UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

IN RE GRAND JURY. Nos. 21-55085 21-55145

D.C. Nos. 2:20-cm-00046-UA-1 2:18-cm-01758-UA-1

ORDER AND AMENDED OPINION

Appeal from the United States District Court for the Central District of California John Kronstadt, District Judge, Presiding

Argued and Submitted June 7, 2021 Pasadena, California

Filed September 13, 2021 Amended January 27, 2022

Before: Mary H. Murguia, Bridget S. Bade, and Kenneth K. Lee, Circuit Judges.

Order; Opinion by Judge Lee 2 IN RE GRAND JURY

SUMMARY *

Grand Jury Subpoenas

The panel affirmed the district court’s orders holding appellants, a company and a law firm, in contempt for failure to comply with grand jury subpoenas related to a criminal investigation, in a case in which the district court ruled that certain dual-purpose communications were not privileged because the “primary purpose” of the documents was to obtain tax advice, not legal advice.

Appellants argued that the district court erred in relying on the “primary purpose” test and should have instead relied on a broader “because of” test. Under the “primary purpose” test, courts look at whether the primary purpose of the communication is to give or receive legal advice, as opposed to business or tax advice. The “because of” test—which typically applies in the work-product context—considers the totality of the circumstances and affords protection when it can fairly be said that the document was created because of anticipated litigation, and would not have been created in substantially similar form but for the prospect of that litigation. The panel rejected appellants’ invitation to extend the “because of” test to the attorney-client privilege context, and held that the “primary purpose” test applies to dual- purpose communications.

The panel left open whether this court should adopt “a primary purpose” instead of “the primary purpose” as the

* This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. IN RE GRAND JURY 3 test, as the D.C. Circuit did in In re Kellogg Brown & Root, Inc., 756 F.3d 754 (D.C. Cir. 2014). The panel wrote that Kellogg’s reasoning in the very specific context of corporate internal investigations does not apply with equal force in the tax context, and that the disputed communications in this case do not fall within the narrow universe where the Kellogg test would change the outcome of the privilege analysis.

The panel addressed remaining issues in a concurrently filed, sealed memorandum disposition.

COUNSEL Thomas F. Carlucci (argued), Foley & Lardner LLP, San Francisco, California; Evan J. Davis (argued), Hochman Salkin Toscher Perez P.C., Beverly Hills, California; for Movants-Appellants. Mark S. Determan (argued) and Joseph B. Syverson, Attorneys; S. Robert Lyons, Chief, Criminal Appeals & Tax Enforcement Policy Section; David A. Hubbert, Acting Assistant Attorney General; Tracy Wilkison, Acting United States Attorney; Tax Division, United States Department of Justice, Washington, D.C.; for Plaintiff-Appellee. Laura L. Buckley, Higgs Fletcher & Mack, San Diego, California; Kevan P. McLaughlin, McLaughlin Legal APC, San Diego, California; for Amicus Curiae Executive Committee on the Taxation Section of the California Lawyers Association. 4 IN RE GRAND JURY Jenny Johnson Ware, McDermott Will & Emery LLP, Chicago, Illinois, for Amicus Curiae American College of