Privilege protections held firm, but caution should remain: The Sixth Circuit affirms privilege protections in internal investigations

Although the order was ultimately overturned by the Sixth Circuit, which stated the lower court made “substantial departures from bedrock privilege and work-product principles,” the District Court’s ruling stands as a warning: attorneys should anticipate challenges to privilege protections during internal investigations and take careful steps to preserve privilege throughout. Attorneys should exercise discipline in protecting privilege through all phases of investigation – including when engaging outside counsel and consultants, conducting interviews, managing document productions and disclosures, generating work product, and planning cross-border investigations.

Background

The case arose from a bribery scandal involving FirstEnergy and former Ohio House Speaker Larry Householder. In 2020, the federal government issued subpoenas to FirstEnergy in connection with a criminal complaint charging Householder with violating the Racketeer Influenced and Corrupt Organizations Act, see 18 U.S.C. § 1962(d), in connection with an alleged bribery scheme. The charges implicated FirstEnergy in the bribery scheme involving Householder related to the passage of an Ohio bill that provided bailouts for two of FirstEnergy’s nuclear powerplants and a fixed revenue stream of $100 million annually to FirstEnergy. Shortly thereafter, FirstEnergy and an independent committee of its board retained separate outside counsel to conduct internal investigations and advise on strategy for handling the subpoenas.

The complaint and subpoenas gave rise to numerous legal and regulatory actions involving FirstEnergy – including a shareholder securities class action. In this action, claimants sought complete access to “all previously withheld documents” related to the internal investigations conducted by outside counsel. A special master recommended that the court grant the claimants' motion to compel, and the District Court accepted the report and recommendation. The District Court then denied FirstEnergy's motion to certify the order for interlocutory review. FirstEnergy then filed a petition for mandamus relief.

Sixth Circuit decision

The Sixth Circuit granted mandamus relief – an extraordinary remedy – and vacated the District Court’s production order finding the lower court made “substantial departures from bedrock privilege and work-product principles.” The Sixth Circuit opinion solidifies these “bedrock” principles in its opinion:

• Attorney-Client Privilege. The Sixth Circuit found that FirstEnergy’s communications with outside counsel regarding the investigations were for the purpose of “securing legal advice” through internal investigations into the company's potential criminal and civil wrongdoing and therefore were protected. The court emphasized that “[i]n asking for outside counsel's analysis about what happened and in seeking its legal advice about what to do in response to the ‘very significant legal risk it suddenly faced,’ FirstEnergy and the board clearly sought legal advice.”
• Work Product Privilege. The Court also found that the materials created as part of the internal investigation were protected under the work product doctrine because they were created in anticipation of litigation as evidenced by the “onslaught of legal and regulatory action surrounding FirstEnergy's investigations” – which the Sixth Circuit emphasized left “no question as to the driving force behind the investigations.”
• Use of Legal Advice in Later Business Decisions Does Not Pierce Privilege. The Sixth Circuit made clear that privilege protections do not collapse merely because a company makes business decisions based on legal advice. The Court emphasized that what matters is that the company sought legal advice – not what it later did with that legal advice – stating: “Companies ‘regularly consult their attorneys about a variety of problems arising in the course of the business.’ None of these adjacent business purposes for seeking legal advice transforms the communications and legal work into something other than legal advice.”
• No Waiver by Limited Disclosure to Government and Auditors. The Sixth Circuit explained that FirstEnergy did not waive privilege protections through disclosures to the government in connection with a deferred prosecution agreement or to its auditor because the documents produced or disclosed were not privileged, were otherwise discoverable, or were bare bones conclusions.
• Investigations Did Not Yield Mere Facts. Finally, the Sixth Circuit also rejected an argument by the shareholders that the investigations conveyed mere facts. The Court explained that legal advice does not exist without facts and outside counsel “did not simply recite facts learned from third parties; they determined what happened, whether it was lawful, and what civil and criminal liability could result.”

Rehearing petition

Following the Sixth Circuit’s decision, investors filed on October 8, 2025, a rehearing petition in which they alleged that the decision shielded documents but did not bar depositions about facts learned from the investigations. On November 6, 2025, the Sixth Circuit denied the petition, stating that neither the District Court nor the parties nor the panel distinguished deposition testimony from physical documents, and that the mandamus decision and its reasoning apply to the entire production order.

Key takeaways

Although the Sixth Circuit reaffirmed privilege protections over communications and work product created during internal investigations, this case is a reminder that challenges to privilege will continue to arise. These issues can arise in investigations of varying scope and for clients of all sizes. Even if a client doesn’t make front page news, these lessons are just as relevant to protecting client’s business interests and information. Counsel should remain vigilant to safeguard privilege protections and take care to ensure privilege is being protected throughout all phases of an investigation.

The investigation should be led by counsel from the beginning and should be properly planned to maintain privilege protections. At every key inflection point, counsel should assess whether privilege is being sufficiently protected:

• Outside Counsel and Engagement Purpose. Retain outside counsel to strengthen privilege protections and clearly state in engagement letters that the purpose of the work is to provide legal advice to the client. Where legal advice will inform or relate to business decisions, attorneys should be particularly careful to document that the purpose of any work conducted is to provide legal advice and is in anticipation of litigation or regulatory enforcement.
• Agents or Consulting Experts. When engaging agents or consulting experts, structure engagement letters to make clear that the expert is engaged to assist attorneys in providing legal advice. Be sure agents or consulting experts are supervised by and acting at the direction of counsel.
• Witness Interviews. Ensure interviews are conducted by counsel and that the Upjohn warning is given prior to commencing each interview and documented in interview memoranda.
• Document Productions or Disclosures. Attorneys should carefully review any productions or disclosures of documents related to an investigation for privilege status and promptly claw back in writing any inadvertent disclosures of privileged material. In federal cases, attorneys should consider seeking a 502(d) order to serve as an additional layer of protection against waiver by inadvertent production of privileged documents. When sharing information with third parties such as auditors, consider providing a verbal update out of an abundance of caution and stick to only factual findings or “bare bones” conclusions.
• Work Product. Attorneys should ensure work product and communications generated by the investigation are not merely a recitation of facts, but also contain mental impressions and opinion work product. Work product should be clearly marked as such and include language stating that the work contains the mental impressions of counsel and privileged communications.
• Cross-border investigations. FirstEnergy is a critical reminder that, when dealing with cross-border investigations, counsel should be sure to understand which jurisdiction’s privilege could apply, which tests are used to determine this, and what differences may exist in the privilege protections among relevant jurisdictions. Because a challenge to privilege and work product may not arise until years after the investigation, counsel must be mindful to consider which jurisdictions may apply in the event of a challenge. Cross-border investigations should be structured in a way that ensures protection under potentially applicable privilege doctrines.

Authored by Nadira Clarke, Peter Spivack, and Briana Borgolini.