In re Grand Jury
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TikTok TikTok The Facts
The case arose from a grand jury subpoena to an unnamed law firm seeking documents related to a corporate client's tax planning. The firm withheld documents under the attorney-client privilege, arguing they reflected legal advice. The government argued many communications were primarily for business rather than legal purposes. The Ninth Circuit applied a 'primary purpose' test, asking whether legal advice was the primary reason for the communication, while other circuits applied varying tests including whether legal advice was 'a significant purpose.'
The Application
The tax planning documents at issue exemplified the dual-purpose communications problem: they reflected both the client's business strategy and legitimate requests for legal guidance on tax liability and structuring. The Ninth Circuit's primary purpose test would have required the firm to show that legal advice was the dominant motivation for the communications, whereas other circuits' tests would permit privilege to attach even if business objectives were substantial, provided legal advice played a meaningful role. The Supreme Court's dismissal as improvidently granted without deciding the standard left the validity of the firm's privilege claim unresolved, and the appropriate test for applying privilege to dual-purpose tax planning communications continues to vary by circuit, creating uncertainty for corporate counsel and practitioners navigating whether privilege protects communications where legal and business purposes are intertwined.
The Conclusion
**Dismissed as improvidently granted, January 23, 2023.** After oral argument the Court determined the record did not properly present the circuit split question and dismissed the case without decision. The circuit split over dual-purpose communications and the attorney-client privilege remains unresolved. The IRS and corporate counsel practice in this area continues under uncertain standards.
No circuit court data for this case.
Case Analysis
Overview
The Supreme Court granted certiorari to resolve a long-standing circuit split over how to determine when attorney-client privilege applies to communications that serve both legal and non-legal purposes, the so-called 'dual-purpose' communications problem, but ultimately dismissed the case as improvidently granted after argument, leaving the circuit split unresolved and the privilege standard uncertain.
Facts
The case arose from a grand jury subpoena to an unnamed law firm seeking documents related to a corporate client's tax planning. The firm withheld documents under the attorney-client privilege, arguing they reflected legal advice. The government argued many communications were primarily for business rather than legal purposes. The Ninth Circuit applied a 'primary purpose' test, asking whether legal advice was the primary reason for the communication, while other circuits applied varying tests including whether legal advice was 'a significant purpose.'
Issue
When an attorney-client communication serves both legal and non-legal purposes, whether privilege applies: (1) only if the primary purpose was obtaining legal advice; (2) if legal advice was a significant or one of the purposes; or (3) under some other standard. And how courts should apply that test to dual-purpose communications.
Rule
The attorney-client privilege protects confidential communications between a client and counsel made for the purpose of obtaining legal advice. Where communications serve dual purposes, both legal and business, courts have applied different tests. Upjohn Co. V. United States (1981) broadly protected corporate attorney-client communications but did not address the dual-purpose problem. The 'primary purpose' test is the most widely applied but its application varies.
Analysis
The tax planning documents at issue exemplified the dual-purpose communications problem: they reflected both the client's business strategy and legitimate requests for legal guidance on tax liability and structuring. The Ninth Circuit's primary purpose test would have required the firm to show that legal advice was the dominant motivation for the communications, whereas other circuits' tests would permit privilege to attach even if business objectives were substantial, provided legal advice played a meaningful role. The Supreme Court's dismissal as improvidently granted without deciding the standard left the validity of the firm's privilege claim unresolved. And the appropriate test for applying privilege to dual-purpose tax planning communications continues to vary by circuit, creating uncertainty for corporate counsel and practitioners navigating whether privilege protects communications where legal and business purposes are intertwined.
Conclusion
**Dismissed as improvidently granted, January 23, 2023.** After oral argument the Court determined the record did not properly present the circuit split question and dismissed the case without decision. The circuit split over dual-purpose communications and the attorney-client privilege remains unresolved. The IRS and corporate counsel practice in this area continues under uncertain standards.
Notes
OT2022. Added via SCOTUS bulk import 2026-05-14
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