and parallel proceedings.
It reinforces that robust internal investigations can still happen without automatically becoming discovery giveaways.

But don’t get complacent. Privilege fights often turn on small facts: who directed the work, how documents were framed,
and how widely results were shared. The best “privilege strategy” is boring consistencyplus a healthy fear of the “Forward” button.

of Real-World Experience (The “Names Changed, Anxiety Real” Edition)

Below are experience-based patterns commonly reported by in-house and outside counsel working on internal investigations.
These are composite scenarios (not a description of any single matter), but they reflect how privilege issues tend to flare up in the wild.

Experience #1: The “Helpful” Executive Summary That Wasn’t

A company commissions outside counsel to investigate allegations of improper payments. Counsel prepares a tight legal memo:
exposure analysis, potential enforcement pathways, and recommendations for remedial steps. Then someone requests an “executive summary”
for business leaders. A well-meaning team member drafts a one-pager that blends facts, legal conclusions, and “tone” considerations for public messaging.
It gets distributed broadlyoperations, HR, finance, even a couple of people who “just wanted to stay in the loop.”

When civil litigation arrives, plaintiffs don’t even need to fight hard for the privileged memothey attack the widely shared summary as waived material,
and then argue it opens the door to the underlying analysis. The lesson is painfully simple: if you need a business-facing document,
make it narrowly factual and action-oriented, and keep counsel’s legal analysis on a separate track with limited distribution.

Experience #2: Auditors Want Comfort, Plaintiffs Want Your Workpapers

Another common flashpoint is the auditor conversation. Audit teams legitimately want to understand what happened and whether controls are being fixed.
The problem starts when the company hands over counsel’s interview memos or investigation slides “just to be transparent.”
That transparency may feel good in the momentand feel catastrophic later when a plaintiff’s expert insists the auditor communications are discoverable
and argues waiver.

The more resilient approach is to share facts and remediation status without sharing counsel’s mental impressions:
timelines, control changes, disciplinary outcomes, and high-level descriptions of investigative steps. Many teams find that
a carefully prepared “audit update” can satisfy legitimate audit needs while keeping privileged legal content where it belongs:
in legal channels.

Experience #3: The “Dual Purpose” Trap and How to Avoid It

Internal investigations almost always serve dual purposes: legal advice and business decision-making. The trap is not dual purpose itself
it’s creating a record that sounds like the investigation was primarily a business exercise with lawyers as spectators.
The strongest investigations usually have clear indicators that counsel is driving the process for legal reasons:
an engagement letter framed around legal advice, a defined client (often the board or a special committee), legal risk assessment baked into the scope,
and workstreams designed to support legal analysis (for example, interviews structured to test elements relevant to potential claims).

When teams do this well, privilege disputes tend to focus on margins rather than the whole file. When teams do it poorly,
privilege disputes can become existentialand expensive.

Bottom line: the Sixth Circuit’s approach is encouraging, but it rewards disciplined lawyering and disciplined documentation.
Think of it as “privilege hygiene.” It’s not glamorous, but it prevents painfuland very publicproblems later.

Conclusion

The Sixth Circuit’s decision is a clear message to companies and litigants: internal investigations conducted to secure legal advice,
especially in the face of real litigation and regulatory risk, are not automatic discovery fodder. Attorney-client privilege and the work product doctrine
remain essential tools for responsible governance and effective compliance.

If your organization wants the benefits of a thorough investigation and the protections the law provides, build the record carefully:
define the legal purpose, keep counsel in the driver’s seat, separate legal analysis from business deliverables, and control distribution like it’s
a limited-release sneaker drop.